Q. David Bowers
Wage Indexes From 1871 to Date
To appreciate why collectors did not save Liberty Seated, Morgan, and other silver dollars in quantity at the time of their issue, it is interesting to reflect upon figures compiled by the United States government and published in the Statistical Abstract.
In 1871 the average annual wage in America was $415, rising to $418 in 1872 and falling back to $401 in 1873. During the next decade the average annual wage remained lower and did not reach $418 again until the year 1900. Inflation, as a later generation of Americans was to know it, did not exist.
In 1910 the average wage was $575, climbing to $1,340 in 1920, $1,420 in the peak year of 1929, $1,390 in 1930, and then falling back to a low of $1 ,040 in 1933. The average wage then began to climb, reaching $1,310 in 1940, $2,820 in 1950, $4,190 in 1960, $6,230 in 1970, $12,200 in 1980, and $18,000 in 1990.
In 1871 the average hourly wage was 14 cents. According to government statistics, from 1877 through 1880 inclusive it dropped to 11 cents. By 1900 it was 15 cents, 192053 cents, 194065 cents, 1960 $2.09, and 1990 $10.03.
To convert the value of a dollar in 1871 to its equivalent value in 1991, one multiplies by 72.3. In other words, the value of an 1871 Liberty Seated dollar to the average American wage earner in 1871 was roughly equivalent to what $72.30 would have been worth to the average American wage earner in 1991. It is no wonder that relatively few silver dollars were saved in Proof or any other preservation at the time ofissue. In 1871, American society was much more stratified than it would be a century later. Only the wealthy could afford to collect silver dollars by date sequence, even if they obtained them for only face value. With the average working man having a wage of $8 per week (women working in textile mills were more apt to earn about $5 or $6 per week), it was all the average citizen could to do find enough money to feed and clothe a family.
The multiplier for the year 1878, when the Morgan silver dollar was introduced, is 94.5, meaning that what was the value of a newly minted Morgan dollar to someone in 1878 was equivalent to $94.50 to an American wage earner in 1991. In terms of relative buying power, to set aside a newly-minted 1878 dollar as a souvenir in the time of issue was like spending $94.50 on a newly-issued coin in 1991.
By the end of the early Morgan series in 1904 the multiplier was 61.2. At the beginning of the Peace series in 19.21 the multiplier was 20, and at the end of the early Peace series in 1935 the multiplier was 18.2. If the hourly wage index is used, the multiplier for 1971, the first year of the Eisenhower dollar, is 3.01, meaning that by 1991, the year the present index was compiled, the average wages were 3.01 times higher.
The Year 1871 in History
The Franco-Prussian War was fought in 1870-1871. The German Empire triumphed, and her military prowess and munitions became world-famous. Germany obtained five billion francs as reparations from France, an amount equal to $965 million. Germany went on the gold standard, dumping several thousand tons of silver on the market. So much silver was on hand that France, Belgium, Switzerland, and Greece suspended silver coinage for a period. This signaled a decline in silver prices on the worldwide market, a fall that continued for the rest of the decade.
On January 18 at the Hall of Mirrors in the palace of Versailles outside of Paris, the victorious Germans proclaimed the start of the Second Reich (which was to last until 1918; the First Reich was the Holy Roman Empire, which Napoleon terminated in 1806; Hitler's Third Reich ended in 1945). Wilhelm I of Prussia was emperor, and Count Otto Von Bismarck served as first chancellor. Various German political entities were brought under one government.
The Dominion of Canada, created in 1867, added British Columbia. The first Canadian census, taken in 1871, showed an ethnic composition of 1,082,940 French, 846,000 Irish, 706,000 English, 549,946 Scots, and 202,000 Germans, among others. The population of the United States stood at about 39 million, that of France 36 million, Germany 41 million, Italy 27 million, Japan 33 million, and Great Britain 26 million. In Africa, Henry M. Stanley, correspondent for The New York Herald, located the lost David Livingstone at Lake Tanganyika and greeted him with, "Dr. Livingstone, I presume?"
In its infinite wisdom, Congress declared under the Indian Appropriation Act (March 3, 1871) that Indians were now wards of the government and from then on, Indian tribes would not be recognized as separate nations or independent entities, and no further treaties would be made with them. (The native Americans had honored every treaty, the white men none.)
The Pennsylvania Railroad expanded its operations and provided service to New York City, Chicago, St. Louis and many other cities. On Wall Street, the firm of Drexel, Morgan & Co. was organized by J.P. Morgan and Philadelphia's Drexel banking interests. J.P. Morgan would become a coin collector and assemble a cabinet including runs of U.S. gold Proof sets; the collection would be given to the American Numismatic Society. P.T. Barnum's "Greatest Show on Earth" circus opened in Brooklyn, and in a season of traveling grossed $400,000. C.A. Pillsbury & Co. was founded and went on to become a leading American flour miller and purveyor of food stuffs, with Pillsbury's Best XXXX flour (introduced in the following year, 1872) becoming well known.
The Chicago fire, said in legend to have been started when Mrs. O'Leary's cow kicked over a lantern, raged on October 8th and 9th and destroyed over three square miles of the city, causing an estimated $190 million dollars' worth of damage, and killing about 250 people. Meanwhile, in Peshtigo, Wisconsin on October 8th through 14th, 1,182 people were killed in a devastating forest fire which wiped out the city.
Mints in operation included Philadelphia, Carson City, and San Francisco. The Carson City coinage would, in time, be distinguished for its rarity.