236 
COTTON 
Furthermore you apply this principle in the 
purchase of all your supplies — all needs ; you secure 
your luxuries as well as your necessities when you 
think the time and the place are best. 
THE MANUFACTURER'S POLICY 
The manufacturer does likewise. He goes to 
the market for his supplies at the time when he 
considers the market at its lowest point. In this 
the cotton spinner is not different from other men; 
if the market points to an advance in price, he will 
make his purchase now. But he runs a risk; his 
needs are many, his supplies costly, and prices may 
not advance; they may even decline. When this 
turn is taken, loss naturally follows and often to 
such an extent that all profits are absorbed in the 
loss. To reduce these risks to a minimum, and 
also to arrange so that but a margin of the value 
would be required for protection, contracts were 
early arranged which allowed a spinner to buy his 
cotton on the basis of future delivery. This device 
of trading in contracts for the future delivery of 
cotton was quickly adopted by the trade, especially 
by those concerned either with the movement or 
consumption of cotton. An exceedingly gratify- 
ing advantage to the spinner was this, for now he , 
might estimate the quantity of cotton needed at a 
certain time, make his purchase on the basis of a 
future delivery, and in the meantime continue the 
manufacture and sale of his products. Knowing 
the amount of the manufacturing expenses, and 
now just what his cotton in the raw would cost four, 
six, eight or ten months in advance, he could estab- 
lish his selling price, make his purchases and his 
sales, and all the while be relieved of worry over 
