8 BULLETIN 324, U. S. DEPARTMENT OF AGRICULTURE. 
but there is no doubt that by standing ready at all times to engage in 
buying and to pay full prices it injected into the local situation an 
effective stimulus to maintain prices at the highest possible level. 
Yards for warehousing and insuring the baled cotton of members 
were operated by the exchange at different points in the valley. 
The expense of operating the exchange was provided for by a fixed 
charge on each bale handled. Through the operations of the coopera- 
tive exchange in 1912 much was learned about marketing, several out- 
lets for cotton were secured, and confidence was created in the coop- 
erative marketing plan. 
In the following season (1913) the exchange functioned mainly 
in the marketing of long-staple cotton, fully three-fourths of the cot- 
ton handled being of this class. More private buyers had come into 
the valley, so that the competition for short-staple cotton was sufii- 
ciently keen to make it unnecessary for the exchange to enter that 
field. Doubtless, the understanding on the part of the buyers that 
the exchange stood ready to buy short-staple cotton had some influ- 
ence on the local market. As a marketing agency for long-staple 
cotton the exchange proved its value and must be largely credited 
with insuring the continuance of the Durango cotton industry in the 
Imperial Valley in 1914. Under the practices pursued by private 
buyers it is improbable that long-staple cotton could have secured a 
foothold in the community. Methods of buying cotton which depend 
for profit on the ignorance of the producer as to the value of his 
product find greater range of opportunity when applied to long- 
staple cottons, which possess more factors of value than does short- 
staple cotton. } 
While the exchange was successful in marketing membership cot- 
ton, the plan of financing, which was the same as in 1912, provided 
inadequate funds for meeting the expenses in 1913. Added charges 
assessed against the cotton were sufficient to finance the actual opera- 
tions, but a deficit resulted from heavy reclamations on some of the 
cotton, which was all shipped out in so-called “hog-round” lots, 
that is, without classification. 
In 1912 the exchange handled 2,800 bales. In 1913 the organiza- 
tion included 139 members and handled about 5,000 bales. 
The financial reliability of the organization was well tested in its 
warehousing and marketing activities. On each bale of cotton stored 
in the exchange yards under bonded management and insured, the 
exchange issued a warehouse receipt and made arrangements for 
loans at a reasonable rate of interest through Los Angeles and local 
banks. 
From $40 to $50 per bale were loaned on warehouse receipts. so 
that in 1912 the exchange stood responsible for loans to its members 
aggregating fully $100,000, and in 1913, for more than double that 
