s. There are some obvious
disadvantages connected with this latter procedure.

If the mill is a very large one, the selling agent may handle no goods
except the product of that mill, but in the great majority of cases, the
factor will represent a considerable number of mills.

Immediately on receipt of the invoices of the goods consigned to the
selling agent, the mill can draw against them a percentage of their
value, previously agreed upon, usually about two-thirds of their net
selling price, and upon these loans interest at the rate of 6% is
charged. The difference between the rate at which the commission house
can borrow money, (in normal times perhaps 4 to 4-1/2%), and the 6% which
is usually charged to the mills, constitutes a considerable part of the
profits of the factor's business.

Factors Provide
Selling Facilities

The factor often provides a store, together with a complete selling and
office force, and every facility for receiving, storing, selling, and
shipping the goods, and for financing the business. The salesmen of the
house travel throughout the country, reaching all the important markets,
and the managers of the different departments, who thus understand the
needs of the market, are in a position to advise the mill with
intelligence and exactness as to the kind of goods which should be made
to meet the requirements of the trade. The cost of warehousing and of
insurance on the merchandise is also paid by the commission agent.

[Illustration: _Spinning room in a large mill. These are all ring
spindles_]

The prices at which the goods are to be sold are fixed by the mill, but,
of course, they will finally sell at prices determined by the market
conditions. As the goods are sold, the amounts which they bring are
credited to the mill, less whatever has been advanced against them. The
selling agent also stands ready, no matter on what time and terms the
goods may be sold, to credit the mill with the net value of the sale,
less 6% interest for the unexpired time within which the customer may
pay, and from this interest charge also he secures part of his return. Of
course if bank rates are very high, as they sometimes are for short
periods, the factor may be out of pocket on the interest account, instead
of making profit. As the goods are sold, so are the equities in them
released, and the balance is credited to the mill. If, however, the goods
sell at a loss there will be no equities coming to the m