Recoil

Somewhere off San Francisco, its radio silent and its whereabouts unknown, the Japanese liner Tatuta Maru lay in wait early this week--unwilling to land until it was sure its cargo would not be seized as a result of U.S. freezing orders (see above). The cargo: $2,500,000 worth of raw silk, which a special train waited to take to Eastern mills.

The Tatuta Maru was a symbol of the recoil the U.S. would have to brace itself for if President Roosevelt chose to fire his new economic weapon. The U.S. last season got only 18% of its silk from China and other minor sources, all the rest (273,711 bales) from Japan. Loss of this supply would mean i) an epidemic of bare or lisle-clad shanks, 2) abrupt dislocation of the U.S. hosiery industry (97,000 workers), 3) lesser repercussions on many another U.S. clothing manufacturer.

In Philadelphia, whose hosiery mills gross $25,000,000 a year, the American Federation of Hosiery Workers stopped wage negotiations with manufacturers, turned its attention instead to asking Washington to speed up production of nylon (now supplying 18% of U.S. hosiery needs), mercerized cotton, rayon, other silk substitutes.

As mills tried frantically to add to their stocks, price of silk on the New York Commodity Exchange spiraled last week from $3.04 to $3.65 a pound. Then OPACS's Leon Henderson clamped down with a request to suspend trading, a tentative price ceiling of $3.04 (the Monday level). To Manhattan's Commodity Exchange (which suspended silk trading and deliveries this week) this meant loss of its last important item of trade. Copper and rubber trading had been suspended previously and hide trading is limited by a price ceiling.

For defense, silk is important in parachutes (which take 10 lb. each) and powder bags used to fire big guns. For parachutes, the U.S. could substitute synthetics such as nylon, but only silk (because it burns completely and leaves no residue) can be used for powder bags. Present U.S. stocks of silk are about 53,000 bales in warehouses. 35,000 bales held by mills, enough to satisfy civilian needs for nearly four months or defense needs (according to one Washington estimate) for about three years. To conserve this supply 0PM at week's end took control of all silk deliveries, ordered mills not to exceed their pre-freezing consumption of about 5,000 bales a week.

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