Cotton, Corn and Risk in the Nineteenth Century

The Journal of Economic History

Volumn 35, Issue 3, 1975, Pages 526-551

  Wright, Gavin ^a  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

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EID: 84948896903     PISSN: 00220507     EISSN: 14716372     Source Type: Journal    
DOI: 10.1017/S0022050700075628     Document Type: Article

References (47)

1. Cotton 'Overproduction' in Late Nineteenth-Century South-em Agriculture, S. DeCanio, Joubnal of Economic History, 1973, XXIII, 608-633, (September S. DeCanio, Agriculture in the Postbellum South (Cambridge, 1974), pp. 240-261.
2. letters from prominent cotton-growers, See particularly the in U. S. Senate Report 986, Report of the Committee on Agriculture and Forestry on Conditions of Cotton Growers in the United States (1895). Hereinafter referred to as "Senate Report 986. "
3. Debt Peonage in the Cotton South after the Civil War, Journal of Economic History, 1972, XXXII, 665, Roger Ransom and Richard Sutch, (September Brown and Reynolds, "Debt Peonage Re-examined," pp. 867-868; Joseph D. Reid, Jr., "Sharecropping as an Understandable Market Response-The Postbellum South" and Robert Higgs, "Race, Tenure, and Resource Allocation in Southern Agriculture, 1910," both in Journal of Economic History XXXIII (March 1973) 106-130, 149-169.
4. Self-Sufficiency in the Cotton Economy of the Antebellum South, R. Gallman, Agricultural History, XLIV, See primarily (January 1970), and W. K. Hutchinson and S. H. Williams, "The Self-Sufficiency of the Antebellum South," Joobnal of Economic History XXXI (September 1971).
5. J.R. Behrman, Supply Response in Underdeveloped Agriculture, 1968, The argument that small farmers attempt to avoid market-place risks by devoting a large share of their acreage to food crops appears in (Amsterdam, J. M. Boussard and M. Petit, "Representation of Farmers' Behavior with a Focus-Loss Constraint," Journal of Farm Economics XLIX (November 1967); M. Lipton, "The Theory of the Optimizing Peasant," Journal of Development Studies W (April 1968). "Safety-first" models are categorized and discussed in detail in J. Roumasset, Risk and the Efficiency of Peasant Agriculture (North-Holland, forthcoming).
6. Safety-First, Gambling, and the Subsistence Farmer, H. Kunreuther, G. Wright, The theoretical aspects of this model are explored in (unpublished).
7. J.H. Moore, Agriculture in Antebellum Mississippi, See, in addition to Gallman, (New York, 1958), p. 58; U. B. Phillips, American Negro Slavery (New York, 1918), pp. 207-208; Charles S. Davis, The Cotton Kingdom in Alabama (Montgomery: Alabama State Department of Archives and History, 1939), p. 66; W. N. Parker, "A Note on Regional Culture in the Corn Harvest," Agricultural History XLVI (January 1972), pp. 181-189. For the postbellum period, see statements in J. R. Dodge's survey in Report of the Statistician," United States Agriculture Department Annual Report (1876). For example, "they use the same labor [on food crops] which is employed on cotton, but at seasons which do not interfere" (p. 149).
8. Cost of Cotton Production and Profit per Acre, For example, Texas Agricultural Experiment Station, Bulletin No. 26 (Bryan, Texas: March 1893); USDA, "The Cost of Cotton Production," Division of Statistics, Miscellaneous Series, Bulletin No. 16 (1899).
9. The Creation of Risk Aversion by Imperfect Capital Markets, R.T. Masson, American Economic Review, 1972, LXII, 77-86, (March See also Masson, "Utility Functions with Jump Discontinuities: Some evidence from Peasant Agriculture," Economic Inquiru XII (December 1974).
10. The Income Elasticity of the Poverty Line, Review of Economics and Statistics, 1973, LV, 327-332, This effect would help to explain the fact that corn output per capita is higher on large farms, even though m is clearly lower. For twentieth-century evidence that the "elasticity of the poverty line" with respect to income is about 0. 6, see R. Kilpatrick, (August
11. H.M. Wagner, Principles of Operations Research, 792-795, (Englewood Cliffs, New Jersey, 1969), or F. Hillier and Liebennan, Introduction to Operations Research (San Francisco, 1967), pp. 370-377.
12. R. Fogel, S. Engerman, Time on the Cross, 1974, I, 199-209, (Boston, esp., and Vol. II, 138-149.
13. Debt Peonage, 658-664
14. The Lock-in' Mechanism and Overproduction of Cotton in the Post-Bellum South, Agricultural History, 1975, XLIX, The best statement of the Ransom-Sutch position on the crop mix is (April By "overproduction" of cotton Ransom and Sutch mean that cotton cultivation was pushed beyond the point of equality between the marginal rate of transformation and the price ratio.
15. Cotton and Cotton Seed, 1955, USDA, Agricultural Marketing Service, (Statistical Bulletin No. 164, June "Revised Estimates of Corn Acreage, Yield and Production, 1866-1929" (mimeo, 1934); Prices of Farm Products Received by Producers (Statistical Bulletin No. 16, June 1927).
16. The Cost of Cotton Production, 1899, Division of Statistics, Miscellaneous Series, Bulletin No. 16
