TABLE 27.-Production and consumption of cotton by principal countries during last prewar season; also number of active spindles in each country, and consumption of cotton per spindle.

[Source: U. S. Census Bulletins on "Cotton Production and Distribution," supplemented by other est mates for countries not there shown.]

1 Estimates derived from reports of investigators and similar sources. Does not include cotton used in home manufacture.

* Represents cotton exported and cotton consumed in spinning mills. Including home manufacture, the cotton crop for China is estimated at 1,200,000 bales, making the world crop 22,200,000 bales.

Judging by the number of active cotton spindles in 1914, as estimated by the United States Census, the chief cotton manufacturing nations under normal prewar conditions ranked in this order: United Kingdom, United States, Germany, Russia, France, British India, Austria-Hungary, Italy, and Japan. Of the permanent changes that have been wrought by the war, it is as yet too early to judge with any degree of precision. The important types of changes have been three: The extension of cotton spinning in certain countries outside the area of hostilities, particularly the United States, Japan and Brazil; the

destruction or removal of cotton machinery from invaded areas of France, Belgium, Poland, and Northern Italy; and the political transfer of certain cotton manufacturing areas of Europe by the redistribution of territory under the peace terms, particularly affecting France and Germany in western Europe, and Austria-Hungary and the newly created States in central Europe. The final adjustments will alter considerably the order of rank of the various cotton manufacturing countries (and their constituent areas) but is not likely to change the composition of the groups.

The United States, which provides about two-thirds of the world's supply of raw cotton is seen to be second to Great Britain in the size of its cotton manufacturing industry, comprising in the last prewar year 22 per cent of the world's cotton spinning machinery, and using 27 per cent of the total volume of cotton consumed. The rank of the American cotton manufacturing industry, as second in magnitude, has not been changed since 1914. The war-time developments within the United States, brought about by the increased demand for manufactures of cotton, principally for military use, were in the direction of extension of spinning facilities and the consumption of an increased portion of the domestic cotton crops.

The varying amounts of cotton consumed in relation to the number of spindles are largely a measure of the comparative fineness of the average yarn spun in each country, and are also influenced by the speed of operation and degree of utilization of the spindles in the various countries. Thus, the average consumption of cotton per spindle in the United States in the last prewar year was 90 pounds a year, while in the United Kingdom the average spindle did not consume more than 39 pounds per year, indicating a much finer average count of yarn produced in the English industry. The abnormally large consumption per spindle in Japan is the result of both the coarser average count of the yarn spun, and the fuller utilization of machinery through continuous night and day working of the mills.

THE NORMAL WORLD TRADE IN COTTON YARN-IMPORTS AND

EXPORTS IN 1913.

The international trade in cotton yarn and thread amounted in normal times to approximately $200,000,000 per year, of which seveneighths, or more than $175,000,000, consisted of yarn for manufacturing purposes, as weaving, knitting, lace making, braiding, and the like. The value of the sewing thread, knitting, crochet, and embroidery cottons, and similar hand work yarns put up for retail sale, which enter into international shipments, amounted to about $25,000,000 yearly. The present discussion will confine itself mainly to the trade in cotton yarn for manufacturing purposes, which is the character of the bulk of the yarn produced in this country, and is distinct both

in its use and its tariff interest from the trade in sewing thread and yarn put up for retail sale.

The following table presents the quantity and value of imports and exports of cotton yarn of the leading trading countries during 1913, the last full prewar year, which may be taken to represent normal conditions:

TABLE 28.-Principai countries exporting and importing cotton yarn during the last prewar year.

[Source: Official foreign trade records of each country, or most authentic indirect source available.]

1 SPECIAL NOTE.--World trade total not obtainable exactly or in complete detail, owing to lack of or defective records of many small countries and remote areas. This is particularly true of the records of imports, and in view of the varying practices of different countries in compiling foreign trade statistics-as the use of official instead of actual values, or the inclusion of freight and other charges in import values-the import figures of the various countries are not all directly comparable.

Fiscal year for India and Canada ended Mar. 31, 1913. Indian figures are for seaborne trade.
Fiscal year United States ended June 30, 1913; weight of exports estimated from value.

4 Weight incomplete, none given for yarn to value of $1,471.000.

$ Records are for 1912; 1913 not available.

Import total derived by combining exports from principal countries shipping to Turkey.

The three principal yarn exporting nations are seen to be the United Kingdom, Japan, and India; lesser amounts are shipped from Germany, Austria-Hungary, and Italy; and comparatively small amounts from the other countries of Europe. The foreign sales of American yarn were an almost negligible factor in the world trade prior to the war. The striking expansion of the American yarn trade during the war and the likelihood of its permanence are discussed in Chapter V.

