6 



I may also refer to yet another aspect of the cotton trade which 

 is likely to have a bearing on the future demand. Egyptian cotton 

 ranks second among the world's cottons, and is only surpassed by the 

 so-called Sea Island, the main source of which is certain of the Southern 

 States of America and the West Indies. The Sea Island crop is what 

 is known as a highly speculative one; it has a narrow basis in that its 

 cultivation is restricted to a relatively small tract, and from economic 

 as well as natural causes the supply is a precarious one. Not only is 

 it more troublesome to cultivate, so that the extra price barely com- 

 pensates for the extra labour and expense involved in the cultivation, 

 but that cultivation is restricted to the more humid and tropical 

 tracts in which the risk of sudden loss through pests and disease 

 is greatly enhanced. The margin of profit is thus insufficient to 

 compensate for the extra risks involved, and the tendency is for the 

 cultivation to diminish. 



These facts all have their bearing on the Egyptian problem, and, 

 while they indicate an increasing competition from outside sources 

 in the markets for the present standards of Egyptian cotton, they 

 also indicate a probable reduction in the supply of Sea Island. The 

 conclusion, it is true, is highly speculative, but the tendency is there, 

 and is sufficiently clear to justify the attempt to develop a cotton which 

 will be capable of taking the place of Sea Island in the future. 



, From the point of view of demand for goods manufactured from 

 the higher grades of cotton, I have found the opinion widely held that 

 this demand is large though, at the present time, mainly potential. 

 It is a demand capable of absorbing any amount of the best staple 

 cotton Egypt is likely to be in a position to offer, and of absorbing it 

 at its full relative value. In other words, the trade is sufficiently 

 flexible to develop a demand equal to any supply that can be offered. 

 That this opinion is correct cannot, I think, be doubted, but it requires 

 to be qualified in certain directions if the interests of the grower and 

 dealer in raw cotton are to be adequately guarded. 



The opinion has been expressed in the course of discussions on this 

 subject that the facts do not support this view of the potential demand. 

 It has been instanced that a short crop of Mit 'Afifi in one year has 

 led to the realization of a high relative price for that season's produce, 

 and that that price has reacted in the following year in a largely 

 increased crop, which, in its turn, has resulted in a heavily depreciated 

 price. That experience is no doubt true ; but it hardly justifies 

 the conclusion which some would attempt to draw from it. It has 

 already been pointed out that, owing to specialization in machinery 

 and also to the necessity for experience in working a particular cotton 

 if the best results are to be obtained from it, spinners are, as a rule, 

 conservative. They will pay a premium for a class to which they 

 are accustomed rather than change to another class, if the shortage 



