The Difference a Dollar Makes (Part 1)

Sep 15, 2022 | Financial Literacy, Monetary Education


Picture: 1901 Silver Morgan $1 Dollar coin and a 2009 Federal Reserve $1 Dollar note

A single dollar bill won’t buy you much these days but a single Morgan dollar will. 

In order to truly understand the concept behind Rethinking the Dollar one needs to look no further than how much the Dollar has changed. I’m sure you can agree that a single dollar bill won’t purchase much these days. Maybe if you are lucky you might find 3/4 of a candy bar or a bag of chips that’s half air/half chips just to give you some examples. 

The dollar as a standard for measuring value has failed. There’s no need to argue or question my statement, let’s just look at historical records.

The best way to measure value is to look at two items (Morgan Silver dollar and a Federal Reserve Note) over a certain period of time. For this article let’s just use 100 years as our time measurement.

In 1901, the year this Morgan dollar (above) was minted the world was a lot more peaceful. We were years before the first World War and six years prior to the Panic of 1907, which was the turning point in our nations monetary governance.

The population in the United States was 76 million with a workforce  made up of 82 percent men and women at 18 percent.  During that time the idea of a two person income wasn’t necessary like it is today. The yearly household income which was brought in by a male in most cases was $750 on average. Yes, $750. That’s not a misprint. The average income brought home between a male, female and with optional child labor was $750 a year. 

To show how strong the Dollar was over a hundred years ago just look at the hourly wage of the top industries in 1901.

hourly wages big

The top paying job on average was in the financial world at $.50 cent an hour. So that means that two hours of labor for a white collar worker was one single Morgan dollar. On the lower end, the average factory worker, which was more common would have to exchange four hours of labor for that same Morgan dollar at $.23 cents an hour.

While the yearly salary and hourly wages from 1901 sounds outrageous today in 2015. Keep in mind that the cost of being a live a hundred years ago was a lot cheaper in comparison to today. 

In order to demonstrate how strong in purchasing power a Morgan dollar was in 1901 is measure how much it could purchase your family. Listed below are the average cost for the household necessities a family needed. 

1901 Retail price

The retail price for the primary goods that were needed to feed a family totaled $1.19. That’s seven items for a single Morgan dollar with some change included to feed a family. So my point in mentioning value is that a single Morgan dollar which equaled four hours of labor for a factory worker made life less hectic when his money could purchase more.

Today in 2015 we couldn’t imagine working a single day for two Morgan dollars as a factory worker. Today we work for Federal Reserve Notes and a single note purchases 96% less than what a Morgan dollar purchased over a hundred years ago. I don’t have to add up the actual cost of those seven items above in Federal Reserve Notes because you know it’s well beyond a single dollar.

Above is just a little history lesson about the journey of the Dollar and how it effects those that depend on its ability to retain value. All the factors I listed above from the dynamics of the household to the cost of living are still relevant today. The only thing that has changed drastically is the appearance of the Dollar and most importantly how much a dollar purchases. 

It’s my opinion that the corrosion of the Dollar as a reliable measurement of value is reaching a breaking point. As you can see that the last 100 years hasn’t been favorable for those who have depended upon paper money alone. 

The value of the Dollar will continue to decline in purchasing power because the system demands that it does. Therefore your cost of living will continue to increase as well. 

The only way to minimize the diminishing of your wages and purchasing power is to improve your monetary literacy. 

If monetary history is a good view of past events, then the future of the Dollar is no different than any other fiat currency. It’s no wonder that all un-backed fiat currencies fail the same way. Fiat currencies ultimately come to an end and when they do the people, which don’t know any better, become the victims.

Today is the time to take notice in monetary matters that concern you.

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