Cotton Cloudburst

Under pressure from cotton mercers who protested that the Government's cotton holdings acted as a "cloud" over the market, the Federal Farm Board last week announced the coming of a cloudburst. During the year beginning Aug. 1, the Board will dispose of 650,000 bales of cotton, one-half of the amount it bought from the 1930 crop at an average price of 16.3-c- a lb. It will be the first real sale made by the Government since it began trying to peg cotton prices. Since cotton sold last week at 6-c- a lb., and since it costs approximately $3.50 per year to store and insure a bale of cotton, the total Federal loss on this transaction will be between $25,000,000 and $30,000,000.

The Farm Board made its decision on the recommendation of "cotton cooperatives, leading Southern Bankers and leaders in the textile trade." But the' decision did not please Southern Senators. Georgia's George and South Carolina's Smith clamored for the Board to withhold its sale "for another year at least."

Last week's announcement affected only one-fourth of all Federally-owned cotton. Not to be sold before July 31, 1933, announced the Farm Board, are its other 650,000 bales or the 2,100,000 bales owned by the American Cotton Cooperative Association, its debtor. In addition, the Department of Agriculture owns 365,155 bales of cotton accepted as collateral on defaulted seed loans, but does not intend to dispose of them "in the immediate future."

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