The merchant is up against a very different proposition. As we have seen, he buys for cash, and not only sells on credit, but carries a large proportion of what he buys for several months, before he can dispose of it. There are so many kinds of wool merchants that it is almost impossible to make any general observations. One merchant, for example, may specialize entirely in domestic wools; in that case he would do all his buying in the spring months and would gradually dispose of his material, having first graded it, during the remainder of the year. Another house might do the bulk of its business in South American wools, which would mean a fall purchasing season. Still another would handle both domestic and South American, and a fourth might import from all parts of the world, so that buying and selling would be going on continuously and at the same time throughout the year. The credit requirements of the first two houses would be an easier demand upon the bank than those of the latter, but in all cases the judging of the risk involves certain primary considerations, each of which really necessitates the close study of the individual case. [Sidenote: _Credit Risks_] A wool merchant’s business is largely based on his estimate of the future. There are no “future” markets for wool as there are for cotton and silk, and the wool dealer cannot therefore protect himself by hedging. Were it not for the fact that he assumes a risk which neither the grower nor, in most cases, the manufacturer is able to take, he could not maintain his position as the middleman. The merchant’s buyer must, as we have seen, be able to judge the amount of shrinkage within a very small fraction, he must know the demand for each quality of wool so that he may be sure not to pay more than he can sell for, and, what is more, he must be able to forecast the future with a certain amount of accuracy in order to make his profit. Furthermore, the merchant must be constantly on his guard against doing more business than his capital warrants, while at the same time, unless he makes every dollar work, his business will in normal times fail to show him a profit. [Sidenote: _Merchant Manufacturers_] Some wool dealers have become considerably more than middlemen, and have gone quite extensively into the first stages of manufacture. This is particularly true of some of the large houses which of recent years have established top manufacturing departments, and which therefore sell a large proportion of their goods not as raw wool but as tops and noil. [Sidenote: _Brokers_] Although the dealers do the bulk of the commission work in consignment sales, there are a great number of brokers whose function is primarily the buying and selling for account of others. These houses usually operate with a limited capital, and are not extensive seekers of credit. [Sidenote: _Mills_]