148 Economic Cycles: Their Law and Cause 



eter" of industry, the production of pig-iron; and 

 that, when an allowance is made for a lag of two years 

 in the adjustment of the pig-iron industry, the cycles 

 of the yield per acre of the crops are generally repro- 

 duced in the cycles of the production of pig-iron, the 

 relation being so close that the coefficient of correlation 

 is r = .718. 



To find the relation of the cycles in the yield per acre 

 of the crops to the cycles in the movement of general 

 prices, we made use of an index number of general 

 prices extending from 1870 to 1910, and of our index 

 number of the yield per acre of nine crops covering the 

 same interval of time. The problem of separating the 

 cyclical movements in these two series from their 

 secular movements was solved, and the lag of the cycles 

 of general prices behind the cycles in the yield of crops 

 was found to be about four years. The coefficient of 

 correlation between the cycles in the yield of the crops 

 and the cycles in the general prices lagging four years 

 behind the crop cycles reached the very high value 

 r = .800. When the lagging cycles of general prices were 

 plotted and their graph superposed upon the graph of 

 the cycles in the yield per acre of the crops, the two 

 curves were found to present a degree of congruence so 

 close as to justify our working theory that the fun- 

 damental, persistent cause of the cycles of prices is the 

 rhythmical movement in the yield per acre of the crops. 

 The cycles in the yield per acre of the crops are followed 

 at an interval of about two years by the cycles in the 



