THE INFLUENCE OF CROPS UPON BUSINESS 7 



the demand for the most varied sorts of merchandise, and the 

 economic machine in most of its branches is apt to be stimulated 

 to some extent through increased consumption. On the other 

 hand, when the agricultural output fails, the farming population 

 is at once obliged to retrench, to forego contemplated improve- 

 ments in their farms, to curtail many of the usual or expected 

 expenditures, perhaps even to withdraw deposits from banks, and 

 so abridge the working capital of others. If, too, the prices of 

 breadstuffs and meats rise, many of the rest of the community 

 will have to devote a part of what they are accustomed to spend 

 upon other things to the purchase of food. They will have to 

 abstain from some of their usual purchases in order to buy these 

 necessaries of life. At such times, then, not only will the indus- 

 tries which produce primarily for the farmers feel the pinch of 

 reduced consumption, but other industries as well, which produce 

 objects that in ordinary times are consumed by the masses of men. 

 The clothing trades, for example, may be expected to feel the dif- 

 ference, and the liquor, tobacco, and other similar occupations are 

 also likely to be affected. 



2. In the second place the very solvency of a large part of 

 the agricultural population, and of those connected by business 

 relations with them, depends to a considerable degree upon the 

 outcome of the year's harvest. Whether or not the farmer will 

 be able to repay loans which he has contracted, whether or not 

 he will be able to settle his bills with tradesmen and dealers, and 

 whether or not he can pay for his agricultural machinery and farm 

 improvements, will in many cases be decided by the size of the 

 crop. If the crop fails, his various creditors the banker who has 

 lent him money, the mortgagee of his farm, the shopkeepers from 

 whom he has bought his supplies, and any others to whom he is in- 

 debted will either have to wait, or, if they force a settlement, will 

 not improbably suffer losses. If these delinquencies occur upon too 

 wide a scale, the failure in agriculture may be propagated into other 

 fields, and bankruptcies among bankers, dealers, and manufacturers 

 may ensue. If the harvest, on the other hand, is good, and can be 

 marketed at profitable prices, the capital of the affiliated creditors 

 will once more be set free and made ready for new activities. 



