"Man the Lifeboats!"

One thing the cotton textile industry has never been accused of is monopolistic tendencies. One of the biggest sources of U. S. payrolls, a weighty factor in the Federal Reserve Board's production index, the cotton textile industry is composed of 1,000 desperately competitive and generally unprofitable mills. About the only check on production the industry knows is the capacity of its warehouses. As long ago as last October the warehouses held over 150,000,000 yards of print cloth, about three times as much 'as was sold that month. But the mills, as is their habit, kept operating at close to top speed, meanwhile losing up to 1/4-c- on each yard they loomed. Cotton cloth output in March was 48% above the same month of 1938, while production of all U. S. indus-try was up only 24%. By last week, with the warehouses now crammed with 180--190,000,000 yards of unsold goods, the mills were finally starting to curtail operations.

It so happened that the cotton mills had an excellent excuse for slackening their pace--a shortage of cotton. It was a purely man-made shortage, for the U. S. Government holds under loan 11,400,000 bales, enough to keep the U. S. in shirts and skirts, sheets and towels, for nearly two years.

Nevertheless, the price of spot cotton last week was up to 9 1/2-c-, highest level in nearly two years, and 1 1/2-c- above the price of cotton for delivery after the new crop starts to move in August. The shortage has become so serious that the British spinners in Lancashire protested bitterly last March and the New York Cotton Exchange last week formally recognized the squeeze.

Paradoxical though the shortage is, it is precisely what the Government's cotton policy was supposed to accomplish. On the 1937-38 tremendous crop of 19,000,000 bales the Government offered to lend farmers 9-c- per Ib. The market prices went as low as 8-c-, with the result that the Government's cotton holding jumped to 11,400,000 bales. Secretary of Agriculture Wallace would like to sell some of his cotton now, but the Southern Senators, riding a rising market for their constituents, will presumably see to it that no Government lint is released so long as the market price is so close to the 9-c- loan figure.

The Senators' shortage may benefit their constituents and provide the mill operators with an excuse to work off inventory but it is no great contribution to the permanent solution of the U. S. cotton problem. That problem is basically the loss of foreign markets, for the U. S. used to export two-thirds of its annual crop, now exports only one-third. Alabama's Bankhead (Tallulah's uncle) has an answer in the form of export subsidies but the Senate last week turned it down, largely because the subsidies would directly benefit no one in the U. S. In defense of the defeated measure Texas' Tom Connally orated:

"Cotton is like a sinking ship. When a ship at sea is sinking, you do not wait to work out navigation problems and try to devise a long-range program. You just shout, 'Man the lifeboats!' Now we are trying to man the lifeboats for cotton."

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