SERVICES IN COTTON MARKETING 31 
mer advance. A considerable part of this credit is procured by liens 
on the crop. 
Before the Civil War cotton was grown chiefly on large planta- 
tions and was financed to a large extent by the factors who sold it. 
Advances were furnished both in plantation supplies and in cash. 
The war left the planters little in addition to their lands, and these 
were, in many cases, heavily mortgaged. With the high prices of 
cotton then prevailing, creditors were readily found who would 
make liberal advances to the planters for reequipping their planta- 
tions and hiring their former slaves to grow cotton. The necessary 
equipment was bought at war prices, and the unorganized negro 
labor was found to be unreliable and expensive. On the other hand, 
the price of cotton declined from an average of 83.4 cents per pound 
in 1864 to 11.7 cents in 1876. For a long series of years, therefore, 
the cotton grower found himself in the unhappy position of being 
forced to pay loans on a lower price level than prevailed when he 
borrowed the money. Under these conditions the creditors deter- 
mined the number of acres to be planted to cotton and the time the 
cotton was to be sold. 
The spread of the cotton-growing territory into regions where 
growing of cotton is largely on family-sized farms, the extension of 
railroads, and the development of interior town markets weakened 
the hold of the factor and for a time threw the burden of financing 
the growing of cotton on supply merchants, especially in the newer 
cotton-producing regions, which in turn got their supplies from the 
port or factor towns. The merchant granted credit on the basis of 
acres planted to cotton and insisted that the cotton be delivered as 
ginned. 
The relations between the old factor and the planters were per- 
sonal, and credit was based largely on confidence. The supply mer- 
chants often followed the same policy and gave credit where it was 
not deserved. As a result it became necessary to charge wide mar- 
gins of profit on supplies to make up for losses caused by bad debts. 
Thus the control of credit enabled cotton factors and the supply 
merchants to control the first stages of cotton marketing. 
Beginning about 1900 the trend of the price of cotton has been 
steadily upward (fig. 8). Parallel with the upward trend in prices 
of cotton the grower has become less and less dependent upon mer- 
chants and factors for credit and has obtained more of his credit 
accommodations through banks. 
The creation of the Federal reserve banking system, Federal land 
banks, and the intermediate credits banks, and the more liberal 
attitude manifested toward farm paper have aided the banker in 
financing the crop. The advent of the boll weevil since 1900 has 
tended to make the mere crop mortgage too risky unless joined with 
chattels or personal indorsement. When paper is thus properly 
secured, it is in much demand by the bank. The high cost and lack 
of buying freedom of store credit is driving much of this business 
to the banks. 
FINANCING COTTON OUT OF GROWERS' HANDS 
The opportunities for converting production loans into so-called 
marketing loans secured by warehouse receipts are being greatly 
