50 
BULLETIN 1444, TJ. S. DEPARTMENT OF AGRICULTURE 
prices, cotton was 62 and all commodities 66. In 1912 the price 
of cotton had advanced to 11.5 cents per pound but was then 
11 points lower than it was in 1896, when measured in terms of pur- 
chasing power of all commodities, for cotton was 90 and all com- 
modities 101. 29 The change in price from 7.9 cents per pound in 
1896 to 11.5 cents in 1912 was due largely to changes in the relation- 
ship between money and commodities. These changes may take 
place rapidly. The period from the beginning of the World War to 
1920 illustrates such a rapid change. 
Price index numbers like those of the Bureau of Labor Statistics, 
the Federal Keserve Board, and Dun and Bradstreet are the best in- 
dicators of changes in the general price level. 
actual price of cotton and what it would have been 
if it had maintained the same relationship 
to General price level as existed 
on the average from 1910 to 1914 
CENTS 
PER 
POUND 
90 
80 
70 
60 
50 
4-0 
30 
20 
10 
1 
,Actua 
Price 
r 
a 
i 
t 
Yhat it would hove beenl 
| 1 1 
y\ 
/ 
/J 
[I 
iiiimn 
iniiim 
imum 
iimim 
lllllllll 
lllllllll 
lllllllll 
mil m 
lllllllll 
lllllllll 
lllllllll 
lllllllll 
lllllllll 
lllllllll 

1790 1800 1810 1820 1830 1840 1850 I860 1870 I860 1890 1900 1910 1920 1930 
Fig. 5. — The index used is that of wholesale prices in the United States, from United 
States Department of Agriculture Bulletin No. 999, page 2. The actual price is that 
shown in United States Department of Commerce Bulletin No. 153, Cotton Production 
and Distribution, pages 75-77 
Figure 5 shows the actual price of cotton and what it would have 
been if it had maintained the same relationship to the general price 
level as existed on the average from 1910 to 1914. 
Changes in price relationships may be due to changes on either 
the demand side or the supply side, or both. In the early history of 
the trade cotton sold at a higher price than wool. The invention of 
the saw gin and the consequent opening up of the vast areas in the 
Southern States cheapened the cost of production and tended to put 
cotton on a lower price level compared with other commodities. The 
cheapness of it multiplied its uses as clothing, as household furnish- 
ings, and as raw material in industry. For a century the increasing 
demand through multiplication and expansion of uses,- was met by 
the ever-expanding supply, and for a large part of the time at de- 
29 Bureau of Labor Statistics No. 284, p. 131 ; and No. 149, p. 83. 
