100 Economic Cycles: Their Law and Cause 



Rising and Falling Prices as Related to Yield-Price 



Curves 



Thus far it is clear that the prediction of agricul- 

 tural prices is dependent upon a knowledge (1) of the 

 law of the variations of price with the yield per acre, 

 and (2) of the law of the annual change in the yield per 

 acre of the several crops. If the relation between prices 

 and yield per acre were constant, the theory of agricul- 

 tural cycles would be completely elucidated; for, once 

 having discovered the law of the relation of price to 

 yield per acre, nothing more would be necessary then 

 to connect the yield with the meteorological conditions 

 of its critical season, and the resulting prices for a long 

 term of years could be predicted with great probability. 

 But the relation between the price of the crops and the 

 yield per acre varies with the level of general prices, and 

 it is of the first importance to know the manner of varia- 

 tion. 



If the course of prices in the United States for the 

 period 1866 to 1911 is examined, it will be seen that, 

 in general terms, we may with justness characterize the 

 period 1866 to 1890 as a period of falling prices, and the 

 period 1890 to 1911 as a period of rising prices. If 

 therefore, in case of each of our representative com- 

 modities, we construct two yield-price curves, one 

 for the period of falling prices and one for the pe- 

 riod of rising prices, we shall, by comparing the two 

 curves for the two periods, discover how the demand 

 curves, or yield-price curves, vary in periods in which 



