wn names directly to their customers. The amount of capital
required to handle a business in this way is proportionately very large,
for the concern must be able to keep itself sufficiently supplied with
raw materials, and then to carry the expenses as these materials pass
through the slow stages of manufacture until the goods are finally
finished, after which they may have to be kept in stock for a time until
the delivery dates, and then, after shipment, the accounts have to be
carried until the bills are paid, so that, from the time the manufacturer
pays for his raw material until he finally receives pay for his goods is
a very long period.

Loans Made Upon
Warehouse Receipts

The financing of a business conducted in this way can be assisted by
loans from warehouses upon stocks of raw material stored there, by bank
accommodation, and by facilities which certain banks give for the cashing
of a substantial percentage of those accounts on the books of the concern
which the customers have not discounted themselves. Also, in handling his
merchandise in this way, the manufacturer must have a thorough
understanding of the best means of marketing his product, and this care
of the selling end is, of course, an added burden upon his shoulders
which, in many cases, he may not feel competent to handle properly.

Therefore, the comparatively few concerns which do have sufficient
capital to sell directly, in addition to the many from great to small who
have not, will market their product through what are known as dry goods
commission houses, sometimes referred to as factors, and simply as
commercial bankers. The commission house system, as we have it here, does
not exist anywhere else, and its great growth in the United States has
been largely due to certain peculiarities in our banking methods, which
have prevented mills--even those with a reasonably sufficient supply of
capital--from obtaining the amount of direct banking accommodation
necessary for their needs.

The commission house, in its usual relations with its mills, undertakes
to conduct the sale of their products. Some commission agents insist upon
having the entire selling control of all of the goods the mill produces,
or at any rate, of all the goods of the kind which they are equipped to
sell. Others, again, will take over a partial selling control of the
product of a mill, and various lines of the same manufacturer may be
found offering through different channel