17. The Ex-Slave in the Post-Bellum South, Ransom, Sutch, Journal of Economic History, 1973, XXXIII, (March Tables 2 and 3. An inverse correlation between yields and farm size was also reported by J. R. Dodge in USDA Annual Report for 1876, pp. 130, 139-147, and is indeed virtually a universal cross-section finding. See K. L. Bachman and R. P. Christensen, "The Economics of Farm Size," in H. M. Southworth and B. F. Johnston, editors, Agricultural Development and Economic Growth (Ithaca, 1967).
18. Productivity and Income Distribution, 437, Agriculture in the Post-bellum South, pp. 176-180.
19. Safety-First ana the Holding of Assets, Econometrica, 1952, XX, 431-449, This is the objective function proposed by Roy in his classic statement of the safety-first principle: (July
20. Safety-First, Gambling, and the Subsistence Farmer., Kunreuther, Wright
21. A.G. Bogue, From Prairie to Corn Belt, 1968, 53, For general discussions of tenancy as a temporary status, held by those trying to accumulate experience and financial resources, see (Chicago, 65-66; R. P. Brooks, "The Agrarian Revolution in Georgia, 1865-1912," Bulletin of the University of Wisconsin, History Series, Volume III (Madison, 1914), 59; Donald L. Winters, "Tenant Farming in Iowa, 1860-1900," Agricultural History XLVIII (January 1974). For numerous additional references, and a critical view of the reality of this "agricultural ladder" (as opposed to the motivation), see LaWanda Cox, "Tenancy in the United States, 1865-1900," Agricultural History, XVIII (July 1944).
22. M.B. Hammond, The Cotton Industry, 1897, 121-122, Comments to this effect may be found in the 1895 Senate Report No. 986, 323 and elsewhere, and in (New York: American Economic Association, 136. See also the long quotation from W. J. Northen (1889) in DeCanio, Agriculture in the Postbellum South, pp. 108-109. DeCanio also quotes (pp. 103-104) from DeBow's Review of the late 1860's, showing the apprehension with which observers viewed the concentration on cotton. For graphic complaints about the effects of the rapid price fall, see La Wanda Cox and John H. Cox, editors, Reconstruction, the Negro and the New South (New York, 1973), pp. 331-333.
23. Debt Peonage, 665
24. Cotton 'Overproduction', DeCanio, 612, Agriculture in the Posthellum South, p. 96.
25. 25, Senate Report 986
26. The Cost of Cotton Production, 62, USDA
27. Hammond, The Cotton Industry, 173
28. Cotton Competition and the Post-Bellum Recovery of the U. S. South, G. Wright, Journal of Economic History, XXXIV, For demand curve estimates, see (September 1974). This study finds some increase in the demand elasticity after the Civil War, but argues that such a result is in part an artifact. For estimates of very low elasticities for later years, see Henry Schiutz, The Theory and Measurement of Demand (Chicago, 1938), chapter viii.
29. DeCanio, Agriculture in the Postbellum South, 104
30. 310, Texas Agricultural Experiment Station, Bulletin No. 26
31. 286, Senate Report 986, Emphasis added.
32. USDA Annual Report, 1876, 148-151
33. Agriculture in the Postbellum South, 99, Quoted in DeCanio
34. 302, Senate Report 986, Hammond stated plainly that the "unprofitability" of cotton dated only from the period since 1890, which is to say the early 1890's (The Cotton Industry, p. 167).
35. Hammond, The Cotton Industry, 149
36. USDA Annual Report for 1876, 149
37. 330, Senate Report 986, Similar statements appear on pp. 144, 292, 410.
38. USDA Annual Report for 1878, 151
39. 317, Senate Report 986
40. Hammond, The Cotton Industry, 190, Emphasis added. The attack by Charles H. Otken on the "credit monopoly" is similarly ambiguous at many points on how this monopoly causes "overproduction" of cotton. See The Ills of the South (New York, 1894), esp. pp. 56-57 61. In his policy prescriptions, it is clear that what Otken is calling for is "two years of self-denial and economy" (p. 30).
41. The General Merchant in the Economic History of the New South, J.P. Bull, Journal of Southern History, XVIII, 41-42, (February 1952), Thomas D. Clark, "The Furnishing and Supply System in Southern Agriculture since 1865," Journal of Southern History XII (February 1946).
42. Cotton 'Overproduction', DeCanio, 624-631, Agriculture in the Postbellum South, pp. 241-261. Because the "speed or adjustment" is defined in terms of a percentage of the long-run shift, DeCanio's estimates in fact imply that the cotton supply response was below that for wheat in every year after the first. DeCanio acknowledges the possible appropriateness of a symmetrical supply elasticity (Agriculture in the PostbeUum South, pp. 309-311).
43. Resource Allocation Under Share Contracts, D. Gale Johnson, Journal of Political Economy, 1950, LVIII, (April
44. 298, Senate Report 986
45. Speculation, Risk and Profits: The Ambivalent Agrarian in the Late Nineteenth Century, J. Lurie, Agricultural History, 1972, XLVI, 269-278, (April The "Uncle Remus" quotation may also be found in this article.
46. Cotton Competition, Wright, 629-635
47. Hammond, 122