Walkerd --
I no longer have my copy of "Monetary Trends in the United States and
the United Kingdom," a book written in 1982 by Milton Friedman and
Anna J. Schwartz (University of Chicago Press). It is a core study in
money supply and inflation, which ties the value of a dollar to 1929
values.
Because I don’t have a copy of the book I can’t tell you precisely why
they started with 1865, though other research would indicate that only
at the time of the American Civil War did verifiable economic numbers
start to be collected. It was in 1862 that the Union government
started issuing paper bills in lieu of silver and gold coins. Paper
bills had existed before, but were essentially guarantees based on the
creditworthiness of state banks and thus not national in circulation.
According to Friedman and Schwartz’ research, the 1865 dollar was
worth $0.865 – and this web page tracks the value through 1967 in
several charts with data taken from the book:
The Friesian School
"Money, Value and Monetary History" (undated)
http://www.friesian.com/money.htm
Deflation lowered the value to $0.444 in 1896, when gold was
discovered in the Yukon and a long period of inflationary history
began.
* In 1916 the dollar was worth $0.74, but World War I inflation
boosted it to $1.067 by 1919.
* In 1929, chosen arbitrarily as the standard, the value was $1.00.
* The deflation of The Great Depression put the dollar at $0.733 in
1933.
* In 1940, just prior to World War II, the dollar stood at $0.809.
* By the end of World War II in 1945, the dollar was at $1.253.
* By 1967, the dollar was at $2.162.
* Despite wage and price controls during the Nixon Administration in
1971, inflation continued through 1975, when the dollar was at $3.465
Every few decades, the Bureau of Labor Statistics "re-normalizes"
prices for inflation, making a new year the 100% base. They did so in
1967. They have provided an easy-to-use calculator on their web page,
market "CPI Inflation Calculator" that tells you that $1.00 in 1967 is
now worth $5.51 in 2003. The calculator works between 1913-2003:
U.S. Department of Labor
The Bureau of Labor Statistics
http://stats.bls.gov/
So, to continue Friedman’s time series, the value for 2003 would be
$11.913. Thus, an 1865 dollar would be $13.772 today.
Note that there are detailed statistics on consumer (not producer)
price indexes at the BLS website, starting with 1913:
U.S. Department of Labor
"Consumer Price Indexes"
http://www.bls.gov/cpi/
Google search strategy:
"Milton Friedman" + "money supply"
CPI + “Bureau of Labor Statistics”
I hope that this provides the type of information that you’re seeking.
If any aspect of this answer is unclear, please let me know before
rating the answer.
Best regards,
Omnivorous-GA |
