Money in Old West films

[ckramer]

I really enjoy a good western, spaghetti or Hollywood, and because many of them deal with bounties and the like, money comes up (i.e. the price on someone's head). To me the figures always seem impossibly high for the time period, and I'm not just talking about bounties (which could be intentionally comically high) but the cost of whiskey or other sundries. They're always talking in dollars but even as recently as the 1950s and maybe more recently a single dollar was quite a bit of cash for daily purchases, let alone in the 1880s.

My question is, was the value of the dollar different from the early 20th century or is this just classic Hollywood not really caring about details like that?

 

[RBH]

Info circa 1870's.

 

[Stanley Doble]

That is just Hollywood. Reminds me of a story from the Golden Age of movies. A big studio head was explaining his idea for a new picture to his writers and director.

" This is supposed to be the story of a typical American family. Average, see? Father makes about $20,000 a year".

What makes this funny is that at the time, the average American income was about $2000 a year. It would be like making a picture about the "average" family today with an income of $500,000 a year. Which come to think of it, is what they do.

When you watch a movie from the thirties or forties and they are throwing around figures like $5000 or $10,000 that is an amount of money the average movie goer would never see in one lump in a lifetime.

So yes, Hollywood exaggerates such sums and also is used to dealing in much larger amounts of money than the average person.

 

[Stanley Doble]

For a standard of comparison, gold was about $20 an ounce through most of the 19th century and the first third of the twentieth century. From 1933 to 1970 it was pegged at $35. Today it is $1300.

Before WW1, and back to the mid 19th century, a labourer made about $1 to $1.25 a day. More for skilled workmen.

After WW1 prices approximately doubled and so did wages. An old man told me that in the 1920s the electricians union went on strike for $1 an hour. It was predicted that if they got it, construction of new homes and commercial buildings would cease because of the extra expense. In those days electricity was the newest high tech innovation, and a trained electrician got very high pay.

In about 1900 author Jack London rented a new house in the Russian Hill section of San Francisco, then a new and fashionable district, for $3 a month. I thought this must be wrong until I remembered that my grandfather rented a house in small town Canada for $6 a month in the 1930s, when prices were more than double what they were in 1900.

The $3 a month rent was from Sailor On Horseback , Jack London's biography.

Sometimes you get a hint about prices and income from old books. The Cotton Kingdom by Frederick Law Olmstead had some statistics about prices and wages in the US in the 1850s. Another good source would be London Labour And The London Poor by Mayhew, which was a study of wages and living conditions in London England in the 1850s.

 

[Stanley Doble]

As a general rule the dollar falls in value by half every 10 years. Sometimes faster, sometimes slower, but the US government has a policy of devaluing the dollar by 2% a year or more.

The dollar of today is worth about 2 cents in pre WW1 money. Maybe less.

 

[ckramer]

I figured as much. I was watching the Searchers with John Wayne and he throws around $5 "yankee dollar" coins like nothing which, again, struck me as odd but as you all said, that's just hollywood. Thanks RBH for the price chart. Very interesting. Assuming by "blanket" they mean a wool blanket that would mean a Woolrich blanket costs about 100x more today than it did then. Although that's most likely a product of marketing more than inflation alone.

 

[Stanley Doble]

I figured as much. I was watching the Searchers with John Wayne and he throws around $5 "yankee dollar" coins like nothing which, again, struck me as odd but as you all said, that's just hollywood. Thanks RBH for the price chart. Very interesting. Assuming by "blanket" they mean a wool blanket that would mean a Woolrich blanket costs about 100x more today than it did then. Although that's most likely a product of marketing more than inflation alone.

As I said, the dollar of today is about 2 cents in 1914 money. So a $3 blanket would now be $150. Maybe more in 1870s terms.

There was almost no inflation from the end of the Napoleonic Wars (1815) to World War 1 (1914). Although prices rose and fell, they always came back to about the same level. Inflation as we know it is a 20th century phenomenon.

 

[Renault]

Yeah! I like the seven shot "Sharps" repeater!!! LOL.

