The Costs of Doing Hard Time: A penitentiary-based regional price index for Canada,
1880-1925
Alan Green, Mary MacKinnon and Chris Minns
(Queen’s University, McGill University, Trinity College, Dublin and IIIS)
Financial support for this research has come from the SSHRC. We thank Stephanie Andrews for
excellent research assistance, Herb Emery for providing us with unpublished data and electronic
versions of Labour Gazette data, and Ann Carlos for comments. We thank seminar participants
at the CNEH, TCD, University of Oxford and City University, London, for comments.
Canadian economic history is usually written to highlight regional variation, and with an
emphasis on a sharp rise in the rate of growth around the beginning of the twentieth century (the
Wheat Boom). However, information on Canadian price levels over time and across regions is
extremely sketchy.1 Thus one can have only limited confidence in nominal to real conversions
of wage, earning, and aggregate income estimates. The implicit price index used to deflate pre1900 GNP estimates depends heavily on a cost of living index for Kingston, Ontario. For 190126, more nationally representative cost of living indices continue to be the major component of
the implicit price index (Urquhart, 1993, pp. 6-7). The most thorough analysis of the post-1900
consumer price data (Emery and Levitt, 2002), shows a major split in regional consumer price
levels between western and eastern Canada in the early 1900s, some convergence before 1914,
and then a rapid levelling out of regional price variation by the end of the First World War. If
there were substantial differences in price levels across Canada before 1918, can Kingston prices
be a good guide to national trends? When and why did regional prices converge within Canada?
This paper uses a new source to estimate Canadian regional inter-temporal price indices
from the 1880s to the 1920s. By 1880, there were federal penitentiaries in New Brunswick,
Paquet and Wallot (1993) constructed price indexes for Quebec City and Montreal for 17601867. A few wholesale price series for Toronto date back to the 1850s (Michell, 1931), and
there is some wholesale price data for Montreal for the 1860s to 1880s (Hamelin and Roby,
1971).
1
1
Quebec, Ontario, Manitoba, and British Columbia, and starting in 1883, very detailed
information on their expenditures was published. We address three questions:
1) How did east-west relative prices change over time? British Columbia was politically
part of Canada in 1883, but the transcontinental rail link was completed only at the end of 1885.
If the C.P.R. tied Canada together economically, then we might expect regional price gaps to
drop sharply within a few years of the railway’s completion. However, the rapid settlement of
the west during the Wheat Boom could have created substantial demand shocks that kept prices
high. Price series extending from the 1880s to the 1920s allow comparisons over several phases
of Canadian economic development.
2) Within eastern Canada, how similar were prices in areas that were long-settled and
had well-established means of transportation by 1880? In line with Canadian historiography on
regional variation, we find much bigger price differentials both within eastern Canada, and
between eastern and western Canada, than appear in similar price indices for the northern United
States. Most goods could not pass freely across the Canada US border, as there were substantial
tariffs, and this would have allowed price differentials to persist. Canada had less welldeveloped retail and wholesale networks than the US at this time, which could have caused
substantial regional price variation.
3) How different are estimates of aggregate growth when a new national price series is
used instead of Urquhart’s deflator? We find three substantial differences. First, per capita real
income grew faster from 1883 to 1899. Second, while growth was rapid from 1899 to 1913, it
was a little slower than Urquhart estimated. Third, given that we estimate prices were more
volatile from 1914-22, we find a substantial disruptive effect of the Great War. Overall growth
2
from 1883 to 1922 was somewhat higher than the Urquhart estimates indicate, suggesting a
greater degree of convergence towards US income levels.
Penitentiaries as a source of price data
The principal sources for this price index are records of expenditures for Canadian
federal penitentiaries, published as part of the Annual Report of the Auditor General
(abbreviation AGR).2 The penitentiaries were in or fairly near major urban areas. In eastern
Canada, penitentiaries were located in Dorchester (east of Moncton, New Brunswick, near the
New Brunswick / Nova Scotia border, to the north-east of Saint John, the largest city in New
Brunswick), north of Montreal (St Vincent de Paul), and Kingston (at the east end of Lake
Ontario). In Western Canada, the British Columbia Penitentiary was in New Westminster, now a
suburb of Vancouver, while the Manitoba Penitentiary was in Stony Mountain, about 15 miles
north of Winnipeg.3 Two new federal penitentiaries were constructed on the prairies in the early
20th century. There was a penitentiary in Edmonton, Alberta, from 1906 to 1920 (why it closed
in 1920, we aren’t sure). The Saskatchewan Penitentiary in Prince Albert opened in 1911. In
some years, the AGR also includes information for the Prince Albert and Regina jails, and we
include information from these prisons whenever possible. When Saskatchewan became a
province in 1905, these jails were transferred to provincial responsibility.
Table 1A shows inmate numbers in each of the penitentiaries. Kingston was always the
largest institution. While Kingston was a fairly small, and slow-growing, city (Table 1B),
Ontario was the most populous province. Most prisoners in the Kingston Penitentiary came from
Criminals sentenced to a term of imprisonment of 2 years or more serve their time in a federal
penitentiary. Provincial sessional papers rarely include the necessary level of detail on
expenditures by other prisons.
3
The British Columbia, Manitoba, and Dorchester Penitentiaries were all new buildings. The St.
