20 BULLETIN 1445, U. S. DEPARTMENT OF AGKICULTURE 
reimburses himself by attaching a draft to these documents and sends 
them to the designated banker in the central market for payment. 
The cotton will probably be compressed before it reaches concentra- 
tion destination; and in case it is, the cost is either added to or 
included in the freight. When the cotton is delivered at the con- 
centration point, the bills of lading are exchanged for warehouse 
receipts and insurance policies are attached. If a very high margin 
of credit is desired and the merchant is not very strong financially, 
the bank usually requires that all unsold cotton be hedged. 
If the ownership of the cotton is changed when it is moved from 
the local to the central market, as is usually the case, the local banker 
draws a draft on the purchaser and attaches it to the bills of lading, 
invoice, and insurance certificate. These are sent through the bank's 
correspondents and may be sight or time drafts. When the draft is 
received and paid and the cotton has arrived, the banker holding the 
documents exchanges the bill of lading for a trust receipt to enable 
the buyer to claim and transfer the cotton from the cars into a ware- 
house, where he is given a warehouse receipt, which he returns to the 
bank and has the trust receipt canceled. 
The merchant is required to pay the freight when the cotton 
reaches concentration destination; but when he sells the cotton, if 
he ships it out over the same road, he gets a rate based on through 
haul from point of origin. This means almost a total refund of con- 
centration freight when the quantity of cotton going out over a 
road equals that which came in over it. Concentration freight 
charges are known as freight expense bills. The life of these bills 
may vary somewhat, but they usually run about one year. 
Inrportant services performed at the concentration warehouse are 
receiving the cotton, sampling, pressing, patching, conditioning, put- 
ting on missing bands, and weighing. The cotton is also tagged, 
marked, and branded in even-running lots for reshipment. The 
charges for rendering the different services varies from one ware- 
house to another. 
DISTRIBUTION 
From the standpoint of marketing, cotton is distributed both in 
time and space. Time has to do with the rate at which it is moved, 
toward consumption, and space relates to the parceling of the cotton 
to the various users of cotton wherever situated in the world. 
Time distribution is an attempt to even demand and supply condi- 
tions of one season with another on the basis of costs and anticipated 
prices. It is preeminently the field of speculation, because of 
changes in demand and supply of actual cotton or of anticipated 
supply. The cotton merchant is continually confronted with the 
problem of time distribution. Cotton may be moved out of concen- 
tration warehouses as quickly as it is classed or it may stay there 
indefinitely. The merchant usually accumulates considerable cotton 
that he has not previously sold. These purchases are hedged in some 
distant month, and if he has not sold the cotton before that time, he 
may deliver it on the future contracts sold against it. During times 
of high prices and uncertain business conditions, he is forced to sell 
his cotton out in small lots spread more or less throughout the year. 
When the merchant is thus carrying unplaced cotton, he is compelled 
by the bank not to allow storage, insurance, and handling charges to 
