THE TREND OF PRICES Cotton prices are the barometer of this ever changing relation between supply and demand. From the beginning of cotton culture in America they have shown a varied range. Prices were rising when Whitney invented the cotton gin in 1793, and by 1901 the consequent increased production had taken effect, causing a drop from 44 to 22 cents per pound export prices!' Prices continued to fall for the next decade owing to the embargoes preceding the War of 1812 and the spread of cotton culture through all the South Atlantic states. Cotton reached its lowest at 11 cents in 1811, but the War of 1812, by hindering the importation of cotton goods, helped to establish the cotton manufacturing industry in America. This new industry being protected by tariff, the price of cotton rose steadily until it reached 34 cents in 1817. The high prices had doubled production during 1815-18 in a period of rapid westward expansion to Alabama, Mis sissippi, and Louisiana. Under the pressure of increasing production prices fell steadily (excepting the short crop year of 1824) until 1830 when they reached the low level of 9 cents. The market demands of both foreign and domestic manufactures were keeping pace, however, and prices rose steadily until 1838, reaching levels be tween 17 and 14 cents. In this period production had doubled again and the United States was growing eight times as much cotton as in 1815. High prices, removal of Indians, and consequent opening to settlers of new lands in Georgia, Alabama, and Mississippi, produced speculation, overexpansion, and overproduction which continued to depress prices until 1844. Although during this period cotton sold as low as 6 cents in 1844, the production increased 50 per cent. From 1844 to 1859 was a period of rising prices. The South was prosperous in the decade from 1849 to 1859, and cotton averaged over 10 cents, reaching 12 cents in 1850. Portions of Texas and Arkansas were opened up, and as U. B. Phil lips has shown, the railroads from the coast to the in terior further increased production in inland North Carolina, South Carolina, Georgia, and Alabama!' The Civil War marks a peak in the price of cotton.
The blockade and temporary stoppage of production ran the price up to various levels reported at $1.80, highest spot price, 70 cents, lowest spot, and 55 cents export price. The crop of 1861 had been the second largest thus far produced, and much of this became available after the war at high prices. In 1865 over 2,000,000 bales were marketed at a price of 30 cents. Due to dif ficulties of political and industrial readjustments with the human factors, it was not until 1877 that pre-war production was reached, although over four million bales were produced both in 1870 and 1875. Prices fell rapidly until they reached 10 cents in 1878. For the twenty years from 1879-99 production doubled, and prices con tinued to fall. Prices from 1891 to 1902 never saw 10 cents, and in 1898 fell to the lowest point in history, 5.6 cents. The view, sometimes expressed, that if con ditions made the cultivation of cotton wholly and pro spectively unprofitable, it would take a whole generation to wean southern farmers from its culture, received ade quate proof in the 1890's. A slacking in the rate of spread of the cotton area resulted in rising prices, which hung around 10, 12, and 14 cents until the 1914 crop. In that year the largest crop in history and the dis organization in the cotton markets attendant upon the outbreak of the World War broke the market to 6.8 cents. In 1914 "cotton brought tears" to the whole South. Increasing war demands again raised the prices, which reached as high as 35 cents in 1919, the highest since the Civil War. In 1920 the price depression car ried cotton with a crash down to 16 cents. Resulting reduction of acreage and boll weevil damage began a rise which carried it back to 23 cents in 1924. Since then the largest acreages in history reduced the price until it reached 10 cents in 1926, lowest since 1915. The pendulum swung again, and the 1927 crop is estimated to have brought the farmer from 18 to 20 cents.