CHAPTER V 



THE RISKS OF THE COTTON MARKET 

 SPECULATIVE NATURE OF COTTON RAISING 



WE HAVE just seen that on the producer of cotton falls 

 the burden of two great risks of nature: the weather and 

 the weevil. To the vicissitudes of production must be 

 added another hazard just as great the risks of the 

 market. The great variations in production suggest wide 

 variation in prices. What economists call that "imper- 

 fectly adjusting and readjusting equation of supply and 

 demand in a money economy" is nowhere better exem- 

 plified than in the cotton market of the world. The 

 changes in production due to wars, to depredations of 

 insects, and to the vagaries of the American climate have 

 made cotton the humpty dumpty of commodity crops. 

 The study of cotton supplies, cotton surpluses, cotton 

 consumption, and cotton prices is the lifetime work of 

 experts engaged in the classification and distribution of 

 stocks of raw cotton to spinners. Consequently, most of 

 the studies devoted to fluctuations in cotton have been 

 made from the standpoint of the consumer and manu- 

 facturer. It is the purpose of this chapter to address 

 itself to the interrelations of average producer and price 

 fluctuations. 



The raising of cotton is essentially a speculative in- 

 dustry. "As I have no disposition to gamble or invest 

 in lotteries, I do not grow cotton," wrote an Arkansas 



