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[Illustration: GUARANTY TRUST CO'S COTTON PRICE CHART.
_Spot Prices, New York, Middling Uplands_]




The Fabric of Civilization





A Short Survey
of the Cotton Industry in the
United States


Guaranty Trust Company of New York
140 Broadway

FIFTH AVENUE OFFICE                               MADISON AVENUE OFFICE
Fifth Avenue and 43rd Street             Madison Avenue and 60th Street

  LONDON OFFICES                                     LIVERPOOL OFFICE
  32 Lombard Street, E. C.               27 Cotton Exchange Buildings
  5 Lower Grosvenor Pl., S. W.

PARIS OFFICE                  HAVRE OFFICE              BRUSSELS OFFICE
1 and 3 Rue des Italiens    122 Boulevard Strasbourg     158 Rue Royale




COPYRIGHT, 1919

GUARANTY TRUST COMPANY OF NEW YORK




          The cotton industry touches the lives of
          the vast majority of the peoples of the
          earth. The ensuing survey does not pretend
          to cover the field in all its diversity. It
          aims to give, in brief compass, such
          general facts concerning the industry in
          the United States as may enable the reader
          quickly to familiarize himself with its
          broader outlines.




Contents

CHAPTER                                          PAGE
      I  The Importance and Power of Cotton         5
     II  Where Cotton is Grown and Spun and Why    10
    III  The Raw Cotton Market                     17
     IV  The Cloth Market                          27
      V  Financing Cotton and Cotton Cloth         33
     VI  American Cloth in Foreign Markets         38
    VII  Some of the Grower's Problems             41
   VIII  In the Cotton Mill                        45
     IX  The Finishing Operations                  57




The Fabric of Civilization




CHAPTER I

The Importance and Power of Cotton


Cotton is the fabric of civilization. It has built up peoples, and has
riven them apart. It has brought to the world vast and permanent wealth.
It has enlisted the vision of statesmen, the genius of inventors, the
courage of pioneers, the forcefulness of manufacturers, the initiative of
merchants and shipbuilders, and the patient toil of many millions.

A whole library could be written on the economic aspects of cotton alone.
It could be told in detail, how and why the domination of the field of
its manufacture passed from India to Spain, to Holland, and finally to
England, which now shares it chiefly with the United States. The
interdependence of nations which it has brought about has been the
subject of numerous books and articles.


Genius that Served
The World's Need

Nor is the history of the inventions which have made possible to-day's
great production of cotton fabrics less impressive. From the unnamed
Hindu genius of pre-Alexandrian days, through Arkwright and Eli Whitney,
down to Jacquard and Northrop, the tale of cotton manufacture is a series
of romances and tragedies, any one of which would be a story worth
telling in detail. Yet, here is a work that is by no means finished.
Great inventors who will apply their genius to the improvement of cotton
growing and manufacture are still to be born.

The present purpose, however, is to explain, as briefly as may be, the
growth of the cotton industry of the United States, in its more important
branches, and to endeavor, on the basis of recognized authority, to
indicate its position in relation to the cotton industries of the
remainder of the world.


America the Chief
Source of Raw Material

For the present, and for the future, as far as that may be seen, the
United States will have to continue to supply the greater part of the
world's raw cotton. Staples of unusual length and strength have been
grown in some foreign regions, and short and inferior fibers have come
from still others. But the cotton belt of the Southern States, producing
millions of bales, is the chief source of supply for all the world.

The following table, taken from "The World's Cotton Crops, 1915," by J.
A. Todd, gives the comparative production of the great cotton-growing
areas, for the 1914-1915 season:

    America     16,500,000 bales of 500 pounds
    India        5,000,000   "    " 500   "
    Egypt        1,300,000   "    " 500   "
    Russia       1,300,000   "    " 500   "
    China        4,000,000   "    " 500   "
    Others       1,300,000   "    " 500   "
               -----------
    Total       29,400,000   "    " 500   "

The American crop is thus approximately fifty-six per cent. of the
world's total. The other producing countries have shown since the
beginning of the century an interesting, if not a remarkable growth, that
of China being the largest in quantity, and that of Russia, the largest
in proportion. The American increase has been larger, absolutely, than
that of any other region, and there is little indication that it will not
continue to hold first position.


English Spinners
Dominate World Market

In the manufacture of cotton, Great Britain's supremacy, while not so
great proportionately as that of America in growing it, is for the
present not likely to be challenged. The following table of the number of
spindles in the chief manufacturing countries is based on English figures
compiled shortly before the outbreak of the World War. The number of
spindles is the usual basis upon which the size of the industry is
judged. It is not a perfect method, but it has fewer objections than any
other:

    Great Britain        55,576,108
    United States        30,579,000
    Germany              10,920,426
    Russia                8,950,000
    France                7,400,000
    India                 6,400,000
    Austria               4,864,453
    Italy                 4,580,000
    Latin America         3,100,000
    Japan                 2,250,000
    Spain                 2,200,000
    Belgium               1,468,838
    Switzerland           1,398,062
    Scattering            2,499,421
                        -----------
    Total Spindles      142,186,308

Such figures can be only approximate. The war has brought growth in the
United States and in Japan, but has certainly reduced the numbers of
spindles in Germany, Austria, and Russia. It is doubtful, moreover, how
well the French industry has been able to maintain itself. But the
tabulation is accurate enough to show the relative standing of the
various countries. There are, as has been indicated, other standards than
the number of spindles. The United States, through the fact that it
specializes, generally speaking, on the coarser fabrics, uses about
5,000,000 bales of cotton annually, as compared with Great Britain's
4,000,000. The British product, however, sells for much more. Thus the
value of the spindle standard is affirmed. England, then, produces well
in excess of one-third of the cotton cloth of the world; the United
States considerably more than one-fifth of it, with the other countries
trailing far behind, but prospering nevertheless.


The Individuality
of the Cotton Fiber

[Illustration: _The cotton fiber--a highly magnified view, showing the
twist_]

It is a curious ruling of fate which makes the spinning of cotton fiber
possible. There are many other short vegetable fibers, but cotton is the
only one which can profitably be spun into thread. Hemp and flax, its
chief vegetable competitors, are both long fibered. The individuality of
the cotton fiber lies in its shape. Viewed through the microscope, the
fiber is seen to be, not a hollow cylinder, but rather a flattened
cylinder, shaped in cross-section something like the figure eight. But
the chief and valuable characteristic is that the flattened cylinder is
not straight, but twisted. It is this twist which gives its peculiar and
overwhelming importance to cotton, for without this apparently fortuitous
characteristic, the spinning of cotton, if possible at all, would result
in a much weaker and less durable thread. The twist makes the threads
"kink" together when they are spun, and it is this kink which makes for
strength and durability.

Though the cotton plant seems to be native to South America, Southern
Asia, Africa, and the West Indies, its cultivation, was largely confined
at first to India, and later to India and the British West Indies. At the
beginning of the eighteenth century, the West Indies, because of their
especial fitness for growing the longer staples were supplying about
seventy per cent. of the food of the Lancashire spindles. The United
States having made unsuccessful attempts to produce cotton in the early
days of the colonies, first became an important producing country toward
the end of the eighteenth century. American Upland cotton, by reason of
its comparatively short staple, and the unevenness of the fibers, as well
as the difficulty of detaching it from the seed, was decidedly inferior
to some other accessible species. The Southern planters who grew it,
moreover, found it next to impossible to gin it properly, the primitive
roller gin of the time being unsuited to the task, and the work of
pulling off the fibers by hand being both tedious and expensive. In 1792,
the amount exported from the United States was equivalent to only 275
bales.

[Illustration: _Eli Whitney, the schoolmaster inventor of the cotton
gin_]

The next year, 1793, is the most important in the history of cotton
growing in the United States. In the autumn of 1792, Eli Whitney, a young
Massachusetts man who had just been graduated from Yale College, sailed
from New York to South Carolina where he intended to teach school. On
shipboard he met the widow of Nathaniel Greene, the Revolutionary
general. Mrs. Greene invited the youth to begin his residence in the
South on her plantation at Mulberry Grove, Georgia. Here one evening,
some officers, late of General Greene's command, were discussing the
great wealth which might come to the South were there a suitable machine
for removing stubborn Upland fiber from its green seed. The story goes
that while the discussion was at its height, Mrs. Greene said:

"Gentlemen, apply to my young friend, Mr. Whitney. He can make
anything."

Whitney commenced work on the problem. A room was set aside as his
workshop, and it was not long before he had produced the beginnings of
the gin. He fixed wire teeth in a board, and found that by pulling the
fibers through with his fingers he could leave the tenacious seed behind.
He carried this basic idea further by putting the teeth on a cylinder and
by providing a rotating brush to clean the fiber from the teeth.

The changes which followed immediately upon the introduction of the
cotton gin were tremendous in scope and almost innumerable. There was a
time, before cotton became a staple, when the South led New England in
manufacturing. That time passed almost immediately. Iron works and coal
mines were abandoned, and men turned their energies from the culture of
corn, rice, and indigo largely to the raising of the cotton.


Expansion in
Production

The following figures, giving production in the equivalent of 500 pound
bales for the year at the close of each ten-year period, give some idea
of the tremendous expansion which ensued.

                            _500 Pound
    _Year_                     Bales_
    1790                          3,138
    1800                         73,222
    1810                        177,824
    1820                        334,728
    1830                        732,218
    1840                      1,347,640
    1850                      2,136,083
    1860                      3,841,416
    1870                      4,024,527
    1880                      6,356,998
    1890                      8,562,089
    1900                     10,123,027
    1910                     11,608,616
    1917                     11,302,375

By this table it will be seen that the Civil War and the freeing of the
slaves held up production only temporarily. In 1914, the banner year, the
crop reached the tremendous total of 16,134,930 bales of five hundred
pounds each.

Some little spinning had been done in the seventeenth century, but in
1787-88 the first permanent factory, built of brick, and located in
Beverly, Massachusetts, on the Bass river, was put into operation by a
group headed by John Cabot and Joshua Fisher. This factory failed to
justify itself economically, chiefly because of the crudeness of its
machinery. But Samuel Slater, newly come from England with models of the
Arkwright machinery in his brain, set up a factory in Pawtucket in 1790.
From that time forth the growth was steady and sure, if not always
extremely rapid.

The following table,[A] which covers the whole country, relates
particularly to New England in the years before 1880, because the cotton
manufacturing industry until then was largely concentrated there. It
shows how the manufacturing interests of the country profited by the
discovery that brought wealth to the agricultural South:

    =======+=======+============+=========+=============+==============
           |_Number|            |_Cotton  |             |
           |  of   |  _Number   |  Used   |  _Number    |  _Value of
    _Year_ | Estab-|    of      |   in    |     of      |  Product in
           | lish- | Spindles_  | Million |  Employes_  |   Dollars_
           | ments_|            | Pounds_ |             |
    -------+-------+------------+---------+-------------+--------------
      1810 |       |     87,000 |         |             |
      1820 |       |    220,000 |         |             |
      1830 |   795 |  1,200,000 |    77.8 |     62,177  |   $32,000,000
      1840 |  1240 |  2,300,000 |   113.1 |     72,119  |    46,400,000
      1850 |  1094 |  3,600,000 |   276.1 |     92,286  |    61,700,000
      1860 |  1091 |  5,200,000 |   422.7 |    122,028  |   115,700,000
      1870 |   956 |  7,100,000 |   398.3 |    135,369  |   177,500,000
      1880 |   756 | 10,700,000 |   750.3 |    174,659  |   192,100,000
      1890 |   905 | 14,200,000 | 1,118.0 |    218,876  |   268,000,000
      1900 |   973 | 19,000,000 | 1,814.0 |    297,929  |   332,800,000
      1910 |  1208 | 27,400,000 | 2,332.2 |    371,120  |   616,500,000
      1918 |       | 34,940,830 | 3,278.2 |             |
    =======+=======+============+=========+=============+==============

  [A]  This tabulation includes spinning and weaving
       establishments only.

The North, having this growing interest in an industry struggling against
the experience and ability of the more firmly established English market,
sought naturally for the protection given by a high tariff. The South,
having definitely dropped manufacturing, pleaded with Congress always for
a low tariff, and the right to deal in human chattels.

There is little need to go further into the rift which began to develop
almost immediately. In 1861 the split occurred. The war between the
States caused hardly more suffering than the blockade which cut off the
spinners of Manchester from the vegetable wool which supplied them the
means of living. Cotton proved its power and its domination. It was a
beneficent monarch, but it brooked no denial of its overlordship.


Early Exports
to England Heavy

The invention of the Whitney Gin, as we have just said, found the United
States able to use but a small part of the cotton grown. What became of
the remainder? Obviously, it was exported to provide the means for
operating the English mills. Here is a table which shows how American
cotton left the Southern ports for England and the Continent in the
alternate decennial years beginning in 1790, three years before the
invention of the cotton gin by Eli Whitney. The figures are exclusive of
linters.

                                 _Exports in
                               Equivalent of 500
    _Year_                        Pound Bales_

    1790                             379
    1810                         124,116
    1830                         553,960
    1850                       1,854,474
    1870                       2,922,757
    1890                       5,850,219
    1910                       8,025,991
    1917                       4,587,000

In 1910 American cotton made up almost exactly three-quarters of the
whole amount imported into Great Britain. The other countries of Europe
have developed a spinning industry by no means inconsiderable. American
cotton is sent to almost all those European countries which spin and
weave.

Such a movement had of course a profound effect upon the currents of
world trade. The cotton crop is the second in value of all the crops
produced in the United States, and such a large part of it is exported
that the credit it gives to its sellers enables them to buy in return
some of the most valuable of the products manufactured in Europe.

The following table gives the amount of cotton, expressed in the
equivalent of 500 pound bales, exported to the various countries named in
the decennial years:

    ======+=========+=========+========+=======+========+========+=========
          |_United  |         |        |       |        |_Nether-|
    _Year_| Kingdom_|_Germany_|_France_|_Italy_|_Russia_| lands_ |_Belgium_
    ------+---------+---------+--------+-------+--------+--------+---------
    1821  |  175,438|    1,496|  54,878|  1,796|    609 |   8,372|
    1830  |  419,661|    2,246| 150,212|    471|    223 |  17,135|
    1840  |  989,830|   18,317| 358,180|  7,805|  4,406 |  21,698|   25,780
    1850  |  863,062|   10,090| 251,668| 18,707|  8,677 |   8,590|   25,492
    1860  |2,528,274|  132,145| 567,935| 54,037| 43,396 |  25,515|   29,601
    1870  |1,298,332|  173,552| 306,293| 14,549| 30,341 |  17,050|    3,452
    1880  |2,433,255|  308,045| 359,693| 59,126|204,500 |  65,325|   17,896
    1890  |2,905,152|  837,641| 484,759|129,751|193,163 |  17,438|   93,588
    1900  |2,302,128|1,619,173| 736,092|443,951| 54,950 |  74,635|  148,319
    1910  |2,444,558|1,887,657| 968,422|393,327| 67,203 |  18,823|  102,346
    1917  |2,387,101|         | 658,553|369,213| 15,945 |  10,098|




CHAPTER II

Where Cotton is Grown and Spun and Why


We have seen (page 5) that the world's cotton crop is produced chiefly by
the United States, with 56%; India, with 17%; China, with 13-1/2%; Egypt
and Russia with 4-1/2%, the remaining 4-1/2% being made up by Brazil,
Mexico, Peru, Turkey, Persia, Japan, and several other countries.


