Y 
PRODUCTION OF AMERICAN EGYPTIAN COTTON. 17 
COMMUNITY CREDIT FOR FINANCING THE CROP. 
The production of cotton in a new region involves some arrange- 
ment for financing the crop until it can be sold. The expenses of 
production up to the time of picking are not much greater than with 
other farm crops, but ordinarily the pickers must be paid promptly, 
and the cost of picking, together with the cost of ginning, requires 
an outlay of funds greater than farmers can ordinarily meet without 
special credit arrangements. This is particularly true when cotton 
growing is being undertaken in a new region, because the marketing 
of the crop takes more time than when the industry is well estab- 
lished. Under such conditions the crop can rarely be sold as soon as 
itis ginned. It must be classed and assembled into uniform lots, and 
must move to market gradually if the best prices are to be obtained. 
Even in the case of the well-established cotton industry in Egypt the 
crop moves to the market very gradually, much of it not reaching the 
manufacturer until the following spring or summer. Meanwhile it 
must be financed. 
In view of the uncertainties attending the marketing of long-staple 
cotton from a new locality, brokers are not likely to risk paying what, 
they believe to be the full value of the crop if asked to take it un- 
classed in round lots, as it comes from the gin. For that. matter, 
even when they have the advantage of a well-established market, 
farmers would probably benefit by holding their cotton in storage 
until it can be classed into even-running lots and sold with the least 
element of risk to the cotton merchant or the spinner. 
The associated growers in the Salt River Valley have met this prob- 
lem of financing the crop by a plan of community credit. Arrange- 
ments were made with local banks to secure the necessary funds. 
Each bale of cotton, as soon as it was ginned, was placed in storage 
and a receipt was issued against it, these receipts being used as col- 
lateral for loans through the association. In this way it was possible 
for the grower to procure money to defray his expenses for picking 
and ginning without losing possession of his cotton until it was 
finally sold to the manufacturer. In the absence of such a system 
of community credit, it probably would have been necessary for the 
grower to sell his cotton as soon as it was ginned for whatever price 
he could obtain.? 
GINNING IN RELATION TO PRODUCTION. 
The roller gin which is used for Egyptian cotton can not be oper- 
ated as rapidly or as cheaply as the saw gin which is used for Upland 
Pe ine Ts a oe oe ne i Ry ee 
'In 1917 many growers in the Salt River Valley executed contracts with a corporation 
manufacturing automobile tires which undertook the financing of their crops in return 
for an option on the product. 
