2 



The former method assumes an adaptability in the market for 

 the raw material which must be practically unlimited. This assump- 

 tion may be true, or almost true, of certain agricultural products, 

 and in such cases the method may be safely adopted. It is in no sense, 

 however, true of the cotton industry, which is built up of a number of 

 very specialized sections, the raw material of one of which is unsuited, 

 or even totally useless, for the purpose of another. This method is 

 here, therefore, inapplicable, and we are forced back on a study of the 

 economic side of the question if we are to discover the fundamental 

 conditions on which it will be possible to build a sound superstructure 

 of biological investigation. My own personal experience has hitherto 

 been restricted to the so-called short staple cottons, of which the 

 underlying economic conditions are fundamentally different from 

 those of the Egyptian cotton, and I have, therefore, devoted some 

 time and trouble during my stay in England in visiting Lancashire and 

 investigating the economic aspect of Egyptian cotton. Such an 

 investigation is essential to a correct formulation of those recommenda- 

 tions which are the more immediate object of my mission. I propose 

 to commence the report by formulating the results of that investigation. 

 Such procedure will simplify the expression of subsequent recommenda- 

 tions inasmuch as it will indicate the objective to which they are 

 directed. 



I. 



The most prominent feature of the cotton industry, even in that 

 strictly limited section which makes use of Egyptian cotton, is its 

 diversity. Even among the spinners of Egyptian cotton are to be 

 found users who have specialized on certain classes and who prefer 

 those classes to any others. In many cases they may, and do, use 

 other classes, but such use is definitely a substitution use, dependent 

 on such questions as limitation of supply or relative price, and is not 

 willingly adopted. There is thus a definite and natural conservatism 

 in the trade which opposes free interchange between classes even when 

 such interchange is practicable. The problem of Egyptian cotton is. 

 therefore, not a simple one : it is, on the contrary, a complex of problems. 

 The unit is a single class which, under normal conditions, meets a 

 particular demand. The value of that class is, to a certain extent, 

 determined by the relation between supply . and demand within the 

 class itself, and is, in part only, subject to the influence of the relation 

 between total supply and total demand. It may actually occur that 

 the spinner will pay less for an intrinsically superior cotton, in the 

 sense that it will spin finer yarn, than for an inferior one. 



We have here, I think, the first consideration that must be clearly 

 borne in mind when approaching the problem from the producers' 

 standpoint. Production is, and must continue to be, diverse. Not 