Like to see one of them!!

 

[Guttersnipe]

Stanley, I thought that the purchasing power of the U.S. dollars ebbed and flowed with inflation throughout the 19th century. No? If I recall correctly, wasn't the 1860s an inflationary? I know that when you chart the U.S. Dollar to the British Pound, the exchange rate remains pretty constant, until the American Civil War...

 

[Stanley Doble]

Stanley, I thought that the purchasing power of the U.S. dollars ebbed and flowed with inflation throughout the 19th century. No? If I recall correctly, wasn't the 1860s an inflationary? I know that when you chart the U.S. Dollar to the British Pound, the exchange rate remains pretty constant, until the American Civil War...

View attachment 13893

That is more or less what I was trying to say.When gold and silver were the standards, prices might rise and fall due to political or economic conditions but sooner or later they came back to normal. The age of ever rising prices, or falling money values, began exactly 100 years ago.

Your chart confirms what I said earlier about the value of the dollar settling down after the end of the Napoleonic Wars (and the War of 1812) and holding steady until the beginning of the First World War, except for a spike inflation at the time of the Civil War.

 

[Matt Crunk]

In the film The Big Sleep (1946) Private Eye Philip Marlowe states his fee as $25 a day plus expenses. I thought it's be interesting to compare that to other wages of the day as well as today.

In 1946 the Federal Minimum Wage was $.40 (40 cents) per hour. The average non-supervisory wage was listed as around $1.00 per hour. By dividing the average household income of $2,600 into the 40 hour work week, we get a slightly higher hourly wage of $1.35. So by this we can conclude that when Marlowe was on a job, he earned approx. 2 and a half to 3 times that of the average hourly worker.

Using an inflation calculator, that $25 per day in 1946 would equal to $320. in today's money. By contrast, I have a friend who occasionally works as a private investigator and his current rate is $125 per hour with a 12 hour minimum retainer, plus expenses, so basically $1,500. per day. A little online research shows that his rates are slightly above average for the profession.

Interesting.

Also of note: Marlowe's client is stated to be a millionaire. A "millionaire" today would be equal to someone with a net worth of $78,000. in 1946. In other words the term "millionaire" in 1946 meant 12 times the wealth that it does today.

 

[Matt Crunk]

I also find it interesting that inflation doesn't equally affect all prices:

Average annual income today is 18 times greater than it was in 1946.
The price of eggs has barely doubled while milk has increased times 5. and bread times 10.
Current gasoline prices are 17 times that of the mid 1940s

Contrastly,
New cars cost 25 times more.
The average cost of a new home is incredibly 51 times more.

People of the late 1940s lived much better on an average income than we do today. Daily staples may have cost them slightly more, but big ticket items like new cars and homes were much easier to obtain.

 

[Stearmen]

This sight really puts it all into perspective! http://www.drquinnmd.com/bank.html As you can see, Jesse James had a $25,000 bounty on his head. Also, keep in mind, in the short run in the boom towns, mining and cattle, prices could go through the roof. Far more people became rich supplying the miners then panning for gold. Just ask Levi Strauss, who made his first fortune in San Fransisco dry goods store!

 

[Fading Fast]

I also find it interesting that inflation doesn't equally affect all prices:

Average annual income today is 18 times greater than it was in 1946.
The price of eggs has barely doubled while milk has increased times 5. and bread times 10.
Current gasoline prices are 17 times that of the mid 1940s

Contrastly,
New cars cost 25 times more.
The average cost of a new home is incredibly 51 times more.

People of the late 1940s lived much better on an average income than we do today. Daily staples may have cost them slightly more, but big ticket items like new cars and homes were much easier to obtain.

Part of the reason the big ticket items cost so much more today is the use of borrowed money and the tax deductibility or mortgages (and all the other government programs) that support housing prices. If the government does something to promote home ownership (like it does through a multitude of programs and benefits), the price of that item will move up relative to other items. Also, the use of borrowed money brings much more demand and will support greater supply and higher prices.

