22 BULLETIN 1445, U. S. DEPARTMENT OF AGRICULTURE 
tract is the same as the first except that the seller must provide the 
insurance policy and deliver it and/or negotiable insurance cer- 
tificates to the buyer, and provide, if necessary, war risk insurance 
for buyer's account. The buyer is responsible for the collection of all 
insurance claims. The actual tare is determined in the third case 
according to the rules of the foreign market. 
FREIGHT BROKERS 
The sale of freight room on ocean-going vessels is made by brokers 
who are located at the important ports and at interior markets whose 
merchants do a large export business. As a rule they not only sell 
freight room but render a number of other services, such as tracing 
shipments, looking after freight and wharfage charges, sampling, 
compression, and the execution of the proper documents in making 
shipments. The brokerage charge amounts to only about 5 cents per 
bale, although other expenses may run considerably higher, depend- 
ing on the service performed. The firms are usually styled freight 
contractors and forwarding agents. 
MONEY TRANSACTIONS 
The payment for the cotton goes through different channels and 
proceeds more rapidly than does the actual cotton. Most sales are 
made b/y telephone, telegraph, or cable. Such agreements are fol- 
lowed by letters of confirmation, which repeat the terms of sale, or 
write out in detail that which was given in code. 14 
When the seller has complied with his part of the contract the 
money transaction is much like that if the ownership changes be- 
tween local and central market. The seller attaches' a draft to the 
bill of lading, invoice, and insurance policy (if he carries the in- 
surance), and presents the papers to the bank. If it is a domestic 
shipment, the seller is credited with the face value less certain charges 
for making the collection. The papers are immediately forwarded 
to the banker's correspondent at the point of destination. The buyer 
honors the draft and it is paid. The bank holds the documents as 
security, if payment is made on the basis of a credit arrangement. 
When the cotton arrives, the buyer must have the bill of lading to 
claim the cotton, so he deposits a trust receipt with the bank until 
he can have the cotton delivered into a warehouse and can procure 
warehouse receipts, which are in turn deposited at the bank. 
If the sale has a foreign destination and is in terms of foreign 
money, the seller draws his draft and sells it for the best price he 
can get. Such drafts or bills of exchange, as they are more fre- 
quently called, are usually drawn for a period of from 30 to 90 
clays. There are banks which specialize in buying and selling such 
paper. They are called foreign-exchange brokers. 
CONTROLLERS 
When exported cotton arrives at the foreign port, it is weighed, 
tared, and classed. If an American merchant without a foreign 
office is selling to a foreign merchant, the American obtains the serv- 
ices of a controller, who looks after his interests in weighing, taring, 
14 For illustration see Miller, T. S., cotton trade suide and student's manual, Austin, 
Tex., 1923, pp. 276-278. 
