44 
futures price in the near active month or a specified month. The 
" on " or " off " thus includes the differences for grade and staple and 
the parity between spots and futures. These are the bargaining 
points for the merchants ; because the rest of it has been fixed, if the 
cotton is hedged. 
PRIMARY MARKETS 
CHARACTER AND LOCATION 
The primary or farmers' markets are the assembling points for 
the growers where they meet the cotton buyers. With the exception 
of a few instances in the case of large planters or in unusual years, 
the buyers never go to the farms to bargain for the cotton. In the 
western part of the Cotton Belt these markets are often called 
wagon markets. The cotton is hauled in by the farmers in the seed, 
and is taken to a custom gin. After it has been ginned and baled, it is 
hauled to an accustomed square or market street similar to that 
shown in Figure 5 and sold from the wagons. Every railroad station 
that receives any appreciable amount of cotton for shipment is a 
market place, and many interior villages off the railroads have their 
cotton buyers. 
ORGANIZATION AND PERSONNEL 
Only a very few of these markets are organized in the sense that 
there are any adopted rules governing transactions in them. 
Usually each buyer operates independently. To obtain an outlet 
for the cotton he buys and to have adequate price information, he 
makes connection with some firm in a central market which furnishes 
him price quotations and limits on which he bases his price paid to 
farmers. This kind of buyer is little more than an agent of the 
cotton merchant. There are other local buyers who buy and then 
sell to the one making the best offer. They may resell in the local 
market, or they may wire to buyers in one or more of the central 
markets and sell there. 
Some of the buyers are in the market for the one purpose of 
making profit by their purchase and sale of the cotton. Others, 
especially supply merchants and bankers, may be buying primarily 
for purposes of collecting old debts or for advertising. In the 
larger local markets there is usually one buyer who represents a 
cotton merchant in a centralizing market. He buys some cotton 
direct from the growers, but he buys most of his supplies from the 
local supply merchant, banker, and speculator buyer at the close 
of the day. 
PRICE MAKING IN THE LOCAL MARKETS 
It has been shown that the futures market is the central price- 
making organism in the cotton-marketing world. It was shown 
that the price in these markets is based on the price of contracts in 
the futures market and that the cotton merchants in the centraliz- 
ing markets in turn are the most important sources of converting the 
prices in the central markets into the price in the local markets. 
They do this by means of the limits they give to their local repre- 
