PRIMARY COTTON MARKET CONDITION'S IN" OKLAHOMA. 17 
The differences established by various cotton exchanges are sup- 
posed to be based upon the supply and demand for the different 
grades and to be readjusted as the proportion of the different grades 
in each crop becomes evident. As the spinning value and waste 
content of grades have never been systematically worked out, there 
is no accurate information in existence on which a scientific difference 
sheet can be made. 
If the difference represents what the consumer is willing to pay, 
these differences should be approximately uniform throughout the 
country. Because he can not tender them on general contract and 
may not be able to negotiate a satisfactory sale, the interior agent is 
probably justified in offering less for low-grade bales than they will 
bring on the exchanges. For the high grades, however, for which a 
premium is regularly offered by exchanges, there would seem to be 
no good reason why he should not offer proportionately as much 
above middling prices as the exchanges do. The whole question of 
a fair and logical difference sheet is closely allied to the question of 
fair and impartial grading, and such a system is never likely to come 
into existence and t>e put into general use by any of the forces now 
controlling the cotton industry. 
Summing up this whole matter of premiums and penalties, we 
may say that the farmer sells his cotton subject to comparatively 
little variation in price in consequence of variation in grade, but 
that he is subjected to a process of averaging to which he is not 
consciously a party, which is based upon no definite consideration 
of his rights or interests and which must inevitably be so adjusted 
as to leave a hidden profit for the buyer. This system of averages is 
arrived at by rule of thumb, is never reduced to writing, and is 
subject to no supervision or adjudication. 
Averaging prices on the original purchase of cotton is a vicious 
practice because it is impossible to equitably distribute its benefits 
and burdens. On each particular day of the season the man who 
sells a good bale receives less than he should because his price is 
averaged down a little to cover the loss which the buyer will sustain 
on the poor bale of his thriftless and indifferent neighbor. If each 
farm and each farmer produced good and poor bales in the same pro- 
portion, a reasonable system of averaging prices for the day would 
work no particular hardship, although the average price would neces- 
sarily be low enough to protect the dealer who must resell on accurate 
grades; but when it is remembered that many individual crops are 
better throughout the season than others, because of superior seed, 
better cultivation, prompt picking, and careful handling, it is one of 
the most vicious injustices of the entire cotton-handling system that 
an average price should be enforced against these better crops, thus 
11835°— 13 3 
