• U.S.

SHORTAGES: The Climb in Clothing

4 minute read

On top of the rising costs of food, gasoline and rent, inflation-riddled Americans now have still another worry. As the Christmas shopping season begins, prices of clothes and most other textile goods are climbing. A man’s cotton dress shirt tagged $12 a year ago is selling for at least $14 this holiday season—if the shopper can find what he wants at all.

An all-silk necktie that went for $7.50 last year is now $12.50. At Manhattan’s Saks Fifth Avenue, men’s wool suits that sold for $280 earlier this year now cost $310. Presaging a further rise at the retail counters, wholesale apparel prices in October rose 1.7%—the biggest monthly jump since the Korean War year of 1950.

Prices are rising for a wide variety of reasons: threadbare supplies, bad weather, questionable Government policy and heavy foreign demand. In addition to the shortage of natural fibers, a scarcity of synthetics looms. The oil shortage is tightening the supply of petrochemicals, which are used in many man-made fabrics.

Silk is in short supply because of labor shortages in the Japanese silk industry and heavy Japanese buying of Chinese silk to meet high demand. Wool is scarce largely because prices fell last year when demand dropped because of the popularity of synthetic double knits.

Taking advantage of the bargains, Japanese and other foreign buyers bought up 40% of the U.S. wool output, as well as most of Australia’s production. Now double knits have become less popular; but wool is tight, and wool prices are climbing.

Cotton is the most widely used natural fiber, but long staple (quality cotton) is no longer very stable. Demand for all grades is so greatly outstripping supply that the price of raw cotton is about 650 a lb., v. 250 a year ago. In Atlanta, a decorator showing drapery samples cautions: “Don’t choose anything with cotton—it’s sky-high.” In Bar Harbor, Me., a manufacturer of sea bags says that he is going out of business because he cannot get any more duck cloth. In San Francisco, Levi Strauss & Co. has begun informally to ration jeans and other denim goods to clothing stores. Women’s Wear Daily predicts that manufacturers of cotton denim will not be able to accept new customers for “at least a couple of years.”

Demand for Cotton. Exports are significantly responsible for the shortages that are forcing prices up. Some 6,000,000 bales of U.S. cotton, no less than 45% of this year’s crop, will be sent abroad. The Japanese have bought about 1,800,000 bales, 2½ times their normal purchase. The U.S. Government no longer permits the Japanese to convert their huge hoard of dollars into gold, and so they are moving their money instead into such commodities as soybeans, wheat, shrimp—and cotton. In addition, China, hit by a bad crop, is buying unexpectedly large amounts of American cotton—700,000 bales this year.

The U.S. cotton crop was hurt, too, by flooding this spring. Worse yet, the Agriculture Department last winter anticipated surpluses rather than shortages, and it cut back the number of acres on which it pays its standard 150 a lb. subsidy. That move saved the taxpayers $100 million, but by reducing the cotton crop by 4%, it aggravated shortages and drove prices up.

Though the Agriculture Department’s move was designed to help cotton farmers, most of them were angry. The reason: months ago they committed their crops for sale to brokers at prices averaging a little less than half the current levels. A minority of farmers who held out are now reaping windfall profits, as are the brokers, who bought at low prices.

As shortages become more severe, talk of export restrictions has begun to crop up. Georgia Democratic Senator Herman Talmadge is demanding controls on all commodity exports because of the cotton crisis. The U.S. learned to its sorrow earlier this year that controls on individual commodities lead to problems in other areas. When the Government slapped controls on exports of soybeans in June, foreign buyers simply put their money instead into related U.S. commodities, like peanuts and alfalfa, whose exports then had to be controlled too. A blanket program on all exports would be patently unacceptable to the Administration, which believes that export controls are unmanageable and counterproductive.

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