TWENTY-FIRST ANNUAL YEAR BOOK— PART VII 575 



Right after the close of the war there was a great deal said about the 

 enormous demand which Europe would make at once upon us for food 

 and clothing; we all realized that their demand had been below normal, 

 and it was anticipated that there would be an enormous demand. Now, 

 speculators, both on this side of the water and on the other side, loaded 

 up all of the warehouses of Europe with food and clothing, mostly food- 

 stuffs, right after the war. If you will notice export figures, you will see 

 that they sent over enormously increased cargoes of merchandise for 

 about eight months. Effective demand failed to materialize, and we have 

 had shipped back during the past summer great quantities of canned 

 goods which was sent over more than a year or a year and a half ago. 



Demand did not develop, and as a consequence a great deal of money 

 was lost, and a great many bankruptcies occurred, especially in Europe. 

 V/hat was the reason? It was found that the people couldn't buy. They 

 needed the things we had, but couldn't pay for them. We had correctly 

 anticipated what they wanted by what they needed, but failed to take 

 into consideration that they could not buy what they wanted and needed. 



Cotton and Wool. 



Now, take cotton for example: Germany had practically no cotton 

 during the entire period of the war from the outside, except a very little 

 reserve which it was able to get from Holland and the Scandinavian 

 countries and the Balkan districts, and naturally we expected Germany to 

 take cotton in enormous quantities. But in the first year after business 

 resumed after peace was declared, they took only 550,000 bales, which is 

 a little less than one-third of their pre-war consumption. This year they 

 will be able to take 800,000 bales, according to present estimates — still 

 two years after the war one-third of their pre-war consumption of cotton 

 was only being demanded, altho they have been out of cotton for a num- 

 ber of years. The difficulty is that those people have nothing with which 

 to buy, and with the consuming power of Austria and Czecho-Slavokia 

 and Jugo-Slavokia curtailed, you can see that that great market which 

 we once had, is what we now call a poor buyer. Their needs are great, 

 but their effective demand is not developed yet, and that is why you are 

 hearing so much today of various schemes to put them back on their 

 feet to secure purchasing power, for, after all, people have to buy. 



The purchasing power of a people is dependent upon their wants 

 and earning capacity. For example, we have in Africa about 60-million 

 people who don't furnish us a market for one ton of anything. They 

 have no wants, and they don't buy anything. As you increase their wants 

 and their earning power, you make a market. War has torn Europe for 

 a generation or two, and that is what has weakened our wool market 

 and our cotton market and our wheat market. Ever since the war we 

 have had an extra large accumulation of wool. I took occasion to make 

 a very careful study of this situation during the past year when there 

 was a great deal of talk as to what was the matter with the wool mar- 

 ket. Among other things we cabled to all of our commercial attaches 

 and embassies in various countries to make a careful survey of the sup- 

 ply of wool on hand, including New Zealand, Australia, South Africa 

 and India, and thus, with other data we were able to find out to our own 



