part of the particular countries in producing yarns of certain fineness, quality, or finish. By virtue of their peculiar advantages— either the result of an early start and acquired skill, advantages of climate or character of labor, peculiarities of organization, conditions favoring the use of certain materials or machinery, or advantages in the availability of cheaper machinery or materialsthese countries have found themselves able to produce certain counts or qualities of yarn more easily or more economically, and have come to be looked to as the regular sources of supply for these yarns, unless prohibitive barriers in the way of difficulties of transportation or excessive import duties intervene.

In many cases, no inherent natural or technical reason exists why the same products could not be made in the importing countries, except that it would involve so much higher cost, or call for such changes in method of manufacture, as to make it more profitable to import that part of the yarn requirement from the country known to have comparative advantages for its production. Often the quantity of yarn of a particular quality or process required in the domestic consuming industry of a country would not be large enough to afford sufficient inducement to domestic spinners to develop that branch of the industry.

This situation explains, in large part, the dependence of Germany and many Continental countries, as well as of the United States, upon the English spinning mills for their supply of certain kinds of yarn. The advantages of the British manufacturers for producing very fine counts, mule-spun yarns from Egyptian cotton, fine doubled yarns, and specially-processed yarns for lace, hosiery, and threadmaking, has rendered it more convenient for these countries to import than to produce such yarns of this character as their domestic industries required. Similarly, Germany came to be looked to for coarse waste yarns, for "vigogne" or imitation wool yarns, and particularly for dyed, glazed, and other specially processed yarns. Much of the yarn imports of England have consisted of fine Englishspun yarns which had been sent over to the Continent for special processing. Similiar advantages have been possessed by the Swiss for producing fine bleached yarns particularly suitable for embroidery. These are the chief factors underlying the main international currents in cotton yarn under normal conditions. They explain the position of the various countries as importers or exporters and the character of the yarns which they buy or sell abroad. The growth of cotton spinning in the newer countries to the point of self-sufficiency for the bulk of the lower-count yarns, has in many instances been definitely fostered by high protective duties intended to exclude imports. Such has been notably the case in Russia and Brazil. On the other hand, improvements in transportation have

facilitated the working out of these forces, and the contiguity of the chief manufacturing nations of Europe, bringing the spinning mills of one country near the weaving mills across the border, tends to explain the seeming anomaly of almost every manufacturing country of Europe being both a buyer and seller of cotton yarn.

In the light of conditions just sketched, there may be discerned three outstanding types of movements in the international trade in cotton yarn which are not likely to be radically altered or diverted. They are:

(a) The trade in coarse and medium yarns with the countries less industrially advanced, of which the shipments to China, the Balkans, and South America are types.

(b) The inter-European trade, in specialties, or because of proximity, of which the German imports from England and the Swiss imports from Germany are types.

(c) The shipment to manufacturing countries outside of Europe of fine counts or specially processed yarns, which the exporting countries have particular adaptability to produce more successfully or more economically.

It is evident from the detailed analysis in the preceding chapters of the American import trade, that the shipments of cotton yarn to the United States belong in the last class. With a highly developed and diversified cotton manufacturing industry which not only supplies 99 per cent of its own requirements from its domestic. spinning frames but has developed an export trade in its staple lines-coarse and medium counts-several times the volume of its total annual imports, the import requirements of American industries render the United States a buyer in the yarn marts only of certain kinds of yarns-very fine yarns above the counts spun here in quantity; doubled yarns, mule-spun from Egyptian cotton; and yarns specially processed or prepared for use in particular industries.

POSSIBLE SOURCES OF AMERICAN YARN IMPORTS.

In view of the character of the yarn import requirements of the United States, it is hardly probable that any new sources of imports will develop in the near future to compete in the American market, beyond those countries which for years prior to the war constituted the sources of our imports. The great bulk of cotton yarn shipped in international trade, excepting only the exports from Great Britain, is of coarse and medium yarns, in only a small measure exceeding 40s, and rarely over 60s. The aggregate value of the international shipments of cotton yarn in 1913 indicated an average price of about 234 cents per pound, which was about the normal price for coarse yarns ranging from 16s to 20s. Of the six cotton manufacturing

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countries whose exports in normal times amounted to as much as $5,000,000 a year, Japan and India have been seen to be principally purveyors of coarse yarns to the Eastern markets; few cotton mills in Germany are known to spin in quantity above 50s; while the trade of Austria-Hungary, or what was formerly Austria-Hungary, with the neighboring countries, and the shipments of Italy to the Balkans, the Near East, and South America, have been chiefly of low counts. The only country which produces in quantity and is in a position to export fine cotton yarns of the character which are imported into the United States has been Great Britain, and it is Great Britain that has supplied the bulk of such foreign-spun yarns as have in the past been required by American industries. In fact, a large part of the fine yarns required by Germany, the Netherlands, Switzerland, and other Continental countries, as well as the United States, are regularly imported from England.

