120 HUMAN FACTORS IN COTTON CULTURE 



If owners are forced to the need of credit they can secure 

 it by giving a crop lien on cotton. The variable human 

 factor then in the production of cotton, the one economic 

 man, is this owner-operator. He is able to speculate with 

 the cotton market by varying his acreage, and it is his 

 reductions that help to vary production. Working on 

 the problem of the relation between the prices of agri- 

 cultural commodities and the acreage devoted to that 

 crop the next year, R. G. Engberg of the Institute of 

 Economics found that the highest relation existed for 

 cotton. A correlation of +.62 with a probable error of 

 .08 was found to obtain between the price of cotton and 

 the acreage planted to the crop the next year. The only 

 other significant correlation found, +.42, was for flax. 21 



As a matter of fact, the reductions of acreage do not 

 fully account for the price fluctuations. When the cotton 

 farmer reduces acreage, nature decreases the production 

 in a larger ratio and the price of cotton is correspond- 

 ingly increased in greater proportion. That this tendency 

 exists is shown in the analysis of the following table com- 

 piled and commented on by Carl Geller. 22 



A glance at the table brings out the following facts: 

 Since 1890 there have been nine low-priced bumper crops 

 followed by nine attempts to cut acreage. The highest 

 reduction in acreage was 17 per cent, the lowest 3, and 

 the average 11. The corresponding reduction in size of 

 crop ranged from 13 to as high as 40 per cent, with 

 the average at 25.2. The resulting increases in price 

 ranged from 8 per cent (owing to an excessively large 



21 Industrial Prosperity and the Farmer, p. 34. 



22 "Fewer Acres and More Dollars," Commerce and Finance, 

 Jan. 12, 1927, p. 123. 



