140

AGRICULTURAL RELIEF
[ have some mighty interesting data on the question of the creating
of surplus, and it is absolutely germane to this proposition, because
it coes to the very root of the trouble. It shows why it is impossible
for a cotton grower to prevent the creating of a surplus, and there-
fore why it is absolutely necessary that some means should be pro-
vided whereby that surplus can be handled without detriment to
him after it is created.

I might say in that connection too, Mr. Chairman and gentlemen,
that a good deal of confusion, I think, a good deal of loose talking
and thinking is involved in regard to surplus. One of the most fortu-
nate things for the industry to-day, in my opinion, 1s the fact that
the cotton grower can not prevent the creating of a surplus. Why?
Simply because in the period of depression, at the time when the cot-
ton grower found himself confronted with ruin, if he could prevent
the creating of a surplus, or if he could keep control of the production,
the inevitable reaction would be that he would go to the other extreme.
There is no escape from that. In other words, if he could simply
say, by his ipse dixit, “We are not going to have next year but
10,000,000 bales of cotton,” he would say it, and he would put it
up to a price that would absolutely bankrupt the commercial world
or the manufacturers of cotton products. If he could do that, he
would put it up to $1 a pound. He wouldn’t need any legislation
or anything.

It 1s a very fortunate thing he can not do that. It is a fortunate
thing that the whole matter, in the long run, is subject to the play
of economic law, and the adjustments which come from period
to period.

Mr. Fuumer. And although he reduces his acreage, he is apt to
have an increase in production, instead of a decrease?

Mr. Stone. I will come to that right now. For instance, if you
were to suppose this situation; Just suppose that to-night the mills
of America, or the cotton mills of the world, would run out and
finally consume the last bale of actual cotton in existence. The
panic that followed the failure of Baring Bros. in London in 1893
would not be a circumstance to what we would have. Why? Simply
because millions of cotton operators all over the world would be
thrown out of work. The money invested in those plants would be at
a discount; the stock would not be worth the paper it was written
on if any such condition as that existed. Why doesn’t it exist? The
reason and the only reason it doesn’t exist is because the American
cotton growers maintain a surplus for the benefit of American
industry and American and foreign mills. He is bound to have that
surplus. Anything "that would interrupt the continuity of the
operation, that is to say, the transition of the cotton as actually
produced by the grower from the field into the course of trade, into
the hands of the handlers, and into the mills, and out into the trade,
as a manufacturers’ product, anything which definitely interrupts
that continuity of operation, has a paralyzing effect on the entire
industry dependent on the raw commodity. In other words, the thin
A it possible for the operation to continue is the Fact that
tar is ahvays back here a supply of cotton which can go forward,

On hoo Jorw: Va shen 1t reaches the price where it is brought out.
it compel thom, go , Since the necessities of the people who produce

o turn it loose—I have in my pocket a letter about