Primitive Methods of
Growing in India

India is the first country wherein, so far as we have record, the growing
of cotton reached the stage of an industry. There conditions are almost
ideal, apparently, for the production of a great crop; yet, for many
years the crop was a small one, and was utilized locally in the domestic
manufacture of the light clothing worn by the people. Nothing remotely
resembling the present modern factory system developed during all the
thousands of years that the Indians had the field practically to
themselves. The plant grown in India for a long time produced a short,
uncertain staple, difficult to gin and still more difficult to spin. The
greater part of the cotton growing districts are still given over to the
short staple varieties (about 3/4 inch) but in recent years certain
varieties of Egyptian and American cotton have been produced with some
success. About 20,000,000 acres are given over to the culture of the
plant, but the methods used are to a great extent primitive in the
extreme. Most of the crop, being unsuited to the needs of the British
spinners, is either manufactured in Indian mills, of which the number is
constantly growing, or exported to Japan. Before the war, Germany was a
large consumer of Indian cotton.

The figures given as representing the Chinese crop probably are not any
more accurate than the usual statistical figures concerning China. The
Chinese are still largely in the domestic system of manufacture, and much
of their crop--probably a larger proportion than in India--is spun and
woven in the neighborhood where it is grown, without ever appearing in
statistical tables. The methods of growing are equally primitive. The
fiber is short, and the mills of the country import more raw cotton,
yarn, and textiles than they export.


The Growing Importance
Of Egyptian Staples

The Egyptian crop is one of the most interesting, both in the methods
of culture, and in the product. From the point of view of
statistics--remembering the uncertainty of the size of the Chinese
crop--Egypt is the third cotton growing country of the world. This is
the more interesting because it was not until about 1820 that Egypt was
considered as a source of supply. The present area, under extremely
intensive cultivation, is about 1,800,000 acres, and nine-tenths of this
is in the Nile delta.

Climatic conditions are radically different from those of the United
States. Little rain falls during the growing season, but an elaborate
system of irrigation provides a sufficient and probably more satisfactory
water supply, insomuch as the quantity of water can be regulated, and
there is little danger of either too much or too little moisture. The
regions where the soil is not composed exclusively of the black delta
mud, but is a mixture of sand and mud, produce the best crops. The land,
after being plowed, is thrown up into ridges about three feet apart.
Channels for water are formed at right angles to the ridges. The seeds,
before being sown, in March, are thoroughly soaked, and after the
seedlings appear there is frequent hoeing and watering. The total water
is equivalent to a rainfall of about 35 inches. There is little
cultivation in the American fashion, hand labor being employed almost
exclusively. The result of all this intensive effort is an abundant crop
of long-stapled cotton with an extremely strong fiber, bringing in the
open market a price second only to that of the American Sea Island
variety. Much of the Egyptian cotton is used in the manufacture of
hosiery and other knit goods, sateens, sewing thread, etc., but recently
it has also been found to be exceedingly well fitted for the manufacture
of the fabric used in pneumatic tires, and for the duck or filter cloth
used in such industries as the refining of sugar.

[Illustration: _Pickers in Delta Field_]

Russian cotton, so-called, is really grown largely in Turkestan though a
small amount is produced in the Southern Caucasus. The culture has been
under way since very early times, but had little more than local
significance until about 1875 when the Russian Government took steps to
foster it, distributing American seed of the Upland variety, importing
the necessary equipment, and providing instructors, frequently Americans.
Railroads to handle the crop were built, and, with all this favorable
assistance, progress was rapid. About one-third of the cotton used in the
Russian mills up to the time of the war was grown on Russian soil, the
remainder being brought largely from the United States.


The American Crop
As the World's Basis

But the bulk of the world's supply is the cotton grown in the United
States. The price for American Upland Cotton governs the price of the
other varieties. The acreage devoted to the cultivation of the cotton
crop in the United States is approximately 34,000,000. The increase since
1839, when census figures covering this point were first obtained, has
been about seventeen fold. The 1916 acreage, of the various States,
together with figures giving the value of the crop and the comparative
rank, is here given:

    ================+==========+==============+========+===============
                    |          |   _Gross     |        | _Crop Value
                    |          |Equivalent 500|_Approx-|   Including
     _States_       | _Acreage_|  Pound Bales | imate  |     Seed
                    |          | Exclusive of |Percent-|  and Linters_
                    |          |   Linters_   | age_   |
    ----------------+----------+--------------+--------+---------------
    Alabama         | 1,977,000|      517,890 |    4.6 |   $86,940,000
    Arizona         |          |       21,737 |    0.1 |     6,300,000
    Arkansas        | 2,740,000|      973,752 |    8.6 |   164,840,000
    California      |          |       57,826 |    0.5 |     9,410,000
    Florida         |   183,000|       37,858 |    0.3 |    10,260,000
    Georgia         | 5,195,000|    1,883,911 |   16.7 |   322,600,000
    Louisiana       | 1,454,000|      638,729 |    5.7 |   102,260,000
    Mississippi     | 2,788,000|      905,554 |    8.0 |   152,270,000
    Missouri        |   345,000|       60,831 |    0.5 |    10,100,000
    North Carolina  | 1,515,000|      617,989 |    5.5 |   103,940,000
    Oklahoma        | 2,783,000|      959,081 |    8.5 |   150,270,000
    South Carolina  | 2,837,000|    1,236,871 |   10.9 |   207,220,000
    Tennessee       |   882,000|      240,525 |    2.1 |    40,130,000
    Texas           |11,092,000|    3,125,378 |   27.7 |   495,590,000
    Virginia        |    50,000|       18,777 |    0.2 |     3,140,000
    All Other States|          |        5,666 |    0.1 |       970,000
                    +----------+--------------+--------+--------------
      Totals        |33,841,000|   11,302,375 | 100.00 | 1,866,240,000
    ================+==========+==============+========+==============

There are generally speaking, two kinds of cotton produced in the United
States--Upland cotton, and Sea Island cotton. The former makes up the
great bulk of the crop, the relative percentages in 1917 being 99.2 and
.8.


The Constant Search
For Long Staples

A few years ago the terms short-staple and Upland were practically
interchangeable, but the great demand for long staple, chiefly from the
manufacturers of thread and of pneumatic tire fabrics has led to a
successful attempt to grow the longer fibers in the Upland districts, so
that now more than a million bales annually are being produced in the
Upland districts of cotton with a staple length of 1-1/8 inches and more.
The world's total production of long staple is in the neighborhood of
2,250,000 bales. Egypt is the chief producer outside the United States,
her product being approximately 1,000,000 bales of 500 pounds every year.
Although the product is small, the best Sea Island produced in the United
States grows upon the small islands off the coast of South Carolina. The
long-staple Upland is grown chiefly in the Mississippi delta, where the
product is called "Peeler," "benders," etc., though the percentage of
long-staple produced elsewhere is steadily increasing. The success of
certain Arizona growers in producing long-staple from Egyptian seed is
being watched with great interest. More than 3,000 bales came from this
source in 1916, the fiber averaging 1-1/2 inches in length. There has
recently been developed there, the new and important Pima variety, which
is superior to the native Egyptian cotton, being both longer and whiter,
and the growers are now planting Pima almost exclusively.

The following table, taken from the Encyclopedia Brittanica, gives the
comparative length of staple of the more important varieties of cotton.
The order in which they are given represents, roughly, their relative
commercial value:

                                _Length of Staple
    Sea Island Cotton               in Inches_
      Carolina Sea Island              1.8
      Florida Sea Island               1.8
      Georgia Sea Island               1.7
      Barbados Sea Island              2.

    Egyptian Cottons
      Yannovitch                       1.5
      Abassi                           1.5
      Good Brown Egyptian (Mitafifi)   1.2

    American Cotton
      Good Middling Memphis            1.3
      Good Middling Texas              1.0
      Good Middling Upland             1.0

    Indian Cottons
      Fine Tinnevelly                   .8
      Fine Bhaunagar                   1.0
      Fine Amraoti                     1.0
      Fine Broach                       .9
      Fine Bengal                       .9
      Fine ginned Sind                  .8
      Good ginned Kumta                1.0

The table of the number of spindles in each country in the world, given
on page 6, gives some idea of the relative position of the United States
in the field of cotton manufacturing. We have seen how the English
industry, having the prior start, grew to imposing proportions and helped
to bring about a change almost as great in its effects as the French
Revolution, which was occurring at almost the same time. British
supremacy in cotton manufacturing has never been truly challenged, but
there has been an appreciable growth in several other countries, and in
Germany and Japan, at least, the recent development has been little short
of phenomenal. New figures will probably show that in the future Japan
will be the chief competitor of England and the United States for a share
of the cotton trade of the world.

[Illustration: _Fall River, Massachusetts_]


The Home Market
Created An Industry

The chief factor in the growth of the American industry was probably not
the nearness of the source of supply, cheap fuel or labor, nor any of
these factors which operated in the case of England, such as climate,
geographical position, and shipping control, but more than anything else
the presence of a market close at hand which grew so rapidly, more
rapidly indeed than the industry could grow to meet it. Aided to some
extent by an import tariff, the manufacturers have weathered some short
periods of depression, but in the main the industry has grown in direct
ratio to the growth of the country.

[Illustration: _A typical Southern mill_]


New England As Home
Of American Spinning

The cotton mill, as we have seen, early chose New England as its
domicile. Mills are scattered more or less throughout the entire region,
but there are several localities which stand out beyond all others, and
almost deserve the title they have acquired as the centers of the
industry. Premier place for a long time was held by Fall River, and even
now the race between that city and New Bedford is strong, with the lead
slightly in favor of the former city.

Bristol County, Mass., in which these two centers, and Taunton, are
located, Providence, R. I., and Middlesex County, Mass., together
contained 10,086,686 spindles in 1917, or 29.5% of the country's total of
34,221,252.

The growth in this one locality is due probably to the advantages which
come with centralization, as well as to the natural advantages they
possessed. These latter, which include particularly water power and a
moist climate, are not as important now, With steam power and mechanical
humidifiers as they were a generation ago.

In the Middle Atlantic States, the number of plants and the spindlage
have remained about stationary over a long period of years, and are even
showing a tendency to decrease. Small weaving establishments which buy
their yarn are particularly numerous around Philadelphia, and there are
large cotton duck mills in and near Baltimore.


Mills in the Midst of
Cotton Plantations

It has been in the South, however, that the growth of the cotton
manufacturing industry in the last few decades has been most phenomenal.
In 1860 there were 324,052 spindles in the cotton growing States compared
with 8,632,087 in New England. In 1917, the figures were: Northern
States (including Connecticut, Illinois, Indiana, Maine, Massachusetts,
New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and
Vermont), 19,835,662 spindles devoted to the spinning of cotton
exclusively; Southern States (including Georgia, Kentucky, Louisiana,
Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Texas,
and Virginia), 14,292,918 spindles devoted to cotton exclusively.

The census figures do not give the number of spindles in each city except
when the confines of the city and of the county happen to coincide. But
the appended table is presented as showing the spindlage of counties
having more than 100,000 spindles devoted to the spinning of cotton.

About 1880, the Southerner saw the opportunity that awaited him when he
should manufacture his own cotton. At that time he was consuming only
188,748 bales, while New England took 1,129,498. In ten years, he was
utilizing more than half a million bales, while New England had just
passed the million and a half figure. In 1905, the South consumed
2,140,151 bales, while New England had climbed to only 1,753,282. The
figures are Scherer's, who points out that the race was won in
twenty-five years. However, as competition with the South increased, New
England, following the earlier lead of Old England, has tended always to
produce a finer and finer quality of cloth, leaving the coarser grades of
sheeting, drills and ducks to the Southern mills. Thus, while the South
is consuming an ever larger proportion of the cotton crop, she is still
far from receiving for her product the money that comes to the New
Englander, who with a higher grade of labor and greater variation of
output is constantly catering, with dress fabrics and fine stuffs of
various kinds, to a discriminating well-to-do patronage.

                               _Spindles
      _County_                   (Number)_
    Bristol, Mass.              7,294,221
    Providence, R. I.           1,709,713
    Middlesex, Mass.            1,082,752
    Hillsborough, N. H.           907,245
    Spartanburg, S. C.            831,476
    Windham, Conn.                780,232
    Worcester, Mass.              766,110
    Greenville, S. C.             758,144
    Essex, Mass.                  645,020
    Hampden, Mass.                642,096
    Gaston, N. C.                 603,102
    Kent, R.I.                    594,380
    Anderson, S. C.               582,464
    Berkshire, Mass.              521,408
    New London, Conn.             512,170
    Oneida, N. Y.                 419,255
    York, Me.                     408,600
    Androscoggin, Me.             402,471
    Muscogee, Ga.                 346,740
    Pittsylvania, Va.             346,320
    Union, S. C.                  330,656
    Strafford, N. H.              318,160
    Cabarrus, N. C.               315,810
    Mecklenburg, N. C.            272,198
    Guilford, N. C.               262,862
    Richland, S. C.               244,660
    Essex, N. J.                  232,291
    Albany, N. Y.                 226,564
    Madison, Ala.                 225,168
    Greenwood, S. C.              217,744
    Pickens, S. C.                211,320
    Bristol, R. I.                210,488
    Hampshire, Mass.              198,792
    York, S. C.                   198,404
    Fulton, Ga.                   198,016
    Aiken, S. C.                  193,989
    Laurens, S. C.                193,312
    Richmond, Ga.                 192,914
    Rockingham, N. C.             191,810
    Durham, N. C.                 172,532
    Newberry, S. C.               168,040
    Chambers, Ala.                164,000
    Cherokee, S. C.               163,820
    Kennebec, Me.                 163,815
    Alamance, N. C.               153,176
    Knox, Tenn.                   152,100
    Lancaster, S. C.              151,768
    Richmond, N. C.               149,748
    Chester, S. C.                146,692
    Stanley, N. C.                146,000
    Rutherford, N. C.             143,400
    Calhoun, Ala.                 138,048
    Troup, Ga.                    136,204
    Floyd, Ga.                    126,264
    Cleveland, N. C.              125,182
    Cumberland, Me.               124,392
    Spalding, Ga.                 121,252
    Talladega, Ala.               115,448
    Philadelphia, Pa.             114,547
    Merrimack, N. H.              113,316
    Davidson, N. C.               110,564
    Baltimore City.               106,008
    Halifax, N. C.                104,116
    Hall, Ga.                     102,588

The wealth of the world--at least up to the time of the Great War--was
constantly increasing and while there is little likelihood that the
demand for the coarser grades of goods will fall off, the need for finer
stuffs, not only in the United States, but abroad, is constantly growing.
The greatest development of the South is probably still to come.