Vincent de Paul penitentiary was first a reformatory for boys. In the late 1860s, Kingston
2
3
Ontario. Part of the reason for using Kingston as the base for our price index is that such a large
institution purchased most items every year. Inmate numbers in each penitentiary varied
considerably over time, in part because total Canadian population expanded and shifted
westwards. Business cycles also had an effect on inmate numbers, with the turn-of-the-century
boom and the wartime boom reducing penitentiary populations in 1902 and 1917.
The office of Auditor General was established in 1878, and the first Auditor General and
his staff pursued their task vigorously (Sinclair, 1979). Correspondence with hapless civil
servants who had failed to provide adequate information about expenditures, or whose
departments had spent more than was authorized, was published as part of the report. It appears
that penitentiary clerical staff submitted quickly and thoroughly to the firm demands of the
Auditor General.
The expenses include much information relevant to the cost of living outside the prisons.
Prisoners and prison officers were fed and clothed, and prisons consumed coal and other fuels for
heating and light. The penitentiary data have several advantages over other sources of cost of
living information for the same period. The first is that the information is presented in a similar
way from 1883 to 1922. Another is that the AGR prices are the actual prices paid by the prisons,
and a third is that penitentiaries very likely purchased goods of the same (low) quality every
year.4
The federal government’s Department of Labour published retail price data in The
Labour Gazette (abbreviation LG) for 1900 onwards, but information is available monthly only
from 1910. The Bertram and Percy (1979) and Emery and Levitt (2002) series start in 1900
Penitentiary held about 800 inmates, but Quebec inmates were transferred out by the mid-1870s.
4
The later AGR list the name and location of suppliers as well as prices and quantities. In many
cases, an individual supplier sold the same good to several, if not all, of the penitentiaries, and it
4
because they rely on LG reports. Barnett (1963) ends his study of Kingston in 1900.5 Between
1910 and 1922, the LG data were drawn from reports by Gazette correspondents in Canadian
cities. The correspondents were instructed to collect price information “from retailers doing
considerable trade with working men.” We do not know how representative the retail prices
reported by correspondents were, and whether the quality of data collection changed over time
and place. The price quotations for 1900 and 1905 were collected retrospectively from the
account books of retailers later surveyed by LG correspondents.6 Barnett uses a variety of
sources, especially newspaper reports of prevailing market prices, as well as retailers’ account
books.
While our source has clear advantages, it is subject to important queries. Price patterns
across the penitentiaries may not be representative of relative retail prices. Below, we address
this question directly by comparing penitentiary prices for some important foods to Labour
Gazette prices, and to scattered evidence on 19th century prices.
We suggest that penitentiaries can be thought of as having been somewhat similar to
retail establishments. While penitentiaries would have been relatively large purchasers of
common items (such as flour and potatoes), many retail establishments in medium sized towns
bought at least as much each year. Some of the luxury items were purchased by the prisons only
at Christmas, or only for the staff, and so annual expenditure on these items was modest.
Penitentiary populations generally rose between the 1880s and the 1920s, but so did the size of
almost all towns, and very often the scale of businesses.
is highly likely that these were identical items.
5
Allen (1994) relies on Barnett for pre-1900 trends, and on LG data for Toronto and Vancouver
for 1900-1914.
6
These LG price quotations are for December. The penitentiary data usually include several
price quotes for major goods.
5
Penitentiaries advertised for tenders for supplies (amounts spent were reported in the
AGR), and complaints about the inefficiency of having each penitentiary order its own supplies
appear in the Reports of the Inspector of Penitentiaries up to the 1920s (e.g. report for 1920-21,
SP 35, p. 12). Can we think of the prisons’ purchasing patterns as being similar to what retail
merchants in the same area would have been doing?
There are at least three ways in which the penitentiary buying patterns were unusual.
Most obviously, the penitentiaries bought a plain diet and cheap clothing, but spent heavily on
providing large and solidly-built premises.7 Wardens and the Inspector presumably told each
other about problems with particular suppliers, so that decision makers in British Columbia
probably had more information about possible suppliers in Quebec and Ontario than did a typical
retail merchant in B.C. Penitentiaries purchased some highly specialized items (locks, steel bars,
prison cloth, etc.) that were quite possibly only made by one or two suppliers.8 Not only were
the specific prison items unlikely to be purchased by retail merchants, a typical small-town
general merchant probably did not stock any extremely specialized items, and may therefore
have had less reason to turn to distant producers.
Political influence could have affected the awarding of contracts. Our initial
investigation of penitentiary supply patterns reveals little evidence that political affiliation was
important. There was considerable turnover in the firms supplying the penitentiaries, and
turnover was not closely associated with changes in the party in power in Ottawa. The office of
the Auditor General was supposed to reduce the incidence of political patronage and other forms
7
Every penitentiary had a farm, and various workshops as well (Curtis et al. 1985). Where a
penitentiary did not purchase an important food item, such as potatoes, pork, or milk, this was
usually because its farm supplied the good. We have avoided using the prison farm prices listed,
instead looking for other institutions purchasing the same item.
