Large Growers
In the case of the larger grower, or the syndicate of growers, the local buyer is usually eliminated. These planters obtain their credit from the large merchant buyers, who in turn are carried by their banks.
Intermediate Buyers
Very frequently the local buyers are scattered so thickly through a neighborhood, and each accumulate such small and heterogeneous lots of cotton that an intermediate buyer finds his way into the natural order. Sometimes the intermediate is merely a “scalper” who buys from the local dealer and sells to merchant buyers. In other cases, notably in Texas, he acts as a concentrating agent, buying at local points from growers and selling, usually at compress points, to representatives of merchants or mills. In the latter case he is referred to as a “street buyer.”
Financing Early Stages
Where the grower surrenders his cotton to the local dealer the latter usually has it ginned, but in cases where the planter is able to finance himself he takes his cotton to the gin himself, pays for the ginning, and either sells in so-called gin bales, (before they are compressed) or, if a warehouse is available at the gin or compress point, holds his cotton until he can obtain a satisfactory price for it. The local banks perform a very important part of the crop financing at this stage, for, since the grower sells for cash, the buyers require advances. These are made by the Southern banks against buyers’ tickets, showing cotton purchased, against gin receipts, warehouse receipts, compress receipts, and finally when the cotton is shipped, against bills of lading.
The Square Bale
The Merchant Buyer’s Importance
The Take-up Man