The place in export trade held by the leading cotton manufacturing countries is determined not so much by the size of the domestic industry, as by the size of the exportable surplus, which is based upon the extent of the home market. It may be measured by the total requirements of a country's home population as compared with the total output of its cotton mills, taking into account that the per capita consumption of cotton goods-and cotton yarn is, in the main, but the raw material for the manufacture of cloth and apparel-varies widely in different countries according to climate, mode of living, and general state of culture and prosperity. The United Kingdom, with its highly developed cotton spinning industry, and a population of only forty-five millions, would naturally be more important in the world trade as an exporter, than would the United States, with a domestic market comprising over one hundred million persons, and with the largest per capita consumption of cotton goods of any people in the world. And it is found that the British cotton industry regularly exports 80 per cent of its annual output, whereas the United States produces over 90 per cent of its cotton goods for its extensive domestic market. Similarly, comparatively small countries like Japan, with developed cotton industries, would be expected to export considerable quantities of cotton yarn, while the full production of the Russian cotton mills is hardly adequate to supply the needs of the country's large population.

The three principal countries importing cotton yarn in 1913 were China, Germany, and the Netherlands; British India ranking fourth; with Turkey and the Balkan countries, mainly Roumania and Bulgaria, following in amount of annual imports. Considerable quantities, although comparatively of lesser importance, are normally imported by the other countries of Europe; by the United States and Canada in North America; by Argentina, Brazil and Chile, in South America; the East Indies, and Egypt. China, easily the largest importing country, absorbed in 1913 nearly one-half in weight and about 30 per cent in value of all cotton yarns shipped between nations. The American import trade in 1913 accounted for less than 1 per cent of the total quantity of yarn carried in international trade, and about 24 per cent in point of value.

CONDITIONS DETERMINING THE MAIN CURRENTS IN INTERNATIONAL YARN TRADE.

The principal currents in international trade in cotton yarn, and the position of each country as an exporter or importer of yarn, are largely controlled by the relation between the amount and character of the output of the domestic spinning mills, and the particular requirements of the looms and other yarn-consuming machinery of the country. For weaving-whether on power-driven machines in

modern factories or on hand looms in the homes of peasants-is carried on in almost all countries beyond the primitive stage. Backward and semi-developed countries, as a rule, have almost no spinning machinery, and in so far as they do their own weaving and knitting rather than import the finished cloth and wearing apparel, they rely upon imports for their supplies of cotton yarn. Such is the character of the yarn requirements of Turkey, the Balkan States, and parts of South America.

A number of countries, somewhat more advanced in cotton manufacturing, possess extensive yarn-consuming industries, calling for larger quantities or finer qualities of yarn than can be well supplied from domestic spindles, and consequently figure largely as importers. of yarn to supplement the domestic supply. The large yarn importations into British India, and into the more important South American Republics, arise from such a situation.1

On the other hand, certain countries with particular advantages for extensive spinning industries, have set themselves to produce for export large quantities of yarn beyond the requirement of the domestic consuming capacity, and depend upon export trade for the prosperity of their cotton mills. The most striking instance is that of the United Kingdom, which has easily the largest and most widely distributed yarn export trade of any country, supplying in 1913 about 30 per cent in volume and 40 per cent in value, of the total international shipments. Similar cases are those of Japan and India, with advantages of cheap labor and relative proximity to their markets, who compete in supplying the vast demand of the Chinese hand-loom industry for coarse yarns.

Moreover, with the general development of cotton spinning throughout the world, there has grown up a specialization on the

LA word in retrospect as to the general development of the international yarn trade, and of the present tendency toward finer yarns, is pertinent at this point. In the early days of cotton manufacture, yarn production was in the hands of a few countries, possessing the machinery and developed skill, which supplied the import requirements of much of the rest of the world. The total volume of trade was decidedly smaller, and consisted mainly of low counts. As the use of cotton goods increased the world over, with the increase in annual output of the raw material and the extension of manufacturing facilities, cotton spinning mills came to be established in countries which formerly relied upon the old-fashioned hand-spinning in the homes, or supplied themselves with yarns from abroad. Coarse and medium counts make up the bulk of the yarns used, and are the easiest to spin, depending least upon the high skill, specialized machinery, or exceptional climate favoring the older manufacturing countries. The export trade to the newer countries tended to diminish, therefore, on the lower-count yarns, as the domestic mills came to supply an increasing part of the domestic market.

The total volume of the international trade in cotton yarn did not, however, decline, but with the everwidening use of this cheapest of clothing materials, the exporting countries have been forced, in a measure, to resort to the production of medium and fine counts and specially processed yarn, which the newer countries had not yet come to make or could not produce successfully. Such has been the experience of the Lancashire spinning industry of England, which has found its former markets for coarse yarn on the Continent of Europe, in India, and in the United States diminish during the last few decades, as the growing cotton industries in these countries came to supply an increasing part of the home needs. Import requirements of the countries where cotton manufacturing is a more recent development tend gradually toward finer counts, which leads the old exporting countries to "go finer" in the character of the yarn spun and exported.