8
Goods purchased from the U.S. were virtually always of this type, for example guns or
6
of corruption. A firm that failed to secure a contract knew what its competitors were receiving
because Sessional Papers were public documents. The rapid turnover of suppliers may reflect
low profit margins on the business, low quality of goods supplied, or ease of entering the
penitentiary supply business. There may have been considerable waste, supplies may have been
pilfered by guards, and unauthorized expenditures may have been disguised as legitimate
purchases. None of these, however, would have affected the accuracy of the prices listed.9
Constructing a price index for Canada, 1883-1922
We have selected twelve years of the AGR around which to build our penitentiary price
index: 1883/84, 1886/7, 1889/90, 1892/93, 1895/96, 1899/1900, 1905/06, 1910/11, 1913/14,
1917/18, 1919/20, and 1922/23. Up to 1906, reports are for the twelve months ending June 30th .
Beginning in 1907, the fiscal year ends March 31st.10 The 1883/4 report is the first listing
detailed expenditures for individual goods, and 1886/7 is the first year after the completion of the
CPR main line. The 1889/90, 1899/1900, and 1910/11 reports include price information relevant
for the census of 1891, 1901, and 1911. The Wheat Boom is conventionally dated as having
begun c. 1896, and 1913/14 was the last peacetime year. The 1917/18 and 1919/20 Reports give
an indication of the intensity of war and post-war inflation, and the 1922/3 report is the last
listing the prices for individual goods acquired in purchases of $500 or less.11
A price index represents the relative cost of consumer expenditures over time or across
machinery used in large buildings or in the workshops.
9
The reports of the Inspector of Penitentiaries usually include the per capita costs of maintaining
prisoners in each institution, and Wardens of the higher cost institutions were clearly under
pressure to reduce, or at least justify, their expenditures.
10
Reports were published in the next series of Sessional Papers. Therefore, the 1899/1900 AGR
is in 1901 Sessional Papers.
11
In principle, we could construct an index for every year from 1883/4 to 1922/3, but in the early
years we are sometimes forced to use price quotations from an adjacent year, so that up to the
mid-1890s we could at most generate numbers for every other year.
7
regions. A set of weights is needed to aggregate expenditures over a range of goods. We follow
the existing literature in constructing indices with relative quantities of goods fixed across time.12
Emery and Levitt's (2002) index uses weights adopted by Bertram and Percy (1979). For food
items, their weights are derived from the 1901 United States expenditure survey, while weights
for fuel and light are based on 1926 Dominion Bureau of Statistics estimates of domestic
national consumption. Bob Allen's (1994) comparison of the cost of living in British emigrant
destinations, including Canada, used weights based on British working-class household
expenditure.
We mainly employ the weights Haines (1989) used in his regional price index for the
United States in 1890. Haines' index is based on data collected as part of the Aldrich Report in
1889 and 1890. This report included budgets for over 2000 families, from which expenditure
weights can be derived. We find Haines' weighting system attractive for two reasons. First, we
expect that a representative budget for late 19th century American families would be similar to
the budget of the typical Canadian family. These weights are fairly close to those used by
Bertram and Percy (1979) and Emery and Levitt (2002). The second reason we adopt Haines'
weights is that he provides weights for commodity subgroups as well as individual goods. The
price index for food is divided into cereal and bakery products, meat, fish and fowl, dairy,
vegetables, fruit, condiments, and other foods. This structure is useful as we often have price
observations for several, but not all, of the goods within a subcategory. Where a penitentiary
purchase price was absent, whenever possible we used prices in federal or provincial reports for
12 As Haines notes (1989, p. 100), an index with fixed quantity weights is not a “true” cost of
living index, as substitution effects in response to spatial (and temporal) variation in relative
prices are ignored. We follow Allen (2001) in constructing a geometric price index as an
alternative. The results, available in the full version of this paper, are little different when we
adopt this approach.
8
other nearby institutions, or for years of little price change, the penitentiary price from an
adjacent year.13 When no price could be found, we maintain the sub-category weights derived
from the Aldrich report while re-weighting the contribution of the individual goods that make up
the sub-category.
Table 2 lists the four expenditure groups in our index: food, clothing, fuel and light, and
“other” goods. Within the food sub-categories, flour, beef, potatoes, and butter receive high
weights, as in the average budget in the Aldrich Report.14 The other goods within each subcategory receive equal weight. Unlike Haines, we cannot include alcohol and furniture, as there
are few annually repeated prices for these goods in the penitentiary records. A potentially more
serious omission is rent. Indicators of rental costs are few and far between in the reports of the
penitentiaries. US budget studies, and the only Canadian source on late 19th century expenditure
patterns, suggest that workers spent less than 20% of their income on rent (Dick, 1986, p. 480).15
For the clothing sub-index, we did not use Haines' sub-category weights. Prior to 1910,
the penitentiaries purchased little ready-made clothing, but made large expenditures on various
types of cloth and leather. We chose items for which we can find purchases by most
penitentiaries in most years, and assign equal weight to each. Unfortunately, cloth prices are not
reported for 1883/4, so this year’s index is based solely on the other three sub-indexes.
The fuel and light sub-index consists of coal, wood, and coal oil, with the items weighted
13
For example, prior to 1891, Kingston Penitentiary milled its own flour (we find prices for
wheat), so we use flour prices from the nearby insane asylum. Military records, records of
Indian Schools, the North West Mounted Police, and of steamers operated by the Department of
Fisheries, all provided some missing prices.
14
Bread dominates Haines' cereal and bakery product index, but with few exceptions the
penitentiaries baked their own bread. We substitute flour for bread in our index.
