THE closeness with which Lancashire's prosperity is involved with the cotton crop of the United States and the Indian harvests is not likely to be questioned by anyone connected with the trade. Just as the former dominates supply prices, so the latter determine the demand of the chief consuming market. But owing to the great elasticity of demand for cotton products, the problem created by a crop failure in either market is made much more acute. As though this were not enough, it appears that the crop variations, which are here considered, have followed curiously similar courses, resulting, in the writer's belief, in the extraordinary fluctuations in prosperity to which the cotton trade is subject. I propose, therefore, first to discuss how the two-fold dependence arises; secondly, to attempt to show why the demand for cotton textiles is elastic; and, thirdly, to give a brief survey of the history of the trade since I890, in support of my belief that there is a sufficiently close correspondence between changes in the productivity of the cotton crop and the Indian harvests as to bring their respective effects to bear on the trade at roughly the same time. This coincidence is, perhaps, the fundamental reason for the regular rise and fall of prosperity between the extremes of high profits and big losses in Lancashire business. Indeed, it would explain many of those things which are themselves advanced as causes of depression; in particular, mill-building booms.
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Dec 1, 1930
John Ryan 
Open Access