Tomas Zahora

U.S. Social and Intellectual History

Professor Price

 

Interpreting Prices in Wichita in the 1870s

 

Dimes and dollars and dollars and dimes,

An empty pocket the worst of crimes;

It's not so nominated in the book,

But that's the way it seems to look.

It is so, it is, for the people say so,

And surely the people ought to know;

And as their fiat makes all rules,

This precept now is taught in schools,

And little Miss and Master, too,

Are learned big I and little "w" you,

And in their plays not to mingle

With those whose papas cannot jingle

Dimes and dollars and dollars and dimes,

For an empty pocket is the worst of crimes.

 

True, classic wit, in days of yore,

'Midst its legendary lore

Tells of a rule for measuring men

By the deeds that they had done.

Thus Caesar was great for shedding blood,

And Paul for the way he preached the word,

And so of all in ancient times,

But now they're measured by their dimes.

Old or young, married or single,

Amount to nothing if they can't jingle

Dimes and dollars and dollars and dimes,

For an empty pocket is the worst of crimes.[1]

 

The purpose of this paper is to suggest ways of interpreting and "translating" prices in Wichita in the period between 1870 and 1880.  Its findings should aid the museum staff in explaining historical prices to visitors, and in informing visitors about the possible questions one can ask when trying to read non-contemporary prices in today's terms.  The first part of the essay will outline the main elements of the process of interpreting prices, and the second part will apply this process to the particular situation of Wichita in the 1870s.

Because of a lack of economic background, I relied rather heavily on the article "The Interpretation of Wages and Prices in Public Historical Displays" by James C. Cooper and Karl Borden, and  "A Bicentenary Contribution to the History of the Cost of Living in America" by Paul A. David and Peter Solar, the latter being the main source of Cooper's and Borden's analysis. [2]  I reproduce their methods and figures without expressly evaluating them – a historian of economics, or an experienced economical analyst is needed to examine the value especially of David and Solar's study after more than a quarter of a century.

Interpreting Historical Prices

Cooper and Borden outline the main problems encountered by public historians and museum curators who want to inform the public about the past by furnishing their exhibits with original prices.  The use of merely nominal prices, such as the price of a hotel room in Wichita Western Hotel in 1874, to use a local example, equaling two dollars including board per night, tends to misinform, rather than illuminate the visitor.  Not that the provided information is incorrect – on the contrary, most museum employees strive scrupulously to present a truthful image of the past.  The problem is that the casual visitor, whose familiarity with nineteenth-century history tends to be somewhat limited, finds it difficult to place the nominal price into the proper context.  The result of such an encounter in a museum may be a sentimental image of the "good old past" when things were much cheaper and life incomparably simpler; but even to a more perceptive visitor, the notion of two dollars in 1874 currency means very little.  Attempts have been made, therefore, to "translate" these prices into late twentieth-century terms in order to make them at least roughly intelligible – despite possible pitfalls which are outlined below – to modern visitors.  Tables based on changes undergone by the Consumer Price Index over time, as well as tables expressing the changing relative value of labor, have been outlined by David and Solar to reflect these trends.

Before discussing the conversion tables that adjust historical prices to more intelligible figures, it is necessary to make clear several points relevant to this process.  First, prices, even when adjusted for inflation over time, reflect production costs and production technologies that change over time.  Even if one did establish that a bushel of wheat in 1870 would cost x dollars in 2000, it would not be, in a manner of speaking, the same wheat.  Had equal amount of human labor been expended on the same amount of wheat in 2000 as in 1970, it would be much more expensive.  Second, higher productivity, as the note above suggests, results in higher value of labor.  A worker in 2000 earns more in proportion to his labor than a worker in 1870 would, because he is able to produce more goods.  Correspondingly, the same amount of hourly labor results in a higher relative wage – more goods are available for him or her to buy.  Third, the very availability and utility of goods and services changes over time.  Horseshoe makers would not make much of a living in Wichita today, and one would vainly seek a Gateway Country store in the same town in the 1870s – the examples are obvious, but they illustrate a reality of ever-changing offer of services and goods.  Even if a historian is able to estimate what kind of hotel room the two 1874 dollars would procure in 2000, it would be difficult to establish what other late-twentieth-century services that same amount could provide.  One could, following the analyses of Solar and David, and Cooper and Borden, outline more points of divergence, but at least the three mentioned above should be kept in mind when making nineteenth-century prices intelligible.