15
Bertram and Percy (1979) and Emery and Levitt (2002), however, assign higher weights for
rental costs in their indices.
9
according to Haines (1989).16 The final category contains two items that do not fit elsewhere:
tobacco and soap.17 Their relative weights within the “other” sub-index again reflect Haines'
work with the Aldrich report.
Results
Figure 1 and Table 3 present inter-temporal, inter-regional indices. We use Kingston in
1899 as the base city. In the mid-1880s, prices in Winnipeg and Vancouver were far higher than
in the east, while Montreal prices were about 25 percent higher than Ontario or Maritime prices.
By 1890, Winnipeg prices had fallen close to the level of Montreal prices, but Vancouver prices
remained substantially higher than those found anywhere in eastern Canada. Prices in the
western Prairies were closer to those of BC than Manitoba. In the early 1890s, price differentials
across Canada were very much larger than those found at the same time in US cities near the
Canadian border. According to Haines (1989, p. 101), 1890 prices in Portland (Oregon) were
only 10-25% higher than prices in Bangor (Maine), Syracuse (New York), Minneapolis
(Minnesota) or Detroit (Michigan). Prices in Chicago and Boston (excluding rents) were
generally somewhat above those of the smaller cities.18 Why price variation within Canada was
so much greater we are not yet sure.
By the early 1900s we see further evidence of price convergence. Montreal prices are
now well in line with those in Kingston and Dorchester. West of Winnipeg, there are still some
years when prices far exceed eastern levels, but the regional price differentials are lower,
sometimes substantially lower, than in the years before the turn of the century. By 1917/18,
16
The penitentiaries had electric light by about 1910, but some price quotations for coal oil
continue to be given.
17
It may be possible to add a few hardware items, such as turpentine, nails, and lumber .
18
With Syracuse at 100, relative prices were Portland 121, Boston 113, Bangor 110, Chicago
108, Minneapolis 99, Detroit 98.
10
differences in the cost of living across Canada appear to be very small. We have the largest
number of observations for the components of the food price index (Table 4A), and here it
appears that the Western price premium always previously in evidence has been completely
eliminated. While the turmoil associated with postwar inflation brought back a gap in the overall
index for Vancouver, this seems to have been a short-term relapse. By the early 1920s, living
costs in the highest price region were less than 10% above those in the lowest price region.
Part of the reason for the reduction in the east-west gap is the sharp drop in the difference
in the cost of fuel and light during the First World War. Coal output in Alberta increased rapidly
after 1910, and this may have been partly responsible for the relative decline in western fuel
prices.19
For the early 1900s, we have another way of comparing costs across penitentiaries: the
average annual cost of feeding prisoners. The reports on penitentiaries gave total annual
expenditures on rations, average daily number of prisoners, and for these years, the total value of
prison farm produce consumed in the prison. Thus expenditure on rations plus farm produce
consumed in the prison, divided by the average number of inmates, approximates food costs.
Not all the food was consumed the same year, some was wasted, and some was eaten by the
staff.20 We also remain unsure about the meaning of the prices assigned for produce grown on
the farms – these may not always have been prevailing market prices.21
Prisoners’ diets were much less varied than the diet of Table 2. Well over half the total
The price per ton of coal produced in western Canada rose more slowly between 1914 and
1920 than did the price of coal produced in eastern Canada. Canadian Mineral Statistics 18861956, pp. 56, 101,104,110.
20
We have not included expenditures on hospital luxuries like eggs, or on the staff mess.
21
The St. Vincent de Paul farm always produced the highest value of food consumed in the
institution, probably because they raised a lot of pigs. The value of farm produce consumed in
each prison changed substantially from year to year.
11
19
expenditure on rations was for beef and flour. Both goods were relatively transportable, so we
expect to find smaller regional variation in provisioning prisoners than in feeding workers and
their families. By 1908, inmate food costs were no higher in BC than in Kingston (about $45 per
head). Prisons likely varied their diets according to the local cost of food, with BC buying more
fish than Kingston, for example.
We doubt that any free citizen would have volunteered to consume a prison diet, and
individual consumers were not likely to buy beef and flour by the barrel. However, with many
labourers earning only about $300 per year, the low cost of a prison diet gives some clue as to
how poor working class families could have survived. Around 1910, the un-weighted national
average cost of the LG’s food budget for a family of five was about $360 per year.
Table 3 and Figure 1 show the cost of the consumption bundle falling sharply across
Canada in the late nineteenth century, with Winnipeg seeing the largest drop in relative prices.
In the first decade of the twentieth century, prices rose by about 35 percent in the three eastern
cities. Winnipeg clearly continued on the path of price convergence with eastern Canada, with
the overall price level increasing by only about 20 percent. The second decade of the twentieth
century saw rapidly rising prices during and just after the First World War. By the time the war
induced cycle of inflation and deflation was over, price levels in the east were only 30-40%
above their immediate prewar levels, and at most 30% higher in the west. The east/west split
that had been so obvious up to about 1910 had largely disappeared.
