COTTON 241 



During the time consumed in the operations from 

 raw material to finished product, capital is locked 

 up with no return until the final sale. To meet 

 daily and monthly requirements, the spinner se- 

 cures his cotton. So close is the margin of profit 

 that any material increase in price in the raw shape 

 may act to his disadvantage, even to such an extent 

 as to wipe out his profits entirely. To protect 

 these profits he can purchase contracts for future 

 delivery which will enable him to figure actual cost 

 in his estimates just what price the raw product 

 will command at some future time. It insures him 

 on actual cost, protects him if an advance does take 

 place. All the while, too, he has not been obliged 

 to secure large quantities of cotton to be stored and 

 looked after from day to day; he is saved all this 

 trouble, risk, and expense. 



Briefly then, the contract for cotton for future 

 delivery enables the spinner to secure his raw ma- 

 terial any time during the year, and safeguards 

 him against a time, if such should come, when it 

 sells for an abnormally high price. It should be 

 remembered, however, that the market may be 

 so manipulated as to force prices for future delivery 

 to such heights as to threaten his profits, unless he 

 has continued to insure and protect his takings by 

 constant buying and selling, thus putting him on 

 the defensive and in the tread-mill of speculation 

 as well. These constant fluctuations day after day 

 the year round are the evil influences at work, often 

 to the spinner's advantage and as often to his 

 disadvantage. 



WHAT OF THE PRODUCER? 



The producer may at times imagine that trading 



