The effect of fluctuations of cotton prices on the southern community is complex and far-reaching. Within themselves these price movements may be said to con stitute practically another business cycle for the South. The business cycle is one thing; the cotton cycle another. Engberg attempted to investigate the price influence of the domestic business cycles on cotton. Using the volume of pig iron production as an index of general business conditions, he correlated these figures with the price of cotton nine months afterward. He found a correlation of +.489." Below :50 is not regarded as a high correlation. It will be remembered that the correlation of the size of the domestic crop to price was found to be —.778, much more significant. He sums up: "It was found that out of 19 farm products, including butter and cheese, only three—hogs, sheep and cotton—had fluctuations at all typical of the business cycle." 3° The coefficients indicate that only in the case of cotton does the apparent influence of the business cycle approach in magnitude the influence of the volume of production. Often moving in harmony with the national cycles, cotton prices have frequently operated to give the South a period of depression in the midst of the nation's pros perity. It might be pointed out that while a nation-wide
depression would be reflected in reduced takings of cotton mills, a corresponding period of prosperity would not take up the slack in a bumper cotton crop. A like phe nomenon is found in the Western Wheat Belt. It is the penalty visited upon specialized regions. A good example of commodity depression during industrial prosperity is' the stupendous crop of 1926, 17,977,000 bales, possibly the largest ever grown, which sold for 10.2 cents. The result was to plunge the Cotton Belt into a period of depression in spite of the fact that the business cycle for the nation registered prosperity. "The cotton crop of 1926," the President of the Georgia State Agricul tural College estimated, "will bring the farmers who produce it $1,000,000,000 less than they needed in order to break even or slightly better." This loss "represents $1,000,000,000 of frozen loans and unpaid bills which cannot be liquidated."