10-c- Cotton

While President Hoover last week discussed with U. S. tycoons in Washington the grand strategy of his offensive against the Depression (see p. 9) these tactical sorties were made:

P: Chairman Myron Charles Taylor of U. S. Steel Corp. ordered $5,000,000 expended on plant renovation in anticipation of an autumn revival in the steel trade.

P: Chairman James Henry Rand Jr. of Remington Rand, Inc. (office equipment) informed Secretary of Commerce Chapin in an open letter that he had instructed his purchasing department to buy immediately $4,500,000 of raw materials for use over the balance of the year. Wherever possible Remington Rand will place contracts for next year's consumption "based upon an anticipated business increase of 25%. . . ."

P: The Lamp, Standard Oil (New Jersey) house organ, urged all industries to spread available work among as many men as possible by shortening hours, stating that Standard Oil without loss of efficiency had thus retained 2,900 employes, 9% of the total force. Standard of New Jersey's President Walter Teagle took the chair of a Hoover sub-committee to push the job-sharing plan throughout U. S. industry (see p. 9).

Biggest business news of the week was a roaring bull market in cotton that lifted all deliveries above 9-c- a pound--nearly 100% above the June lows. Last month brokers on the New Orleans Cotton Exchange lazily perused their newspapers during most of the trading sessions. Last week they swarmed in a shouting, milling mass as they executed the deluge of buying orders. Their excited turmoil was heard above the traffic in Gravier Street. Loiterers grinned up at the exchange when they caught the yells and cheers of brokers as quotations crashed through to new highs. Cotton houses took on full crews, raised salaries, worked late settling contracts. Though its throne has tottered, dangerously of late, Cotton was again King last week.

Trading on the New York Cotton Exchange, the other big futures market, was the heaviest in two years. Even on the spot exchanges in many towns & cities of the South the cotton boom brought wild trading. Atlanta reported more buying orders handled in the last two weeks than in the previous six months. From Mobile, Memphis, Little Rock, Dallas, Galveston the exuberance spread through the highways & byways out into the hot, rich fields of ripening cotton. Most of this year's crop is still to be picked. Profits from the rally will go into the pockets of all growers from the humble renter to the big plantation owner. Anderson Clayton & Co., big Houston brokers, believe that most planters were unable to pledge their crops at local stores or for bank loans, will thus be able to sell for cash. Though little of last year's 13,000,000-bale carryover is owned by planters, most of it is in the South. Since June the value of all the South's cotton has leaped $400,000,000.

Professional traders in New Orleans admit they have lost the market ''to the boys from the country"--cotton dealers in small towns, country buyers, merchants, small business men who have never speculated before. It was reported that Arthur W. Cutten, famed Chicago bull, had skimmed much cream from the rally; there were no large killings in the South. Many old time speculators have been wiped out through ill-timed short-selling.

Cotton men expect another drop in the Government crop estimate for September, look for no sharp set-back in price in the meantime. They recall the famed boom of 1927 when prices zoomed from 12 1/2-c- a pound to 24-c-, most of the rise occurring in August and September. In 1921 an unexpectedly short crop of less than 9,000,000 bales combined with a sudden demand from textile mills (which were leading the way out of the post-War slump) shot cotton up 10-c- a pound in six weeks.

Textile mills have recently been heavy buyers. Exports of 335,000 bales for this season were more than double the figure for last year, but the trade was wondering what effect the British textile strike would have on the price (see p. 14). Students of fundamental business conditions last week eyed the textile trade. Mills have reopened, prices have been upped. The Annalist, index of cotton cloth production, though adjusted to season variations, last week stood at 74.8, up from its Depression low of 56.7%.

Entering this week, July cotton soared to 10-c- for the first time in more than a year. The buying fever spread rapidly to other commodities. Silk surged upward on word of a buyers' panic in Japan which forced the Yokohama and Kobe exchanges to close. A rush to cover future requirements shot rubber above 4 1/2-c-, up 80% from its June low. Copper, wheat, sugar, cocoa, coffee, were all driven up in the stampede to buy, buy, buy.

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