SPECULATIVE NATURE OF COTTON RAISING 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 planter in the The feeling was more forcibly expressed by a North Carolina pamphleteer writing in the picturesque phraseology of 1883: There is another view of this subject, we now call to the attention of the farmers, thousands of whom are earnest and devout Christians.
The man who will jeopardize the happiness of his wife and little ones and deprive them of bread, by a cast of the die, or the turn of a card at the faro table they deem lost to all feeling of morality and swiftly bound for hell.
Yet, year after year, they hazard the happiness and live lihood of their fond wives and children by giving mortgages upon their homes and liens upon their crops, "trusting to chances," that they will make a good cotton crop and be able to pay them off, that "other countries will fail in the produc tion of cotton this year, and ours will, consequently, be higher," that labor will be cheaper than last year, that there will be not too much nor too little rain, that there will be no hail storms, and a hundred contingencies, the happening or not happening of which would be sufficient to take the bread out of their families' mouths and deprive them of a home.
[This] "trusting to chance" . . . is a higher species of gambling than that of the man who bets $10 that a 48 will be thrown or the ace turned; in this respect the two differ. Do they differ otherwise? Let each man answer for himself.' Within. the memory of many southern farmers the price of a standard five-hundred-pound bale of cotton has varied from $35 to $200. Taken year after year, it is doubtful, as Hammond says, whether cotton yields as large returns as would result from a safer, more diver sifted system of farming.' As is so often admitted, cotton proves the occasion of serious loss. But high prices when they come remove the gloom, and Cotton the King is again in high favor with his chief subject, the planter.
In one way the risks of the market fall with peculiar directness on cotton. Of the important crops produced in the United States, cotton is peculiar in that all of the crop must be sold by those who produce it. The only use of cotton to the cotton farmer is its use in exchange, its only value is its market value. Cotton thus is gov erned completely by a money economy. In fact, the lower the price of cotton the greater likelihood that the farmer will have to sell immediately all he has produced to sat isfy his creditors as speedily as possible. On the other hand, it is estimated that only 17 per cent of the great United States corn crops ever leave the farm where they are produced. The live-stock farmer may sell corn and oats, or he may sell hogs and cattle. Corn, pork, and beef fill the family larder regardless of the price. The all-cotton farmer possesses nothing that he can use; he must sell it all. The risks of the market do not fall with such crushing force upon the grower of corn. Cor respondingly, the need for diversification is greater with the cotton grower.