MARKETING The methods by which cotton is marketed " are inher ent in the credit system. The crop lien, as said above, is a form of restrictive credit which assigns to the creditor the control of the sale of the product. Accordingly, cot ton produced on rented land or on credit arrangements is sold through the landlord or merchant. Often in the Cotton Belt ginners and supply merchants are cotton buyers, having connections with the larger cotton com panies. The demands of the creditors and the fact that cotton is practically the only cash crop for many farm ers, tend to throw the product on the market as soon as it is ginned. An observer of southern agricultural con ditions thus sees the interaction of producers with buyers in the primary markets: I saw the farmers coming into the markets this fall by hundreds with the products over which they had sweated and toiled all the year; a great unorganized procession . . . with out a common purpose and no group direction. . . .
Once in market towns they find themselves the one un organized group in a world more or less highly organized. [The cotton farmer] finds himself everywhere under pres sure and in a hostile atmosphere. . . . Each man must deal separately with this powerful and intricate machine for buy ing and financing his crops. He finds that he is competing in the market with his neighbor farmer, . . . thus lowering the price for both. . . . Often he cannot wait; the merchant and the banker are clamoring for their money, . . . the re sult . . . prices are often forced below the cost of pro duction." The rush of cotton to market " can be seen in the fact that 80 per cent of the cotton handled during the whole year is marketed from September to February. Of the 11,300,000 bales marketed during the whole year of 1921, over 8,000,000 were disposed of from September to February. In 1922 over 10,000,000 out of 12,443,000 bales were marketed during the same period. In 1926, 10,250,000 bales were thrown upon the market during October, November, and December, on the heels of a 2,698,000-bale shipment in August and September. The market sagged under the weight, and cotton brought lower prices in December. As a result, the facilities of the Cotton Belt, poor at best for handling the crop, suffer a near breakdown. Defective terminals, inadequate stor age, and a general indifference result in exposure that to any other commodity would spell ruin." It is not possible to state with accuracy the losses to producers from ex posures, but it is known that millions of pounds of worth less staple are scrapped from bales, caked and rotted from mud and water. In the season of 1918-19 the loss from bales sent to the pickeries from the New Orleans market amounted to 1,142,000 pounds, equivalent to nearly a pound and a half for each bale of the press re ceipts at New Orleans.' If it were left to be determined by the nature of cot ton itself rather than by the financial weaknesses of the growers, the marketing of cotton might well be evenly distributed throughout the year. Cotton, as a matter of fact, keeps better in storage than any other farm crop. "Nearly all banks," writes Gilbert H. Collings, "are will ing to advance money on cotton at liberal terms if the cotton is properly stored and insured. In fact they prefer it to real estate and will accept it as collateral as readily as government bonds." 32 Most warehouses, however, be long to mills, middlemen, factors, and the non-farmer group. One-half the warehouses in Texas, for instance, are located in two cities, Galveston and Houston. Georgia has the best distributed system of warehouses, but in most areas warehouses offer comparatively poor service for high charges to farmers because of the small volume of business." There exists justification for Carl Williams' " state ment that "cotton has been and still largely is a city man's crop" in the fact that cotton classing is a techni cal art of which the farmer is ignorant. Since cotton cannot be used on the farm or by retail consumer, there exists no possibility of the growers' dealing with indi vidual consumers. The modern cotton trade, then, is or ganized on the basis of assembling a large quantity of fibre of certain qualities to supply vast manufacturing establishments. There exists, thus, for the cotton pro ducer only a wholesale market manned by technical ex perts in the art of classing cotton. The lack of what may be called retail competition, the fact that the farmer has no alternative but to sell to the manufacturer's repre sentative, the cotton buyer, whose methods of classing he may not understand, is responsible for the farmer's suspicion of cotton exchanges and his demand for special legislation in regard to marketing."
That there exist foundations for suspicions of the cot ton marketing system is pretty generally known through out the Cotton Belt. A study of cotton market conditions in small towns in Oklahoma " found that in the same market on the same day, the same grade of cotton brought widely varying prices, depending on personal factors. This situation may be owing to the ignorance of the county buyer in the classing of cotton. He pays the grower of poor fibre too much, and he pays the grower of long staple too little. It has been shown that the general merchant pays a higher rate for credit than non-credit cotton, thus offsetting to a slight degree high interest charges It is Mr. Coker's opinion that: The county buyer pays the same price for all cotton that is brought to him. This is the fault of the large cotton houses, local buyers, and cotton mills themselves. With a few notable exceptions these have taken little or no interest in the production of superior cotton, though they could al most immediately increase the length and improve the char octet and grade of the entire crop by seeing that each indi vidual grower was properly compensated for superior quality in his produce' On the other hand, it is considered legitimate in many instances to underbuy cotton. "The failure to discrimi nate in price to the farmer is so general that many buyers do not consider it dishonest, but look upon it merely as one of the ways of increasing the profits of their business." failure to pay the market price for the staple is due, it has been suggested, to the restriction of competition. "In some towns . . . in the Cotton Belt there is a general understanding among these men [buy ers] whereby each enjoys the exclusive right to do busi ness with certain farmers. . . . For instance when a farmer brings a load of cotton to town, one of them will walk out and place his foot upon the hub of the wagon and begin talking to the farmer. This is the accepted sign that the farmer is his customer." 40 It was shown in the North Carolina study that the producer who knew the class of his cotton obtained on the average $1.15 per bale more than the farmer who was not furnished such information." If this can be ac cepted as generally true the growers must lose from twelve to sixteen millions of dollars a year because of ignorance of grade. Carl Williams is authority for the statement that the Mississippi and Arizona cooperatives "have consistently sold cotton at from $10 to $15 a bale above country market prices. The Oklahoma and Texas short-staple associations whose cotton is of lower value have developed a differential of from $5 to $10 a bale." 42 The Cotton CoOperatives are the attempts of the grow ers to break through the cotton system. Like many social changes, the organization of cooperatives grew out of a crisis—the fall in the price of cotton after the war. The first to be organized was the Oklahoma Association in April, 1921. The movement grew until in 1925 there were fifteen Cotton Cooperatives in thirteen states with a total membership of 284,867. They have formed a federation in an overhead body, the American Cotton Growers' Ex change, which coordinates the activities of the various associations. Within four years from the founding of the organizations they had handled 3,140,928 bales of cot ton." Conflict with the established cotton system has been evident throughout their history. Men who have signed up their cotton have not been able to deliver it to the Cooperatives because of credit arrangements and crop liens. Many more have been kept from joining by this factor. The tenant has no option ; his fate is in his landlord's hands. If the landlord joins the Cooperative, the tenant, in debt to the supply merchant, cannot wait for any part of the payment for his share of the crop. In addition to the individualism of the farmer, the Co operatives have had to fight the covert, and often open attacks of the vested interests in the cotton trade. Supply merchants and cotton buyers have been hostile toward these efforts, on which depends the future of the cotton system in the South.