Field warehousing let farmers borrow against goods still sitting on their own floor

Farmers, canners and manufacturers sat on valuable inventory but could not borrow against it, because banks could not take possession of goods still on the borrower's floor. The obvious fix — moving goods to a distant terminal warehouse — was slow and expensive.

Field warehousing built the warehouse around the goods instead: a warehousing company leases part of the borrower's premises, posts signs, and installs a trained, bonded custodian with exclusive access. The custodian's 'continuous, exclusive and notorious' possession creates a valid bailment, and receipts naming the bank become collateral.

The technique spread across the US: by mid-1941 there were about 5,000 field warehouses and roughly $150 million of credit outstanding against their receipts, with national players including Lawrence Warehouse Company and Haslett.