Purchasing power of a penny in 1870?

I was going by this and assumed the cheapest must be the price for a blank postcard with the postage printed on it, but I must be wrong because I can’t find such a thing.

I’ve been trying to find a site with prices from general stores but haven’t had any luck.

Since they were living far from any store, the chances of the girls actually spending the money was limited. It was very probably more of a “shiny object” to them that they somehow knew was linked to buying things. Ma & Pa Ingalls probably rarely saw more than $100 per year in cash since they were itinerant farmers.

A good Laura Ingalls Wilder page

Its not just inflation that is a factor things like technology, transportation & communications have made goods and services cheaper. So a penny may be worth 20 cents in regards to inflation but in the 1870 alot more labor went into each product bought with a penny. Coke for example started selling at the turn of the 20th century for a nickel for a 6oz bottle. In 2005 a 2-liter (67oz) can be had for $0.99 so the price per ounce is only double what it was a hundred years ago even though wages are 10-20x higher.

From this page

So an 1870 penny could buy a candy bar. Of course, a candy bar in 1870 was a big treat for a poor kid.

McDonalds may pay a kid $5.15 per hour, but union laborer rates are probably on the average of $15.00 per hour if not more, NJ area. I have a hard time finding kids to cut grass in the summer for less than $9.00 No economist either sorry, just observations

Someone else has already commented on the postage. However, a loaf of bread did sell for a penny during that era. And (what passes for) a (decent) loaf of bread nowadays goes for $2 or more. Yes, you can buy a loaf of white play-doh for $1 in Wally World, but I wouldn’t eat that, sorry. I’m frustrated enough with what’s happened to rye and “whole wheat” bread as it is. They’ve both turned soft, too.

There was “penny candy,” but that wasn’t a penny a piece, it was so much for a penny. What made it that expensive was the sugar, which mostly came from the Caribbean back then, and the shipping costs. Bread, OTOH, was flour (wheat was the #1 crop planted on the prairie at that time), :smack: yeast (“sour dough” yeast is wild yeast you get from leaving water with something the yeast can digest setting out open), and water. Of course, there was also the “opportunity” cost of fuel to bake the bread (not many trees on the prairie; houses were built from sod, but I don’t think you’d want to bake bread with dried dung). OTOH, when you build, etc., with wood, the wood’s not gone; when you burn it, bye-bye.

All that to say this: As someone else has already commented, some prices have increased proportionately; others haven’t. :dubious:

At that time, the overall cash supply was a lot smaller relative to the GNP than it is today. There just wasn’t that much cash around. This was a HUGE political issue at the time. The populist movement was getting started around that time, and their big issue was the tight money supply and its effect on midwestern farmers. Remember William Jennings Bryan and his Cross of Gold speech in 1896?

The Ingalls family didn’t see much cash. Even in later years when they were more prosperous, they used relatively less cash than we would today. (I haven’t read the books in ages, so I’ll talk in terms of the TV show.) Ma would sell eggs to Mr. Olsen’s store, and buy goods there. He gave her credit for the eggs, not cash. She would then “spend” the credit in the store. This seems like a decent enough arrangement until you consider that by taking credit rather than cash, Ma was locked into shopping only at the Olsen’s store. There wasn’t any place else to shop in Walnut Grove, of course, but if she had had some cash, she could have taken it on her occasional trips to Mankato, and bought at Kato-Mart, which had much lower prices and a bigger selection.

In light of that situation, the role of Mrs. Olsen changes dramatically. She was portrayed as an overbearing greedy busybody, but she was basically played for a laugh. But considering that she was in charge of the only store in town, she becomes significantly less benign. Would someone like her have inflated prices? Certainly. Sold inferior goods for premium prices? Of course. Refused to let people return defective items? Yup. Many story lines on the show focused on her conflicts with her husband, who was basically a decent guy, but quite a wimp. He tried to deal fairly with the Ingalls family and other townspeople, and she would step in and try to work things to the store’s advantage. On the show, the fair and the good always won out, but in real life? I doubt it. Think of what it would have been like to have to shop with the real Mrs. Olsen. It would have been a real problem. And the limited cash flow prevented people from taking their money elsewhere. It also meant that a new store was unlikely to open. An established store run by a prosperous family could afford to let people buy on credit. It would be a lot harder for a start-up to do that.

So, to make a long story short, the “value” of the shiny penny was far more than its actual buying power, especially in 1870, when the Ingalls were much poorer than they were in the Walnut Grove years. It represented the very rare opportunity for the girls to have some actual buying power of their own.

