Gross National Product in the United States, 1834-1909
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research
Volume Title: Output, Employment, and Productivity in the United States after 1800 Volume Author/Editor: Dorothy S. Brady, ed. Volume Publisher: NBER Volume ISBN: 0-870-14186-4 Volume URL: Publication Date: 1966
Chapter Title: Gross National Product in the United States, 1834?1909 Chapter Author: Robert E. Gallman Chapter URL: Chapter pages in book: (p. 3 - 90)
Consumption, In vestment, and Employment
Gross National Product in the
United States, 1834--1909
ROBERT E. GALLMAN
UNIVERSITY OF NORTH CAROLINA
This paper is a short summary of the main findings of a study of American national product since 1834. Concepts, estimating procedures, and a few tests of the estimates are described in the appendix. We have attempted to keep these matters out of the body of the paper. The reader is duly warned to look into the appendix before he makes use of the series in his own work.
Levels and Rates of Growth of National Product and National Product Per Capita
The findings described in this section are similar to the findings of two earlier papers. Therefore, they are discussed very quickly and the reader is referred to the earlier papers.'
NOTE: My obligations are many: to the Ford Foundation for the support of a Faculty Research Fellowship and research assistance; to the Development Fund of Ohio State University for support of a research leave of one academic quarter and for research assistance; to the following scholars who let me see and use their unpublished work and who were willing to discuss my work with me--Simon. Kuznets, Dorothy Brady, Manuel Gottlieb, Robert Fogel, Paul David, Albert Fishlow, Martin Primack, Moses Abramovitz, William N. Parker; to Larry Shotwell, Stephen Hu, and Marz Garcia, who helped in the gathering and processing of data; to wife, Jane, who read and summarized several monographs on early American industries for me; to William P. McGreevey, who helped to design and carry out the distribution estimates; to Barry Poulson, who assisted me ably for more than a year and who has provided me with data arising out of his study of U.S. industrial growth, 1809--39; and, finally, to the discussant, Richard A. Easterlin, who made important suggestions for the improvement of the paper. None of these people or institutions should be held liable for the results of my work.
1 "Commodity Output, 1839--1 899," Trends in the American Economy in the Nineteenth Century, Studies in Income and Wealth 24, Princeton for NBER, 1960; "Estimates of American National Product Made Before the Civil War," Economic Development and Cultural Change, April 1961.
4
CONSUMPTION, INVESTMENT, AND EMPLOYMENT
LEVELS OF NATIONAL PRODUCT AND NATIONAL PRODUCT PER CAPITA
CIRCA 1840 AND 1950
In 1839 the United States was a very young country, not long on the path of industrialization. One tends to think of it as still small and relatively weak; but, in fact, this is not correct. American aggregate product was probably smaller, but not much smaller, than the aggregate product of
each of the two major world powers of the time, Great Britain and France (see Table 1). International comparisons are difficult to make today and the difficulties are multiplied when we attempt comparisons for a date well over a hundred years in the past. But there are several different ways of going about it and the results obtained are similar
enough to yield useful conclusions. First, Deane and Cole have recently estimated British national income
for 1841.2 Converting their figure into dollars by use of the par of exchange yields a result about one-quarter above the level of American GNP (less changes in inventories) for 1839. The American figure probably exceeds American national income by about 5 per cent. Consequently, British national income probably exceeded American national income by about 30 per cent.
Ideally, international comparisons should be made by valuing components of the national products to be compared by a common price system. Gilbert and Kravis have shown that this procedure may give results quite different from those of a comparison conducted through the rate of exchange. Seaman made estimates of this kind for 1839, which show that British national income exceeded the American by 50 per cent; French national income exceeded the American by nearly 60 per cent. Three points should be made about the Seaman estimates. First, Seaman's American estimate is very much lower than ours; the margin is too great to reflect only conceptual differences. Second, we derived the British estimate by multiplying Seaman's per capita figure for England and Wales
by the 1841 poj,uiation of Great Britain. But per capita product in England
and Wales may very well have exceeded per capita product in Great Britain. Third, Seaman used American prices in all of his computations.
When a comparison is made between two countries, one of which is more highly developed (industrialized) than the other, the use of the prices of the less-developed country to make the comparison will lead to results relatively favorable to the more highly developed country, and vice
2 The next few paragraphs refer to Table 1. Citations should be sought in the sources of that table.
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