470 AGRICULTURAL ECONOMICS 



clothing long before these conditions appear. As is the case in the 

 improvement of homes, so, naturally, the larger demand for clothing 

 vastly increases the demand for materials and labor. The resulting 

 scarcity of wool, for example, has greatly advanced its market price. 

 The general advance of the standard of living throughout all the 

 ranks of the population, from the highest to the lowest, is manifestly 

 one of the most potent causes of the increase of the demand for com- 

 modities, and consequently of the advance of prices. On every side 

 the wants of the people have been multiplied and diversified. They 

 demand more and better things. Their requirements are larger, more 

 varied, and more exacting. The growth of the cities, the cult of 

 fashion, the increase of leisure, and numberless factors have combined 

 to bring about this advance of living standards. Rational extension 

 and diversification of consumption are highly desirable. When, how- 

 ever, the change proceeds so rapidly as during the last decade, it 

 accelerates greatly the upward movement of prices. The resulting 

 increase of the cost of living is likely under these circumstances to 

 produce a reactionary effect on the standard of living, causing the 

 consumers to curtail expenditures, and thus to abandon the gains that 

 have been briefly won. In short, the advance of the standard of living, 

 if not rationally guided and safeguarded, threatens to bring about a 

 later decline of the standard to a lower level. 



148. SUBSTITUTION AS A FACTOR IN PRICE-MAKING 1 

 BY EDWARD T. PETERS 



That the price of an article is influenced by the supply, not only 

 of the article itself, but also of other articles which may be used in its 

 stead, is a familiar principle of economics; but, owing perhaps to the 

 insignificance of the rye crop of the United States, the influence of the 

 rye supply upon the price of wheat does not seem to receive in this 

 country the attention to which it is entitled. For the five years from 

 1895 to 1899, inclusive, rye formed 49 and wheat 51 per cent of the 

 combined European crops of these two grams, and the European pro- 

 duction of the two together formed 69 . 5 per cent of the world's pro- 

 duction of the same two cereals. Of the world's production of wheat, 

 however, Europe contributed only 55.5 per cent, whereas she con- 

 tributed of the world's production of rye no less than 94. i per cent. 



1 Adapted from "Influence of Rye on the Price of Wheat," Yearbook of the 

 Department of Agriculture, 1900, pp. 167-82. 