The locations of the world's cotton markets have been dictated by the
location of the growing fields and the manufacturing centers. Thus we
find that the great raw cotton markets of the United States are in New
York and New Orleans. In Europe they are at Liverpool, Bremen and Havre.
Because of conditions imposed by the German government, the Bremen market
is largely dependent upon New York and Liverpool. The other great world
market is that of Alexandria, which, although it handles but a
comparatively small part of the world's crop, is important on account of
the quality of the staple which makes up the Egyptian bale.

The two chief American markets, New York and New Orleans, are sharply
differentiated. The New Orleans market is a true trader's market. The
great bulk of the sales made on the New Orleans floor are bona-fide
sales, in which cotton actually changes hands. The New York market on the
other hand is a merchants' and manufacturers' market, in which business
transactions are protected against loss by the purchase or sale of
"futures", though, of course, there is always a large amount of
speculating. Delivery is rarely demanded. The function of the exchange,
therefore, is largely that of insurance. The intricacies of this market
will be discussed later.




CHAPTER III

The Raw Cotton Market


Because of the ramifications of the cotton industry, the cotton itself,
on its devious way from planter to consumer, is successively the concern
of a series of individuals and corporations. The immense value of the
product, the expense of growing, handling, manufacturing, and selling it
all mean that great quantities of capital are utilized in bringing it at
last to its final consumer. At any stage of the process, cotton
represents no inconsiderable part of the nation's wealth, and to expedite
its journey, merchandising and financial methods of a highly specialized
technique have been developed. There are two very clearly marked stages
in this process. The first has to do with the raw cotton, as it goes from
planter to mill. The second has to do with the journey from mill to
consumer. The first is usually called the Raw Cotton Market, and the
second the Cloth Market.

The planter begins his work early in the spring. His crop is dependent
upon his ability to secure and pay for the labor to work it, for the
tools and machinery which are used, and his own expenses. Small planters
are rarely sufficiently in funds to enable them to go through the growing
season without financial assistance. They must borrow money, and they
usually borrow it with the growing crop as a basis.


The Local Grower
And the Charge Account

They may borrow from the country merchant in the town near which their
plantations are located. Credit here is usually furnished through the
"charge account" system, whereby the merchant supplies the planter's
wants for the growing season, even to the extent of giving credit to his
farm hands. Tenant farmers live almost entirely on credit furnished by
the store-keepers of the vicinity. When the picking season begins, in
July, August, or September, according to the region concerned, the
merchant, in lieu of money, may take the cotton as it comes from the
gins, crediting the grower thereof at the market price. The cotton thus
accumulated is sold to local buyers, or, occasionally, to shippers or
exporters. In the case of the larger plantations, or groups of
plantations operated by syndicates or corporations, the cotton is
frequently shipped direct to the mill or, more often, to a warehouse. The
larger producers, instead of getting their credit from the local stores,
as their tenant farmers do, are financed either by their banks, or by
their buyers, who in turn are financed by their bankers.


The Street Buyers
Of Texas Towns

In some districts, particularly in Texas, there is the small or local
buyer, usually called a "street buyer," who operates in the smaller
towns, buying his cotton at the gins in lots of from one to ten bales,
either from the small planters, or from the country merchants. This
buying gives a certain concentration to the crop, and enables the larger
buyers to deal in lots of comparatively uniform quality from certain
regions, the general type of whose product is known.

[Illustration: _Street buyer in a Southern town_]

Cotton bought from the planters or from the country merchants is almost
invariably paid for in cash.

Cotton is frequently sold at the compress point, rather than at the gin,
this course being pursued in the case of large producers, or when the
original buyer is a mere local operator. One of the most important
operations, commercially as well as industrially, is the grading of
cotton, which takes place as a rule at the compress point under the
supervision of the buyer, who employs experts for this purpose. Cotton
mills as a rule operate on certain specified grades of cotton, and any
deviation from this grade means either a readjustment of machinery or
disgruntled and dissatisfied employes, or, perhaps, an inability to fill
an order for cloth of certain types. The manufacturer will usually refuse
to accept any grades save those he has specifically commissioned the
buyer to obtain for him. The actual grades, and the terms describing them
have been established by the United States Government, and are rigidly
adhered to by the trade. Prices are established on the grade known as
"middling" as a basis, and variation from this basis is taken up in the
price.


Standardization of
American Cotton Grades

The grades, for white cotton, as established by usage and confirmed by
Governmental standardization are:

    Middling Fair           Strict Low Middling
    Strict Good Middling    Low Middling
    Good Middling           Strict Good Ordinary
    Strict Middling         Good Ordinary
    Middling

For yellow tinged stock the grades are:

    Strict Good Middling    Middling
    Good Middling           Strict Low Middling
    Strict Middling         Low Middling

For yellow stained and blue stained there are only three grades quoted,
good middling, strict middling, and middling, the inference here being
that stained cotton below the basic grade, is unsuited for most
commercial purposes.

With cotton selling around thirty cents a pound, the difference between
the cost per pound of middling fair, the highest market grade of white
cotton, and good ordinary, the lowest market grade, may amount to twelve
or thirteen cents. The value of the shipment, and its use as a basis for
credit, is dependent upon its proper classification.

The large cotton buyers purchase for the account of mills, for exporters,
or for clients abroad. They are usually firms of strong financial
standing, and as we have seen, they are bankers or factors themselves,
financing growers or small buyers during the growing of the crop, and the
first concentration of the cotton. But when the large movement of cotton
is on, it is frequently necessary that they, like the local banks, must
be financed in order that they may execute their orders, or, as is
frequently the case, accept cotton sent to them on consignment. Cotton
sent on consignment must be stored until a market is found for it, and in
order that proper storage facilities may be supplied, the provision of
suitable warehouse facilities is an important matter.


Warehousing as
Industry's Great Need

Until recently, warehousing in its relations to the textile trade, had
not been developed to the extent which might have been expected in those
methods which would make it of the greatest use and advantage to textile
interests. By means of the facilities which could properly be afforded by
warehouses, manufacturers, or merchants should be able, at times of
favorable markets, to lay in large stocks of materials, and to finance
them safely and easily.

Today, this need is being met in constantly increasing measure by the
Independent Warehouses, Inc., affiliated with the Textile Banking Co.,
and having, like the latter, the support of the Guaranty Trust Company of
New York, and the Liberty National Bank of New York.

Modern warehouses of approved type, with all requisite facilities, will
be established by this company at various ports of entry throughout the
country, as well as at the important concentration points in the cotton
belt, and also in the great textile manufacturing centers.

[Illustration: _Weighing cotton on the compress platform_]

Thus it is seen that the cotton merchant has an important economic
function to perform. His is the duty of gathering up the great aggregate
of cotton, from all parts of the cotton belt, and distributing it in
exactly the quantity and grade needed to the cotton manufacturers of the
world. In the performance of this function, and in order that the supply
of cotton may be fed out exactly as it is needed by the manufacturers,
the cotton merchants have found it convenient, and even necessary to
establish great common markets where they may meet and enter into the
transactions with each other and the whole world which are necessary to
bring the cotton into the channels of commerce and keep it moving to its
multitudinous destinations. These markets are in addition to the numerous
local markets where the preliminary concentration takes place, and to
some extent they are subsidiary to the latter, where the cotton of the
actual quantity and quality they are seeking is to be had in the first
instance. Yet it is the great markets which establish the prices, for it
is they which are in close and immediate touch with all the other markets
of the world, and it is on their floors that the merchants and brokers
meet who deal in great quantities. It is their connection with the
numerous sources of information which gives these great markets their
importance, for it is they which register immediately and most accurately
the resultant of the sum total of all the economic forces which
determine the price.

[Illustration: _The New York Cotton Exchange_]

The great cotton markets of the world are those of New York and New
Orleans, in the United States; Liverpool, in England; Bremen, in Germany;
Havre, in France; Alexandria, in Egypt; and Bombay, in India. There are
differences between these markets which give a greater importance to some
of them. Bremen, which serves a large territory, operates under
governmental restrictions which make it necessary for Bremen merchants to
deal in other markets as well. Havre serves chiefly the needs of France,
which is not one of the large cotton consuming countries. Alexandria
deals only in Egyptian cottons, and Bombay, whose dealings are confined
mostly to the native staples, has neither the responsiveness nor the
completeness of the remaining markets. Thus, by elimination, the three
great markets of the world, wherein cotton of all kinds is dealt in, and
all forms of transactions in it are common are those of New York, New
Orleans, and Liverpool. To these, the cotton world looks for guidance
from day to day. The prices established on their several floors are the
prices of the world.

[Illustration: _Cotton train going from gin to compress_]

The Liverpool Exchange, under different names, has existed since 1841,
having taken approximately its present form in 1870, in the attempts to
stabilize conditions after the great speculative period which resulted
from the American Civil War. The New York and New Orleans Exchanges were
both organized the following year. The uniformity of rules and practices
in the trade which resulted from the establishment of the exchanges have
been of inestimable benefit to the industry and to the world, and this
despite occasional abuses, which have usually been corrected as methods
for correction have been evolved.


Spot Markets and Those
Which Deal in "Futures"

The New Orleans Cotton Market, and those of lesser cities, are largely
spot markets, that is, the dealings which takes place in the Exchanges at
those points involve the actual transferring of cotton which is on hand,
or, at least, contracted for. The New York market deals preponderantly
in what are known as contracts for future delivery, or, in the language
of the Exchange, "futures." The Liverpool Cotton Market is both a great
"spot" cotton market, and a great "futures" market. The striking thing
about these "futures" contracts is that but few of them are fulfilled by
actual delivery.

The question then arises, what function is fulfilled by the New York
Exchange that it should have such an important place in the cotton
market? To the uninitiated the speculative features of the market have
often served to condemn it, and at times of speculative fever, or of
manipulation such as has occurred on one or two occasions, there has been
public agitation calling for legislation against dealing in futures. Yet
the New York Exchange performs a very definite and valuable service, and
its trading methods have served to stabilize the whole industry, and to
remove from it much of that very speculation which is frequently charged
against the Exchange itself.

The justification of the Exchange is found in the fact that the futures
contracts common on its floor afford the cotton merchant and manufacturer
a chance to insure themselves against losses occasioned by fluctuations
in the market. The method by which this is done is called hedging.


Why the Merchant
Must Hedge His Sales

For the cotton merchant, the situation as it develops is approximately
this: buying, as he must, all grades and quantities of cotton, he may
have an immediate market with the spinners whom he serves for only
certain of these grades, and thus may have left on his hands a large
supply of cotton of other grades which came to him in his purchases which
he has no call for at the time. These "overs" are subject to the risk of
a decline in value unless the merchant can find some way to protect
himself. Nor is this risk the only one run by the cotton merchant. The
spinners frequently contract for months ahead for the output of their
mills, and it is part of the merchant's task to see that the cotton is
available at a contract price when the spinners are in need of it. Such
contracts for future deliveries are not only common but customary. If it
were impossible for the spinner to make such contracts, it would, of
course, be impossible for the weaver to make future contracts for the
delivery of cloth. Such a condition unsettling the distributing markets,
would be intolerable. Hence, the necessity of future contracts between
merchants and spinners. The situation would otherwise be a very difficult
one for the merchant whose supply of cotton, and the price he must pay
for it, are subject to the vagaries of nature, which may grant a
bountiful crop one year, and a short and inferior one the next, with
consequent fluctuations in price sufficient not alone to wipe out his
profit but his capital as well.


The Hedge As a
Credit Transaction

Hedging, as has been said, affords the protection, against serious loss
which these varying conditions make probable.

"It may almost be said," observes Arthur R. Marsh, former President of
the New York Cotton Exchange, "that as the main business of banks today
is not dealing in money, but in credits, so the main business of the
cotton exchanges is now in credit transactions in cotton, toward which
the actual cotton 'on the spot' stands in much the same relation as the
money in the banks to the sum total of their transactions in credit. It
serves as a reserve at once for the satisfaction of unliquidated credit
balances and for the maintenance of sound credit values in all the credit
operations."

Elsewhere, Mr. Marsh describes the hedging process in these words: "A
hedge is the purchase or sale of contracts for one hundred or more bales
of cotton for future delivery, made not for the purpose of receiving or
delivering the actual cotton, but as an insurance against fluctuations in
the market that might unfavorably affect other ventures in which the
buyer or seller of the hedge is actually engaged."

[Illustration: _The floor of the New York Cotton Exchange_]


How Merchants Secure
Protection by Hedging

The cotton merchant, in making a hedge, would proceed in this fashion.
Having made an actual sale of cotton to a spinner for future delivery,
the price being fixed according to current quotations in New York for
deliveries to be made in the month specified in the contract, he would
buy futures for a corresponding amount of cotton on the New York Cotton
Exchange.

If the price of cotton should have advanced when the time for the
delivery of the actual cotton comes, he will be able to sell his futures
contract at a higher price, thus offsetting the loss sustained upon the
deal in actual cotton. Or, if he prefers, he may hold the "futures"
contract until its maturity and sell it at the then prevailing figure.
The first course would be the customary one for a bona-fide merchant,
whose sole concern is protecting himself against loss by fluctuations in
price.

If, on the other hand, cotton should fall before the merchant bought to
fulfill his actual contract, he would make a profit upon his sales to the
spinner. He would, however, suffer a loss upon his futures contract, for
the seller would be able to purchase the cotton to fulfill the contract
at a lower point than the contract called for, and would consequently be
able to deliver to the merchant who made the hedge, cotton which the
latter would be forced to accept at a price higher than the then
prevailing one, and thus again the profit and loss would balance each
other. The usual custom is, not for the merchant to accept delivery, but
to pay over to the seller of the futures contract the difference between
the contract price and that prevailing. This would be just the difference
between his own purchasing and selling price in his actual dealing with
the spinner, and so would eliminate the profit, due to change in price,
made in that transaction. Thus, by the hedging process, the merchant
loses a possible profit on a falling market, but at the same time fails
to suffer a loss when the market is against him.


Hedging as Practiced
By Cotton Manufacturers

The manufacturer's hedging is necessarily somewhat different in practice,
though the same in principle. If he accepts orders for cloth requiring
more cotton than is being held in his warehouse, he may buy futures
contracts to the amount of the additional cotton he will need. Then in
the event that his actual purchase of cotton may be at a figure which
would tend to reduce or eliminate his profits on the sale of the cloth,
already fixed by contract, he may sell his futures contract at a
corresponding profit, thereby preventing loss. Should the price of cotton
fall in the interim, his profit on the sale of the cloth will be larger,
but the settlement of his futures contract will be expensive to the same
extent. Thus he sacrifices the chance of a greater possible profit in
order to be insured against loss.