Comparisons with other information about Canadian prices
For most of the years covered by both our new indices and the Emery and Levitt (2002)
indices, the cost of living patterns are roughly consistent, assuming that we can match prison
prices with LG reports for Saint John, Montreal, Toronto, Winnipeg, Regina, Edmonton, and
12
Vancouver. Using either set of data, inter-urban price differentials fell markedly in the second
decade of the twentieth century, and prices in the early 1920s were close to twice as high as they
had been around 1900. We have no information on rents, while the Emery and Levitt series
cannot include clothing. Therefore panels A and B of Table 4 show the food-only component of
penitentiary and Emery-Levitt price indices, with Kingston in 1899/1900 and Toronto in
December 1900 set to 100.
Penitentiary data suggest even higher Vancouver prices than do LG records. Edmonton,
Regina and Prince Albert prices were also often higher. However, our Saskatchewan data come
from three different prisons, and the numbers of inmates in these 4 prisons changed rapidly
(Table 1A), so we hesitate to put too much emphasis on results for Alberta and Saskatchewan.
Both panels 4A and B show Ontario as the low-price province before the First World War, not
just relative to western Canada, but also relative to Quebec and the Maritimes. Manitoba prices
were not dramatically above Quebec and Maritime prices in most years before the war, while
from Saskatchewan to British Columbia, prices were much higher than in Ontario. By the early
1920s, regional differentials had been largely ironed out.
The one period where our indices diverge substantially from the Emery-Levitt and
Bertram and Percy series, is around the end of the First World War. Part of the reason for this is
different weightings – the Haines weights put more emphasis on goods that experienced the
biggest price increases at this time, and also more weight on goods that were generally
particularly expensive in Vancouver.22
Another reason for differences between penitentiary and LG based series would be
For all penitentiaries, using the Emery-Levitt weights, but penitentiary prices, for the food
items in both indices reduces food costs in 1922 by 10% or more. The Vancouver food price
level is lowered in 10 of 12 years, but only in 1883 and 1922 is the reduction greater than 15%.
13
22
dissimilar trends in retail/wholesale markups, or in the prices of prison goods and higher quality
items purchased by reasonably prosperous consumers. We compared LG prices for 1900-22 to
penitentiary prices for four important foodstuffs: beef, flour, butter, and potatoes.23 With the
exception of potatoes, the yearly average penitentiary price was never higher than the December
retail price. This likely reflects both a quality difference and a retail markup. The ratios of
potato prices bounce around considerably over time and place, probably reflecting seasonality in
potato prices and the lack of transportability of potatoes. We see no clear pattern of penitentiary
to retail price differentials across cities or over time. Thus we do not think it is likely that the
degree of competition in retail markets changed systematically over time or place.
During the war, all armies were purchasing huge volumes of the low quality foods that
made up the bulk of penitentiary food purchases. However, for beef, flour, and butter, 1917/18
and 1919/20 ratios of penitentiary prices to December retail prices are generally similar to those
of 1913/14. We need to explore this issue further: it is possible that with wartime scarcities of
some consumer goods, LG correspondents were changing the grades of the items they reported
on.
In 1919 and early 1920, retail prices rose steadily. The Bertram-Percy and Emery-Levitt
series rely on December LG prices. The average weekly cost of the LG family budget of food,
fuel and light, and rent was 68% above the 1913 (annual) average in December 1919, 78%
higher as of March 1920, and 92% higher in July 1920. Several of the goods the penitentiaries
bought were purchased on contract. Presumably by 1917, and even more so by 1919, contracts
had inflationary expectations built in. The penitentiary price series for these years anticipate
retail price increases that occurred a few months later (Table 4, Panel C, column (3)).
23
We thank Herb Emery for supplying us with an electronic version of the Labour Gazette data.
14
We undertook the present project largely because of the scarcity of price data before
1900. Thus it is hard to verify pre-1900 penitentiary prices by comparing them with other price
data. Our indices suggest a quite different picture from that drawn by Barnett for Kingston
(Table 4, Panel C, column (4)). We see a larger decline from 1883 to 1900 in all three eastern
penitentiaries, and the decline is spread through the 1880s and into the 1890s. The penitentiary
price series for Kingston appears to move rather more like the Toronto wholesale price index for
grains and flour (column (5)).
There is support for our finding that prison prices were much lower in Kingston than in
Montreal in the 1880s and 1890s. Federal government immigration agents occasionally reported
retail prices in their district. In 1889 (SP 1890, vol. 6), Kingston prices for a range of food items,
plus soap, tobacco, and wood, were 20-35% below Montreal prices.
Implications of the new price series
So far, wherever we have been able to check the penitentiary price series against other
sources, the penitentiary prices are representative of prices in the broader community. If we
could add a rent component to our index, we certainly would. Here, we investigate how much
estimates of real GNP per capita change if we use a penitentiary price index, rather than the
existing implicit price deflator (Table 4, panel C, column (1)). We show the impact of using six
variations of the penitentiary price index (Table 5, columns (2) to (7)), and focus on the last.
Each of the first five variations assigns different weights to the five original penitentiaries, based
on regional population distributions (the Maritimes, Quebec, Ontario, the Prairies, and British
Columbia). All show substantially greater growth in income per capita between 1883 and 1922
than does the Urquhart series (column (1)). Column (7) is a simple average of the existing
Urquhart series and the fifth variation. We assume that if we could control for other aspects of
15
expenditure, the trends in the penitentiary series would be somewhat reduced, and column (7)
does this. Two sets of our new estimates, Urquhart’s series, and estimates of US GDP per head
(in US 1899$) are shown in Figure 2.
