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CHAPTER IV.

THE PRESENT STATE OF THE TRADE-THE GROWTH OF COTTON IN THE WORLD.

In addition to the very large stocks of cotton and cotton goods, at the various consuming points in the early part of 1861, the exclusion of 8,000,000 of customers from European and North American markets, by reason of the blockade of the Southern ports, has made the retention of the crops of the Confederate States less inconvenient to the outer world than would otherwise have been the case. The people of the South have, since May 1, 1861, depended almost entirely on the production of their own mills for all descriptions of dry goods,' and have used their leading staple for almost every conceivable purpose. The quantity which they have thus disposed of, up to September 1 next, will be equivalent to at least 1,500,000 bales. The following estimate may, therefore, be received as approximating very nearly to the amount of cotton that may be expected on hand at the commencement of the next commercial year :

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Crop of 1860 remaining over on September 1, 1861.

At the Ports, including 300 bales new crop

In the interior towns.

On the plantations

Crop of 1861

:

Bales

37,574

6,200

25,000

68,774

Estimated stock in the Confederacy on September 1, 1863

2,368,774

E

Of this quantity, however, it is not likely (assuming the advent of peace this summer) that more than 1,500,000 bales can be sent to market prior to the close of the shipping season in 1864, in consequence of the absence of the proper inland transportation facilities, the operations of the war having so deranged the steamboat, railroad, and wagon communications, that very many months must elapse before they can be restored to their former efficiency. 700,000 bales, at least, will be required for consumption in the American States, North and South, leaving 800,000 bales for exportation to foreign countries, against 3,127,568 bales shipped during the season which closed August 31, 1861, and which were distributed as follows:

(These figures do not include that consumed in the Northern States, which will in future be classed as Foreign Ports.')

The average annual consumption of American cotton, on both sides of the Atlantic, for the ten years preceding the discovery of gold in California and Australia, was about 2,400,000 bales; since that epoch 3,000,000 bales have been required; and it is probable that the impetus that will be given to commerce by the recurrence of peace may cause the demand in the next decade to increase to 3,500,000 bales. The crops from 1851 to 1857, inclusive, averaged 3,090,943 bales each year, or just equal to the wants of the world, while those of 1858, 1859, and 1860, yielded an average of 4,059,112 bales per annum, showing an excess of 3,000,000 bales at the breaking out of the war, most of which had been converted into manufactured goods, there having been an increase within those three years in the spinning force of Europe and America of about thirty per cent., which gave a fictitious, not an actual, consumption to the extra production. This was evidenced by the enormous quantities of dry goods' at all the chief markets, particularly those of India and China, the large profits on a few small invoices that reached their ports at the close of the wars in

which they had been engaged having stimulated excessive shipments thereto, which business acted favourably for a time upon the home trade, and for a while increased the exports, but subsequently lessened them, as far as quantity was concerned, although the value, according to the Board of Trade tables, was not so greatly diminished, the enhanced price keeping up the amount. With this exception, nothing whatever happened to augment the demand; in fact, the commercial panic that occurred in the latter part of 1857, if it effected any change, caused considerable economy in the use of cotton goods for the several succeeding years. In ordinary times there is always two years' supply of cottons in the crude and manufactured state at the consuming points; at the fall of Fort Sumter there was a sufficiency for three years' requirements. And hence European, as well as American, statesmen, who were unfamiliar with the details of the trade, made an error in thinking that the war would at once bring about a cotton famine. Articles of commerce that are used for food are rarely carried over the year of their growth, owing to their perishable nature, while the materials for clothing-cotton, wool, silk, flax, &c.—can, either in their raw or finished condition, be kept for an indefinite time without deterioration in quality. Capital thus becomes invested in them, and stocks accumulate. When money is 'easy,' cotton is firm; when money is tight,' cotton is weak. Short crops of wheat will at once create an additional demand for foreign grain; but not so with cotton or other products of a like character, which of course are depreciated in value by a breadstuffs scarcity causing large sums of money to be sent abroad to purchase, or rather to meet the drafts valued against the importations of grain. The idea now entertained by many of these statesmen, that the world having got along pretty well so far without the usual supply of American cottons coming to ' hand, indicates that other nations are not so dependent on the ⚫ Confederate States as was supposed,' is equally fallacious. Only a portion of the three years has transpired; yet cotton is selling at Liverpool at three prices,' or famine rates. What, then, must be its value a few months hence? Surely the warehouses will not be permitted to be exhausted of the raw material and manufactured article before an effort be made to obtain the