Using the Consumer Price Index to Interpret Prices

The Consumer Price Index (CPI) "measures the average change in prices of goods and services that urban consumers purchase for day-to-day living."  The index uses a fixed basket of market goods, and traces customer expenditures upon these commodities, to arrive at a measurement of the effect of changing prices on the overall cost of living.[3]  Each CPI uses a particular year as a starting-point for its analysis: changing prices are interpreted in relation to that year.  The current CPI, evaluated by the US Department of Labor and the Bureau of Labor Statistics, uses the years 1982-84, as their reference point.  The CPI developed by David and Solar revolves around the year 1860, and covers the two-hundred-year period from 1774 to 1974.  Cooper and Borden updated this CPI to 1994.[4]

 Although its results are but rough estimates, the 1774-1994 CPI can be used to translate historical prices into modern prices.  To interpret the $3 wage of Klondike railroad workers in 1898, Cooper and Borden multiplied that wage by the 1994 CPI value and divided it by CPI for 1898: (3*1789/100) = 53.67.[5]  Clearly, fifty-three dollars per day appears more like a reasonable daily wage than $3.

To bring the available CPI up to date, I have used the recent values of CPI, published by the Bureau of Labor Statistics.  I multiplied the yearly percent increase in the current CPI by the previous year's value in Cooper and Borden's CPI table.  In 1994, that figure was 1789.  To further update this list, it is necessary to simply enter the yearly percent increase in the current CPI and the former year's adjusted CPI value: CPI (2000) = CPI (1999) * 3.3 = 2010*3.3 = 2076.4427 (one should not round the numbers when calculating, as the difference will build up).  The following is the adjusted CPI Index for 1994-2000:

 

Year                CPI % increase over previous year*           Adjusted CPI

1994                2.7                                                                   1789

1995                2.5                                                                   1833

1996                3.3                                                                   1894

1997                1.7                                                                   1926

1998                1.6                                                                   1957

1999                2.7                                                                   2010

2000                3.3**                                                               2076

 

* Percentages are based on December-to-December CPI changes.

** The percentage for 2000 is based on the latest (October) release of Bureau of Labor data; to get more precise value, one should use the December percentage, which will be released in January.[6]

 

When interpreting the price of one night stay at the Western Hotel in Wichita in 1874 (room and board), the original $2 is multiplied by the product of division of 2076, representing the year 2000, and 137, representing 1874: 2*(2076/137) =  $30.31.  Thirty dollars appears quite acceptable, even economical, by today's standards; above all, such a figure provides the observer with at least an approximate idea of the cost of the hotel: it is not the $350 a night Hiatt suite, nor the $17 a night den of vice. 

Yet there is a problem with the Consumer Price Index: it is too general to provide more than merely a vague idea of prices.  The factors of productivity and the relative value of labor must be considered to bring the CPI-based adjusted price into a more historically correct perspective, especially when wages, not prices, are evaluated.  The Bureau of Labor Statistics measures quarterly and yearly increases in productivity (in the third quarter of 2000 this value has been 3.3% over the previous quarter[7]).  Thus, even wages current at the time when Cooper and Borden wrote their article – not to mention the study by David and Solar – should be adjusted to reflect the progress of productivity: one would receive more for the same amount of labor today.  Wages, in other words, tend to grow faster than prices.

Using the Money Wage Rate Index to Interpret Prices

David and Solar utilize the concept of Labor Cost of Living to point out the effect of increasing productivity on the cost of living.  This variable is the result of division of the appropriate (time-adjusted) Money Wage Rate (MWR) index figure and adjusted CPI figure.  David and Solar's Money MWR reflects average earnings by non-skilled workers, and uses the year 1860 as its reference point.[8]  Cooper and Borden adjusted this index to 1994; the following is a continuation to 2000[9]:

 Year               MWR % increase over previous year*       Adjusted MWR

1994                2.4                                                                   10975

1995                2.57                                                                 11257

1996                3.79                                                                 11684

1997                3.58                                                                 12103

1998                2.6                                                                   12420

1999                3.58                                                                 12864

2000                3.3**                                                               13291

 

* Percentages are based on December-to-December MWR changes.

** The percentage for 2000 is based on the latest (October) release of Bureau of Labor data.

 

The daily $3 wage at Klondike in 1898, when "translated" according to the MWR index, climbs to $232.33 a day in 1994, and soars to (3*13291/135) = $295.36 in 2000 – almost thirty dollars an hour when the number is divided by ten working hours.

