RISKS OF THE COTTON MARKET 115 



THE TREND OF PRICES 



Cotton prices are the barometer of this ever changing 

 relation between supply and demand. From the beginning 

 of cotton culture in America they have shown a varied 

 range. Prices were rising when Whitney invented the 

 cotton gin in 1793, and by 1901 the consequent increased 

 production had taken effect, causing a drop from 44 to 

 22 cents per pound export prices. 14 Prices continued to 

 fall for the next decade owing to the embargoes preceding 

 the War of 1812 and the spread of cotton culture through 

 all the South Atlantic states. Cotton reached its lowest 

 at 11 cents in 1811, but the War of 1812, by hindering 

 the importation of cotton goods, helped to establish the 

 cotton manufacturing industry in America. This new 

 industry being protected by tariff, the price of cotton 

 rose steadily until it reached 34 cents in 1817. The high 

 prices had doubled production during 1815-18 in a 

 period of rapid westward expansion to Alabama, Mis- 

 sissippi, and Louisiana. Under the pressure of increasing 

 production prices fell steadily (excepting the short crop 

 year of 1824) until 1830 when they reached the low 

 level of 9 cents. The market demands of both foreign 

 and domestic manufactures were keeping pace, however, 

 and prices rose steadily until 1838, reaching levels be- 

 tween 17 and 14 cents. In this period production had 

 doubled again and the United States was growing eight 

 times as much cotton as in 1815. High prices, removal 

 of Indians, and consequent opening to settlers of new 

 lands in Georgia, Alabama, and Mississippi, produced 

 speculation, overexpansion, and overproduction which 

 continued to depress prices until 1844. Although during 



"Cotton Atlcu, p. 20. 





