io READINGS IN RURAL ECONOMICS 



another sort. We should naturally expect, then, the output of agri- 

 culture to be of peculiarly intimate and conspicuous influence 

 upon general business conditions in the United States. 



II 



At the same time there are, needless to say, other factors than 

 the output of our farms which may affect our prosperity, and 

 whose influence may quite outweigh the influence of our harvests. 



i. First, it will be noted that in the case of those agricultural 

 products which belong in large degree to foreign trade the finan- 

 cial success or failure of the harvest in any given locality depends 

 to some extent upon the output of the same product elsewhere. 

 An unusually large harvest in this country, if accompanied by 

 small harvests abroad, obviously means prosperity for the Ameri- 

 can farmers, means large exports and high prices, tends to mean 

 incoming gold and expanding credit. But, if accompanied by ex- 

 cessive crops abroad and flagging demand, it means, on the other 

 hand, extraordinarily low prices, diminished exports, and depres- 

 sion in agriculture, if not in general trade. We have examples of 

 each of these situations in the period centering about 1880. In 

 1879 the wheat crop, the corn crop, and the cotton crop were all 

 the greatest ever known in our history up to that time. But in 

 England and Europe the wheat crop was a failure on account of 

 excessive rain and cold, and in India the cotton crop was a partial 

 failure. We had then the conditions which would naturally result 

 in prosperity for agriculture and flourishing trade. In 1880 these 

 conditions were repeated. All three of these crops in America ex- 

 ceeded even the levels of 1879, and the foreign crops again ran 

 short. There resulted, as everyone knows, a business develop- 

 ment rapid beyond all parallels in our previous commercial history. 

 But note the situation only two years later. The American wheat 

 and cotton crops in 1882 exceeded even the record-breaking totals 

 of 1880, and the corn crop was the largest, with one exception, 

 in our history. But in that year the countries of Europe also pro- 

 duced the greatest total wheat output in their history. The price 

 of wheat in America accordingly fell, and the amount exported 

 was strikingly diminished. The market for cotton also proved to 