Are the real GNP per capita estimates of column (7) more in line than the estimates of
column (1) with what we might expect, given our knowledge of Canadian economic
development? We know that Canada lost a huge number of people to the republic to the south in
the late 19th century. The new series suggest that the population exodus occurred at the same
time as income per head for the remaining population was rising. This observation is consistent
with evidence for the same period that high emigration rates from Ireland raised incomes in
Ireland (Boyer, Hatton, and O’Rourke, 1994). The Wheat Boom (1896-1913) still appears as a
major upturn in the rate of income growth. Our estimates suggest that most of the income
growth per person was concentrated in the early part of the Wheat Boom. Slower growth
coincided with the years of large scale immigration in the decade to 1914. The First World War
was a tremendous shock to Canada. Over 650,000 men served in the Canadian Expeditionary
Force (Morton, 1993, p. 278) at some time during the war, about a third of the male population
of military age (15-44 in 1911). Our estimates suggest that growth stopped during the war, and
that in the year of peak industrial unrest (1919), incomes were well below pre-war levels. The
Urquhart series also shows a sharp drop in income by 1919, but a more moderate decline relative
to 1913.24 By 1922/3, our new estimates show the short but very sharp downturn of 1921 was
largely over. We think it plausible that by then incomes would have returned to roughly the prewar level.
In 1920 and 1921, it cost about $1.12 Canadian to purchase $1 US, well away from the normal
$1CDN=$1US exchange rate (HSC series H627). This seems in line with our impression that
there was more inflation in Canada than the US around this time.
16
24
Conclusions
For the years where both LG and penitentiary data are available, we mainly get similar
results. We therefore feel more confident about the likely reliability of both for the periods when
only one is available (after 1922 and before 1900). Why series based on the December LG data
show so much less inflation around end of the First World War, we are not sure.
The findings based on the new price index are
1) Price dispersion across the country was much higher in the early 1880s than in 1900. The
completion of the transcontinental railway presumably lowered prices in Winnipeg. Vancouver
prices initially diverged from those in the rest of the country, and remained much higher into the
early 1900s. In eastern Canada, where rail and water links were long established, Montreal
prices were higher than those of southern Ontario or New Brunswick until the late 1890s, but
then dropped sharply. Around 1890, regional price differences in Canada were substantially
greater than in northern regions of the U.S.
2) The 1880s and 1890s in Canada, as in other trading countries, were generally years of
declining prices. Our data suggest that prices fell substantially more in this period than has been
previously thought. After 1900, prices rose in all parts of the country, but at quite unequal rates
by region. By 1913, living costs as far west as Winnipeg were fairly well standardized, and by
the early 1920s, price levels were similar across the country.
3) The time path of economic growth per capita is substantially altered by using the penitentiary
price index rather than the existing implicit price index. Principally, we find greater growth
before and at the beginning of the Wheat Boom, and a greater negative shock to the Canadian
economy associated with the Great War and its immediate aftermath.
17
References
Allen, Robert C. (1994), “Real incomes in the English speaking world, 1879-1913,” in Labour
Market Evolution: the economic history of market integration, wage flexibility and the
employment relation, eds. G. Grantham and M. MacKinnon. London: Routledge.
Allen, Robert C. (2001), "The great divergence in European wages and prices from the Middle
Ages to the First World War." Explorations in Economic History, 38 (4), 411-447.
Balke, Nathan S. and Robert J. Gordon (1989), “The Estimation of Prewar Gross National
Product: Methodology and New Evidence.” Journal of Political Economy, 97 (1), 38-92.
Barnett, Robert Francis John (1963), “A Study of Price Movements and the Cost of Living in
Kingston, Ontario for the Years 1865 to 1900.” Unpublished M.A. thesis, Queen’s University.
Bertram, Gordon, and Michael B. Percy (1979), “Real wage trends in Canada 1900-1926: some
provisional estimates.” Canadian Journal of Economics, 12 (2), 299-312.
Boyer, George R., Hatton, Timothy J., and Kevin O’Rourke (1994), “The Impact of Emigration
on Real Wages in Ireland, 1850-1914.” Eds. Timothy J. Hatton and Jeffrey G. Williamson.
Migration and the International Labor Market. New York: Routledge, 221-239.
Canada, Department of Labour. Labour Gazette. Ottawa: King’s Printer.
Canada, Dominion Bureau of Statistics (1957), Canadian Mineral Statistics 1886-1956. Ottawa:
Queen’s Printer.
Curtis, Dennis, Graham, Andrew, Kelly, Lou, and Anthony Patterson (1985), Kingston
Penitentiary: The First Hundred and Fifty Years, 1835-1985. Ottawa: The Correctional Service
of Canada.
Dick, Trevor J.O. (1986), “Consumer Behavior in the Nineteenth Century and Ontario Workers,
1885-1889.” Journal of Economic History, 46 (2), 477-488.
Emery, J.C. Herbert, and Clint Levitt (2002), “Cost of living, real wages, and real incomes in
thirteen Canadian cities, 1900-1950.” Canadian Journal of Economics, 35(1), 115-137.
Haines, Michael R. (1989), “A state and local consumer price index for the United States in
1890.” Historical Methods, 22(3), 97-105.
