COTTON PRICES AXD MARKETS 41 
The business of these organizations is conducted by a president, a 
secretary, a treasurer, and a number of committees. The^ usual com- 
mittees are those on membership, information and statistics, finance, 
quotations, insurance, classification, grievances, arbitrations, and 
appeals. Each exchange has a body of rules which defines the terms- 
used, prohibits certain practices, prescribes the methods of doing 
business, and provides means for enforcing the rules. The rules 
are designed to standardize the business, to eliminate dishonest or 
detrimental practices, and to promote the best interests of the 
members. 
FUNCTIONS 
From the standpoint of marketing services the chief functions of 
those in the centralizing markets are: (1) To sell cotton in even 
running lots; (2) to assemble and class the cotton for shipment to 
spinners, either direct or through a dealer: and (3) to buy it from 
farmers and local buyers and carry it until it is wanted. To reduce 
his risk in performing this last function, the merchant ordinarily 
sells future contracts equal to the number of bales carried. These 
are sold from day to day as he buys the cotton. 
The mill wishes to buy cotton in even-running lots. The mer- 
chants in these centralizing markets are in the best position to make 
such sales. They buy and assemble hundreds of bales, although 
they often store many at the small compress warehouse concentra- 
tion points. The classing of the cotton into even-running lots on the 
basis of either private types or Government standards is done in the 
central market on warehouse samples. 
The merchants in these markets carry a great deal of cotton. The 
mills may buy a large part of their supplies in the summer and 
fall, but have it delivered in small lots throughout the season. If 
the merchants have not sold their purchases ahead, they continue 
to buy and store the cotton, pending the time the mills come into 
the market. They thus carry the surplus which accumulates in the 
fall to other seasons or from one year to another. They are well 
situated to perform this service because they have access to the best 
warehouses, deal in large even-running lots, and are able to obtain 
favorable credit and insurance terms. These centralizing markets 
do most of the exporting or selling to exporters. 
Some of the centralizing markets have a number of large cotton 
factors and f. o. b. sellers. The factor does not class the cotton and 
sell it ^ in even-running lots. Each grower's cotton is sold " lot 
through " or in what are sometimes called " hog round " lots, to 
merchants and shippers. The chief function of the factor is to give 
the growers the services of a skilled salesman and the marketing 
facilities available in these markets. The f. o. b. shippers sell cot- 
ton in the primary markets from samples sent them by the owners, 
usually local buyers or large planters. In most markets they charge 
$lper bale for their services. When the owner is satisfied with the 
price offered, he is notified where to ship the cotton and on whom 
to draw his draft. 
