# Purchasing power of a penny in 1870?

**URL:** <https://boards.straightdope.com/t/purchasing-power-of-a-penny-in-1870/284114>\
**Category:** Factual Questions\
**Created:** [January 10, 2005, 10:34pm UTC](https://boards.straightdope.com/t/purchasing-power-of-a-penny-in-1870/284114 "2005-01-10T22:34:02Z")\
**Posts on this page:** 3\
**Page:** 3

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**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\
**Post date:** [December 28, 2012, 4:10am UTC](https://boards.straightdope.com/t/purchasing-power-of-a-penny-in-1870/284114/41 "2012-12-28T04:10:37Z")

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OP does ask specifically for _purchasing power_, but it is sometimes overlooked that wages have generally inflated faster than goods prices have. In other words, a larger share of wages had to be spent on subsistence food in older times. Obviously this would affect the perceived value of a penny: even if it only bought a bun, that bun would represent more wealth to a laborer.

Variations by place, occupation, hours-per-week, etc. may make comparisons difficult, but [here’s a page that shows wages in England between 1264 and 1980.](http://www.wirksworth.org.uk/A04VALUE.htm)

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**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\
**Post date:** [December 28, 2012, 8:11pm UTC](https://boards.straightdope.com/t/purchasing-power-of-a-penny-in-1870/284114/42 "2012-12-28T20:11:47Z")

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Well in 1893 My great Grand Father bought the ranch 120 acres with livestock and farming equipment for “the sum of $10.00 US gold coin”. I sold 20 acres of the ranch in 2005 for $350,000.

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**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\
**Post date:** [December 28, 2012, 8:50pm UTC](https://boards.straightdope.com/t/purchasing-power-of-a-penny-in-1870/284114/43 "2012-12-28T20:50:06Z")

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I suspect the disconnect between the dry inflationary decrease in value and the presumption that a penny was actually worth something back then is due to the fact that food commodities hold down the CPI-based inflation rate. Wheat is now about [$9 a bushel](http://www.bls.gov/ro3/apmw.htm), versus [$1.02](http://www.thestarbarn.com/documents/AboutThe1870s.pdf) in 1870; sugar is $0.19 per pound today, versus $0.07 then. Stick butter is $3.23 per pound today, versus $0.15 then. So food prices have gone up by as little as two and a half times, and 21 times at most. It’s worth remembering that wholesale prices for agricultural goods [actually fell significantly](http://ushistory.councilforeconed.org/visuals/lesson27_visuals.pdf) from 1870-1900.

Conversely, gold is currently $1,650ish per troy ounce, versus $22.88 in 1870, or just over 72 times more. GDP, adjusted for PPP, is now $15 trillion, versus $99 billion, an increase by a factor of 152.

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