With the impending bankruptcy of Sears, I felt that now would be a good time to talk about the 1902 Sears Roebuck Catalogue. This 1200 page monster was the Amazon website of its day, allowing people from even the remotest corner of the country to purchase the latest goods and fashions from a trusted retailer at competitive prices.
Of course, one of the most notable aspects of the 1902 Sears Roebuck Catalogue is the startling difference between modern prices and the 1902 prices advertised in the catalogue. These dramatic price changes are attributable to inflation, which has been surreptitiously doing its wicked work on the U.S. dollar for a full century now.
My introduction to the 1902 Sears Roebuck Catalogue came as a child when I used to visit my grandmother’s house to mow her lawn. My grandmother had a reprint of the old book, which I always perused after finishing my lawn-mowing duties.
The thing that always fascinated me about the 1902 Sears Roebuck Catalogue was its inflationary implications – the staggering amount of purchasing power the U.S. dollar had lost between 1902 and the present day.
For example, a men’s solid 14K gold pocket watch with a 17-jewel, Waltham movement (which would have been state of the art at the time) cost between about $30 and $50, depending on the case options chosen (hunting cases were more expensive than open-faced cases).
A quick scan on eBay reveals that similar gold pocket watches in good condition are selling for anywhere from $400 to maybe $2,500 today (in 2018). Of course, if pocket watches were still produced today, you can bet that retailers would sell them for higher prices than secondhand ones fetch on eBay.
Or maybe instead of a gold pocket watch, you are interested in a breech-loading, double barrel shotgun with a solid walnut stock. The 1902 Sears Roebuck Catalogue had a full 11 pages of double barrel shotguns to choose from. Yes, these hunting guns could be anonymously ordered through the mail in 1902 – no identification necessary!
And their prices were almost unbelievably low by today’s standards. The cheapest examples cost around $8 or $9, while the very finest Remington shotgun with a Damascus steel barrel and an English walnut stock rung up at only $50. These same shotguns today run from just a few hundred dollars to several thousand dollars, depending on condition, rarity and a myriad of other factors.
Another interesting find in the 1902 Sears Roebuck Catalogue is the selection of concrete-filled steel fire safes for sale. These robust safes had stepped, 5-flange doors (in order to better resist explosives), applied-gold exterior decoration and built-in interior cabinets. Prices started at only $6.25 for a cut-down model and rose to a princely $32.25 for the largest size – a 1,150 pound behemoth with an inner steel security door.
In contrast, today it is tough to find a good burglary-fire safe for anything less than about $700. And prices can easily rise to $5,000 or more for high-security models. Yes, there are cheaper safes out there, but they are usually sub-par import safes straight off the container ship from China. If security is important to you, these low-quality, imported safes should be avoided at all costs.
As you can see, regardless of the product category, inflation has decimated the purchasing power of the U.S. dollar over the past 116 years. According to the Bureau of Labor Statistic’s CPI inflation calculator, the U.S. dollar has lost about 96% of its purchasing power between 1913 (when records were first kept) and 2018.
This means that every dollar in 1913 is equivalent to over $25 today. However, the BLS calculations use some questionable methodologies, including hedonic adjustments and substitution effects. Looking at actual prices paints a bleaker picture of inflation, with $1 of goods from the 1902 Sears Roebuck Catalogue equal to something closer to $50 or $100 of goods today – a stunning 98% to 99% loss of purchasing power.
In case you were wondering, the dollar suffered almost no inflation before 1933 because the U.S. was still on the gold standard at the time.
But we have come a long way from the days of the gold standard, and not in a good way. The fact is that the U.S. dollar has been progressively and systematically destroyed by its supposed protector, the U.S. Federal Reserve. This disturbing trend is even more blatantly obvious when one examines the secret history of 20th century U.S. currency.
This is why I recommend that investors position themselves in antiques, bullion, fine art and other hard assets over the coming years. The day is coming when the dollar’s slow motion collapse will transform into a terrifying plunge. I don’t know about you, but I want to own tangible assets that cannot be arbitrarily printed by a central bank when that time finally arrives.
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