10 BULLETIN 146, IT. S. DEPAETMEjSTT OF AGEICTJLTUKE. 



the farmer's debt. At current prices, the crop of 1913 was probably 

 no exception to the rule, and left the producers poorer for having 

 grown it. 



THE SYSTEM OP MARKETING AT CHARLESTON. 



The structure of the market system at Charleston is the same now 

 that it has been for many years, and is similar to that formerly found 

 at most of the other leading cotton markets. It consists of cotton 

 buyers, factors or commission merchants, and warehousemen. The 

 buyer at Charleston does not buy from the farmer, but only from 

 the factor. In theory the factor acts as the selling agent for the 

 farmer and receives a commission on sales. He never sells directly 

 to the mills, but only to cotton buyers. But, in fact, the chief busi- 

 ness of the factor is to advance money and supplies to farmers to 

 enable them to make their crops and to collect these accounts when 

 due. He is the money lender and is indispensable when the farmer 

 is in debt or has insufficient capital for the year's needs. The num- 

 ber of acres planted in cotton by a man measures in a rough way the 

 amount of the advances a factor is willing to make to him on his 

 crop, and this fact accounts for the persistence of many in growing 

 cotton under present low prices. Warehousemen simply receive a 

 storage fee and are not concerned in the actual buying or selling of 

 cotton. The system is good in theory, and was formerly much 

 more general, but its inflexibility is regrettable, and in many cities 

 outside of the Sea Island section this has led to great changes in 

 practice or to the entire abandonment of the system. 



There are some unfortunate conditions and practices existing in 

 and around Charleston which are detrimental to the Sea Island 

 trade. These have the sanction of precedent or custom and are 

 therefore hard to change or eradicate. 



CENTRALIZATION OF MARKET CONTROL AT CHARLESTON. 



Perhaps one of the most notable of the local conditions is the fact 

 that a single firm of cotton buyers usually purchases over three- 

 fourths of the Carolina crop. Four firms of factors make practically 

 all of the advances toward raising the crop. The firm of buyers 

 and all four of the factors do their banking with the same institu- 

 tion. The cotton-buying firm is represented on the directorate of 

 the bank. The potential power of a firm of cotton buyers in such 

 a position is, of course, great; and it matters not how square the 

 relation between the cotton buyer and the bank is or may have 

 been, there are always many who voll suspect that the firm's connec- 

 tion with the bank is being used to a selfish end. 



Under ordinary conditions in the cotton trade, farmers would be 

 in a position to meet such a situation by offering their cotton through 

 other brokers or to other cotton buyers. But in Charleston this is 