Hamelin, Jean, and Yves Roby (1971), Histoire Économique du Québec 1851-1896. Montreal:
Fides.
Johnston, Louis, and Samuel H. Williamson, "The Annual Real and Nominal GDP for the United
States, 1789 - Present." Economic History Services, March 2004, http://www.eh.net/hmit/gdp/
Morton, Desmond (1993), When Your Number’s Up: The Canadian Soldier in the First World
War. Toronto: Random House.
Paquet, Gilles, and Jean-Pierre Wallot (1993), “Some Price Indexes for Quebec and Montreal
(1760-1913).” Histoire Sociale/Social History, 31 (Nov.), 281-320.
Scott, Jack David (1984), Four Walls in the West: The Story of the British Columbia
Penitentiary. New Westminster: Retired Federal Prison Officers’ Association of British
Columbia.
Sinclair, Sonja (1979), Cordial But Not Cosy: A History of the Office of the Auditor General.
Toronto: McClelland and Stewart.
Taylor, K.W. and H. Michell (1931), Statistical Contributions to Canadian Economic History,
vol. II. Toronto: MacMillan.
Urquhart, M.C. (1993), Gross National Product, Canada, 1870-1926: The Derivation of the
Estimates. Montreal and Kingston: McGill-Queen’s University Press.
18
Table 1: Canadian Penitentiaries and Urban Populations, 1881-1923
A) Inmate Numbers
Year Dorchester,
St. Vincent Kingston Manitoba
Regina
Prince
Alberta
B.C. Total
N.B.
de Paul
Jail
Albert
1883
125
308
534
96
74 1,137
1886
149
278
578
90
105 1,200
1889
161
322
554
66
91 1,194
1892
172
374
532
75
17
75 1,245
1896
192
383
605
80
29
101 1,390
1899
226
447
570
112
21
5
90 1,466
1902
210
345
460
105
22
9
94 1,236
1905
233
357
448
190
31
21
139 1,398
1909
246
510
570
144
91
204 1,765
1913
195
405
516
200
95
206
351 1,958
1917
211
428
475
92
99
160
229 1,694
1920
306
520
615
156
186
34
197 1,931
1923
363
625
729
218
335
216 2,486
Source: Department of Justice, Report on Penitentiaries. Counts for one day – end of June to 1905, end of March thereafter.
Prince Albert and Regina jails became the responsibility of Saskatchewan after 1905. 1913 on Saskatchewan Penitentiary in
Prince Albert.
B) Urban Population (in ,000)
Prince
New
City
Moncton Montreal Kingston Winnipeg Regina
Albert
Edmonton Westminster Vancouver
Province
New
Quebec
Ontario Manitoba Sask.
Sask.
Alberta
British
British
Brunswick
Columbia
Columbia
1881
5
155
14
8
2
1891
9
220
19
26
7
14
1901
9
328
18
42
2
2
4
6
27
1911
11
491
19
136
30
6
31
13
100
1921
17
649
22
179
34
8
59
14
117
Source: 1921 Census of Canada, Vol. 1, Table 12. Population totals appear to be for city boundaries as of 1921. Populations
below 1,000 not shown in the source table.
19
Table 2: Expenditure weights for the penitentiary price index
Fuel and
Food
Clothes
Light
58
21
9
Cereals and Bakery 16
Fruit
4 Braces
7.7 Coal
42
Currants and
Fuel
Flour
10.7 raisins
2
Cotton
7.7 Wood
42
Prunes
Coal
Oil
Barley
1.7
2
Canvas
7.7
16
Condiments
1 Hats, Straw
Oatmeal
1.7
7.7
Pepper
Rice
1.7
0.3
Leather, pebble 7.7
Meat, Fish, Poultry 33 Vinegar
0.3
Leather, split
7.7
Beef
18.8 Salt
0.3
Leather, sole
7.7
Fish (not herring)
Other
foods
Leather,
upper
20
4.7
7.7
Mutton
Coffee
Other
4.7
3.3
Linen
7.7
12
Bacon or Pork
Eggs
4.7
3.3
Lining
7.7 Tobacco
43
Dairy
Lard
Soap
3.3
Serge
18
7.7
57
Butter
11.5 Molasses
3.3
Ticking
7.7
Milk
Sugar
6.5
3.3
Tweed
7.7
Vegetables
3.3
9 Tea
Beans
1.8
Potatoes
5.4
Peas
1.8
Weights of sub-components (bold), and weights of components (bold italics) sum to 100.
