CHAPTER V 



THE MECHANISM OF CYCLES 



"Agriculture is the Foundation of Manufacture and Commerce." 

 — Motto of the United States Department of Agriculture. 



Thus far in our investigation of the cause and law of 

 economic cycles, we have shown that the annual rainfall 

 in the principal grain-producing area of the United 

 States passes through definite, well-defined cycles; and 

 that the yield of typical, leading crops is so closely 

 related to the rainfall of their respective critical seasons 

 that the cyclical movement of the rainfall of the critical 

 seasons is approximately reproduced in the yield per 

 acre of the corresponding crops. These cycles of crops 

 constitute the natural, material current which drags 

 upon its surface the lagging, rhythmically changing 

 values and prices with which the economist is more 

 immediately concerned. In order to understand the 

 connection between the flow of the undercurrent of 

 agricultural yield and the surface changes of values and 

 prices, we have taken the necessary first step of con- 

 necting the prices of agricultural commodities with 

 their supply. But the supply varies with the acreage as 

 well as with the yield, and consequently to carry further 

 our investigation we must know how closely the prices 

 of crops are related to their yield. 



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