When wages are interpreted in terms of increase in productivity, the equation results in somewhat inflated numbers.  The MWR rates show how much one would receive for the same amount of labor today – they do not, however, correspond to the availability of goods to the laborer in 1898, for reasons that should by now be clear.  The amount and variety of products available to the worker, as well as the portion of one's wages necessary for the purchase of a particular product, is different today than in 1898 – or in 1870, for that matter – and if we do, like Cooper and Borden, use one index for prices and one index for salaries, we get a somewhat misleading picture.  Nevertheless, the MWR index can be valuable in pointing out to the visitor that because of increased productivity more goods are available to a worker now for the same labor than ever before.  To present concrete figures, probably the best way of approaching a reasonable solution is by using one index, preferably the adjusted CPI index, in figuring both prices and salaries: the ratio of product and wage remains unchanged, and the visitor learns not how much the laborer would be able to buy today, but how much was actually available to him at the time.  By using concrete examples, one is even more likely to bring things into a reasonable perspective; and here we must consider the particular case of Wichita in the 1870s. 

Interpreting Historical Prices in Wichita

"Although our city, from force of circumstances, is almost purely commercial, yet when we come to aggregate the capital and number of the industries of our town, we flatter ourselves that the showing is not so bad."[10]  The enthusiastic report in The Wichita Eagle on April 3, 1973, proclaiming Wichita to be the Queen of the Southwest, stands witness to the resilient spirit of the early inhabitants of a former trading-post.  The increase in population was spectacular, especially in the beginning: the population was 5779 in 1881, 4209 three years before, and 2580 in 1875.  The 1870 census recorded less than five hundred inhabitants. [11]  The year 1873, however, marked the beginning of a depression that lasted until June 1875.  Cattle prices fell, and cattle industry as such suffered.  But the city rebounded relatively easily, and in June 1875 Wichita's Relief Committee replied to Fort Riley that they no longer needed government relief aid.[12] 

One would naturally expect that the depression of the early 1870s would cause a ripple effect that influenced market prices and wages.  I used the more or less regular weekly market price report in the Wichita Eagle to observe the fluctuation of prices in the early 1870s (Appendix: Table A – noted items mark changes: I did not enter lists which were identical with the previous ones).  Since I was only able to survey prices until 1875, my table is incomplete; moreover, although I could follow all prices in 1872, during the next year the layout of the market report changed and included an increased variety of goods (Appendix: Table B).  I therefore marked only those items which paralleled the original layout.  Finally, the newspaper itself did not always include every item in its list, and lists did not appear in every issue.  Still, changes can be perceived.  The first noticeable element is the seasonal fluctuation of prices, especially of grains, which is logical and still occurs.  Hay and oats prices also fluctuate according to the seasons: oats must have been sought after more than usual during the 1874-75 winter, since the price was more than double of the previous year's value.  Some prices, such as that of sugar, soap, tea, or syrup, remain the same, which implies that there were areas of the economy which remained unhurt – or at least that the prices did not reflect significant change.  Surprisingly, the prices for cattle remained relatively stable during the period – but the prices listed on the market are not exactly the prices dealers and farmers dealt with.

Perhaps the best way to make these prices "speak" in today's terms would be to adjust them to 2000 Dollar amounts.  Dozen of eggs, which cost $0.22 in May 1872, would "cost" $3.11 in today's dollars according to the CPI translation.  The price of a dozen of eggs fluctuated rather dramatically during 1874: prices today would be $1.51-$1.89 in January 1874; $1.21-$1.89 in November of the same year, but an incredible $4.54-$6.06 by the end of the year (was this a violent spell of Christmas cooking or a great frost that killed off chickens?).  If nothing else, the CPI inflates the prices to the extent that even changes of a few cents become visible and significant.  The adjusted CPI also takes into consideration the devaluation that progressed in the wake of the depression: the index is 157 for 1870; 147 for the succeeding two years; 144 in 1873; 120 in 1878 and 1879; and by 1889 the value is 111.  Mere observation of rising and falling prices may obscure possible stagnation, and even contrary movement.

Regional Differences

The CPI certainly makes prices stand out in terms of 2000 Dollars; nevertheless, it does not take into consideration regional differences.  When explaining the relative value of a price of a particular item, one must consider the cost of transportation, the location of the place of sale, and the needs of the community – different items will be demanded even in the same city as it develops from a trading center or a village into an urban center.  Wichita's switch from the brief list of market items to the long list in the Eagle in 1873 marks this gradual change undergone by Wichita: spices, not one but four kinds of soap, Chicago-made boots and shoes, citrons, figs, and five kinds of nuts make it to the market listing.  My relatively brief research did not address the costs of transportation at all; and I did not observe the behavior of prices in any other town.  In order to make a comprehensive interpretation of prices in Wichita, more thorough research is necessary.

