PRINCIPLES OF VALUE AND PRICE 



47 1 



Nearly three-fourths of the world's rye crop is produced in two 

 countries, namely, Russia and Germany; hence, if the rye crop of these 

 two countries be added to the wheat crop of the world, there will be 

 a much closer approach to the world's supply of breadstuffs than is 

 made by taking the wheat crop alone; and comparison will show that 

 in most cases there is also a much closer approach to a satisfactory 

 explanation of the movement of prices in harmony with the law of 

 supply and demand. This will sufficiently appear upon examining 

 the accompanying table. 



MOVEMENT OF SUPPLY AND AVERAGE EXPORT PRICE 



* 000,000 omitted. 



Though 1891 shows an increase of 2.4 per cent in the world's 

 wheat supply and 10 per cent increase of the price, the supply of 

 breadstuffs for that year shows a decrease of 4.9 per cent, if the 

 German and Russian rye crop be taken into account. Changes in 

 price appear to occur in harmony with changes in the joint supply of 

 breadstuffs, rather than with the change in the world's wh^at supply 

 alone. 



The apparent anomaly of decreased supply and lower price in 

 1889 is simply an illustration of a particular phase of this same prin- 

 ciple of substitution. Of the decrease in the world's wheat supply, 

 the decrease in the Russian wheat crop accounts for 88 . 3 per cent, 

 and the Russian decrease in wheat and rye accounts for 92 . 9 per cent 

 of the falling off in the joint product of breadstuffs. Local scarcity 



