amount thus
drawn.

Buyers must necessarily hold great quantities of cotton in storage, for
they buy whatever cotton is offered, and must sell, as we have seen,
certain grades and qualities to the mills in order that they may weave
the cloth for which their orders call. Cotton must, therefore, be held in
storage, either at the compress points, which is usual, or at warehouses
operated by factors, or by independent corporations, or in their own
warehouses.

While the buyers by cash payments are concentrating the cotton necessary
to fill their domestic or foreign orders, their need for funds is a
pressing one. Their arrangements with local banks we have seen. When the
cotton is shipped, the local bank, by means of drafts on the buyer's head
office, is relieved of the burden it has been carrying, but the cotton
still represents capital, and if that capital is to continue to earn its
wages it must be the basis for credit. The factors and large banks in New
York or Boston, which have been assisting the local bank, must now assist
the buyer and the warehouseman. The methods by which this burden is
shifted to the larger banks are varied, and we can consider only one or
two of their aspects.

Same Mills Pay Cash, Relieving
Factors of Burden

Some of the larger New England mills pay cash for the cotton which is
shipped to them, buying sufficient in the season to carry them through,
or nearly through, the year. Their buyers, therefore, need support, if
they need it at all, only during the period of concentration. They may
have their private banking arrangements, and may be able to utilize their
warehouse receipts or bills of lading, or their mere notes based upon
mixed collateral, for an advance of sixty to seventy-five per cent. of
the value of the cotton, the line having been arranged in advance. Credit
may be obtained by the buyer directly from the warehouseman, who thus
becomes a factor in his own right, being supported by arrangements
previously made with his own bank. Credit may also be obtained from a
bank, upon bills of lading which are exchanged for warehouse receipts
when the cotton is delivered at the port or at any warehousing point; or
the credit obtained from the bank may be settled and a new credit opened
with the warehouseman when the cotton is shifted from cars to storage.

Warehousemen as Factors of
Growing Importance

The growing importance of the warehouseman has been mentioned. His
services have