It has been pointed out in Chapter II that in the 28 years from 1891 to 1918 fully 85 per cent of all cotton yarn imported into the United States came from the United Kingdom, with about 11 per cent from Germany, 2 to 3 per cent from Switzerland, about 1 per cent from France, and less than one-half of 1 per cent from all other countries combined. These proportions have been substantially maintained, irrespective of the changes in duties that were made during that period.

England is thus seen to have been the chief source of our imports. German spinners could not compete in the American market either with domestic coarse yarns or with the fine or special yarns from England, and their sales in the United States, as has been pointed out in an earlier chapter, were mainly due to special finishes-fast dyeing, high polishing, or careful mercerizing. It is in fact declared that most of the fine yarns from Germany, as well as a part of the medium counts, were spun in England and only finished in Germany. The yarns imported from Switzerland were found to be chiefly embroidery yarns, which the Swiss, as leaders in embroidery manufacture, are naturally best able to produce. Their particular excellence in bleaching and putting up the yarn in form ready for use on embroidery machines largely explains the continuance of the comparatively small quantity which is regularly imported from Switzerland. Beyond these three countries, and the slight amount from France, no other countries figured appreciably as sources of American yarn imports prior to the war, and so far as can now be judged none are likely to do so in the future.

POSSIBLE IMPORTS OF COTTON YARN FROM JAPAN.

Apprehension has been expressed in some quarters as to the possible competition in the American market from Japanese yarns. An examination of the official American import records shows that the

shipments of cotton yarn from Japan to the United States has in the past been negligible. During the ten-year period, 1909-1918, cotton yarn imports from Japan amounted to the insignificant total of 17,716 pounds, valued at $8,723. Nor was there any tendency in these imports to increase even under war conditions. This is explained by the fact that Japan does not produce and therefore can not export in any quantity the yarns which American users find it desirable to import.

In the prewar years, over 80 per cent of Japanese exports was of 16s and 20s, coarse numbers, for the Chinese market, and only about 1 per cent of the Japanese exports was finer than 42s. Of the total output of the Japanese spinning mills in 1914, 97.6 per cent was of coarse and medium counts, i. e., up to 42s, the very yarns on which the American industry has the greatest advantage in competition (as seen from the discussion in Chapter V), and is not only fully self-sufficient, but has come to export in increasing quantities. Only 2.4 per cent of the Japanese output was finer than 42s and the quantity small. The latest available reports of the Japan Cotton Spinners' Association show that there has been little material change in that situation since 1914, and, in fact, the total annual Japanese exports of cotton yarn has shown a decline in the years since 1915 compared with the quantity of prewar exports, despite the world demand and the high prices that could be obtained.

Moreover, the quality of the Japanese yarn is decidedly poorer than the American and would hardly be acceptable in the American market. This is attributed to the lower degree of skill of the average Japanese spinner, combined with a less careful operation of machinery, with an eye to output rather than quality, and the fact that a lower grade of cotton is used than in the American mills in spinning the same count of yarn. For of the total consumption of raw cotton by Japanese mills, averaging during the three-year period 1915-1917 approximately 2,000,000 bales a year, practically all drawn from abroad, the import records show that 65 per cent consisted of Indian cotton, 25 per cent of American uplands, and most of the remainder of Chinese cotton, with a slight amount of Egyptian growth.3 Indian cotton, which constitutes by far the largest part of the material used in Japanese yarns, is short and coarse in fiber, and suitable only for low-count yarns and coarse fabrics which are not marketable in the United States. It has already been pointed out that the American mills are most efficient, and possess the greatest advantages in production, in the spinning of yarns from ordinary American cotton,

1 Annual Reports on Foreign Commerce and Navigation of the U. S. Department of Commerce. "Special Consular Report No. 74, Japanese Cotton Goods Industry and Trade, U. S. Department of Commerce, which supplements Special Agents Series No. 86, Cotton Goods in Japan, by W. A. Graham Clark.

3 Annual Return of the Foreign Trade of the Empire of Japan, 1917, pt. 1, p. 448.

and particularly in competition with Japan the American mills have an advantage-measured by the freight charges on the raw cotton to Japan and the return charges on the yarn to the United States-which counterbalances any advantage on the part of Japan in the way of lower spinning cost.

In other words, the Japanese cotton mills neither spin the counts nor work with the quality of material which American yarn-importing industries could use. With regard to the low counts, moreover, which are the strength of the Japanese industry, it is reported that in the knitting-yarn market of Hongkong, for instance, which Japan preempted during the war-time scarcity of other yarns, the articles produced from Japanese yarns have proved so decidedly inferior that a good demand will again exist for English and American yarns, even at a higher price, as soon as they can be had.1

From all evidence available, therefore, it appears that the only country which can supply the yarns which American industries are likely to import, and from which any measure of competition in the home markets may be expected, is Great Britain. Small quantities of specially processed or put-up yarn will probably again come in from Germany and Switzerland. But there is little ground to expect, under any measure of import duties, that new sources of considerable imports will develop, or that American spinning industries will encounter serious competition from any new direction.

Report of American consul at Hongkong in Commerce Reports, Nov. 21, 1918.