»LE VIII.- 



11 



Hihowinfj supphj and consumption of cotton in tite United States and Knrope — 

 surplus stocks and prices. 



[In bales. ] 



1 Estimated. 



186:?. — The civil war in the United States, which broke out in April, 1861, marks 

 the beginning of the great '^cotton famine'^ from 1861 to 1866. Congress imposes an 

 internal-revenue tax of 2 cents a pound on raw cotton. 



1S6G. — The crop of this year estimated at only half a million bales; the remainder 

 of the crop, shown in Table VIII, is what was held over from the crops of previous 

 years. The first submarine cable put into practical operation in July. 



1S07. — Severe drought and cotton worm damage the crops extensively. 



1868. — Dullness in the manufacturing trade. Congress repeals the internal-revenue 

 tax on cotton. 



1870. — War between Prance and Germany. 



Prices. — What was known as the great cotton famine, caused by the civil war, 

 resulted in extraordinarily high prices, over $1 a pound being paid for cotton in 1864. 

 High prices were maintained throughout the war period, as production had practi- 

 cally ceased in this country. The dullness of trade in the Manchester district in 

 1867 caused a sharp decline, which continued until 1869. The shortness of the crop 

 and the small stocks in the ports increased prices in 1869. The Franco-Pruijsian war 

 in 1870 and the distress in the manufacturing districts of England resulted in a great 

 falling off in prices. The operation of the law of supply and demand is forcibly 

 illustrated during this decade. When the Avorld's sujjply of American cotton was 

 greatly diminished by reason of the civil war, prices advanced to an uuprecedent- 

 edly high point. After the war ceased and planting was resumed, the European 

 supply increased to such an extent that stocks began to accumulate in K'le i)orts and 

 prices declined more than 50 per cent from what they were a year or two previous. 

 With an annually increasing crop in this country, prices continued to decline to the 

 end of the decade. 



