COOPERATIVE MARKETING OF COTTON 39 
receipt of samples they are checked, as shown in Figure 7, and 
classed, as shown in Figure 8. The class or the pool symbol repre- 
senting it is stamped on the duplicate coupons, one part of which 
remains with the sample, the other being sent to the accounting de- 
partment. When samples are “split,” that is, divided for the pur- 
pose of storing in two different places, as is the practice in the Texas 
association, triplicate coupons are used. 
After the classers determine by examination the grade and staple 
of the sample, they are sorted into even-running lots—50 or 100 
samples representing as many bales of the same class—wrapped 
together and placed in racks in the sample room. (See fig. 6.) 
An outstanding advantage in cooperative marketing is the practice 
of classing cotton prior to rather than after it is sold. The initial 
sale of members’ cotton on a classed basis eliminates the evils incident 
to the common practice of farmers selling to local buyers at an aver- 
age or “ hog round ” price. The cooperative practice assures a price 
commensurate with quality, and provides an incentive for the pro- 
duction of better cotton. An examination of the records of one short- 
cotton association shows that 69.6 per cent of its cotton in 1921-22 
classed middling or above; 87.3 per cent in 1922-23; 61.3 per cent in 
1923-24; and 92.2 per cent in 1924-25, 
FINANCING 
The associations, under their plan of organization and opera- 
tion, need little investment capital. With only two exceptions, in 
which reserves have been invested in office buildings, they lease 
their office space. They require, however, large sums to finance the 
handling of their cotton, the total amount depending on the quantity 
of cotton received, the market price, the percentage of the price 
advanced to members, the sales policy, and the policy regarding dis- 
tributions. 
In the beginning some associations proposed to obtain money to 
finance operations from local banks throughout their respective 
States, but this plan proved unsatisfactory. Although some money 
is obtained from small local banks, the tendency soon developed to 
deal directly with a relatively few banks and financial agencies and 
to obtain credit in financial centers where lowest interest rates and 
most favorable terms could be obtained. 
In 1921 the four newly organized associations faced their first 
season without funds, credit, or reputation. Local banks delayed or 
refused the support anticipated, or loaned within limits that only 
partially met requirements. Attempts to borrow from large eastern 
banks were unsuccessful. Finally, relief came at the opportune time 
from the War Finance Corporation. In July, 1921, the War Fi- 
nance Corporation, which had been. revived in January for the 
purpose of aiding in financing the exportation of agricultural and 
other commodities, granted the Staple Cotton Cooperative Associa- 
tion credit to the extent of $5,000,000. Credit was later extended to 
the Oklahoma, Arizona, and Texas organizations, the total com- 
mitment to the four for financing the orderly marketing of their 
estimated receipts, particularly in foreign commerce, involving 
approximately $50,000,000. Very little of this amount was used, 
but the fact that it was made available greatly helped the credit 
of the associations. With the War Finance Corporation extending 
