COOPERATIVE MARKETING OF COTTON 35 
- Practically all association cotton is compressed, except that pro- 
~ duced and sold in southern mill districts. When shipped abroad it 
is further compressed at the port, the standard density being reduced 
to a “high density ” of from 32 to 38 pounds per cubic foot. 
Inasmuch as compressing results in the addition of extra ties and 
patches, the weight of the bale is increased between delivery by the 
farmer and its receipt by the ultimate buyer. Following trade 
practices, the associations show this gain in weight or “profit on 
patching” as a gain accruing to its members. Although shippers 
seem to believe that the extra weight of bagging and ties results in a 
profit from the sale of bagging and ties at the price of cotton, many 
students of the complex question of tare take the position that the 
amount of tare is taken into consideration in the prices paid and that 
the apparent gain is not a net gain, but an economic loss. However, 
whatever advantage may accrue to the merchant or exporter in add- 
ing weight now accrues to the grower in the cooperative marketing 
plan. In some instances there is a gain in weight from the absorp- 
tion of moisture, which, when it occurs, is obviously a net gain to the 
cooperatives. 
The practice of receiving cotton soon after ginning and immedi- 
ately storing it in suitable warehouses is effective in reducing the 
enormous annual loss caused by weather damage. This damage is 
frequently called “country damage” because the bulk of it ordi- 
narily occurs at country points. Asa result of a study made by the 
Department of Agriculture in 1919 the average annual amount of this 
damage was estimated at $2.50 per bale or $30,000,000 a year. Claims 
for weather damage actually paid by the Texas association on the 
cotton exported in 1923-24 amounted to only 8.5 cents per bale for 
the 111,341 bales it exported in that year. The associations practi- 
cally eliminate the loss from weather damage to their cotton, par- 
ticularily the major part which occurs at country points to unware- 
housed bales. This is an advantage to its members, although the 
amount of the net gain is not as large as the estimated losses might 
indicate, because the gain is offset to some extent by the costs incident 
to providing protection. 
INSURANCE 
Under the long-established practices in cotton marketing, wherein 
the cost involved in handling was taken into consideration in the 
prices paid the grower, cotton merchants were more interested in 
obtaining insurance rates on the same general level with their com- 
petitors than in bringing about materially lower rates for the benefit 
of the industry, including the growers. The cooperatives in their 
properly directed efforts to bring about reductions by so handling 
their cotton as to reduce the hazards have not only directly bene- 
fited their members but also have indirectly benefited the entire 
industry. For example, the announcement of the Staple Cotton 
Cooperative Association in 1921 that it would store cotton only in 
warehouses licensed under the United States warehouse act brought 
all delta warehouses under Government regulations, which resulted 
immediately in a 25 per cent reduction in insurance rates, beneficial 
alike to the association and all handlers of delta cotton. It was 
estimated that in the 1921-22 season alone savings in insurance pre- 
miums on cotton in these warehouses amounted to over $280,000. 
