Thomas Tooke

How was the inflation period of the greenback episode compared to 1913-1920? An answer from Kemmerer

In Commodities, The Greenback inflationary period on May 1, 2012 at 12:22 am

Kemmerer compares the 1913-1920 inflationary period to the Greenback episode. Here is what he wrote in 1920.


The maximum depreciation of the American greenback in terms of gold during our period of suspended specie payments was registered on July 11th, 1864, when gold dollars were quoted at a price of $2.85, giving the greenback dollar a gold value of only 35.09. We hear much of the greatly inflated paper money prices of the Civil War period, and yet despite this decline of the gold value of the dollar to a low point only slightly more than one-third of par, the maximum increase in wholesale prices during the period of suspension, 1861-1878, was but 116%. This is a smaller advance than that represented by the present wholesale prices in the United States, as compared with 1913, the average increase to April 1920 — the latest date for which Government figures are available — having been 165 per cent. In purchasing power over commodities at wholesale, our currency is therefore more depreciated today relative to 1913 than was the inconvertible greenback of the Civil War days at its worst; namely, in 1865 as compared to 1861.



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