without capital, depending on donations and assessments, with no power to enforce collection. Instead of confining its operations to buying and selling as the farmers' agent, it attempted to take the place of the country merchants, and to furnish supplies on credit to all the farmers of Texas. To do this successfully would require millions instead of thousands. The reason the banks refused to lend money to the Exchange in March, 1889, was neither opposition to the Exchange nor undue friendliness to the jobbers, but plain business prudence. The Exchange was doing a larger business than its capital warranted; the joint notes used as collateral security were represented by accounts from twenty-five to seventy-five per cent less than the face of the notes, and while innocent purchasers could be protected in the courts, still litigation is a resort which every prudent business man tries to avoid; some of the joint notes were offset by bonds agreeing not to part ownership, while as a matter of fact they were placed in serious jeopardy by being put up as collateral security for extensive loans. The wisdom of these precautions was demonstrated in the final outcome of the Exchange's management.
In October last the representatives of the trust fund, which reached about $17,000, perceiving that it would be inadequate for the ends sought, met at Dallas and placed it in the hands of the manager, instructing him to save such part of the Exchange as might be possible. Since the sale of the building there has been organized a new corporation, composed of Alliance members representing the trust fund; and this new corporation, known as the Farmers' Alliance Commercial Agency, has purchased the Exchange building, and designs carrying on a general buying and selling agency. It is to be hoped that the new enterprise will be more successful than the old one was.
