cotton dealers in this country. Many of the most prominent are associate members of the Liverpool Cotton Exchange. The Liverpool Exchange has sent these American dealers, to be signed, an agreement not to deal directly or indirectly with enemies of His Britannic Majesty. Those who so sign will have their names posted in the Liverpool Exchange and receive preference by the Liverpool members. By implication, those who do not sign will be blacklisted by those who handle the great cotton trade of England.*

These then were the measures which England took to stop the movement of American cotton to Germany. The "blockade" made contraband of everything. In the spring of 1915 this was explained by His Majesty's Attorney General to a group of British scientists, who, better versed in natural science than international law, followed the lead of Sir William Ramsay and, even after March 1, demanded that cotton should be made contraband. The Attorney General explained that the blockade prevented everything from going to Germany by sea and hence it would be superfluous to name cotton as an especial object of embargo. The Order in Council, he said, was very effective in preventing cotton from 'reaching England's enemies. Moreover, he continued, to declare cotton contraband would be to set a precedent which might return to plague Great Britain in the future.

*For the text of the agreement, see Appendix, p. 322.

The effectiveness of the British policy in preventing the Germans from buying and getting our cotton is measured by the fall in cotton prices in the American market.

We have seen that the cotton market reached its high level at the end of April. Though shipments toward Germany had been cut off on March 31, the effect of the great British and German imports carried through. But early in May the trend of prices began to reflect the apprehension of the market as to the future, an apprehension that was justified as the months went by.

The German takings were over. What might have been exported to that country lay a dead weight on the market. Spot cotton in New York, which was 10.60 cents per pound on April 24, dropped to 10.05 cents on May 6. Through May and June it averaged 9.50 to 9.75 cents. By the middle of July the July option had sunk to 8.25 cents. The prospects for a successful marketing of the 1915 crop had indeed become bad.

What is the military value to England of all this economic pressure that she is exercising in the South? Will the German ammunition makers in the fall of 1915 be embarrassed for cotton? It is used mainly in the form of gun cotton to make charges for the artillery and torpedoes. Certainly no reports from the front indicate that the German heavy artillery is sinking into a state of inactivity and there seems to be no excessive economy of torpedoes. That any such result will occur can be asserted or expected only

by those who shut their eyes to the plain facts of the

case.

At the opening of the cotton shipping season, August 1, 1914, the stock of cotton in Bremen (to say nothing of the stock in German spinners' hands) was 309,000 bales, a quantity in excess of other recent years. The direct imports of American cotton into Germany from August 1, 1914, to April 1, 1915, were 242,661 bales. Adjacent neutral countries in the same period imported 1,668,846 bales more than in the same months last year. Assuming that all these excess imports of adjacent neutrals were destined for Germany, the total stock which that country had up to April 1, 1915, amounted to 2,220,507 bales.

It is likely that part of the excess exports to adjacent neutrals were for the consumption of these countries themselves. In particular, it is possible that Italy needed considerably more cotton than last year to supply her own textile mills, which appropriated some of the foreign trade in cotton goods with countries that Germany had difficulty in reaching, such as Mediterranean lands and South America.

Assume, therefore, that Germany to April 1 had 2,000,000 bales of American cotton to meet her requirements. This is only 800,000 bales short of our exports to both Austria and Germany in the year ending August 1, 1914. Moreover, what of the 150,000 bales annually raised in Turkey? What of the 100,000 bales of Persia; and the 1,000,000 of

Russian Turkestan? Is there any doubt that the

:

Jewish dealers who handle this Russian trade smuggled a part of it into Germany, to get the high prices which Germany, alone of all buyers, was offering during the winter? Why in May did England forbid the export of Egyptian cotton to Italy, if it was not moving through to Germany ?*

No one can imagine that the military will not be able to meet its needs from the vast store at hand, not only its needs for this year but also for a long time to come. Besides, so Hudson Maxim says, there are substitutes for raw cotton in making the explosive gun cotton. One, he informs us, is cellulose.

Great Britain is aware of all this. She knows that in the case of cotton, as in the case of grain, the military is fully supplied. The pressure will fall upon the civil users of these products, if it falls at all. The hope is that the pressure on these civil users will become unbearable and that they will force the military to sue for peace.

What is the prospect of a cotton famine in the German textile industries? For certain reasons, Germany needs less cotton than formerly. She has a large export trade in cotton goods. In 1912 this trade amounted to $31,055,000. Since the Orders

*In a letter written to the London Times in April, James G. Peel of Manchester, a large cotton dealer, shows that the exports of Egyptian cotton to Germany and Austria dropped from 99,000 bales in the months October-March of 1913-1914, to nothing in those months of 1914-1915. But the exports of Egyptian cotton to Italy and Switzerland, neighbors of Austria and Germany, increased exactly 99,000 bales to the period under question.

in Council of March 11 placed a ban on all German exports, even if shipped from neutral ports, the only countries Germany can reach are those accessible by land or via the Baltic, which England does not control. Other oversea shipments have ceased. The only foreign markets still available are Turkey, Roumania, Bulgaria, Austro-Hungary, Switzerland, Holland and Scandinavia. In 1913 the shipments to these countries from Germany were about $4,000,000, or only 13 per cent of her exports of cottons. Therefore less raw material than normal is needed to work up for the export trade.

Yet there is reason to believe that more cotton could have been used by German textile industries than was sent them from the 1914 crop. It is recalled that up to April 1 we sent to Germany about 250,000 bales; and to adjacent neutrals 1,650,000 bales more than last year. Assuming that 250,000 bales of our excess exports to adjacent neutrals were actually destined for these neutrals, it appears that up to April 1 we sent Germany, directly and indirectly, about 1,650,000 bales. With regard to German consumption, other estimates agree pretty nearly with those of Ambassador Gerard, who in December wired the State Department that in the year 1914-1915 Germany could take about 2,000,000 bales, Austria about 800,000, together 2,800,000. If that is the case, 1,150,000 bales more of the 1914 crop could have been sold to the Teutonic Allies.

* This does not include exports to Bulgaria, Austro-Hungary and Denmark, for which figures were not available.