[Illustration: _Compress bales bound for New Orleans_]

It is probably more common for the cotton merchant to hedge than for the
manufacturer to adopt that proceeding. The manufacturer, as a rule, has
been accustomed to buy his cotton during the buying season, that is, in
October, November, December, and January, and he makes his arrangements
with his selling agents on the basis of the price paid, trusting to his
own judgment, and the comparatively small fluctuations in the price of
cloth in normal times, to protect him against loss. It is usually
believed that the Southern mills, being newer, and frequently of a
different financial standing, have found it more desirable to have
recourse to this form of insurance than their older competitors in the
North. Then, too, the rapid development of the cotton warehousing system
has made it less necessary for the manufacturers to tie their money up in
great quantities of cotton, as they can buy when the market appears
favorable.


Protection for Mills
Running for Stock

A very important point, however, and one which all manufacturers would do
well to consider carefully is the protection which a "futures" market
gives to a manufacturer making plain goods for stock, particularly on a
falling raw material market, which, of course, would also mean a falling
goods market. To stop the mill because values were falling would be
impossible without utter disorganization, and its attendant heavy loss,
while to keep on manufacturing stock goods with a certainty that they
would be worth less each succeeding month is a disheartening prospect for
the mill.

If, however, the manufacturer sells "futures" for the succeeding months
to the extent of the cotton which he would require each month to
manufacture the goods, he can run his machinery as usual and have a
perfectly free mind, as he has safeguarded himself against any loss due
to a falling value of the raw material. Suppose, for instance, the cotton
market fell off, say one cent a pound each month, with a corresponding
fall in the value of the woven goods. In such an event, the manufacturer
could, as each month arrived, buy a contract for an amount corresponding
to what he had sold, and at a proportionately less price, thus making a
profit on the "futures" which he had sold to an extent which would
correspond, approximately, to the smaller value which his manufactured
goods would then have in the market. Thus the profit on the one side
would take care of the loss on the other. If the market rose instead of
falling, he would make a loss in replacing his futures contract, but his
goods would then command a higher value, and again no loss would be
experienced.

This method of hedging is the regular and standard practice of the
English cotton mills, and, of course, of many of our domestic mills, but
there are some manufacturers who, through their unfamiliarity with the
operations of the futures market, are quite unaware of the protection
which they thus have at hand.


The Responsiveness of
the Great Exchanges

The great exchanges, and the New York Exchange in particular, are thus
used by cotton merchants and manufacturers in every part of the world to
protect themselves in their buying and selling operations. The value of
middling cotton in New York is kept upon par with the value of the same
cotton in any growing or manufacturing point, such factors as freight,
insurance, brokerage, etc., being allowed for in the quoted price.
Quotations on the Liverpool Exchange are thus higher than quotations in
New York by the difference between the amount it costs to deliver cotton
in Liverpool and to deliver it in New York. Thus the merchant and
manufacturer is able to buy and sell hedge contracts on the New York
Exchange, knowing that operations at the New York price in New York are
on a parity with operations at the Liverpool price in Liverpool, or at
the Havre price in Havre. Thus the hedge contract which a Southern
merchant sells in Atlanta, through his broker on the New York Exchange,
may be bought by a spinner in Tokyo or Manchester, anxious to insure his
supply of cotton at a price which would make his contracts profitable.

In normal times the selling of merchants and the buying of manufacturing
engaged in actual and bona fide hedging transaction has been estimated by
competent authorities to make up fully seventy-five per cent. of the
trading done on the New York Exchange. The remaining twenty-five per
cent. may thus be attributed to speculative operations, that is
operations entered into by outsiders through brokers, on the chance of a
rise or a fall in the market. Nor is such speculation without its value.
It is the speculators, as a rule, who are the first to take advantage of
crop reports or weather conditions, or news likely to affect the market
favorably or unfavorably, and buy or sell as their judgment dictates.
Their operations serve to discount such changes to some extent, or at
least to make the breaks and rises more gradual than they would otherwise
be.

In abnormal times, that is times of great scarcity and great demand, or
bumper crops and small demand, the speculative element plays a larger
part, for it is in such times that the greatest fluctuations in price
take place. Merchants or manufacturers holding hedging contracts are
under a greater incentive to buy or sell, as they see their opportunities
for profit growing greater or less, as the case may be, and in
consequence more contracts are made, and they pass from hand to hand with
greater rapidity, the gain or loss thus being distributed among a greater
number of persons than would otherwise be the case. It is the operations
of speculators, and the manipulation that once or twice during its
history has been possible by unscrupulous traders which has brought about
at such times public agitation for the abolition of the Exchange. Recent
changes in the form of the cotton contract have made it almost impossible
for such operations, if repeated, to be successful, and thus there is
little likelihood that the very important economic function of the
Exchange will be interfered with by legislation.




CHAPTER IV

The Cloth Market


The output of the manufacturer finds its way to the ultimate consumer
through a variety of channels. What these are will depend upon the manner
in which the various mills are organized, and their respective policies
as to the marketing of their products. Some mills, usually very large
organizations, will have plants completely equipped, in every department,
spinning, weaving, dyeing, printing, finishing, etc., and will process
all of their goods themselves in every detail, offering them on the
market in their finished form. Some of these may make a wide variety of
fabrics suitable for one class of trade, or for many classes of trade,
while others will specialize on a few articles. A good many concerns that
are not of the largest size, but which confine their production to a few
articles, may also put the goods through every operation themselves.

Then there are a great number of cotton mills, many of them of very large
size, which do no weaving at all, but confine themselves to spinning,
finding a market for their yarns with the many weaving mills which have
no spinning plants.


Many Large Mills
Do No Finishing

Numerous mills, both large and small, manufacturing, principally, goods
of a staple grade, which may either be of fine or coarse character, sell
their entire product in the gray, or unfinished state, because they do
not wish to burden themselves with the task of putting the goods through
the various finishing treatments necessary to fit them for the market.
This method of disposing of the product appeals to many for it reduces
the manufacturing operations to the spinning of the yarn, and to the
weaving of the cloth. The owners or managers of the mills may have had no
experience outside of these branches, and if they themselves were to
attempt to finish, or "convert," the goods they would be entering strange
fields.

Whatever method of merchandising may be adopted, it is certainly obvious
that the product of large mills is so great that it must be disposed of
in a large way, and hence various channels of outlet have grown up to
satisfy the requirements of the case.


Dealing Direct With
Dry Goods Jobbers

A substantial portion of the output of the mills (but nothing like what
it was years ago, and it grows relatively smaller every year), is
disposed of directly to dry goods jobbing houses, and by them to retail
dealers, who sell it by the yard to the consumer. This practice was
formerly more widespread, but has diminished greatly in recent years. A
further enormous yardage passes eventually through the cutting-up houses,
which manufacture garments of every kind, from overalls to pajamas, or
from raincoats to shirts, and dispose of their products to distributors,
who eventually sell them to the public. Then there are retailers whose
requirements for goods of particular kinds are so considerable that their
orders are of sufficient magnitude to warrant the mills in dealing with
them direct.

Again, there are the great mail-order houses, with a gigantic annual
turnover, whose catalogues go to every part of the land, and which
handle great quantities of piece goods, as well as made-up garments, and
whose custom is eagerly sought for.

[Illustration: _Thousands of looms in a single room_]

Other mills make fabrics suitable for use in the military and naval
establishments of the country, and in other public channels, and which,
in selling these fabrics, will deal directly with the Government, or
indirectly through intermediaries.

In addition to these, and other domestic outlets, there is a great
quantity of goods produced for export, which are handled through houses
specially organized for that trade.


Merchandising by
Dry Goods Jobber

One of the oldest established agencies for handling mill products is the
dry goods jobber, and it is to be remarked that many large retail houses
do also a substantial jobbing business, though generally less so in
cottons than in other classes of fabrics. The jobber will buy finished
products from those mills which sell goods in that state, and will also
buy large amounts of gray goods. These he will sell principally to retail
distributors, but his transactions, in addition, will extend into a
multitude of channels, and, he will deal with small garment manufacturers
and makers of all kinds of wares, and will also sell considerable
quantities to the larger cutters when they are unable, for one reason or
another, to buy direct from the mills or from the converters. There are
also numerous small jobbing concerns which buy substantial quantities
from the larger jobbers as occasion may require.

One of the greatest avenues of outlet is through a class of dealers known
as converters, and there are converters operating in every kind of fabric
from cotton to silk. In the last forty or fifty years, this business has
developed into immense proportions, and the converter performs a real and
important service in the trade. He is intimately acquainted with the
needs of his customers, and possesses a fair knowledge of the kinds of
goods put out by the various mills and the different constructions in
which they are sold, and is well acquainted with all of the market
dyeing, finishing, bleaching, and printing concerns, having also a fair
understanding of the various treatments accorded to the goods. He buys
his goods in the gray from the mills, and sends them to the finishers,
printers, etc., to be treated, according to his instructions. By a
careful studying of the fabric constructions, and of the subsequent
treatments, he is able to create fabrics of a suitable and marketable
character, which are in some respects different from those offered by any
of his competitors, and which are brought out with an exact knowledge of
the requirements of the trade to which he is catering. He is able to make
a profit, and generally a very substantial one, by handling the goods in
this way.

Considerable capital is required by the converter, as goods bought in the
gray have to be paid for on practically a cash basis, and he may have to
carry them for a time before they are finally marketed. The converter
sells to the cutting-up houses, to jobbers, and to retailers, or, in
fact, to whatever trade he seeks. Large and profitable businesses have
thus been built up. Many converters have adopted their own distinctive
trade marks, and since the goods that they handle are known by these
trade marks, the identity of the mill which made them originally is often
entirely unknown to the ultimate consumer. The converter can give his
business to whatever mill, at the time, will give him the best value for
his money.


Jobbers Must Know
Status of Mills

These operations are facilitated by the services of another class of
intermediaries, the cloth brokers. If a buyer, whether he be retailer,
jobber, converter, or what not, wishes to secure goods of a certain kind,
he would have a very difficult task if he had to canvass the entire
market, and ascertain what was being offered. Hence he is likely to go to
the cloth brokers. They are in touch with all the principal manufacturing
sources of supply, and will have daily quotations of the offerings of the
different mills; he will know which mills are "sold up," and which are
open for business, and what class of goods they desire to sell.
Consequently the cloth brokers are in a position to offer to would-be
purchasers a wide variety of the different cloths which are available on
the market, and it is their business to buy from the mills as cheaply as
they can, and so get the best possible price for their customers. The
transactions are handled on a small commission, and the average buyer, in
many kinds of goods, is able to do much better by working through a
broker than by opening negotiations directly with the mill.


Most Mills Have
Offices in Chief Markets

Mills selling their products through brokers in this manner may, or may
not, have a representative stationed in the goods market, according to
circumstances. Mills, manufacturing a limited number of plain fabrics,
and which do not sell through brokers, may also be without
representatives in the primary goods market, and will dispose of their
product directly from the mills, partly by correspondence, and partly
through the efforts of their travelers. The great mass of the mills,
however, are regularly and efficiently represented in the great central
goods markets, principally New York, though also in Boston, Philadelphia,
Baltimore, and elsewhere, and their selling agencies are very highly
organized institutions.

These establishments which have sufficient capital to enable them to
finance themselves--with or without the assistance of regular bankers'
loans--may maintain their own selling offices, and market their product
in their own names directly to their customers. The amount of capital
required to handle a business in this way is proportionately very large,
for the concern must be able to keep itself sufficiently supplied with
raw materials, and then to carry the expenses as these materials pass
through the slow stages of manufacture until the goods are finally
finished, after which they may have to be kept in stock for a time until
the delivery dates, and then, after shipment, the accounts have to be
carried until the bills are paid, so that, from the time the manufacturer
pays for his raw material until he finally receives pay for his goods is
a very long period.


Loans Made Upon
Warehouse Receipts

The financing of a business conducted in this way can be assisted by
loans from warehouses upon stocks of raw material stored there, by bank
accommodation, and by facilities which certain banks give for the cashing
of a substantial percentage of those accounts on the books of the concern
which the customers have not discounted themselves. Also, in handling his
merchandise in this way, the manufacturer must have a thorough
understanding of the best means of marketing his product, and this care
of the selling end is, of course, an added burden upon his shoulders
which, in many cases, he may not feel competent to handle properly.

Therefore, the comparatively few concerns which do have sufficient
capital to sell directly, in addition to the many from great to small who
have not, will market their product through what are known as dry goods
commission houses, sometimes referred to as factors, and simply as
commercial bankers. The commission house system, as we have it here, does
not exist anywhere else, and its great growth in the United States has
been largely due to certain peculiarities in our banking methods, which
have prevented mills--even those with a reasonably sufficient supply of
capital--from obtaining the amount of direct banking accommodation
necessary for their needs.

The commission house, in its usual relations with its mills, undertakes
to conduct the sale of their products. Some commission agents insist upon
having the entire selling control of all of the goods the mill produces,
or at any rate, of all the goods of the kind which they are equipped to
sell. Others, again, will take over a partial selling control of the
product of a mill, and various lines of the same manufacturer may be
found offering through different channels. There are some obvious
disadvantages connected with this latter procedure.

If the mill is a very large one, the selling agent may handle no goods
except the product of that mill, but in the great majority of cases, the
factor will represent a considerable number of mills.

Immediately on receipt of the invoices of the goods consigned to the
selling agent, the mill can draw against them a percentage of their
value, previously agreed upon, usually about two-thirds of their net
selling price, and upon these loans interest at the rate of 6% is
charged. The difference between the rate at which the commission house
can borrow money, (in normal times perhaps 4 to 4-1/2%), and the 6% which
is usually charged to the mills, constitutes a considerable part of the
profits of the factor's business.


Factors Provide
Selling Facilities

The factor often provides a store, together with a complete selling and
office force, and every facility for receiving, storing, selling, and
shipping the goods, and for financing the business. The salesmen of the
house travel throughout the country, reaching all the important markets,
and the managers of the different departments, who thus understand the
needs of the market, are in a position to advise the mill with
intelligence and exactness as to the kind of goods which should be made
to meet the requirements of the trade. The cost of warehousing and of
insurance on the merchandise is also paid by the commission agent.

[Illustration: _Spinning room in a large mill. These are all ring
spindles_]

The prices at which the goods are to be sold are fixed by the mill, but,
of course, they will finally sell at prices determined by the market
conditions. As the goods are sold, the amounts which they bring are
credited to the mill, less whatever has been advanced against them. The
selling agent also stands ready, no matter on what time and terms the
goods may be sold, to credit the mill with the net value of the sale,
less 6% interest for the unexpired time within which the customer may
pay, and from this interest charge also he secures part of his return. Of
course if bank rates are very high, as they sometimes are for short
periods, the factor may be out of pocket on the interest account, instead
of making profit. As the goods are sold, so are the equities in them
released, and the balance is credited to the mill. If, however, the goods
sell at a loss there will be no equities coming to the mill, and, in
fact, there are not infrequently deficiencies to make up.

For these services, and according to the nature of the goods being sold,
various commissions are charged, usually ranging between the limits of 4
and 8% of the net returns of the sales. Plain unfinished goods which are
marketed in large quantities are charged for at a relatively low figure,
while fancy goods, sold in smaller quantities and requiring more effort
and expense to sell them, are charged for at a higher figure.

