28 BULLETIN 1445, U. S. DEPARTMENT OF AGRICULTURE 
and has cleared the ground for developing the service features. The 
outstanding service contemplated is that of supplying expert service 
in classification of American cotton, or inspection of such classifica- 
tion, and is provided for in section 4 of the act. 
Inspection service has developed in the performance of most of the 
steps in cotton marketing. Ginning, for instance, is a technical 
process, and bad service can rarely be detected by the cotton grower 
and sometimes not by the ginner himself. Oklahoma has a state- 
wide gin inspection service. 
Formerly there was a great deal of cotton thieving by what is 
known as "tag switching," especially on compress and warehouse 
platforms. Individual bales were identified largely by card tags 
wired to the bagging. Warehouse licensing and inspection services 
inaugurated since 1916, where more responsibility is put on the 
warehouseman, is tending to eliminate the serious evil of switching 
tags from good bales to poor ones. 
Bankers are requiring more efficient inspection service before 
making loans on cotton. It is not enough for the banker to know 
that there is a bale of cotton in the warehouse back of the loan he has 
made. He must know the weight and quality of such bale and that 
it is adequately protected from both physical damage and theft. 
This type of service must be performed by those technically com- 
petent to report on all risks, and such reports should be made peri- 
odical^ to all concerned. 18 
REGULATORY WORK 
Regulatory measures may originate in trade organizations or in 
some Government unit. The function of regulation may be to 
prevent undesirable practices or to encourage practices conducive 
to general welfare. Regulatory legislation is usually in the direc- 
tion of standardization and simplification, whether in private or 
governmental bodies. Generally, regulatory measures are resorted 
to after all other methods fail to accomplish the desired ends. 
Regulatory service is playing an increasingly important role in 
cotton marketing. The several cotton exchanges fix certain rules 
for the conduct of their business, not only between members but 
between members of their organizations and the nonmembers with 
whom they deal. 
The trade regulations of one group may come to be regarded as 
detrimental to other interests in the trade itself or to the interests 
of the general public. Prior to 1914 there had been a growing dis- 
content with the rules governing the operation of exchanges dealing 
in cotton futures. As a result Congress set aside certain old rules 
which had grown up in the trade and prescribed certain others for 
the conduct of the business. The opinion is almost unanimous among 
all branches of the cotton trade that the cotton futures act is construc- 
tive and is rendering a valuable service. 19 
The regulation of railroad transportation and railroad freight 
rates may affect the marketing of cotton. Regulations relating to 
cotton warehouses and warehousing and of compresses and com- 
18 Federal Reserve Board. Financing the Production and Distribution of Cotton, 1923. 
19 For further details see U. S. Dept. Agr. Cir. No. 159, Regulations of the Secretary of 
Agriculture under the United States cotton futures act. 
