F.—ECONOMIC SCIENCE AND STATISTICS 99 
than the fall in the prices of manufactured goods. But even before this 
crisis became acute the foreign trade of that country with Europe was 
diminishing. Some of the loss, no doubt, can easily be ascribed to other 
causes (there is no difficulty in finding quite a number); but the main 
cause was the attempt to initiate and develop self-sufficiency in agri- 
culture by those countries in Western Europe which used to be considerable 
importers of foodstuffs from the United States. The extent to which 
the export trade of the latter was shifting before American economic 
conditions began to change (largely for reasons special to America itself) 
is well exhibited by a comparison between the year 1913 andthe year 1925. 
During that period there was a reduction in exports of about $100 million 
(close on 4 per cent. of the total). But those to Europe fell by 20 per cent., 
those to the rest of North America by 7 per cent., while exports to Asia 
and to Africa were in each case more than doubled. There was an 
increase, too (though a less striking one of only 8 per cent.), in exports to 
South America. The falls in every case were largely in agricultural 
products ; but the increases that took place were mainly in manufactured 
articles, although Asia took a little more of foodstuffs. Such changes as 
these almost certainly have a long-term trend. In any case they are in a 
different category to those which accompanied the low level of prices in 
the years immediately subsequent to 1929. 
If the great depression had been allowed to run its course in a fully 
competitive world economic system in which no obstacles were presented 
to a reasonably free marketing and distribution of commodities, the 
prices of producers’ goods would have fallen more in proportion than 
the prices of consumers’ goods. This would have called into action a 
number of readjusting forces, and if the experience of previous periods 
of recovery from depression had been repeated, demand would have revived 
in such a way that a new position of equilibrium would, in a short time, 
have been attained. But the course pursued by this depression has 
differed very markedly from that of any other which the world has yet 
experienced. Market competition has been much restricted and prices 
of producers’ goods have been maintained or have fallen less than the 
prices of consumers’ goods, with the consequence that there has been an 
exceptionally serious diminution in the production of all durable goods. 
Agricultural commodities, the most important group of consumers’ goods, 
suffered the heaviest fall in price of all; and, although there has beenaslight 
increase in consumption in consequence of this great fall in price, demand 
for foodstuffs is very inelastic and could never have increased to the extent 
required for a restoration of equilibrium. For such a result a diminution 
of output is necessary. It was some time before this was realised by the 
principal agricultural communities producing for export. These have 
instituted or are instituting restriction schemes which are exceedingly 
difficult to handle with effect. But the positive measures taken by many 
countries which are usually importers of foodstuffs to maintain and even 
to expand their agricultural production create still greater difficulties and 
lead to the absurd phenomenon of some governments paying bounties 
for the production of food for the non-production or destruction of 
which other governments pay equally large compensation. 
