THE PRICE OF WHEAT 169 
the causes which have been responsible for the rising 
tendency since 1894. 
(ili) Relation of Wheat Prices to General Prices.— 
As pointed out above, the general level of prices rose 
greatly in the period, mainly as a result of the increase 
in the circulating media. Wheat prices have risen some 
8 per cent. less than the rise in general prices. Now the 
demand for wheat is inelastic, and we should therefore 
expect its price to rise relatively more than the rise 
in other commodities in a period of rising prices. 
Moreover, in a period of rising prices the margin of 
cultivation is being extended, and this should é@ priori, 
accentuate the rise in price; for, as inferior lands are 
brought under cultivation, the marginal cost of pro- 
duction rises. These two factors both tend to accentuate, 
if anything, the tendency of wheat prices to rise. But 
we notice that the actual state of affairs was that, 
relative to the prices of other commodities, wheat prices 
did not rise to the same level. They fell short of the 
rise in general prices by some 8 per cent. For the 
explanation of this, attention must be paid to forces 
operating from the supply side. 
European markets have been deluged with ever- 
increasing supplies of wheat since the early ‘‘nine- 
ties.”? In 1890 the world’s production of wheat was 
2,296,000,000 bushels, while in 1912 it had reached 
4,018,000,000 bushels, an increase of nearly 75 per cent. 
in 22 years. For the three decades ending 1910 the 
average annual production was as follows :— 
TABLE XXIV. 
AVERAGE ANNUAL WORLD’S PRODUCTION 
OF WHEAT. 
Million 
Decade Bushels 
1881-1890 2,269 
1891-1900 2,577 
1901-1910 8,233 
1910-1914 3,944 
F2 
