developed with the need of mills for greater credit, and
their unwillingness to tie up their working capital in cotton held in
their own warehouses. Mills which formerly bought all their year's supply
during the buying season, so-called, now take their cotton from
warehouses as they want it, buying it from their buyers, and making
payment according to the individual standing arrangements. The advent of
the warehouseman who is either a banker, or closely affiliated with a
bank, has undoubtedly done much to make the financing of cotton a more
elastic and feasible proposition, distributing the risk over a wider
circle and making credit more readily available at any point in the
succession.

[Illustration: _Weighing gin bales in a ginnery yard_]

[Illustration: _Cotton warehouses in the South_]

The mill, we have seen, frequently pays cash for its raw stock, or else
buys upon short term notes. The average mill does not have a working
capital large enough to enable it to tie up the thousands of dollars
necessary for such a proceeding, as well as the funds which must
constantly be paid out for wages, for operation expenses of all kinds,
for upkeep, and all other overhead. Mills, as a matter of fact, are
frequent borrowers, either from general banks, or from textile banks or
factors, or from their selling agents, who, as we have seen, combine
their primary and original function of selling with that of supplying
financial assistance.

Mills which purchase cotton from their buyers and pay cash, or
approximately cash, for it, usually buy such cotton to fill orders which
they have already received from their selling agents. They may, in
certain instances, obtain an advance from their agents of a proportion of
the whole selling price of the order, and out of that advance pay for the
purchase of cotton, or they may hold the cotton in warehouses, using it
only as needed, and putting up the warehouse receipts as collateral for
loans.

The raw cotton itself, however, represents only a portion of the mill's
operating expenses and it cannot be the entire basis for financial
operations of the magnitude often needed. These broader financial wants
may be met out of the prospective selling price of the cloth by means of
loans from the selling agent; or, they may be met by direct relations
with a commercial bank, which may make loans on ordinary collateral, on
acceptances, or, as frequently happens in the case of mills of undoubted
int