20
Table 3 Inter-temporal penitentiary price indices (Kingston 1899/1900=100)
Regina/
St. Vincent
Prince
British
Dorchester de Paul
Kingston Manitoba Albert Edmonton Columbia
1883/1884
140
175
140
224
176
1886/1887
126
161
135
169
197
1889/1890
125
149
128
157
204
1892/1893
127
156
121
144
176
180
1895/1896
117
134
101
143
148
157
1899/1900
105
105
100
129
154
135
1905/1906
140
135
127
159
182
161
180
1910/1911
145
142
134
162
157
174
1913/1914
164
187
161
169
221
192
184
1917/1918
271
276
263
260
253
274
255
1919/1920
346
336
320
294
346
326
406
1922/1923
233
226
218
218
220
238
Table 4 – Inter-temporal price indices, food only
A) Penitentiaries (Kingston 1899/1900 = 100)
Regina/
Prince
Dorchester Montreal Kingston Winnipeg Albert Edmonton Vancouver
1883/1884
150
176
141
226
178
1886/1887
118
142
127
156
178
1889/1890
129
153
132
162
190
1892/1893
125
148
120
134
166
179
1895/1896
126
126
99
132
143
159
1899/1900
111
108
100
121
146
140
1905/1906
139
133
122
156
156
175
175
1910/1911
142
147
141
152
159
186
1913/1914
171
171
153
194
221
185
188
1917/1918
299
285
279
262
271
273
287
1919/1920
345
319
322
290
345
312
380
1922/1923
208
204
189
197
166
229
B) Retail Prices, Emery-Levitt (Toronto, December, 1900 = 100)
Saint John Montreal Toronto Winnipeg Regina Edmonton Vancouver
1900
114
117
100
117
138
107
122
1905
134
130
110
118
139
123
132
1910
155
134
128
141
158
142
161
1913
172
148
141
151
168
161
156
1917
249
242
244
224
251
221
235
1919
285
255
265
293
287
270
289
1922
207
192
192
187
196
189
203
21
C) Nineteenth and early Twentieth Century Price Indices (1900=100)
CANADA
KINGSTON
Implicit
Bertram
Price
and Percy,
LG
Barnett, Grains
Index
with
Family
Cost of
and
clothing
Budget
Living
Flour
Year (Urquhart)
(1)
(2)
(3)
(4)
(5)
1880
104
110
151
1883
112
125
148
1886
100
107
111
1889
106
109
126
1892
104
107
116
1895
91
91
111
1898
98
103
112
1900
100
100
100
100
100
1903
106
110
1906
111
123
1909
121
153
1912
131
132
147
160
1914
133
130
151
152
1915
137
136
146
181
1916
149
160
154
191
1917
176
190
196
302
1918
199
207
220
333
1919
219
225
235
299
1920
254
249
287
355
1921
226
209
230
217
1922
205
199
221
178
1923
208
201
220
163
TORONTO
Animals
Dairy
and meats Products
(6)
(7)
101
107
123
117
93
100
99
101
97
95
87
85
87
84
100
100
106
101
118
114
128
130
140
149
158
152
156
167
191
194
264
241
317
266
325
315
303
336
209
270
199
227
187
242
US
Imported
Foods
(8)
129
115
103
125
105
89
95
100
94
94
98
121
114
131
155
181
214
239
278
167
152
164
Implicit
GNP
deflator
(9)
115
113
105
107
103
96
96
100
105
109
112
119
122
124
136
162
191
218
251
219
203
209
Sources: (1) Urquhart (1993, pp. 24-5); (2) Bertram and Percy (1979, p. 306); (3) LG (1921, p. 1057, 1923, p. 842, July prices
1914 on); (4) Barnett (1963, p. 8); (5-8)Taylor and Michell (1931, p.56) (9);Balke and Gordon (1989, pp. 84-5).
22
Table 5: The Effect of Changing Deflators on Estimated Canadian Income per Head, 1883-1922 (in 1899 $)
Year
1883
1886
1889
1892
1895
1899
1905
1910
1913
1917
1919
1922
Urquhart, Kingston
in 1899 $ Pen only
(1)
(2)
118
98
117
90
126
108
132
118
133
124
157
157
199
178
239
227
249
216
270
188
231
164
222
217
5 pens,
weighted
according
to 1901
pop
distrib
(3)
92
88
106
111
112
157
176
227
215
196
169
224
5 pens,
weighted
according
to 1921
pop
distrib
(4)
89
89
106
113
112
157
177
230
224
205
178
234
5 pens,
weighted
according
to 1881
shifting
pop
population
distrib
weights
(5)
(6)
93
93
89
89
106
106
110
110
112
112
157
157
176
176
225
227
212
224
191
205
165
178
219
234
“Halfway”
(Average
of cols. (1)
and (6))
(7)
106
103
116
121
123
157
188
233
237
238
205
228
US Real
GDP per
capita
(US 1899
$)
(8)
198
196
203
210
214
240
290
285
307
320
330
317
Sources and notes: Col. 1 from Urquhart (1993, pp 24-5); col. (2) using Kingston Penitentiary series as deflator; col. (3) using 5
penitentiaries, weighted by regional distribution of Canadian population in 1901; col. (4) weighting by regional distribution of
Canadian population in 1921; col. (5) weighting by regional distribution in 1881; col. (6) weighting by 1881 population for 18831892, by 1901 population for 1895 to 1910, and by 1921 population distribution for 1913 to 1922; col. (7) is simple average of col. (1)
and col. (6); Col (8) from Johnston and Williamson (2004).
23
75
150
225
300
375
Figure 2: Canadian and US income per capita, 1883-1922, 1899$
1883 1886 1889 1892 1895
1899
year
United States
Kingston Pen
1905
1910 1913
19171919 1922
Urquhart
Halfway
Note: US Income in US 1899$, Canadian Income in Canadian $1899
24
index
100 150 200 250 300 350 400
Figure 1: Price levels, 1883-1923 (Kingston 1899=100)
1883 1886 1889 1892 1895
1899
year
Dorchester
Kingston
Regina/PA
Vancouver
25
1905
1910 1913
Montreal
Winnipeg
Edmonton
19171919 1922