I am not comment on the good or bad of this, but just trying to explain why I think some big ticket items have gone up relative to other items. The same can be said of college tuitions.

 

[Stanley Doble]

A million dollars isn't what it used to be. If you had a million dollars in the bank at 2% do you know what your income would be? $20,000 a year. When you see someone who makes $400 a week do you think "that person has a millionaire's income" because that is what it is.

Now if it was a billion the annual interest would be $20,000,000 which is more like it. It seems a billionaire is more like what we used to think of as a millionaire.

 

[LizzieMaine]

Part of the reason the big ticket items cost so much more today is the use of borrowed money and the tax deductibility or mortgages (and all the other government programs) that support housing prices.

To say nothing of rampant speculation in and "flipping" of houses, which drives prices far beyond what they ought to be. The real estate bubble of the 2000s was driven more by fevered speculators than by people buying homes to actually live in long term -- just as the stock market bubble of the twenties was driven by people more interested in short-term profits than in long-term security.

 

[Fading Fast]

To say nothing of rampant speculation in and "flipping" of houses, which drives prices far beyond what they ought to be. The real estate bubble of the 2000s was driven more by fevered speculators than by people buying homes to actually live in long term -- just as the stock market bubble of the twenties was driven by people more interested in short-term profits than in long-term security.

I agree and would add that the line became blurred as I know people who were buying homes to live in, but did everything they could to buy the biggest home with the least money down as they wanted the "investment" as well as a place to live. In truth, they wanted the speculation. When I grew up, you needed 20% down and you knew you had 30 years of payment to make (and you didn't get the mortgage unless you basically had 4 times the mortgage payments in income - i.e., if you had $10,000 in mortgage payments a year, you needed to make $40,000 a year).

 

[LizzieMaine]

I agree and would add that the line became blurred as I know people who were buying homes to live in, but did everything they could to buy the biggest home with the least money down as they wanted the "investment" as well as a place to live. In truth, they wanted the speculation. When I grew up, you needed 20% down and you knew you had 30 years of payment to make (and you didn't get the mortgage unless you basically had 4 times the mortgage payments in income - i.e., if you had $10,000 in mortgage payments a year, you needed to make $40,000 a year).

"No money down to qualified veterans." That, above all else, was what turned the United States from a nation of renters to a nation of homeowners. And a good many of those vets stayed in those homes for the rest of their lives. They were buying *homes,* not "assets."

 

[HudsonHawk]

I agree and would add that the line became blurred as I know people who were buying homes to live in, but did everything they could to buy the biggest home with the least money down as they wanted the "investment" as well as a place to live. In truth, they wanted the speculation. When I grew up, you needed 20% down and you knew you had 30 years of payment to make (and you didn't get the mortgage unless you basically had 4 times the mortgage payments in income - i.e., if you had $10,000 in mortgage payments a year, you needed to make $40,000 a year).

This is the biggest problem. People simply buy more house than they can afford, not to mention long before they are ready to make that kind of commitment. They think they have some God-given right to own a $300,000 house by the time they're 25, despite making $40,000/year.

 

[Fading Fast]

"No money down to qualified veterans." That, above all else, was what turned the United States from a nation of renters to a nation of homeowners. And a good many of those vets stayed in those homes for the rest of their lives. They were buying *homes,* not "assets."

I think you hit on two key points. One, "qualified," used to mean something where the bank truly assessed if you had the wherewithal to make the payments and, two, the mindset of the homeowner was homeownership not speculation.

That said, you also hit on something that caused me to want to augment my earlier comment. While I think, in aggregate, the massive effort by both the government and private financial institutions - special programs, tax benefits, "easier" standards for this and that, etc. - both drove house prices up relative to other items and changed the homeowner's mentality from one of long-term investor to one of short-term speculator (overall, but with many exceptions individually) - there is no question that some thoughtful and honest people benefitted from these efforts. Unfortunately, the effort writ large did massive damage to what had been a relatively stable market (and with a manageable 30 year mortgage and long-term mindset one used to have the ability to get through temporary housing market setbacks) and a great way for the regular person to build wealth over time.