as in the present emergency, the merchant can not afford to 
COTTON WAREHOUSES. | 5 
many of them failed to meet their obligations, thus making it 
especially hard on the merchant. When the price is unusually low, 
‘“close 
out’ the tenant. The cotton, if thrown on the market, would not 
bring enough to settle the account. If the merchant insisted on 
selling the cotton he necessarily would jose much of the money due 
him. 
It is equally true that the local banker is helpless in such a situa- 
tion. His bank advances some money to local merchants and some 
to the farmers. He has borrowed most of this money from some 
larger institution which is usually located outside of the cotton- 
producing section. He is supposed to pay this money back at the 
time that cotton is picked. When the farmer fails to meet his obli- 
gation the merchant naturally finds it difficult to pay his banker. 
Then the local banker is dependent upon the mercy of the larger 
institution. | 
A well-organized system of cotton warehouses would be of the 
greatest assistance to the farmer, the supply merchant, and the local 
banker in financing the cotton crop, especially in tiding over an 
emergency. ‘There is a serious need for warehouses whose receipts 
would be accepted as an absolute guarantee that a certain amount 
of cotton of a definite grade and in marketable condition had been 
stored with the warehouse company. Under such conditions it 
would be very easy for the farmer to store his cotton and offer the 
receipts to his supply merchant as collateral for extending the time 
in which his account must be paid. The merchant in turn could 
surrender these receipts to the local banker and extend the time of 
hisloan. The local banker would then use these receipts in a similar 
way to extend the time of his loan with the larger institution. In 
practically every instance the large banker would be glad to extend 
the time of payment when these receipts were offered as collateral. 
In many instances the rate of interest would be greatly reduced. 
This is one of the very important functions of an efficient system of 
warehouses, and the need of such a system is extremely urgent. 
GENERAL DISCUSSION OF STORAGE FACILITIES. 
It will be shown (Table VII, p. 17) that the warehouses now in 
use are entirely ample in total storage capacity when we consider the 
South as a whole. The investigations indicate that if all storage 
houses, including those belonging to cotton mills in the cotton-growing 
States, were used, every bale of an average crop could be stored. 
There is never a year when there is a demand for this amount of 
storage space. Some cotton is always shipped direct from the gins 
through the compresses to New England and to Europe. Some is 
