Your Secretary has investigated somewhat the benefits of a Traffic Department and has learned that those mills who have established a Traffic Department, either as a part of their individual organization or as a group, such as the South Carolina Cotton Manufacturers Association, have saved a great deal of money by obtaining rate adjustments, and have also recovered many dollars on account of overcharges, etc. It would mean a great deal to this Association to establish such a department, and such a department should be established as an integral part of the Association. It would be the duty of this department to route all freight shipments, collect claims and overcharges arising on account of transportation and, when possible, secure such rate adjustments as will place our mills on equal footing with competing organizations in other sections of the country. I believe that such a department is absolutely necessary to our best interest.

The speaker was for some years attorney for the Southern Power Company, in their home offices, and while there noted the enormous saving which was to be had through an efficient Purchasing Department. I was surprised to learn that no such organization existed in the North Carolina mills, but, however, found that a few of the mills had individual Purchasing Departments and that some purchased through the South Carolina organization. It is believed that the members of this Association should purchase through such a plan. This will amount to a valuable saving to those mills who are now purchasing individually.

The office of the Secretary of your Association should be used by you as a clearing house for information in any lines effecting your business. The more use that you make of this opportunity, the more service the organization is to you.

We, of the South, have been slow to learn the necessity of co-operation, but now as never before the various manufacturers are entering into the common cause for common good, and I, therefore, bespeak for the Association that each of you will bring not only his tacit co-operation, but that he will participate with active individual personal efforts, and in this way alone can we be as strong as we would and accomplish the good to the growth of our industry, which is our end.

Respectfully submitted,

HUDSON C. MILLAR, Secretary.

After the report of the Secretary and Treasurer, the President stated that the next speaker on the program was Mr. J. E. Sirrine, of Greenville, S. C., but that he was in receipt of a telegram from Mr. Sirrine stating that it was impossible for him to come to the meeting on account of the floods having washed away the railway bridges.

He then asked Mr. W. A. Graham Clark, of Boston, Mass., Commercial Agent, U. S. Department of Foreign Commerce to address the convention.

WORLD MARKETS FOR SOUTHERN COTTONS

By W. A. GRAHAM CLARK, Commercial Agent, United States Department Foreign Commerce.

As a result of the great conflict in Europe, American cotton mills have succeeded to a rich heritage of foreign trade. With some of our main competitors entirely withdrawn from the field and the competition from others greatly lessened we have today an unexcelled opportunity to secure and increase our hold on foreign markets. This opportunity is of especial interest to Southern manufacturers as the larger portion of our export trade in this line originates in the South.

With an export of some $112,000,000 in the fiscal year ending June 30, 1916, the United States now ranks second only to the United Kingdom in the cotton goods markets of the world. This is a position that we have attained only under abnormal conditions but it is a position to which we are normally entitled by reason of the extent and efficiency of our industry. With the exception of the temporary demand from the armies of Europe we should be able to hold the larger portion of the trade we have won, not only hold it but in many of the neutral countries considerably increase it. Our future depends on the use we make of the present.

High tide in the international cotton goods trade of the world was reached in the year of 1913 and before considering the future of our exports it might be well to note the extent and character of the competition that we had to face in that year, and how some of the old established currents of trade have since been changed.

In 1913 the international trade in cotton goods amounted to some twelve hundred million dollars, of which the United Kingdom supplied over a half, Germany over a tenth, France over a sixteenth, and Japan, the United States and Switzerland each something under a twentieth. Smaller competitors were Italy, AustriaHungary, Holland, Belgium, Russia, and Spain. The largest importer of cotton manufactures was India, with China second.

The United Kingdom is the one great competitor that is found in every market. The cotton mills of that country regularly export over 80 per cent. of their total production so that their industry depends on export trade for its existence. In the calendar year 1913 they exported $619,051,990 of manufactures of cotton, including cloth sales of over seven billion yards. Cloth constituted over three fourths of the total and yarn about an eighth, the remainder consisiting of thread, lace, cotton waste, knit goods, etc. Of their

vast export of cloth some two-thirds go to Asia, India alone usually taking about 45 per cent. of the total. Next to India their best cloth market is found in China, followed by Turkey, the Dutch East Indies, Egypt, Australia, Argentina, etc. Of their record cloth sales in 1913 some 33 per cent. were grey goods, 29 per cent. bleached, 18 per cent. printed, 16 per cent. piece-dyed, and 4 per cent. yarn-dyed. In the international trade they come nearer to having a monopoly in bleached goods than in any other line, while their competition is least on colored goods. It may be noted that some 85 per cent. of the spindles of the United Kingdom are mule, that they have as yet few automatic looms, and that over twothirds of their looms are engaged in manufacturing goods that carry over 40 per cent. of size on the warp. The British industry is concentrated in a small area and is highly specialized, the operations of spinning, weaving, bleaching, printing, dyeing, makingup and packing being as a rule carried on in separate establishments. A large proportion of the mills work exclusively on special export cloths such as dhooties, sarries, T cloths, tanjibs, lungis, sarongs comboys, khangars, kikoys, burrahs, slendangs, that are in great demand in certain sections of the world but whose names even are unknown to the manufacturers of this country.