And no doubt Laura and Mary ran out and spent their 1864 1C L ON RIB PCGS PR64 RD on candy.

[hijack]

There was a Simpson’s episode once, set in the late 1800’s, where they showed a “Dollar Store”.

They were selling grand pianos, fur coats, and chandeliers.

I remember the passage in Gone with the Wind when Rhett gives Wade a bill to go buy “lots of candy. Enough to give yourself a stomachache.” The half million Rhett made in the blockage would be about 7 million today, except it was all in gold.

I just re-read Dracula (1897) and was tickled to note where someone gave a penny to a child to go buy a loaf of bread “…and keep the change”! Going by this, I’d make a penny about $5 today.

:smack:

Just realized that would have been a British penny…

I never watched LHotP regularly, or much at all for that matter. However, I do remember one episode where the family goes to a fair/ carnival sort of thing. Pa gave at least 2 of the kids quarters.

Well, in On the Banks of Plum Creek we learn what Laura and Mary spent one of those two pennies on. Not sure if it counts as a spoiler, but what the heck…

After their first day of school ever, Pa gives them a dime to go to the Olesons’ store to buy a slate (aka a mini-chalkboard used as a writing tablet). Alas, they have nothing left over to buy some chalk, which costs a penny. Conscientious Laura & Mary don’t want to ask Pa for even more money. So the kids privately decide that Mary will buy the piece of chalk with her Christmas penny, and from then on Mary will own half of Laura’s penny.

The fate of the other penny is left for historians to ponder.

Other monetary references in the LHoP series:

[spoiler]

  • A meal in a railroad hotel costs $0.25 (On the Shores of Silver Lake)

  • In hard times when cats are scarce (and mice are plentiful), a kitten costs $5 (Little Town on the Prairie)

  • Also in LToP, Laura later earns $1.50 a week as a seamstress, with hours from 7AM - 6PM, and a half-hour for mealtime. Pa says of this workday, “That’s fair. You get off an hour early :eek: but have to bring your own meal.”

  • For her first teaching stint, Laura earns $25 (+ bed/board) for two months’ work. Later, as a more experienced teacher, she earns about $75 for teaching school for 3 months (These Happy Golden Years)

  • In THGY, a parlour organ costs the Ingalls $100, $40 of which is Laura’s. The family decides to get the organ as a homecoming gift to Mary, who’s been away at college for the blind.)[/spoiler]

Y’know, I probably should be embarrassed to have this info off the top of my head, but … eh, screw it. Yes, I’m an adult and I read LHoP books once every couple of years!

If you tell your child it is about the same as Santa leaving her a nice shiny Sacky dollar, you’re about on the right track. You could say 50cent piece/half-dollar.

In other words- even then it was more a gesture than a significant sum.

It was $.50 for the kitten. Page 25 of LTotP. Everyone is shocked about how high the price was.

In Farmer Boy Almanzo buys a baby pig for $.50.

I think the ‘getting off half an hour early’ bit was from These Happy Golden Days. In LTotP, Laura makes ‘$.25 a day plus dinner’, which is $1.25 a week.

Dunno about the tv series, but in The Long Winter it’s clear that there’s at least two general stores in town, so Mrs. Oleson doesn’t get to be as horrible as she was apparently made out to be in the show. There’s an argument between a bunch of townsfolk and one of the store owners about what consitutes fair business.

Sorry to be a LH nerd.

Ok, in 1870 how did the British penny compare with the American cent?

I believe it was about twice as much, but am not sure. Early in this (actually last) century when we still had fixed echange rates the pound was worth $4.80. Since there were 12 pennies to the shilling and 20 shillings to the pound, the English penny was worth 1/240 of $4.80 or two cents.

I very much liked Green Bean’s post, but I’d like to add that there were typically social limitations on how stupidly greedy a general store-owner could be, even in the absence of competition. My great-grandfather owned the general store in a very small town in North Dakota - the only town of any size for about 30-40 miles around. If he’d tried to been a real pig, I suspect his neighbors wouldn’t have reacted too kindly - and that could have real consequences if, for example, he’d ever found himself wiped out due to a fire. As it stands, his willingness to engage in barter and credit pretty much did ruin him in the Depression, but I suspect that the reason he did so was about 3-tenths generosity and 7-tenths self-interest (we would hope “enlightened,” but I’m not sure of that)…

Your estimate of 50 cents sounds accurate to me. Replies of 14 cents based on this or that economic statistic are absurd. When I was a child in the early 60’s, I could buy two pieces of “penny candy” for a penny. Those small morsels, if you can find them, would be at least a quarter each today. I would use this reasoning to say your initial estimate is right.