360 HISTORICAL AND POLITICAL. 



him a salary, and requiring of him a bond in the sum of $25,000. 

 He was not a member of the Board of Directors, nor a Trustee-Stock- 

 holder ; he was simply employed to do a certain work, as directed by 

 the Board of Directors. It is deemed best to give the organization of 

 the Texas Exchange in detail, because it was a precedent for the estab- 

 lishment of an Exchange in many other States, and the history of the 

 Alliance business effort must be a compilation of the State efforts, since 

 no national effort has fully materialized up to this time. 



The effort made by the Exchange to handle the Alliance cotton crop 

 during that fall, was worth many thousand dollars to the farmers of that 

 State. It was a very simple and effective system. The Exchange fitted 

 up a very large sample room, and notified the brethren of the order that 

 they could bulk their cotton in their home cotton yards or warehouses, 

 and send packages of samples to the Exchange, where they would be 

 displayed, and the cotton sold with the guarantee of the Exchange that 

 it was correctly weighed and sampled. In this way the Exchange sold 

 cotton direct to the mills or to Liverpool, and had it shipped from its 

 home depot on a through bill of lading, thereby saving all local freights 

 and other expenses of handling. There can be no doubt that this effort, 

 together with the information as to the current price of cotton, every 

 day sent out by the Exchange, raised the price of cotton to the farmers 

 of that State at least one-half of one cent per pound, on the average, 

 for every pound of cotton sold. This, on the crop of 1,300,000 bales of 

 500 pounds each, was a saving to the farmers of $3,252,000 that had 

 previously gone into the pocket of the speculator. 



The people seemed to realize the great benefits they could derive from 

 the Exchange, if they could only cut loose from the crop mortgage 

 system, so as to be able to control their own cotton in the fall. But 

 when it was mortgaged to the merchant, they could not sell it through 

 the Exchange. In this emergency they began to appeal to the Exchange 

 to provide a system of advancing on their crops, so as to enable the 

 Exchange to control the cotton in the fall. In response to many such 

 appeals, the Board of Directors agreed upon a plan, and instructed the 

 business manager to submit it to the people of the State for ratification. 

 This was done about the first of December, 1887, by a circular letter 

 known as "Circular Letter No. 39." This plan and mortgage obligation 

 are given on the opposite page. 



