CAUSES OF CRISES AND CYCLES 205
of one or a few commodities. Crises are intense in the United
States because a single commodity, cotton, constitutes a large
percentage of our total exports.! A fall in the price of this one
export seriously affects our balance of trade, and therefore disturbs
 the rates of foreign exchange very gravely, with the result
that the country as a whole is made to suffer, instead of the depression
 being limited to those who are directly engaged in producing
 cotton. Moreover, the production of cotton is localized,
being confined to one large section of the country that produces
very little else. Directly or indirectly, every trade and the whole
credit structure of the South are intimately connected with
cotton. Distress in the cotton industry threatens the entire community
 with disaster.?
Dew seems to have had some understanding of the tendency
of a particular industry to become unduly stimulated, attracting
capital and labor from other lines until reaction brings a depression
 which spreads to all trades.? A similar suggestion as to the

! Dew wrote in 1840. The following statistics, from the report of the Secretary
of the Treasury for 1843, are pertinent:
ExPORTS FOR SELECTED YEARS
(In millions of dollars)

Total

1821...
1330.
IB35 «vin
1336...
1840 ..

LT a

yd
po |

Cotton

Domestir
goods

“areign goods
eéxported

All
Exports

4

F
2
3

* The discrepancy between this figure and the sum of the two preceding arises in changing each
to the nearest million.

* Dew, The Great Question of the Day (1840), pp. 9, 10. A drop in the price of
cotton in 1836, bringing particular distress in the South, had been an important
feature of the events leading to the crisis of 1837. Dew also laid emphasis, in explaining
 the disastrous nature of our revulsions, upon the great amount of land
speculation, which is peculiarly fitted to cause crises. Ibid., p. 11.
8 Dew, op. cit., pp. 7, 8, 11. Cp. Bowen, Principles of Political Economy (1856),
p. 317.