20 RKADINCS IN Rl KAL KCONOMICS 



The striking preponderance of cotton over all other products 

 in our export trade, therefore, does not prove that the amount of 

 our annual yield of cotton is the determining factor in our trade 

 balance. Whatever the vicissitudes of the crop, the value of our 

 cotton exports remains less liable to violent fluctuations than the 

 value of our less extensive wheat exports. The reason is that the 

 price of cotton adjusts itself more closely to the size of the Amer- 

 ican crop than does the price of wheat, and this gives greater 

 constancy both to the value of the crop as a whole and to the 

 value of the exports. American conditions do not necessarily 

 control the price of wheat ; for, although the United States pro- 

 duces more wheat than any other single nation in the world, it 

 produces less than a quarter of the world's total supply. On the 

 other hand, this country is the source of nearly three quarters of 

 the world's cotton, and what the world pays for that article is vir- 

 tually determined by the mutations of the American crop. When 

 the American crops are extraordinarily abundant, the world price 

 of cotton tends to decline, and so the aggregate values of our 

 cotton crop and of our cotton exports seldom increase proportion- 

 ally to the increase in the quantity produced and exported. In 

 fact, the greater bulk is sometimes more than offset by the lower 

 price, and we may have such a situation as occurred in the years 

 1 898 and 1 899, when the crop broke all known records of output, 

 with one exception, and yet the total value of the crop was the 

 lowest recorded during the past eighteen years. The value of the 

 exports, too, of that superabundant year had been exceeded many 

 times before, and have been invariably surpassed in the subse- 

 quent years, although their amount was, with a single exception, 

 the greatest ever* known. Conversely, a diminution in the amount 

 exported, because of a comparative failure of the American crops, 

 does not necessarily involve a serious reduction in the total value 

 of the exports. The crop of the season 1903-1904 was a com- 

 parative failure, being the smallest, with one exception, in seven 

 years, yet its estimated value was more than double that of the 

 record-breaking year 1898-1899, and exceeded that of any other 

 year by more than 100,000,000. The exports of cotton in this 

 same year of so-called crop failure, though the smallest in bulk, 