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1,000,000 bales that could be afforded by the Cotton States within the next twelve months, and which is not much over one-third of a supply for all Europe, even when there are the usual stocks of cotton and cotton fabrics, and allowing for the quantities received from other quarters. Nor could prices, in the event of that number of bales coming to hand, recede much, if at all, as a large portion of the cotton, and of which the earliest shipments would be composed, is already mortgaged to the holders of the Confederate loans, who, it is expected, will not be very pressing sellers. In addition, the breaking or the abolishing of the blockade would at once give Great Britain 8,000,000 more customers for her textile fabrics, as well as other manufactures, than she has at the present time, without lessening the portion of cotton, 700,000 bales, above mentioned as the consumption in the American States; 150,000 or 200,000 bales are always required in the South, and the operation of the almost prohibitory Federal tariff will draw into the Northern States, at the lowest estimate, 600,000 bales of the raw material. It is difficult, however, to perceive what the North will have to exchange for this vast amount of produce when the South purchases direct from Europe. But the North must have the cotton to clothe the people. The consumption of cotton in the American States with the old and more moderate tariff, was, in the last year of the Union, 843,740 bales. Under the most favourable circumstances no cotton of any moment can be received in Europe from America before next November; and, allowing two months for its fabrication, the demand for goods during the whole of the current year will have to be met from the present scanty stocks, the limited quantities of cotton that may be shipped, and the trifling amount that will be imported from other quarters.

The usual importations of cotton into Great Britain are 80 per cent. of American, and 20 per cent. of other sorts; but, as the exports from hence to the continent are principally of 'other sorts,' there remains 85 per cent. of American, to make what are known as British fabrics, of which, up to the present time, there has been an adequate reserve. After two years of 'agitation' on the subject, an increased supply of the raw material beyond what is induced by high quotations, does not

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reach these shores from other countries, and even that which has been despatched will not more than compensate, as will be discovered, for the great waste of cotton for war purposes in the Federal States. It hardly remains to be tested whether these 'outside' productions will ever take the place of American cottons; they may answer very well for certain kinds of goods manufactured for the home demand: but it must be remembered that the great export trade of England is in other descriptions of fabrics. A silk purse cannot be made out of a sow's ear;' no more can India ever be capable of superseding the Southern States of America in quality of cotton, to say nothing of price. And the same remark applies to Algeria, and other localities where cotton cultivation has been tried over and over again in vain, unless, by some freak of nature, the peculiar climateinfluenced by the Gulf-stream, and other advantages possessed by the States for the culture of their principal staple (among which is their excellent system of slavery, which if discontinued would ruin them, and England too)-be transferred to those countries, as well as the return commerce and general ramifications of trade upon which exchanges depend, and which ever tend to lessen the cost of raw materials at the points when they are needed. The truth is, that the more American cotton manufactured in England, the greater will be the necessity for Surat cotton, and the less American cotton that is passed through British looms (the present is an exceptional period), the smaller will be the quantity of Surat taken. And, in the event of the total cessation of the American cotton trade, India might begin to resume her former occupation of supplying the world with cotton goods, or, what is more likely, her system of labour would become so shipwrecked and deranged as to interfere with her prosperity and entail great loss upon the people of this country, who have invested their capital largely in that part of the globe. Her people are not idlers, and they have various occupations other than that of raising cotton. The general trade of India is steadily on the increase, as will be observed by the following table, which clearly demonstrates that the British commerce with that region is indirectly assisted through the agency of American cottons: