[meteorite-list] Emil Cohen's Market Trends of 1899 - Cohen'sremarks & plausibility of conversion

From: Sterling K. Webb <kelly_at_meteoritecentral.com>
Date: Wed Apr 13 18:19:13 2005
Message-ID: <425D9ABC.2925E2AB_at_bhil.com>

Hi,

    OK, it's Off Topic...
    Historically, the use of gold by many nations to back their currency results
in a flat value for currencies through long periods of time, since it is in the
interests of governments to maintain a stable value for gold. The original and
XIXth century U. S. dollar was backed by the Spanish dollar. (Yes, the Spanish
dollar, which was gold backed.)
    The U. S. used the gold standard for its currency beginning in 1900, at a
value of $20 per ounce. In 1935, in the Depression, the dollar was devalued by
41%, by resetting legal price of gold to $35 per ounce. After World War II, the
Bretton Woods Agreement essentially tied all the world's currencies to the U. S.
dollar and its fixed gold price.
    In the U. S., the value of gold was set by law until 1968, so there were no
"market" fluctuations until the 1970's. By 1980, the "price" of gold was $900
per ounce! After that wild ride, the price of gold declined to less than half
its peak value and the fluctuations have been mild ever since.
    These changes make a comparison by gold values complicated. Here's a table
of the value of the U. S. dollar:

Historical Value of the U.S. Dollar
-----------------------------------
What one dollar was worth
in constant 1991 dollars:

1820-1850 $13.28
1850-1875 $13.14
1875-1900 $14.85
1900-1925 $11.38
1935 $9.91
1945 $7.56
1965 $4.31
1975 $2.35
1985 $1.26
1991 $1.00
(compiled by the U. S. Department of Labor Statistics
and the Bureau of Living Conditions Statistics)

    What's interesting is that the purchasing power of the dollar is essentially
flat throughout the period 1800 to 1900. We accept inflation today as a natural
and inevitable minor evil, but for 72 years of the XIXth century (excepting only
the U.S. Civil War and the Crisis of 1896-98), there was no inflation!
    In effect, inflation has become the mechanism by which price values change
and adjust.

    An excellent article on the complications of calculating the historical
value of money can be found here:
<http://www.sls.lib.il.us/reference/por/features/98/money.html>

    A full table of annual dollar values from 1970 can be found here:
<http://www.allmeasures.com/table.asp?money=on&Submit=Conversion+Table>


Sterling K. Webb
----------------------------------------------------
Martin Altmann wrote:

> Plausibility of the conversion:
>
> As told with exchanging the 1899 german Mark (Goldmark) into USD of our
> days, I had to use as a vehicle the gold price of then and today. - with
> more modern price lists, I guess, one simply could use the known inflation
> rates.
> The problem with my exchange is, that we don't know the effective purchase
> power of gold in 1899.
> Hencefore for testing, how realistic the result 1Mark 1899 = 4.61$ 2004 is,
> here some prices and figures from the end of 19th century:
>
> 3 eggs costed in 1900 0.10Mark ~ 0.46 today's $
> 1 liter beer 0.24Mark ~ 1.10 $.
> 1 liter milk 0.20Mark ~ 0.92$
> 1kg sugar 0.65Mark ~ 3$
> 50kg potatos 1.75Mark ~ 8$
> 1kg porc meat 1.5Mark ~ 6,9$
> 1kg butter 1.86Mark ~ 8.5$
> 1kg coffee 4Mark ~ 18.5$
>
> A miner in 1900 earned per day 3Mark ~ 13.8$
> A dock worker (at this time already known to be paid below the minimum
> living wage) got 61Mark per month ~ 280$
> An assistant teacher 175Mark/month ~ 800$
> A regular teacher 125
> Bismarck had a basic salary of 4000Mark/month ~ 18.500$ (our actual
> chancellor Schroeder get's 14.800Euro ~ 19.200$)
>
> 6 nights in a good hotel 20Marks ~ 92$
> 1 lunch in a restaurant (without drinks) 2Marks ~ 9.2$
> The visit of the doctor coming from 4km away: ~14$
> Issuing a prescription for a medicament: 0.5Mark ~2.3$
> 1 made-to-measure suit 65Mark ~ 300$
>
> Wartburg-automobile 1899 (1.75HP) 3500Mark ~ 16.000$
> Benz Dos-?-Dos automobile (5HP) 4500Mark ~ 20.700$
> Benz Spider 1902 (15HP) 8500Mark ~ 39.200$
>
> (a 3rd class one-way-ticket for the Titanic was in 1912 155Mark ~ 715$)
>
> and so on....
> Thus, I think, that the results of the conversion sound not too unrealistic
> and the resulting meteorite prices give at least the right region.
>
> Buckleboo!
> Martin
>
> PS: And now I will hear some discussions! Were the USA the Maghreb of the
> 19th century? Were the Canadians already strange then? Were Mocs and Pultusk
> the Gao of 1899? Should we have more respect for Campo?........
>
> _____________________________________________
Received on Wed 13 Apr 2005 06:18:36 PM PDT