The selling agent also guarantees the credits of the firms to which he
sells, so that no losses for bad debts can fall upon the manufacturer,
but, at the same time, he will decline orders from any concerns except
those with whose credit he is entirely satisfied.

Not infrequently when the manufacturer conducts his own selling
operations, he will use the facilities afforded by the commission house
for the financial part of the business only, taking advances on his
goods, having his sales cashed, and his credits guaranteed, etc. For
these lesser services, of course, the commissions charged are smaller.

When goods are charged out, the bills are payable to the commission
house, and so, as far as the customer is concerned, the commission house
is the principal in the transaction. In many cases certain modified
arrangements are made, but in most instances the business is conducted as
herein described, and it may fairly be said that the bulk of the dry
goods of all kinds produced in the United States finds its way into the
market through commission house channels.


Making Plain Goods
for Future Orders

It is the policy of most cotton mills, and certainly of those making
plain goods, to run steadily all the year round, and thus the commission
agent, whether he has secured advance orders on the goods or not, has
constantly flowing into his hands an assured stream of merchandise which
must eventually, when sold, pay him a commission. Thus the securing of a
good account means an assured source of revenue to the commission agent.

There are no more important selling organizations for textiles than these
dry goods commission houses, many of them having an immense and
profitable turnover, and their businesses are conducted on a very high
plane of efficiency, and probity, although, in itself, there are many
evils attendant upon this method of the distribution of merchandise, and
which exercise at times a most adverse influence upon the well being of
the mills whose product is thus disposed of.


Strength of Agents
Makes "Paper" Acceptable

It is evident that no ordinary capital would be sufficient for the
supplying of money on call to mills in the immense quantity needed, and
it is here that the banker's capital is called into use. The commission
house is usually a concern of substantial means, sometimes very rich, and
nearly always of a financial standing, which will give it, on its own
account, an assured credit. At certain times of the year the calls for
money from the mills are greater than at other times, and as shipments
come forward, and advances are required, the commission house, in order
to put itself in funds, will issue a series of its own notes in
convenient sized amounts, $5,000 to $10,000 each, for instance, and will
offer these for sale, through its note broker.

This paper, which commands an advantageously low rate of interest, and
which is issued for convenient periods of time, averaging perhaps four
months, is much sought after by banks and other institutions in primary
markets and throughout the country wishing to invest current funds in a
safe and not unprofitable medium. This paper is so acceptable to banks
not only because the credit of the issuing firm is behind it, but also
because it is known that the money which is obtained for the notes will
be lent out to mills on ample collateral. The issuing house is in a
position so entirely safe that hardly ever can a question arise as to its
ability to take care of its borrowings.




CHAPTER V

Financing Cotton and Cotton Cloth


No industry shows better than the cotton industry the economic importance
of banking service. No industry, perhaps, utilizes to such a complete
extent the modern instruments of credit, nor is so dependent upon these
instruments for its proper functioning. At no point in the progress from
seed to cloth is the capital represented by the cotton necessarily or
even customarily tied up. And not only may the cotton itself at any stage
be the basis of credit accommodation, but also, the actual added value
which the labor of any factor in the chain may give to the cotton may
itself be realized upon in advance. The credit possibilities of the
industry have grown with the admission of acceptances to rediscount in
the Federal Reserve Banks, and this admissibility has likewise played a
part in the present growth of the warehouse system, the lack of which was
a handicap to the industry in past years.


Credit Necessary from Seed
to Finished Product

In considering the raw cotton and the cloth market it was necessary to
include some account of the financial and banking processes involved in
the various commercial transactions undertaken. It is perhaps advisable,
however, even at the risk of some repetition, to give a quick survey of
the financial and credit aspects of the industry as a whole from the time
the cotton is placed in the ground up to the actual sale to the cutter-up
or the jobber.

The utilization of credit begins, as we have seen, with the very planting
of the crop. Many of the growers, even those who own their farms, are men
of limited means, and are not able to pay for the necessaries of life and
of labor during the long growing season. The country storekeeper,
accordingly, in return for a lien on the crop, allows them credit at his
store, usually charging interest based on the monthly statement of their
ledger accounts. He in turn receives the necessary accommodation for his
own purchases from the local bank, or from the local buyer or factor with
whom he is affiliated. The high prices prevailing during the past few
years have undoubtedly changed to some extent the small grower's
financial position.


Cash for the Grower
From the Local Bank

The larger growers, or the great corporations which let out cotton lands
to renters, usually operate the stores in their villages upon the same
basis, credit being advanced against the renter's share of the growing
crop. Even these large corporations are seldom able to meet the heavy
demands of the growing season without recourse to the credit service of
those to whom they sell their cotton, or to the local banks. The banks,
or buyers, in turn discount at least a proportion of the commercial paper
thus created with their correspondent banks in New York, Boston, or other
financial centers. This credit arrangement, it will be seen, is almost
entirely based on a moral risk, the lien being made upon the growing
cotton which cannot be liquidated until it is grown, picked, and ginned.

When the crop is picked, it is weighed by the merchant before it is
ginned, and the farmer is credited on the merchant's books with the
amount due him, the balance in his favor being given him in cash. His
concern with the cotton is thus ended. In the event that he is able to
finance himself through the season he takes the cotton directly to the
gin, and has it ginned and baled there, paying the ginnery for the
operation, and selling the cotton directly to a local buyer and the seed
to an oil mill. If the gin warehouse is available, and he desires to wait
for a more favorable opportunity to sell, he may store the cotton, taking
a gin receipt for it, against which the cotton will eventually be
delivered. The gin receipt may be collateral for a loan from a cotton
factor, or from a local bank.

Thus, it will be seen that the grower receives accommodation throughout
his season, and is paid cash for his product when it is delivered. This
arrangement puts a heavy strain upon the cotton buyers, particularly upon
those who deal in large lots for the mills. The method by which the
buyers pay the growers is thus described:

The buyers make arrangements with the local bankers where the gins are
located for the payment of the cotton, the banks furnishing the actual
cash against tickets issued by the buyer's representatives, holding the
tickets in question as their collateral in the meantime. When a
sufficient amount of cotton has been accumulated the local banker, at the
request of the buyer's agent, delivers the tickets in question to the
local agent of the railroad, who in turn issues a bill of lading covering
the shipment to the compress point, which then is attached to the draft
drawn by the buyer's agent upon the buyer's head office, which draft
includes the price paid for the cotton plus interest and exchange charged
by the local banker, who is reimbursed for the amount of the draft thus
drawn. When this cotton is ready for export (or for shipment to the mill
in the United States) local bills of lading, covering shipment from point
of origin to compress point, are exchanged by the cotton buyer's banker
for local bills of lading to port or for through bills of lading.

[Illustration: "_Picked 100 pounds today_"]

When cotton is bought at compress points, compress receipts instead of
tickets are delivered to the local banker, who pays for the cotton as
purchased by the buyer's representative from time to time. When a
sufficient amount of cotton is ready for shipment the compress receipts
are exchanged by the banker for local bills of lading to port (or to
mill), or through bills of lading, as the case may be. These bills of
lading are attached to the draft drawn by the representative on the head
office of the buyer, the local bank being reimbursed for the amount thus
drawn.

Buyers must necessarily hold great quantities of cotton in storage, for
they buy whatever cotton is offered, and must sell, as we have seen,
certain grades and qualities to the mills in order that they may weave
the cloth for which their orders call. Cotton must, therefore, be held in
storage, either at the compress points, which is usual, or at warehouses
operated by factors, or by independent corporations, or in their own
warehouses.

While the buyers by cash payments are concentrating the cotton necessary
to fill their domestic or foreign orders, their need for funds is a
pressing one. Their arrangements with local banks we have seen. When the
cotton is shipped, the local bank, by means of drafts on the buyer's head
office, is relieved of the burden it has been carrying, but the cotton
still represents capital, and if that capital is to continue to earn its
wages it must be the basis for credit. The factors and large banks in New
York or Boston, which have been assisting the local bank, must now assist
the buyer and the warehouseman. The methods by which this burden is
shifted to the larger banks are varied, and we can consider only one or
two of their aspects.


Same Mills Pay Cash, Relieving
Factors of Burden

Some of the larger New England mills pay cash for the cotton which is
shipped to them, buying sufficient in the season to carry them through,
or nearly through, the year. Their buyers, therefore, need support, if
they need it at all, only during the period of concentration. They may
have their private banking arrangements, and may be able to utilize their
warehouse receipts or bills of lading, or their mere notes based upon
mixed collateral, for an advance of sixty to seventy-five per cent. of
the value of the cotton, the line having been arranged in advance. Credit
may be obtained by the buyer directly from the warehouseman, who thus
becomes a factor in his own right, being supported by arrangements
previously made with his own bank. Credit may also be obtained from a
bank, upon bills of lading which are exchanged for warehouse receipts
when the cotton is delivered at the port or at any warehousing point; or
the credit obtained from the bank may be settled and a new credit opened
with the warehouseman when the cotton is shifted from cars to storage.


Warehousemen as Factors of
Growing Importance

The growing importance of the warehouseman has been mentioned. His
services have developed with the need of mills for greater credit, and
their unwillingness to tie up their working capital in cotton held in
their own warehouses. Mills which formerly bought all their year's supply
during the buying season, so-called, now take their cotton from
warehouses as they want it, buying it from their buyers, and making
payment according to the individual standing arrangements. The advent of
the warehouseman who is either a banker, or closely affiliated with a
bank, has undoubtedly done much to make the financing of cotton a more
elastic and feasible proposition, distributing the risk over a wider
circle and making credit more readily available at any point in the
succession.

[Illustration: _Weighing gin bales in a ginnery yard_]

[Illustration: _Cotton warehouses in the South_]

The mill, we have seen, frequently pays cash for its raw stock, or else
buys upon short term notes. The average mill does not have a working
capital large enough to enable it to tie up the thousands of dollars
necessary for such a proceeding, as well as the funds which must
constantly be paid out for wages, for operation expenses of all kinds,
for upkeep, and all other overhead. Mills, as a matter of fact, are
frequent borrowers, either from general banks, or from textile banks or
factors, or from their selling agents, who, as we have seen, combine
their primary and original function of selling with that of supplying
financial assistance.

Mills which purchase cotton from their buyers and pay cash, or
approximately cash, for it, usually buy such cotton to fill orders which
they have already received from their selling agents. They may, in
certain instances, obtain an advance from their agents of a proportion of
the whole selling price of the order, and out of that advance pay for the
purchase of cotton, or they may hold the cotton in warehouses, using it
only as needed, and putting up the warehouse receipts as collateral for
loans.

The raw cotton itself, however, represents only a portion of the mill's
operating expenses and it cannot be the entire basis for financial
operations of the magnitude often needed. These broader financial wants
may be met out of the prospective selling price of the cloth by means of
loans from the selling agent; or, they may be met by direct relations
with a commercial bank, which may make loans on ordinary collateral, on
acceptances, or, as frequently happens in the case of mills of undoubted
integrity, on the mere note of the company operating the mill.


Selling Agent May Shift
Burden to Banks

When the burden is assumed by the selling agent, or factor, he in turn
may shift it to the bank, either by indorsing the note of the mill, or by
indorsing the note of the purchaser of the cloth or by borrowing directly
from the bank on his own paper.

The converter, as a rule, is not a factor, but a merchant pure and
simple, seeking accommodations from a factor or a bank as his needs may
require it. Inasmuch as he usually buys for cash or on short-term notes,
and sells to jobbers or retailers upon more extended terms, his needs are
frequently heavy. His relation with his factor may be, and frequently is,
upon the basis of accounts receivable, or he may borrow upon his own
collateral, or, if he is counted an "A1" risk, upon his unsecured note.

These, in brief are the financial steps in the progress of cotton from
the grower to the jobber. A cursory view is all that is possible, because
in the words of a textile banker of standing "every textile banking
transaction is a law unto itself." Yet enough has been said to show the
all-important part which banking plays in the cotton industry, and to
indicate how dependent are the turning of wheels and the distribution of
cotton and of cloth upon the credit which banks and bankers are able to
provide.


Factors and Their Wide
Financial Service

Frequent use has been made of the word factor, and no adequate definition
of its meaning has yet been given. The factor is, briefly, the commercial
banker of the industry, and his duty is to provide, at any stage of the
cotton process, the financial assistance which may be necessary, either
from his own resources or through his affiliations with some large bank.
It is true, of course, that some factors work only with those dealing in
raw stock, and some confine their services to mills. Some factors are
cotton buyers, some are selling agents, some deal with buyers and some
deal with selling agents. Some are employed only by the mills. Recently,
however, the tendency has been to develop under one roof a unit
institution capable of handling every textile banking transaction. It
will be interesting to enumerate here, briefly, the various functions and
facilities of one such institution:

    1. It makes loans to cotton buyers and to mills
       on cotton held in warehouses or in transit.

    2. It checks the credit of the mill's prospective
       customers.

    3. It cashes accounts receivable.

    4. It makes advances against merchandise for
       the account of mill, converter, or jobber.

    5. It finances merchandise and raw material requirements,
       and current operations.

    6. It deals in acceptances, specializing, of course,
       upon paper arising out of transactions in the
       textile industry.

    7. It maintains an Industrial Department, which
       includes:

       (a) the services of a consulting architect, expert
           in mill construction.

       (b) the services of a production engineer,
           skilled in the laying out of plants in the line
           of greatest efficiency, and in diagnosing
           and correcting the production mistakes
           of an inefficient mill.

       (c) information as to the newest mill practice,
           which it is ready to provide for its
           clients and others.

       (d) readiness to assist customers in the expansion
           of their business either by financing
           new mill construction or by providing
           sales representatives in other countries.

       (e) maintenance offices abroad, either for the
           buying or selling of textiles or equipment,
           or raw materials, or for the complete and
           direct financing of such transactions.




CHAPTER VI

American Cloth in Foreign Markets


We have seen that the American cotton grower supplies more than half of
the world's demand for raw cotton. The cotton manufacturer in the United
States is in no such position. This is not to say that American cotton
goods are not exported in very considerable amounts. From the inception
of the industry in this country varying percentages of the total product
have been sent abroad. The following table, taken from the United States
Statistical Abstract (1910) shows the average annual exports of cotton
goods for the five year periods named, expressed in millions of dollars:

                         _Uncolored    _Colored
              _Total_       Cloth_       Cloth_       _Other_
    1856-60     $7.5         $2.4         $2.3          $2.8
    1861-65      3.7           .4           .9           2.4
    1866-70      4.1           .9           .3           2.8
    1871-75      3.1          1.7           .6            .7
    1876-80     10.0          6.1          2.6           1.2
    1881-85     13.0          8.0          2.9           2.1
    1886-90     12.4          7.4          3.2           1.6
    1891-95     13.3          7.7          3.0           2.5
    1896-1900   20.4         11.6          4.4           4.3
    1901-05     31.3         17.2          7.0           7.0
    1906-10     35.1         16.8          7.2          11.0

The irregularity of the export trade, as shown by these figures, has been
explained on several grounds, the chief factors being, apparently, the
fluctuations in the prosperity and consequently in the buying power of
the home market, and the pressure upon the home market exerted by the
rapid growth of cotton manufacturing in the South.

