Agricultural Finance 



[July, 1910. 



The presence of a given quantity of 

 cotton in a warehouse is a sufficient 

 guarantee to prospective buyers to 

 advance two-thirds or three-fourths of 

 the value of the crop, and also to banks 

 to loan money on the cotton as security. 



Recent experiments with cotton in 

 Hawaii indicate that reasonable profits 

 may be expected from this crop in a 

 variety of situations. The quality of 

 lint is remarkably excellent. Quota- 

 tions received within the past week on 

 average samples of four varieties of 

 cotton are as follows :— For Caravonica 

 and Egyptian, 29c. per pound, 31c. for 

 S a Island, and 15c. for Upland cotton. 

 The unsatisfactory quotations received 

 from samples which have been sent by 

 certain growers to cotton brokers have, 

 in the main, been due to the fact thai; 

 these brokers were interested in upland 

 cotton and did not have any interest in 

 a careful examination of the long linted 

 cottons. This is another evidence of the 

 necessity of an organization among 

 cotton growers, whereby they may select 

 the proper markets and make known in 

 a business way the quality of the cotton 

 which they have For sale. 



Article X. 



In his message to Congress, December 

 5,1906, President Roosevelt said: "Or- 

 ganization has become necessary in the 

 business world, and it has accomplished 

 much good in the world of labour, it is 

 no less necessary for farmers." The 

 country life commission, appointed by 

 Mr. Roosevelt, came to the conclusion 

 that the most important matter in the 

 improvement of farming conditions was 

 that of better organization in a co-oper- 

 ative way. The movement is gaining 

 ground every day, but obviously needs 

 to be extended much farther and to 

 include much larger secondary organi- 

 zations of co-operative associations. The 

 farmer has been merely a producer, 

 content to let the other man distri- 

 bute his products to the consumer. 

 In so doing he has become a skill- 

 ed agricultural scientist, and the 

 federal and state departments of agri- 

 culture have greatly assisted him in 

 this regard. In the meantime, however, 

 others have reaped the benefits of his 

 skill and industry. Many of the largest 

 fortunes in the world have been made 

 in the speculative and legitimate distri- 

 bution of the farmer's products. At 

 last he is beginning to understand that 

 by co-operation he can control the distri- 

 bution of his own products and prevent 

 speculation in them. This will be of 



benefit, not only to the producer, but 

 to the consumer. 



It may well be asked why the farmer 

 should have ever failed to get a remuner- 

 ative price for his products ? All farm 

 products are necessities, and must be 

 distributed to the consumer. Farmers, 

 however, have hauled their products to 

 town, or shipped them by rail or boat; 

 in packages indifferently prepared. 

 Their produce arrives on the market in 

 an unattractive condition, the result 

 being that the buyer prefers to go to 

 the regular dealers and pay his added 

 profit. The only remedy for this state 

 of things is to be sought by the farmer 

 in studying the art of marketing pro- 

 duce, and the business end, as well as 

 the producing end, of agriculture. It 

 is necessary to combine in co-operative 

 associations, if necessary, raising money 

 by subscriptions to build markets, and 

 to hire experienced men to manage 

 these markets. The immediate results 

 of such co-operation have everywhere 

 been increased profits to the producer 

 and a lower price for produce to the con- 

 sumer. It is easy to understand how 

 this occurs when we consider that the 

 present system of distribution is well 

 calculated to preveut the consumer 

 from dealing in any direct manner with 

 the producer. The number of links in 

 the chain of distribution has been in- 

 creased beyond all reason, with the 

 result that we pay too much for farm 

 produce and the farmer gets too little. 

 The farmer and his patron must, there- 

 fore, get together. The merchant's busi- 

 ness is based on the principle of buying 

 at wholesale prices and selling at retail. 

 The farmer on the other hand buys at 

 retail and sells at wholesale prices. He 

 buys farm machinery, fertilizers, gro- 

 ceries, clothing and other necessities of 

 retail dealers. He sells his produce to 

 commission men and wholesalers, and, 

 of course, at wholesale prices. The mer- 

 chant often complains that it is difficult 

 to make a living at his business, even 

 with the shrewdest management. How 

 then does the farmer succeed in making 

 both ends meet with his utter lack of 

 business methods ? 



In Hawaii we should have co-operative 

 associations of the producers of pine- 

 apples, rice, coffee, cotton, bananas, 

 rubber, tobacco, beef, mutton, and 

 poultry. The producers of each of these 

 desirable commodities have mutual in- 

 terests to be best served by co-operation 

 and secondary affiliation between these 

 groups of producers could be made later 

 to uiiilual advantage. 



