52 
BULLETIN 1444, U. S. DEPARTMENT OF AGRICULTURE 
the value of spot cotton is negligible at this time. During the winter 
months the price is therefore largely a result of adjustments of a 
known supply to the strength of demand. This adjustment may be 
made early in the period and is usually made before the close of the 
period. The statistics of most value in this period are those show- 
ing (1) December estimates of production, (2) the carryover, (3) 
business conditions, (4) mill takings, (5) mill consumption, (6) 
stocks of dry goods, (7) activity in the dry goods markets, and (8) 
exports of cotton and dry goods. 
The coining of spring brings with it the "pitching" of the new 
crop and adds an uncertainty to the supply side, which has an in- 
fluence on the price of the old as well as the new crop. The price 
THE BUSINESS CYCLE AND THE PRICE OF COTTON, QUARTERLY 
August, 1900-July, 1915 
QUARTERLY 
INDEX 
120 
110 
100 
£0 
SO 
Middling Spot Cotton 
/* at New Orleans 
/ 1 
Clear in as Index 
-£_ I * 
1 
/- of Business 
I 
: 
' ! 
'. 
1 
1 
! 
' i 
I i 
•\« 
1 
1 
1 
1 
I - 
/ 
/ 
/ 
I* 
1 1 
I 1 
i 
fl 
1 1 
/ 1 
1 
S 
1 
A 
/ 1 
V 
I 
I 
■ 
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-I— 
t 
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i 
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1 / 
F 1 
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1 
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-^-— . 
— __1— _ 
CENTS 
PER 
POUND 
13 
1900-01 
1905-06 
I9I0-'II 
I9I^-'I5 
Fig. 7. — This chart shows the relation between cotton prices and an index of business 
activity based upon bank clearings. For clearings index, see Journal of the American 
Statistical Association, Vol. XIX, New Series No. 147, page 335, monthly index num- 
bers being averaged to obtain the quarterly index. The cotton prices are the official 
spot quotations of the New Orleans market, a three months' average being taken 
during this period is influenced by several factors, such as existing 
stocks of cotton and of goods, exports, and prospective crop. The 
figures of most significance are stocks of raw cotton, rate of mill con- 
sumption, stocks of dry goods, exports of raw cotton, probable carry- 
over, prospective acreage, and weather and crop conditions. Re- 
ports of general preparation for planting, of planting progress, and 
of prevailing weather conditions are considered important toward 
the latter part of the period. 
Throughout the summer months the market is particularly respon- 
sive to all influences affecting the growing crop, for the disposition 
of the old crop has become fairly certain. Government reports of 
acreage and crop conditions are the most important single factors. 
Among the day-to-day influences nothing approaches weather re- 
ports in importance. Indeed it may be said in a very true sense that 
