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I know that it says the values prior to 1913 were estimated, but how can it be possible for the dollar to have any purchasing power before the country even exis

I know that it says the values prior to 1913 were estimated, but how can it be possible for the dollar to have any purchasing power before the country even existed? Shouldn't it be a constant 0 until at least 1776?

kube-system 5y ago
The US dollar was introduced in 1792. The early days of US currency was a mix of notes/coins issued by states, banks, and foreign currencies.
- dragontamer 5y ago
  Don't forget the "Continental dollar", which went worthless almost immediately. The "Continental Dollar" was the denomination of debt of the Revolutionary War. It was horribly mismanaged, hyperinflated into worthlessness and then largely forgotten about. It wasn't a big deal because IIRC, the typical citizen back then was using Spanish Pesos.
toyg 5y ago
As others said, you calculate it as an indirect FX rate with currencies that did exist.
treeman79 5y ago
What was the exchange rate of dollar to British pound at 1776? You can keep going backwards from that point.
- dharmab 5y ago
  Still zero because the dollar didn't exist. The American army was paid in various currencies, some of which (the continental dollar) went to zero before being offered a conversion rate to the new dollar in the 1790s.
inglor_cz 5y ago
One possible idea. The American dollar, when introduced, had a certain exchange ratio to the Spanish real de a ocho, commonly called the Spanish dollar. In fact, real de a ocho was legal tender in the US until 1857, parallel to the American dollar! [0] Spanish real goes much farther back, so you can calculate the hypothetical value of the American dollar backward, too, just against the Spanish real. [0] https://en.wikipedia.org/wiki/Spanish_dollar https://en.wikipedia.org/wiki/Spanish_dollar
unstatusthequo 5y ago
Yes. Wasn’t legal tender until then. Everything prior is conjecture. The value at creation wasn’t based on anything prior. So why analyze it that way?

kube-system 5y ago

The US dollar was introduced in 1792. The early days of US currency was a mix of notes/coins issued by states, banks, and foreign currencies.

dragontamer 5y ago
Don't forget the "Continental dollar", which went worthless almost immediately. The "Continental Dollar" was the denomination of debt of the Revolutionary War. It was horribly mismanaged, hyperinflated into worthlessness and then largely forgotten about. It wasn't a big deal because IIRC, the typical citizen back then was using Spanish Pesos.

toyg 5y ago

As others said, you calculate it as an indirect FX rate with currencies that did exist.

treeman79 5y ago

What was the exchange rate of dollar to British pound at 1776? You can keep going backwards from that point.

dharmab 5y ago
Still zero because the dollar didn't exist. The American army was paid in various currencies, some of which (the continental dollar) went to zero before being offered a conversion rate to the new dollar in the 1790s.

inglor_cz 5y ago

One possible idea. The American dollar, when introduced, had a certain exchange ratio to the Spanish real de a ocho, commonly called the Spanish dollar. In fact, real de a ocho was legal tender in the US until 1857, parallel to the American dollar! [0] Spanish real goes much farther back, so you can calculate the hypothetical value of the American dollar backward, too, just against the Spanish real. [0] https://en.wikipedia.org/wiki/Spanish_dollar https://en.wikipedia.org/wiki/Spanish_dollar

unstatusthequo 5y ago

Yes. Wasn’t legal tender until then. Everything prior is conjecture. The value at creation wasn’t based on anything prior. So why analyze it that way?