The normal position of the United States as an exporter of cotton goods
is shown by the following table, which gives the exports of the chief
manufacturing countries in the year before the war (the figures for 1915
are also given because they show the changes which had already begun):

                          1913            1915

    United Kingdom   $618,000,000   $418,000,000
    Germany           117,000,000     30,100,000
    France             78,000,000     60,000,000
    Japan              58,000,000     95,800,000
    United States      55,500,000     60,200,000
    Switzerland        50,300,000     65,800,000
    Italy              47,800,000     30,500,000
    India              38,900,000     27,300,000
    Holland            30,900,000
    Austria Hungary    27,800,000
    Belgium            23,700,000
    Russia             22,500,000     19,700,000[B]
    Spain               8,300,000     17,400,000
    China               1,400,000      2,100,000

-----
  [B]  Eleven months.

Thus, despite the very remarkable growth which had taken place between
1910 and 1913, the United States ranked fifth among the nations exporting
cotton goods. The reasons for this might be summed up in almost a word.
The attractiveness and rapid growth of the home market provided an outlet
for practically the whole output of American mills. With high prices
prevailing in the home market, the manufacturer was not called upon to
exert himself to stimulate sales in regions where competition would
inevitably be keen and profits small.


Minor Handicaps to
Trade Development

Supporting this main objection there have been others. Until recently the
banking facilities abroad were insufficient to the needs of a greater
commerce; and shipping facilities, in pre-war days, were not such as to
make regular shipments possible to many foreign markets. Over these
conditions manufacturers had not direct control, but there were other
matters in which their own short-comings were all too evident. There is
little need to list again the familiar complaints, known to every reader
of Commerce Reports and the export magazines. Faulty packing and
insufficient attention to orders were the most frequent. The former was
undoubtedly due to inexperience, and the latter to the tendency of the
manufacturer or merchant to consider the foreign market as a place for
disposing of a surplus unsalable at home. To this attitude may also be
attributed the frequency with which shipments for which orders had been
accepted have been delayed or overlooked altogether.

[Illustration: _Compress bales awaiting export on a Savannah wharf_]

The foreign market remained for the American manufacturer a prize so
distant and of such questionable value that he was simply not willing to
make the effort and spend the money that would be necessary to compete
with British, German, French, and other sellers. He would have had to
know local customs and tastes, and all the details that he had so
arduously acquired a knowledge of for the home market. The time was not
ripe.


U. S. Export Trade
As Affected By War

The war served to disarrange the system of cotton cloth distribution of
the whole world. It is now a commonplace to say that the United States,
by the cutting off of the usual sources of supply, succeeded for the
first time in entering in force markets which hitherto had been closed.
It would probably be truer to say that foreign buyers, finding it
impossible to secure their customary supply from their regular sources,
came to the United States and asked American manufacturers to supply
their imperative wants.

Just what this meant is found in the statement that while in 1913 our
total exports of cotton goods amounted to about 445,000,000 yards, in
1917 the figure was about 690,000,000 yards, an increase of fifty-five
per cent. The increase, moreover, has been in the colored cottons, the
uncolored cloths showing an actual decrease.

The United Kingdom, during 1917, exported nearly 5,000,000,000 yards of
cloth, so there is no immediate prospect that the United States will be a
dangerous competitor for that country, except in a few limited lines and
in a few markets. The chief gain to the American cotton industry brought
by the war was the opportunity it gave merchants to introduce their goods
abroad at a time when loss was next to impossible. Operating at an
assured profit they were able to learn the markets without the long and
discouraging fight which would have been necessary had the competitive
power of the other nations been at full force. If, as seems likely, the
economic forces which projected the United States so suddenly and
dramatically into the world's markets shall continue to operate, then the
future will see a further development of our sales.


Future of Foreign Sales
And Probable Markets

Our best and most permanent markets are probably to be found in such
countries as Cuba, Mexico, the Philippines, Central and South America,
and, to a certain extent, Canada and Australia, and parts of Asia and
Africa. To be sure, competition will have to be met both from European
countries and from Japan, whose development in the cotton industry in
recent years has been nothing short of phenomenal. She has practically
doubled the number of her spindles in the last ten years, and her
competition has already been felt, for instance, in China, where American
gray goods have been practically eliminated from the market. Other
growing markets for Japanese cotton goods are South Africa, Australia,
India, and the west coast of South America.

In Cuba and the Philippine Islands, the United States has the advantage
of a preferential tariff agreement and excellent shipping facilities. In
Canada and Australia our cotton goods are popular but the tariff duties
are in favor of Great Britain. In the Dutch East Indies there is at
present a good opportunity for getting a foothold in the white goods
trade. Argentina has lately been our best market for cotton goods, and as
the imports of cotton products into that country amounted to $65,000,000
in 1916, this trade is worth the intensive efforts which are now being
made to clinch it.


Future Development
Up to Merchants

On the west coast of South America, as in the Manila market, there are
established American trading firms that are doing extensive development
work and their efforts have produced favorable results. In the other
Latin-American markets there are practically no local American firms and
in none of them have the possibilities of the trade been more than
touched.

The general opinion seems to be that if the United States is to keep what
she has gained by the war in the cotton goods trade the same care and
aggressiveness will have to be shown in the foreign as in the domestic
trade. England's position today as the foremost exporter of cotton
manufactures is the result of careful study of foreign markets and their
requirements, of catering to the tastes of the people, of aggressive
advertising, of competent foreign salesmen, of reliability in filling
orders, of good packing, and of more or less liberal credit terms.
Manufacturers in the United States will have to follow the same procedure
if this country is to keep her present position in international trade.




CHAPTER VII

Some of the Grower's Problems


Early in the spring, the farm hands begin the work of getting the seed
beds ready. Upland fields have to be terraced, ditched, and drained by an
elaborate process before the work is well begun. Plowing and sub-soiling
are the least of the planter's worries. He must often chop last year's
stalks with a disc harrow or with a stalk cutter. The spike tooth or the
disc harrow must work again after the plowing is finished. It is
customary to plant cotton in a slightly raised bed, in order that
thinning may be more easily done, and that the soil may be more quickly
warmed. Much planting is still done by hand, one man dropping the seeds
in the long straight furrow and another following close behind him with a
hoe, covering them up; but of late years the one-horse planter and the
two-horse combined lister and planter have come into vogue, and, now that
the tractor is both cheap and serviceable, it is possible to plant two or
more rows at a time.


The Long Season of
Intensive Cultivation

When the tiny seedlings first appear above the fragrant mellow soil, the
planter's work is well begun, but it is only begun, for then comes the
season of cultivating and thinning out. As soon as there are two or three
inches of growth, the first cultivation takes place. How many times the
field is cultivated depends on the planter, the nature of the soil, the
availability of labor and other factors. But the general rule is, the
more cultivations, the more cotton. The first cultivation scrapes away
the soil from the plants, leaving them on a small ridge, where the
thinning-out process can easily be done with a hoe. The stalks are left
from fifteen to twenty inches apart in the hill, the rows being usually
about three and a half feet apart. The next cultivation, usually with a
sweep, pushes the soil back against the plants. Then begins the farmer's
fight against the weeds, each of which seems sturdier and harder to
eradicate than its predecessor. Usually cultivation must take place about
every three weeks.

In June, on the average, the bell-shaped blossoms appear. On the first
day they are cream colored or white; on the second day, they change to a
beautiful wild-rose pink, deepening toward evening to a deeper magenta or
carnation. On the third day they fade completely, and the development of
the boll begins.


The Many Enemies
of the Growing Boll

Of the plants upon which humanity depends, the various species of the
genus Gossypium have probably more enemies, and more relentless enemies,
than any other. Besides army worms, cut worms, locusts, green flies, leaf
bugs, blister mites, and several others, nature has produced and rendered
extremely prolific and hardy, these two particular pests, the boll weevil
and the boll worm. It is said that the collective attacks of all the
insects which feed upon cotton cost the country in the neighborhood of
$60,000,000 every year at pre-war prices. The little gray beetle that the
world knows as the cotton boll weevil is responsible for most of this.
The mother weevil lays her eggs in the bud. As the grubs from the eggs
develop, the bud drops. If a weevil arrives on the scene after the bolls
have begun to form, she lays her eggs in those with a fine indifference.
These bolls will not drop, but the grubs ruin the cotton they contain.
There have been numerous investigations and experiments made to develop a
variety of cotton impervious to the weevil's attacks, as well as to find
another insect willing to meet him in combat and overcome him. Guatamalan
cotton is said to be immune and efforts are being made to transplant it
to the United States. A small ant-like creature called a "kelep" has also
been found, which attacks, kills and devours the weevil, but,
unfortunately, the kelep prefers a warmer clime, and pines away and dies
in even the mild winters of the cotton belt. The boll worm is very
similar to the corn worm with which all housewives are familiar, and
indeed corn is its favorite diet. But cotton will do in a pinch, and,
next to the weevil, he ruins more cotton than any other pest. The boll
weevil cost the country about $25,000,000 yearly, pre-war prices, and the
boll worm about $12,500,000 yearly, enough to justify an even greater
expenditure for investigation and eradication than has yet been made.

Despite the ravage of insects and diseases, when a well-tended field of
cotton is ripening, one would think from the number of bolls per plant,
that the owner's fortune was surely made. Unfortunately, the plants shed
bolls as well as buds and flowers, in great numbers. It has frequently
been noted that even well-fertilized plants upon good, carefully
cultivated soil, will mature only fifteen to twenty per cent. of the
bolls produced.

[Illustration: _Cotton blossoms and bolls at various stages of growth_]

The planter will tell you that he would be willing to stand the boll
weevil, the dropped bolls, the extra cultivations, and all the remainder
of it, if he could only be sure that cotton which did mature would be
picked when it should be picked, and picked with rapidity and care.
Picking is the most laborious, as it is the most picturesque operation on
the plantation. Many types of machine pickers have been introduced, but
there are few planters who will admit that any of them suits his
particular needs. Now, as a hundred years ago, the picking is done by
hand. It is a simple operation, so simple that children ten years old can
do it, and women excel in it. But the best pickers rarely average more
than a hundred pounds a day, and most of them pull much less. Careless
work plays its part, too, for cotton is easily dropped from the boll and
soiled or lost altogether. Leaves and twigs as well as the shell of the
boll frequently cling to the fiber, and are picked with it, and all these
things tend to dirty and discolor it, and lessen its marketability. It
requires about three pounds of cotton with the seed in it, as picked, to
produce one pound of ginned or lint cotton.

There were in the United States, in 1917, a total of 24,272 ginneries, of
which 3,921 were idle. Each active gin produced an average of 526 bales
running bales of cotton. The number of gins shows a tendency to decrease
every year, not rapidly, but surely, and this despite the opposite
tendency of the crop. The Whitney gin of the old days has been improved
beyond the dreams of its inventor. He boasted that one man could do as
much with his machine as ten men without it. Today's gin averages about
five bales a day--a quantity which the negro of old would find difficult
to turn out in a year.

To the gin then, which is located either on the plantation or in the
immediate neighborhood, the mule drawn wagons, driven by negroes as a
rule, bring their loads of cotton.

[Illustration: _Gin bale and compress bale showing reduced bulk of
latter_]

As the downy lint, pulled from the tenacious seeds, rolls into the
receiving bin of the gin, the huge compressors are put to work. The
coarse jute bagging is on hand, and the steel straps spread out. The gin
balers as a rule turn out a bale measuring approximately 28 by 56 by 42
inches, and weighing approximately 500 pounds including twenty pounds of
bagging and straps. The cotton, in being separated from its seeds, has
lost about two-thirds of its weight. But the first process in the long
series that manufacturing entails has been completed, and the cotton is
ready to begin its long journey to the mill. It is usually carted to the
nearest railroad station, and from there shipped to the compressing
point.

The small farmer almost always gets his money for the cotton as it leaves
the gin. His interest in it, therefore, is ended when the buyer there
pays him the current price. The cotton is a market commodity from that
time forth.

The compress is a large and powerful hydraulic press, whose function is
to force the loosely packed gin bale into a density that will make its
handling by the railroads, ships, and warehouses more easy and
economical. The compresses are frequently owned by the railroads.


Gin Bales and
Compress Bales

Before being compressed, the bales are sorted according to grade, and are
then compressed into a smaller sized bale, measuring approximately 28 by
56 by 18 inches, with a density of from twenty-eight to thirty pounds a
square foot. It is this bale which is handled from that time forth,
whether it be for export, for consumption in Northern or Southern mills,
or whether, as sometimes happens, it is shipped from place to place as
market conditions change, and the price offered makes reshipment
profitable.


Movement for
Improving the Bale

It is encouraging to note that the war brought about, under Government
auspices, a very definite movement for the improvement of the bale. The
proposal demands the installation of high pressure baling machines at the
gin, capable of producing a bale with a density of thirty-five pounds a
cubic foot. The trading unit in cotton is one hundred bales, and such a
compression would mean that one hundred bales could be loaded into a
single freight car, and shipped directly to the export point or
warehouse. The present practice requires three cars to carry the ginnery
bales to the compressor, and two cars to carry the compressed bales to
the port, warehouse, or mill. The saving in freight and handling is
obvious. It needs only a glance at the photograph of the two bales side
by side to see the possible saving in waste and "city crop," or tare. The
obstacles in the way of such an improvement are those which face any
revolutionary change in commercial methods. Established practice,
invested capital, and the natural conservatism of human nature militate
against quick improvement.




CHAPTER VIII

In the Cotton Mill


The manufacture of cotton cloth may be divided into five departments:

    1. Preparatory processes: Opening, carding,
       combing, and drawing.

    2. Spinning.

    3. Spooling, warping, sizing, slashing, entering
       or drawing-in.

    4. Weaving.

    5. Converting and finishing, including bleaching,
    mercerizing, dying, printing, and finishing.

Before the cotton fiber can be spun into the yarn from which the cloth is
woven, the bales must be broken open, the impurities removed, and the
fibers arranged so that they are parallel and contain no bunches or
tangles. Care in these processes has become more and more necessary and
important as the demand for a higher quality of cloth, possessing greater
strength and evenness, has been developed. Hence, some of the most
elaborate, complex, and admirable machinery in the mill is that devoted
to these preparatory processes. The principle involved is always that of
thoroughly cleaning the material, then opening it so that every fiber
shall be thoroughly separated from its fellows, and then straightening
out the fibers, no matter what types of machines may be used.


Conveying Fiber
By Air Blast

The heavy laps of cotton are first thrown directly from the bale into the
breaker, and the cotton is then usually blown through large pipes from
the room in which the bales are broken to the room in which the openers
are located.

The functions of the opener are two. The first is to clean from the
cotton the dirt and bits of leaf, pod, and foreign substances, which may
have clung to the fiber as it passed through the gin back on the
plantation. The second is to roll the cotton into a more or less regular
"lap," as it is called.