The war has resulted in a great decrease of the British exports of cotton piece goods, from 7,075,558,400 yards in 1913 to 5,735,854,700 yards in 1914 and 4,748,904,600 yards in 1915, calendar years. Their exports of piece goods in 1915 were therefore only about two-thirds of those of 1913 and smaller than for any year since 1893. The loss of the important markets of Germany, Austria and Turkey caused quite a drop in British exports of

piece goods. There has been a still greater drop due to the fact that economic conditions in India, China, and many of their other leading markets, have greatly decreased the demand. The great loss in such markets has been only partly compensated for by France coming into the market for very large amounts. In the home trade some mills have greatly benefitted by large orders from the British Government for khaki, duck, sheeting, etc.. but only a small proportion of Lancashire machinery is adapted to being used for the manufacture of such heavy goods and many orders have had to be sent to the United States, Canada and India.

The British cotton industry today is not running at much over eighty per cent. of its capacity and, while this is partly due to the total loss of some markets and to reduced purchases from others, it is undeniable that the shortage of labor created by the war has been felt acutely and that it has been found impossible to replace the skilled men who have gone into the service of the Government. The mills have made efforts to get the trade unions to relax their customary rules and this has been done to some extent so that operatives are in certain cases permitted to operate more machinery and women are allowed to be employed as creelers in mule spin

ning rooms. A few of the mills have ordered automatic looms. Wages have been forced up but not in proportion to the increase in cost of living, so that wages will probably be higher yet before the war is over. A very significant fact is that as one means of meeting the labor difficulties spinners are using a better grade of cotton. It is well known that English spinners normally use cotton at least a half a grade lower than do American spinners in making the same counts and that this lower cost of their raw material has much aided them in export trade. The use of better grade cotton in itself will necessitate an increase in the price of British goods and it is doubtful if the operatives will ever consent to go back to the use of lower grade cotton or to accept any reduction in wages. The cost of manufacturing in England after the war will be increased still further under the burden of the heavy taxes that will have to be imposed and the probability is that English costs will rise proportionately much more than American, which will give us a better chance in neutral markets.

Germany, next to the United Kingdom, has been the largest exporter of manufactures of cotton, attaining a record export of $136,761,200 in the calendar year 1913. It should be noted, however, that cloth usually makes up only about a third of their total exports in this line, their export of knit goods being almost as large, and about a third consisting of other specialties like embroidery: braid, cotton waste goods, artificial flowers, etc. In cloth their competition is strongest in colored and printed goods and their best markets have been found in the United States and Europe, then in South America and the Levant. In the cheap colored goods that they ship to South America and the Levant they have used large amounts of Indian cotton. In knit goods Germany has predominated and usually supplied some two-thirds of the international demand; it has also been the leader in the manufacture of the embroidery known as "etched lace," in the braid known as "Barmen lace," in artificial flowers, and in the manufacture of goods from cotton waste. Taken altogether Germany has had little success in competing with England for the cotton cloth markets of the world and its exports of cotton manufactures have been mainly in the line of specialties.

Today Germany controls several additional millions of spindles located in Russia, France, and Belgium, but from all accounts their total output is very much smaller than usual, owing to the increasing scarcity of cotton, and the mills that are being operated are mostly on goods required by the army.

France has ranked third in the export of manufactures of cotton, in 1913 reaching a record of $75,275,600. Cloth accounted for less than half of the total, there being a large export of lace and a smaller export of ribbons and tape, knit goods, yarns, etc. Their leading cloth exports have been in dyed and then bleached goods and their best markets found in the United States and

Europe, Algeria and South America. French cloth shipped to this country has been mostly of high grade and tasteful designs but in addition French manufacturers, especially those of Normandy, have been accustomed to make large amounts of low grade goods from Indian cotton for shipment to the native populations of their colonies.

The larger part of the French cotton mills, especially those making fine goods. were situated in the East and these are now mostly in the hands of the Germans. The coarse yarn and cloth mills of Normandy have been turned to the production of army goods and aided by operatives from Belgium, they are running at full capacity. The export of cotton manufactures has, of course, dropped greatly and in 1915 was only a little over thirty millions, and even this consisted mostly of specialties like lace and haberdashery. The portion of their former yarn and cloth industry remaining to them has been sufficient to supply but a small proportion of the war demands and imports of cotton manufacturers have increased from something over sixteen million dollars in 1913 to over 116 million dollars in 1915. This hundred million dollar increase in demand has been of great assistance to mills in England, Italy and Spain in affording an outlet for their cloth and yarn during this trying period. The amount bought from the United States in 1915 amounted to only $3,754,000, owing to the handicap of a tariff discrimination which forces American cotton goods to pay from 25 to 50 per cent. higher rates of duty than similar goods from the countries mentioned. Owing to the loss of its best coal districts the mills now operating in France are paying very high for their power. Some of the manufacturers from the invaded districts are erecting new cotton mills in other parts of the country but as some mills have been destroyed and others dismantled it will probably be some years after the war before the industry can get back to its former basis.

In the export of cotton manufactures from Japan yarn usually accounts for about 60 per cent. of the total and cloth for about 30 per cent., there being a smaller export of knit goods and specialties. Their one big market is China and they have taken advantage of the war to strengthen their hold there on the yarn market in competition with India and on the grey sheeting and drill market in competition with the United States. Their exports have increased in these lines and in addition they have profited by the stoppage of German imports and the falling off in imports of Manchester goods to strengthen their control of their home market by making more of the medium yarn goods that they have hitherto had to import. They have been able to ship knit goods to England itself, owing to the war demand, and they have been trying to secure a larger foothold in India, Australia, and the Philippines. Many of the mills in Japan have placed orders for machinery in England and their output is steadily increasing.