Since the reports of the Kansas State Board of Agriculture began to appear in 1975, I was able to gather valuable, albeit irregularly spaced and erratic, information that can partially address the question of regional differences and wages.  Table C contains listings of wages in selected occupations, together with other possibly relevant information, collected from the reports on the counties of Sedgwick, Harvey, and Johnson.  I chose Harvey County for its proximity to Wichita, and Johnson because of the city of Olathe, whose population approached that of Wichita.  Olathe also lies nearer a large urban area, and I was interested in noticing possible difference in wages between Wichita and Olathe.  A clerk in Olathe could make at most $50 a month in 1875, which translates to only about $786.  In 1880, the higher spectrum of the wage was $60 ($1012) – a 29%, rather than 20% increase in real salary after adjustment.  In Wichita, clerk's maximum salary remained at $75, today's $1180 in 1875, but $1266 in 1880.  Wages offered in Wichita probably reflected a greater need for qualified staff in only newly urban area.  Interestingly enough, clerks in the Harvey county were offered $80 in 1875, but only $60 five years later – here, again, one may surmise that Wichita began to dominate the area as an incipient urban center.  The dramatic deflation of wages from 1875 to 1880 may reflect difficulties, but more probably it is a result of a natural cycle: one look at the adjusted CPI reveals that lower wages did not necessarily imply worsened circumstances.  For dire circumstances, one need only look at the wages paid to domestic servants – one can see why the job was not among the most popular.  Female jobs, as can be expected, earn less than male jobs, regardless of county. 

Conclusion: Caveat Translator

In this paper, I have attempted at least to address – since solutions may lie beyond my time availability, personal interest, and specialization – the most important problems of dealing with prices in historical context.  Prices alone give only a very narrow insight into the economic and social transformations occurring in Wichita in the 1870s.  Any information gained from studying price lists and price "translations" must be supplemented by more general historical data to provide a more reliable image of society.  For purely practical aims, however, such as the need to give museum visitors prices that would actually mean something to them, the CPI interpretation provides at least a rough estimate, one which inflates prices significantly enough to make even small changes evident.  When both wages and prices are adjusted according to the same formula, the ratio between them is preserved, and one can see how much of a given commodity one would be able to buy with a given salary.  On the other hand, if the visitor is interested in learning how much labor would remunerate in today's terms, the Money Wage Rate index can be used to show how much real wages have increased over time.  Another, altogether obvious, option of interpreting prices is by presenting them in terms of fragments of a given wage: thus, as a skilled artisan, such as a blacksmith or a bricklayer, one would earn enough in a day to stay in the Western Hotel, or to buy a sheep (if he ever wanted to buy one).  Finally, whenever dealing with historical prices, one must remember that not only prices, but also services, the value and productivity of labor, and the structure of economy do change over time, and that a simple answer to a price-related question may in fact compare incongruous elements and result in misinformation.



[1]  "The Greatest of All Evils, or The Sin of Wichita."  The Wichita Eagle.  April 17, 1873.

 

[2]  James C. Cooper and Karl Borden, "The Interpretation of Wages and Prices in Public and Historical Displays," The Public Historian 19 (Spring 1997), 9-29; Paul A. David and Peter Solar.  "A Bicentenary Contribution to the History of the Cost of Living in America," in Research in Economic History, vol. 2 (Greenwich, CT: Jai Press, 1977).

 

[3]  Eva E. Jacobs, editor.  Handbook of U.S. Labor Statistics, (Lanham, MD: Bernham Press, 1997).

 

[4] David and Solar, 16-17; Cooper and Borden, 17.

 

[5] Cooper and Borden, 16.

 

[6]  This and previous years' values CPI percent increase rater can be easily found at the Bureau of Labor Statistics website at http://stats.bls.gov/blshome.htm.  (accessed 11/25/2000 at 1:00 a.m.).

 

[7]  Ibid.

 

[8] David and Solar, 27, 57.

 

[9] As MWR I used the Bureau of Labor Statistics' data for average hourly earnings of production workers – the percentages are (+/-0.5%) different from Cooper and Borden's data.  In other words, it is an estimate; but in light of its application, the difference is not decisive.

[10] "The City of Wichita! The Queen of the Southwest."  The Wichita Eagle April 3, 1873.

 

[11] Third Biennial Report of the State Board of Agriculture, (Topeka, KS: Kansas Publishing House, 1883), 446.

 

[12] L. Curtise Wood, Dynamics of Faith: Wichita 1870-1897 (Wichita, KS: WSU, 1969), 23-41.