How much is that...?

By James E. Newell

All of us have had the experience of wondering or being asked about the value of eighteenth century sums of money in twentieth century terms. Fortunately, due to the work of Economic Historians such as John McCusker, average direct conversions from the early eighteenth century up through the present are relatively easy to obtain.

Cost of living indexes are mathematical devices to track the change in value of money over time, and there were several in use in the eighteenth century and others since then. The most well known index today, in this country, is the Consumer Price Index (CPI) published by the U.S. Department of Labor. By comparing indexes alongside each other where they overlap years, McCusker in his book How much is that in real money? has created a continuous index for the past 300 years. The process is as follows: We convert colonial currency to pounds sterling and pounds sterling to dollars at the "standard 17th and 18th century rate" (developed by Sir Isaac Newton in 1704) of 4s,6d "sterling" per dollar (or 0.255 pounds = 1 dollar), and $4.44 18th century dollars = 1 pound "sterling." We then use McCusker's charts to track the change in the dollar.

We know, for example, that in the fairly stable period of 1766 to 1772, one pound in Pennsylvania currency converts to $43.80 in 1993 U.S. dollars. At the "sterling" rate of 20 shillings to the pound and 12 pence to the shilling this places the value of the shilling at about $2.17 and the pence at about 18 cents. It follows then, that one dollar in 1993 is equivalent to $9.76 in PA dollars of the period. There are, however, several other problems to take into consideration, not the least of which is the fact that any index is an average for a particular location in time, and doesn't reflect regional differences. Further, the value of money changes continuously and thus so does the index.

The "dollar," as introduced by the Continental Congress in January 1777, was equivalent, at that point, to one "Spanish dollar" (index of 100 or 1 to 1) The "Spanish Dollar" was the famous "Milled dollar," "Bust dollar," "Peso de ocho Reales," or "Piece of eight." This silver coin was the standard against which most Western nations measured their currency, and itself remained legal tender in the US until 1857.

Unfortunately, inflation was rampant over the war years and, by January 1778, it took one and a half Continental dollars to equal the Piece of eight. Inflation further decreased the dollar's value to almost 8 to 1 by January 1779; to over 31 to 1 in January 1780; and to over 40 to 1 when that currency was finally eliminated in March of 1780. Pennsylvania/Delaware currency didn't fair much better.

In January of 1777, it took 1 1/2 Pennsylvania dollars to equal the Piece of eight. It dropped further to 4 to 1 in January 1778, and to 8 to 1 in January 1779. It was 40 to 1 in January 1780 and 75 to 1 in January 1781. Because of the changes and the fact that they didn't occur just once a year, a reference in a source to a purchase in a particular month should have the price adjusted by the appropriate monthly index to have a precise idea of it's relation to wages or income of the same period or to 20th century equivalents.

Using Table C-1 from McCusker's book we find that, for the year 1777, the following were the month-by-month depreciation rates:

 ContinentalPenn/Del.New Jersey

Using Newton's conversion rate of one dollar to four shillings and six pence, the Pennsylvania/ Delaware dollar started 1777 equivalent to about $6.51 in 1993 U.S. dollars. By the Fall of that year (October), the Continental currency had just begun its slide and was at an index of 115. The Pennsylvania/Delaware currency, however, had an index of 300 indicating a value of only one third of a piece of eight. Thus the PA/DEL dollar was about one half as valuable as it had been at the beginning of the year or about $3.25 in 1993 US dollars. By the time the troops marched out of Valley Forge the next Spring, the Continental was only equivalent to $1.08 and the PA/DEL dollar or $1.09 in 1993 dollars.

Another problem is the difference in buying power between then and now. A loaf of bread was available at about one pence, a standard "fair price" according to a concept left over from the middle ages. With a change in the price of raw materials, the price didn't rise or fall as it would today; the size of the loaf changed. Even so, we would be hard pressed to find anything approximating a "loaf" of bread today for the equivalent amount in 1766 to 1772, of 18 cents. Our standard of living has increased the value we place on a loaf of bread to many times what it was in the eighteenth century. Prices, too, changed continuously. I have taken the following examples from Appendix Table 1 of Bezanson's 1951 book to illustrate the effect of inflation in the Philadelphia area in 1777 alone. The changes are due to a combination of crop failures, embargoes, the changing of retail to rural as people fled Philadelphia and the normal yearly withholding of goods by the farmers who were, instead, "laying up for the winter."

 Jan. 1777July 1777Sept. 1777Dec. 1777July 1778
Bar Iron44.1L/ton90L/ton120L/ton150L/ton201.5L/ton

The shortage of salt was a major problem and the drop in price in September is misleading — the shippers would only accept hard cash. The army responded by seizing all the salt they could find at Egg Harbor and transporting it to "a safe place." Tar, of course, was vital for lubricating wagon wheels and for other war uses. The steady rise in the price of rum must have been particularly hard on the troops as was coffee prices on the practice of drinking coffee instead of tea. Tea prices rose from 13.5s/lb in January to a high of 80.0s/lb in October and moderated to 50.6s/lb in December.

Finally, we are, in the twentieth century, very concerned about the preciseness of measures; they were not. Measures of size and amount were somewhat variable from place to place in the eighteenth century and the common man was not particularly concerned so long as the size changes were not excessive. A bushel could be either a "short" bushel, a "struck" bushel or a "heaped" bushel and even the size of the bushel container might vary. The measure "arpent" was divided by the amount of land one man could plow in a day and varied according to local custom from country to country and even within countries. Serious attempts to standardize weights and measures would not come until the turn of the century.

In summary, it is reasonable to say that in one representative month, (October, 1777) the Pennsylvania/Delaware Dollar was worth $3.25 in 1993 US dollars in the Philadelphia area. The Continental Dollar was worth $8.30 in 1993 US dollars. Prices experienced in other parts of the fledgling United States and with other state currencies varied considerably and should be individually researched to a specific place and time. The cited sources should help.


Bezanson, Anne, Prices and Inflation During The American Revolution, (Philadelphia, PA., University of Pennsylvania Press, 1961)

Bezanson, Anne, Prices In Colonial Pennsylvania, (Philadelphia, PA., University of Pennsylvania Press, 1935)

Kula, Witold & R. Szreter, Measures and Men, (Princeton, NJ., Princeton University Press, 1986)

McCusker, John J., How Much is That in Real Money? (Worchester, MA., American Antequarian Society, 1992)

Copyright © 1996 James E. Newell. All rights reserved.