270 READINGS IN RURAL ECONOMICS 



cotton cultivation in the United States received its most rapid 

 extension from the settlement of the western lands. The move- 

 ment of slave holders and their property to central Alabama and 

 to the Mississippi river bottoms we have already mentioned. A 

 perfect mania for cotton raising and for speculation in western 

 lands had seized hold of the people during these years. 



This speculative tendency was greatly fostered by the opera- 

 tions of the state banks, which were established in this region after 

 the downfall of the United States Bank. The facility with which 

 these banks granted loans gave an unnatural stimulus to the pur- 

 chase of farming lands and to the extension of cotton growing. 

 The new settlers in the western country took up large tracts of 

 land, which, together with their negroes, they mortgaged to the 

 new banks for loans with which to carry on their planting industry, 

 and then turned over to the banks the cotton which they harvested. 

 Trusting in the high prices of cotton, the banks advanced funds 

 far beyond what wisdom dictated, sometimes advancing as much 

 as fifteen cents per pound. In 18 36- 18 37 came a great collapse 

 in prices, followed by a period of bank failures and of distress for 

 the new planters who were unable to obtain further advances for 

 continuing their agricultural operations. Within a period of three 

 years fifty-five million dollars had been applied to the cultivation 

 of lands in the new cotton states, and the production of cotton in 

 these states had nearly doubled. 



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The possibilities of Texas as a cotton-growing region were fully 

 appreciated even before that vast territory had become a part 

 of the Union. The most notable increase in cotton production 

 between 1850 and i860 came from this state, but the sparse 

 population prevented it from surpassing the Mississippi country 

 as a cotton-producing region previous to the Civil War. 



By 1850 all the territory through which the cotton belt now 

 passes had been acquired by the United States, and the outline 

 of the cotton belt, almost as it has since remained, was already 

 to be traced. Some counties (especially in Texas and Arkansas) 

 which did not then produce cotton now do so, and in all of the 

 states the acreage and production of many counties have greatly 



