32 
BULLETIN 1445, U. S. DEPARTMENT OF AGRICULTURE 
improved. The intermediate credit corporations, organized under 
the authority of the agricultural credits act, in some of the cotton- 
growing States have arranged to make their collection of produc- 
tion loans through the cooperative marketing associations. Some of 
the commercial banks are doing the same thing. This practice not 
only simplifies the problem of the bank of converting one type of 
credit into another but it also simplifies the collection problem, for 
the association agrees to make the distribution prescribed by the 
interested parties. 
FINANCING THE MANUFACTURER 
The manufacturer relies largely on the warehouse receipt to finance 
his stock of raw cotton. It is the policy of most mills to carry at 
AGGREGATE RESOURCES OF STATE AND NATIONAL BANKS 
OF LEADING COTTON STATES, AND VOLUME OF COTTON 
dollars PRODUCTION, 1880, 1890, 1900, 1910, AND 1920 
AND 
OUNDS 
1ILLIONS 
4,000 
3.0 
\: 
Cotton Pre 
duct/on 

-------""""1 
1.000 
; 
100 
Resources 
- 
: 
1880 
1890 
1900 
1910 
1920 
Fig. 8. — Comparative increase in volume of cotton production and of bank re- 
sources in the cotton-producing States. Production figures are compiled from 
the reports of the Bureau of the Census. Bank resources are those reported 
in the Federal Reserve Bulletin of March, 1923 
least eight weeks' supplies in their warehouses. The normal mill 
stocks for the mills of the United States are a little over 1,000,000 
bales. 
The sale of dry goods is usually made on the basis of 30 to 90 days' 
credit. The usual time granted in New England is 70 days. The mill 
may get the selling agency to carry the customer or guarantee the 
account, but it must pay for it. When the mill has sold its goods 
for forward delivery, the problems of financing its operation are 
comparatively simple, but should it run into a slack season and have 
to make stock, the funds tied up in raw cotton and unsold cotton 
goods may become dangerously large and a considerable item of 
expense. 
Some mills prefer to buy their cotton in large quantities early in 
the season. A few such mills buy outright and hedge it, but more 