The Energetic
Opener At Work

As the cotton goes into the opener (see diagram on following page), dusty
and dirty, it is seized by strong teeth fastened upon a large cylinder
(A), revolving rapidly, and is flung by centrifugal force against an iron
grid (B) time after time. Sometimes there is a strong current of air
blowing through the tangled mass, helping to loosen the particles. The
dirt comes out through the grid and is carried away, while the lint
itself, after being carried around an indefinite number of times,
gradually works its way along a channel, and finally out between two
large rollers (C), which compress it once more, so that it is, in effect,
a sheet of batting. This sheet, or lap, is rolled up in a large roll (G),
which may be two or three feet in diameter, and is then ready for the
first doubling or blending process. In mills where strength and evenness
of yarn are at a premium, the sheets from three or four laps may be fed
through another opener, usually called a "scutcher," which breaks them
all apart again, mixes up the fibers, cleans out more of the dirt, and
produces a more even lap.

The cotton, as it comes from the opener and the scutcher, is much cleaner
and more attractive. It begins to look like the riches it contains.

[Illustration: _Cross-section diagram of opener_]

To convey the heavy opener-lap from the opener to the carding room, the
more modern mills are doing away rapidly with hand-power, and carry the
lap on a sort of travelling mono-rail conveyor.

The fibers of the lap which comes from the opening room are by no means
parallel, but lie in all directions just as they happened to come from
the grid of the opener. The function of the card is to straighten them,
and at the same time to remove those which are knotted or immature and of
a length below that required for the yarn to be spun, and to take out
practically all of the impurities which may have escaped in the opening
operations.

The principle of carding is one of the oldest of textile mechanical
principles, and all the improvements that have been made have been in
developments rather than in basic ideas. Hargreaves, inventor of the
jenny, and Sir Richard Arkwright both expended their ingenuity upon it,
the latter seeming to have been the first to provide a carding machine
operated by other than hand-power. The basic principle involved is the
straightening out of the fibers by combing or brushing them with wire
brushes or cards.

[Illustration: _"Scutchers" at work_]

In the revolving flat card, which dominates the field today, there are,
as a rule, three principal cylinders. The lap passes first under the
smallest of the three, called the taker-in, which is covered with very
fine saw-teeth all in one long strip of steel, wound and fixed spirally
in the surface of the cylinder. The taker-in receives the cotton from a
feed-roller (C) that turns above a smooth iron plate (D) called the feed
plate. The saw-teeth comb the fibers which are imbedded, so to speak, in
the lap, and deliver the loose ones to the second cylinder, which is the
largest of the group. This main cylinder is covered with wire teeth all
bent at exactly the same angle. The cotton clings to them, and is carried
around to the top of the cylinder, where it is engaged by teeth on the
revolving-flat card which are bent in the opposite direction. This
"card-clothing" arranged in strip, crosswise on a travelling lattice,
moves in the same direction as the cylinder but moves very slowly, and so
the fibers are carded between the two sets of wire points, the short and
immature fibers remaining on the card wires of the lattice and the
perfect and now almost entirely parallel ones being carried over from the
main cylinder to the doffer cylinder, the third of the trio. From this
they are removed by an oscillating comb (F), coming off in a light,
fleecy lap, which is condensed through a funnel into a soft untwisted
roping, or sliver, about the diameter of a man's thumb, and is then
coiled into a can, usually about 45 inches high by 8 inches diameter.

[Illustration: _View of Modern Motor-Driven Opener Picker_]

The conveying of the sliver (pronounced with a long or short i) into the
can is in itself an exceedingly ingenious operation, although a very
simple one. The device is attached directly to the card, and is called a
coiler. The sliver passes into it from the funnel. The hole from which
the sliver emerges is off the center of a steel plate which revolves
slowly, so that the sliver, as it comes out, has an eccentric motion
which causes it to fall into the can in regular coils. Tangling is thus
prevented, and ease of handling secured.


Combing Necessary in
Spinning Fine "Counts"

Combing is necessary in the preparation of cotton for the spinning of
fine "counts" or coarser yarns where great smoothness and regularity are
desired. They are now quite extensively used in the United States, and it
is significant of the trend of the industry here that the number is
rapidly growing. The first cotton comber was invented by a Frenchman of
Alsace named Heilmann. The patent was issued in 1845. Now there are on
the market other machines, both English and American, similar in
principle but improved in many ways.

[Illustration: _Revolving flat cards_]

The first of these preliminary processes is that which is done by the
sliver-lapper. The slivers from 14 to 20 cans are drawn along
side-by-side, passing between three pairs of drawing rollers which will
be described later. From the drawing rollers the slivers now reduced in
size, pass between two pairs of calendar rollers from which they emerge,
not as a sliver, of course, but once more as a lap about a foot wide.
These laps are usually passed to a ribbon lapper, where six of them are
placed end-to-end, and unrolled simultaneously, passed between four pairs
of drawing rollers, and then superimposed, one upon the other, and,
calendered once more, issued as a lap a little less than a foot wide.
This process may be repeated as many times as the quality of the yarn
desired may require, for each drawing process served to straighten the
fibers and so to render the thread more even and capable of finer
spinning.

Combing is exactly what its name implies. The lap is actually raked by a
fine-tooth comb with needle-like teeth of steel ranging from 16 to 90 per
inch. This involves breaking the lap again and the intricacy of the
comber rests in the mechanism which it employs for joining the separated
ends.

[Illustration: _Cross-section diagram of revolving flat card_]

Six or eight laps go through the machine at once, and the product is
combined, condensed, formed into a continuous sliver, and deposited once
more into cans. The process is not a fast one at best, and the chief
contribution of American inventors is in the direction of speed. Each nip
combs only 4/16 to 4/10 of an inch of fiber. The Heilman machine made
about 85 or 90 nips per minute. The American improvement makes 130 to
135. The width of the lap in the American machine is likewise increased,
and the saving in labor, therefore, is considerable. English improvements
have been in the same direction, the resultant saving being almost as
great.

[Illustration: _Ribbon lappers_]

Though many of the processes already described might be called drawing,
in a sense, insomuch as they involve a continual lengthening and
straightening of the lap or sliver, yet drawing in the strictest sense
has not yet begun. It may be done only once, for coarse and cheap yarn,
or it may be repeated a half dozen or more times to produce the finer and
more expensive products. The frame for each repetition is slightly
different, but several types may be isolated. They are, in the order of
their use, the drawing frame, the fly frame, or slubber, the intermediate
frame, and the roving and jack frames.

For fine counts the slivers from the comber, and for other grades that
which comes directly from the card, are taken, then to the drawing frame.
The slivers from the cans, six or eight in number, are fed through one
aperture, and pass, thus combined, between several (usually four) pairs
of rollers, so arranged that each succeeding pair revolves at a more
rapid rate than that which preceded it. The last pair in the series
revolve probably six or eight times as fast as the first pair. This
combination of rollers pulls constantly on the more or less irregular
slivers, rendering them always more nearly uniform in diameter and
density, the thickness of one of the entering slivers serving to
counterbalance the thinness of the other. The drawing frame consists
usually of four or five "heads," and the sliver, after it passes through
one of these "heads," is put through a second one, along with other
slivers, so that the doubling and redoubling goes on constantly. There is
an electric device to stop the machine when a sliver breaks, either at
the back or the front of the frame.

[Illustration: _Combers at work in a mill spinning fine counts_]

From the last head of the drawing frame, the sliver passes to the fly
frame or slubber, which not only continues the drawing and doubling,
usually between three pairs of rollers, but through the aid of a device
which gives the sliver a slight twist and winds it, for the first time,
upon a spindle. This device is known as the flyer, and is, roughly, a
U-shaped piece of metal, which, revolving, inverted, over the spindle,
gives the thread a slight lateral twist as it coils upon the spindle. The
latter also revolves, but with a diminishing motion so that the amount of
twist may be kept uniform as the diameter of the coil upon the spindle
increases. The sliver, now being twisted, is called a sliver no longer,
but the slubbing.

The slubbing is passed between the rollers in pairs, the emerging product
being less in diameter than the diameter of a single slubbing. The
machine combines the fourfold process of combination, attenuation,
twisting and winding. There are more spindles upon this frame than upon
the slubber.

The last drawing frame, except for very fine yarns spun from Egyptian or
Sea Island staples, is the roving frame, similar in principle to the last
two but containing still more spindles. It receives the rovings from the
intermediate frame, combines two of them into one, twists them a little
more, and winds them upon the spindle tubes. The Jack frame is similar
except that its product is finer and smoother.

[Illustration: _Sliver lappers in a Northern mill_]

It is interesting to note, however, that the majority of improvements
have been the fruit of the brains, not of Americans, but of Englishmen.
Copeland points out that this may be due to the English desire to save in
the consumption of cotton, but that more probably it is due to the
development of fine spinning in England, in which most of the machines
here described are chiefly valuable; and he ventures the prediction that
now that American mills have definitely gone in for the finer counts, it
may be expected that engineers here will apply themselves to the
improvement of this machinery.

[Illustration: _Drawing frames, turning slivers into roving_]


The "Mule" Versus
the Ring Spindle

Spinning is the final process which turns the cotton into firm, coherent
yarn, sufficiently twisted, and ready for the loom. The twist given to
the thread by the previous machines has been only enough to make the
fibers hold together. They are still comparatively loose and fluffy, and
their tensile strength is slight.

There are, in general, two types of spinning machines. The first, the
mule, an English product. The second, radically different, is entirely
American. It was invented in 1828 by James Thorpe, and immediately found
some favor, but it was not until the Civil War that it was received on
equal terms with the mule. Today, however, it dominates in the United
States, the comparative figures in 1917 being: ring spindles 30,264,074;
mule spindles 3,634,761. The disparity is growing greater every year, and
the use of the ring is firmly established in other countries as well. The
figures for 1907 were:

                          _Mule_        _Ring_
    England (1909)     39,800,000     7,900,000
    Germany             5,740,000     3,722,000
    France              4,122,000     2,481,000
    Austria             2,307,000     1,277,000
    Italy               1,015,000     1,852,000
    Russia              1,031,000     1,320,000

The mule, by reason of the great size to which it has been developed, and
the impressiveness of its large, rhythmic motion, is one of the most
formidable of all cotton machines, as indeed it is one of the most
complex. It received its name from the fact that, performing two
principal functions--drawing and spinning--it was regarded as a hybrid,
just as the mule is a hybrid cross between the horse and the donkey.

In the mule (see diagram on page 53), which is a long and wide machine,
carrying sometimes, in new models, as many as 1,300 spindles, the drawing
and twisting are not continuous but consecutive. The rovings (B) are held
on a creel (A) at the back of the machine, usually in three or four
tiers, or on long beams or spools. They pass from the creel, or spools,
between three pairs of drawing rollers (C.) Coming out of the rollers,
they are fed to the spindles on the carriage which backs away from the
creel and recedes somewhat faster than the rovings are unwound. This
receding is the essential motion of the mule, for thus the cotton
receives its final drawing. The spindles, meanwhile, are revolving
rapidly, spinning the yarn. The twist goes first to the thin places where
the least resistance is offered. Then, as the carriage carrying the
whirling spindles continues to back away, the thicker parts of the
thread, being comparatively untwisted are pulled down to the average
diameter and are twisted in turn. The carriage usually runs back about
sixty-three inches. At the termination of its run, or stretch, the
spindles increase their speed until the twisting is completed and the
carriage starts on its return trip. This reverses the spindles, and the
thread which has been wound upon them is unwound, the slack being taken
up by one guide wire (D) while the other guides the thread to the winding
point, and winds it up in the opposite direction on the cone-shaped cops
on the spindles. The rollers do not feed out more roving as the carriage
returns. Hence, there is no slack when the round trip is completed.

[Illustration: _Slubbers, showing the U-shaped flyers_]

Except for the use of drawing rollers, there is little similarity between
the mule and the ring frame. The latter has no movable carriage, none of
the splendid sweep of motion that makes the mule so fascinating to
watch. The ring-frame is simple and business-like, and its speed is
amazing. The bobbins holding the roving are placed directly over the
spindles. Around each of the latter is a steel ring. There are at least
112 spindles on each machine, and all the machine rings for the spindles
are fixed in a single frame. The upper edge of the ring is flanged, like
a miniature railroad track, and snapped over the flange is a small but
important C-shaped steel ring, called the traveler.


How Thread is Spun
on the Ring Spindle

When the machine is in operation (See diagram on page 56) each roving (H)
leaving its bobbin, runs through the usual drawing rollers (G) then
through a guiding wire to the ring, where it is passed through its
traveler (B) which is always at the winding point on the spindle. As the
spindle and the rollers revolve, the roving is fed out at a considerably
slower rate than the spindle takes it up, so that there is always a
tension on the thread. The whirling spindle thus pulls on the traveler,
drawing it round and round on its flanged track (A). It revolves just a
little more slowly than the spindle and thus the yarn receives its twist.
Meanwhile, the frame (C) on which the rings are fixed moves slowly up and
down, so that the winding is properly regulated.

It is possible to operate the spindles at a remarkable speed. So perfect
are the bearings which have been evolved that the average speed is ten
thousand revolutions a minute, and on fine yarns it is sometimes 12,000
to 13,000 revolutions. The speed is limited by only two factors: the
first is the ability of the operator to make splicings when threads
break, and the second is the tendency of the traveler to fly off when the
speed is too high. The number of travelers consumed is high at best, and
in a mill which has long been in operation the floor in the front of the
frame is likely to be paved with the little steel rings which have fallen
and been ground into the planks by the heels of the worker.

[Illustration: _Diagram of mule_]

The battle between the advocates of the ring frame and those who favor
the mule is still on. For the American spinner the ring has undoubtedly
many advantages. Because it spins continuously, and not intermittently,
it turns out about a third more yarn per operator. It is usually
admitted, however, that the thread from the mule is more even in
diameter. Advocates of the mule say, moreover, that the thread from the
mule is softer and "loftier", and that cloth woven from it has a more
"clothy" feel. But others say they can produce soft yarn with the ring.
In the United States, where the labor cost is a vital item, the
ring-spindle has an assured place.

[Illustration: _Mules at work_]

The yarn is now a finished product. It may be sold by the spinner to the
weaver or it may be woven in the mill in which it is spun. Before it is
ready for the loom, however, there are a number of operations which must
be completed.

The yarn from the ring frame, or mule, is wound in a large cop, or on a
bobbin. It must be put upon spools before it can be warped. The spooler
is a simple machine, but one that requires constant attendance. In the
spooler, bobbins are placed upon holders or spindles, and the thread is
passed over a series of guides to the spool, up above. The spool revolves
at a high rate of speed, and the thread is wound evenly upon it. The
operator must watch for broken threads, retie them, replace the empty
bobbins by full ones and see that the empty ones are gathered up
uninjured. She--the operator is usually a girl or woman--must be alert
and active, and especially nimble fingered.

[Illustration: _"Close-up" of Ring Spindle in American mill_]

One of the most important inventions, one that was received with acclaim
by the American manufacturer, and one which actually reduced his labor
cost on spooling no less than ten per cent. at one clip, is a tiny little
thing that is held in the palm of the hand. This is the Barber knotter.
When a thread breaks, the attendant places the two ends together in the
machine and by the mere pressure of her thumb ties the knot much better
than she could do it without the knotter. The economies which it effects
extend beyond the mere spooling, for better knots mean fewer breaks in
the warping process, and a better cloth at the end of weaving.

The spools from the spooler are placed on a large frame, called a creel.
The creels have an average capacity of about 600 spools, and there are
usually 16 to 20 in one tier. The threads from the spools are drawn
between the dents of an adjustable reed, then under and over a series of
rollers. From here they are led down to the beam, upon which they are
wound. The revolving of the beam unwinds the yarn from the spools and
winds it regularly and evenly upon the beam itself. There is a device for
measuring the length of the warp wound, and stop motions for arresting
the operation should a thread break or other accident occur.

[Illustration: _Each operator at these spoolers has a Barber knotter on
her hand_]

The yarn of the warp must usually be impregnated with a sizing which will
smooth out and stick down its furry surface and add as well to the
tensile strength so that the strain of weaving may be withstood. For this
the most effective and most generally used machine is the slasher, the
chief feature of which is a roller, whose lower side is immersed in the
sizing solution. Threads from the warp beam are run around this roller
through the solution and then dried, after which it is finally wound on
another beam for the loom. A considerable number of loom beams can be
filled from one set of the warper beams mounted in the slasher.

The lengthwise threads of a fabric are called the warp. The crosswise
threads are called the weft or filling. To make cloth, the warp and weft
must be interlaced with each other in a suitable manner. The operation is
called weaving, the machine in which it is performed is, of course, the
loom. The principal operations of weaving are as follows:

    1. Shedding, or the raising and lowering of the alternate threads
       of the warp, so that the weft may pass under and over them.
       This is done by means of the harnesses and their heddles.

    2. Picking, or placing a thread of the weft between the warp
       threads so raised and lowered by means of the shuttle.

    3. Beating-up, or pushing, each thread of the weft into its
       position close against the thread which has preceded it by
       means of the reed.

    4. Letting-off, or permitting the warp to unwind from the beam only
       just as fast as is needed by the speed of the weaving. This is
       accomplished by friction bands and weights on the warp beam.

    5. Taking-up, or winding upon a roller the cloth as it is
       manufactured.

In addition to these primary operations, the loom has attachments for
performing several other functions, such as stop-motions for stopping the
loom when warp or filling threads break, or when the shuttle fails to
cross the loom completely; temples for holding out the cloth laterally as
the weaving proceeds; a mechanism--in the most modern looms--for changing
the shuttles, or the cops in the shuttles, as the weft thread on the cops
becomes exhausted, etc.

[Illustration: _Diagram of ring spindle_]

The modern cotton loom, which automatically removes the filling bobbins
without stopping the loom, is rapidly displacing the older types, and one
weaver can now attend to a surprisingly large number of looms, being
greatly assisted also by the automatic warp and filling "stop motions."




CHAPTER IX

The Finishing Operations


Following the manufacture of the cloth, come the operations necessary to
prepare it for the market. These involve such treatments as bleaching,
printing, mercerizing, dyeing, and finishing (in the narrow sense).

The number of machines involved in these various processes rivals the
number which are used in the actual spinning and weaving operations.

Modern bleaching is a highly technical science, conceived and planned by
engineers, and carried out with elaborate machinery by skilled workers.

Gray cloth, as it comes from the loom, is of an unattractive color, a
dirty grayish yellow, and contains not only those impurities which it has
picked up on its journey through the mill but those inherent in its
natural state as well, all totalling some five per cent. more or less, of
the total weight. In addition there may be numerous bits of leaf from the
boll which have clung to the fibers through all the processing, and which
appear finally in the cloth as little brownish specks, known to the trade
as motes. Finally, there is the sizing which was put into the warp.

[Illustration: _Warping--The creel in the rear_]


Bleaching an Intricate
Chemical Process

In the bleaching of cotton, there is a series of operations which have
for their object the elimination of the waxy, fatty matters embodied in
the fiber, as well as any dirt which it may have acquired. Then, there is
the actual whitening and the bleaching of the cloth which destroys any
coloring matter which it may contain and finally there are treatments
designed to neutralize the effect of the chemicals used in the bleaching.
Thus, the sequence of treatments might be: first, boiling in plain water,
which removes certain soluble substances; next, an extended boiling in a
strong alkaline solution, which saponifies the waxy, fatty matters in the
fiber, and thus removes them from the cloth or yarn. Third, a steeping in
a bleaching solution--a solution of chloride of lime being largely
employed for this purpose, and which treatment is known as the chemic.
Next, after another thorough washing there is a treatment in diluted
sulphuric acid to neutralize the effects of the chemic, and finally this
is followed again by another thorough washing with possibly an additional
mild alkaline treatment. The nature and the method of all these
treatments varies considerably, and depends upon the character of the
goods being treated, but, at the conclusion, if all has gone well, the
cloth should be a good white and should not be impaired in strength.


Singeing Necessary
in Some Finishes

For a certain class of goods, where a clean, smooth surface is required,
it is desirable to singe the goods before the bleaching. This is
accomplished by passing the cloth, stretched out at full width, very
rapidly over heated plates, or through gas flames, so that the fine hairs
or fuzz are singed off, but the fabric itself has not had time to take
fire. Both sides may be singed and the goods may be passed more than once
through the flame. When yarns are singed, the threads are passed through
the flame very rapidly, being unwound from one set of bobbins and wound
up on another.

[Illustration: _Front view of an automatic loom_]

In the dyeing operation the cotton piece goods pass through a series of
machines, the goods being in rope form as already explained, so that a
number of pieces can be put into each machine, side by side. The wash
boxes, dye vats, etc. are equipped with overhead rollers, by means of
which the goods, which have been sewn end to end, so as to make a
continuous string of them, pass out of the dye, over the roller and down
into the bath on the other side, continuing to circulate around thus
until the desired results have been obtained. In addition to the
preparatory washing and boiling, mordanting and dyeing, there are
subsequent washings to free the goods from loose coloring matter, and
other special treatments are frequently accorded them.

Finishing in its special and restricted sense, implies a series of
treatments, such as stretching, starching, dampening, drying, pressing,
smoothing, lustreing, glazing, stiffening, softening, and whatnot, which
are given to them according to the use to which they are to be put.

The printing press is constructed with a large main cylinder (D), the
size being dictated by the number of colors which it must take care of.
As the printing operation is a continuous one, there must be a continuous
feeding of the cloth, a continuous inking of the engraved rollers (C),
and a continuous cleaning off of the unengraved surface after the
inking.

Under each roller, where it is fixed in its place in the press, is a long
copper trough or pan carrying the coloring material, and in the pan under
the roller, and extending into the coloring matter, is an intermediate
roller known as the "furnisher" roller, and, as the press revolves, this
covers the surface of the copper roller with a heavy film of coloring.
The surplus coloring is scraped off as the roller revolves, by a long,
sharp blade or knife, known as "the doctor," and after the roller passes
this it is quite clean, no coloring remaining on it except that in the
engraved portion.

Each roller has its color pan with its own color in it. Then, as the
cloth (A) passes between the main cylinder, properly covered by suitable
intervening materials and the series of rollers, each roller in turn
prints its own color, and, collectively, the finished pattern is
produced.

[Illustration: _Diagram of cloth printing machine_]

The goods then pass into a drying room and are afterwards introduced into
a steaming chamber, where they are given a good steaming at a slight
pressure. This steaming develops the colors and causes them to impregnate
the fibers more thoroughly. Subsequently, for good work, the goods should
be washed to get rid of the thickening matters that are mixed with the
coloring, and then the printing appears in all its beauty.


Printing on
Full Ground Colors

The foregoing briefly describes the processes of direct printing. In this
case, the penetration of the colors to the opposite side of the goods is
not very good. If a solid and full ground color is needed both on the
face and back of the goods, it can be had either by the "Resist" or
"Reserve" method, or by the "Extract" or "Discharge" method. In the
"Resist" method, when a white figure is wanted on a black or colored
ground, the goods are first printed with some substance which will resist
the action of the dye stuffs. Then, when the goods are dyed, the treated
part does not take the color and the substance used as a resist is washed
out, and thus a white figure is obtained on a solid colored ground.

In the "Discharge" method, the goods are first dyed in a solid color, and
are then treated with certain chemicals which destroy the dyed color
wherever they touch the fabric, these chemicals being subsequently washed
out where they have been applied, and thus again a white figure can be
had in the colored ground. By the "Discharge" method, moreover, colored
figures can also be printed on colored grounds, as certain colorings have
been developed which are not affected by the discharge materials used,
hence, a whole series of beautiful colors can be printed on goods
previously dyed with black or colored grounds, each color being mixed
with a suitable chemical for discharging the ground color, and thus the
colors of the printed pattern come out as desired.

Another important process which is applied to both cotton yarn and cotton
fabrics is that known as mercerization, called after "Mercer" an English
chemist who introduced the process. Cotton when subjected to the action
of strong, caustic alkali contracts violently, but when again stretched
and straightened it is found to have acquired a distinct silkiness of
appearance, and under the microscope the twisted ribbon-like fibers of
the material--already referred to--will be found to have become straight,
glossy and rodlike, just as a bicycle tire would appear after air was
blown into it.

Cotton may be mercerized either in the yarn, warp, skein, or in the
piece, the first being more effective. The best and most satisfactory
results are achieved when the material treated is made of fine long
staple cotton, either Sea Island or Egyptian, the shorter cottons being
relatively much less improved by the treatment. The mercerizing does not
diminish the strength of the material, and gives to it a greater affinity
for dye stuffs.


Internal Organization
of Cotton Mills

The foremen are specialists in their particular departments. The
warehouseman, at one end, is a judge of cotton stock, and the foreman of
the weaving room at the other knows how many automatic looms may safely
be trusted to each weaver on his staff.

In between these two there are, according to the individual mill, a dozen
or more other foremen, all reporting regularly to the superintendent, all
captains of their own companies of workers, and all keen, in the
interests of their own reputations, to operate their departments as
intelligently, as efficiently, and with as little friction with their
individual operators as possible. For it is generally recognized
throughout the cotton industry that profitable business depends as much
upon the whole-hearted cooperation of the wage-earners, as upon any other
single factor.


The Question of
Individual Efficiency

As for the operators themselves, they are so varied, there are so many
problems which they have to face, and such difficulties which those who
employ and direct them have to solve, that anything like adequate
consideration is impossible. From the impersonal viewpoint, leaving out
of account the human elements, the problems of wages, and the correlated
problem of trade organization, there remains the question of individual
efficiency. It is that which we have chiefly to consider.

[Illustration: _Inspecting finished cloth_]

The number of men, women, and children employed in the cotton mills of
the country has increased at a very high rate, but there has been an
interesting diminution in the proportionate percentage of women and
children under sixteen years of age employed.

The United States Census of Manufacturers gives the following figures:

AVERAGE NUMBER OF EMPLOYES IN AMERICAN COTTON MILLS

           _Men_     _Women_   _Children_  _Total_
    1870   42,790     69,637     22,942    135,369
    1880   59,685     84,539     28,320    172,544
    1890   88,837    106,607     23,432    218,876
    1900  134,354    123,709     39,866    297,929
    1910  190,531    141,728     38,861    371,120

In percentages these figures express themselves as follows:

           _Men_    _Women_  _Children_
    1870    31.5      51.4      17.1
    1880    34.6      49.0      16.4
    1890    40.6      48.7      10.7
    1900    45.1      41.5      13.4
    1910    51.3      38.2      10.5

The question of nationality has had an important bearing upon the
development of the industry in the United States. The constant influx
into the country of successive waves of immigration from the different
countries of Europe has often served in a decade to change the whole
complexion of the labor question. In the original New England mills, the
employees were of almost pure English stock. The sons and daughters of
the Yankee farmers entered the mills, not as a permanent occupation, but
merely as a means of getting a start in life.

Just before the Civil War, the Irish began to come rapidly, and the
actual advent of that struggle saw a great number of the remaining
natives leaving for the army, or thrown out of work. When the fighting
was over they did not return, but the Irish came in even greater numbers.
The next decade saw the arrival of the French Canadians in the New
England states, and there also came, in quick succession, natives of
Italy, and of the various states of eastern Europe.

[Illustration: _Baled cloth being put aboard waiting freight cars_]

This change in the national complexion had two very important results. It
brought into the country a constant stream of cheap labor, polyglot, and
lacking in homogeneity, and consequently slow at first to unionize and
strike. This characteristic brought another in its train--a lack of
stability, and a proneness to transiency. The second result was hardly
less important. It meant that though labor was relatively plentiful, much
of it was unskilled. This lack of skill put a premium upon quantity
production, and led to efforts to develop automatic machinery and
labor-saving devices of all kinds. It compelled most American
manufacturers to specialize upon the coarser kinds of yarns and cloths,
made in simple weaves and patterns, in the making of which the minimum
amount of skilled labor was required.


Native Stock
in Southern Mills

Conditions in the South were somewhat different. From the beginning, the
employes here have been almost entirely of native stock. They came from a
class which previously had little opportunity for any employment of a
regular character outside of farming. When the mills were built these
folks were given, for the first time, an opportunity for continuous
employment. Whole families entered the mills, fathers, mothers and
children serving in different or in the same departments. The South at
first specialized on ducks, twills, denims, and such coarse work. Now,
however, there is a growing tendency to diversify the product. The reason
is found in the increasing capability of the workers, many of whom have
by now spent many years of their lives in the mills, and whose fathers
before them were operatives. Unless present conditions change and the
South becomes the mecca of immigrants--a development probably less likely
now than in the years before the war--there seems to be a strong
possibility that a class of operatives, rivalling eventually in skill
those of the English mill towns, will be developed. The stock is the
same, and the latent capabilities are all there. The determining factors
will probably be the economic changes of the next few years.

A remaining factor in the organization of the mill is the size of the
individual plant, the number of spindles and looms it contains, the
number of workers employed, etc. It is in just this particular that some
of the most characteristic developments of the American industry are
found. About the time of the Civil War, the average New England mill had
less than ten thousand spindles. Today the average is probably between
fifty and one hundred thousand, and perhaps nearer the latter figure than
the former. Some of the mills have nearly, if not quite, a full million
spindles in several buildings. The average in the South is much less than
the New England average. The industry in the older section is definitely
localized, even to the extent of having whole towns devoted almost
exclusively to the manufacture of single grades of cloth. In the South
the mills are more widely scattered, advantage having been taken of labor
supply, water power, and other conditions. Local pride has sometimes
caused the establishment of mills in regions economically unfitted for
them. Such mills do not long survive. The advantage of large scale
production has thus been seized chiefly by the New England mills, but the
generally lower wages of the South have tended to equalize the
situation.

[Illustration: _Original Whitney cotton gin, preserved in Smithsonian
Institute in Washington_]