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Residential Construction Industry in the Early Nineteenth Century

Published online by Cambridge University Press:  11 May 2010

Donald R. Adams Jr.
Donald R. Adams Jr.
Affiliation:
Southern Illinois University at Carhondale
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Extract

The contract construction industry today represents one of the most important sectors of the American economy. Total new construction in recent decades has accounted for nearly one-half of the Gross Private Domestic Investment, while non-farm residential building alone accounts for nearly one-quarter of GPDI.

Type
Articles
Information
The Journal of Economic History , Volume 35 , Issue 4 , December 1975 , pp. 794 - 816
Copyright
Copyright © The Economic History Association 1975

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References

1 Lampard, Eric E., “The Evolving Systems of Cities in the United States: Urbanization and Economic Development,” in Perloff, Harvey S. and Wingo, Lowden Jr., editors, Issues in Urban Economics (Baltimore, 1968), pp. 108 and 117Google Scholar.

2 Brady, Dorothy, “Relative Prices in the Nineteenth Century,” Journal ofEconomicHistory, XXIV (June 1964), 161Google Scholar.

3 “History of Wages in the United States from Colonial Times to 1928,” Bureau of Labor Statistics, Bulletin No. 499 (Washington, D.C.: Department of Labor, 1929), p. 56Google Scholar. This bulletin will henceforth be referred to as BLS 499.

4 The data are from the Stephen Girard Collection at the Library of the American Philosophical Society, Philadelphia, Pennsylvania. Girard, in addition to his mercantile, shipping and banking activities was also a real estate speculator.

5 Indeed, this division of costs is generally consistent with what may be the earliest estimate of American building costs on record. In 1648 Dedham, Massachusetts built a school house. The total cost of construction was $57.80 for which the builder received $36.70 (63 percent of total cost) “for his work about ye schoole house.” See BLS 499, p. 48.

6 Cassimates, Peter J., “Economics of the Construction Industry,” Studies in Business Economics, No. 11 (New York: National Industrial Conference Board, 1969), p. 45Google Scholar.

7 Ibid., p. 50.

8 Bezanson, , Gray, and Hussey, , Wholesale Prices in Philadelphia, 1784–1861 (Philadelphia, 1937), p. 392CrossRefGoogle Scholar.

9 Ibid., p. 338.

10 This formulation is a typical Laspeyre index of the form , where C = construction costs.

11 The approximation to such a formula takes the form

Where = labor's share of total cost in the base period; = wood's share of total cost in the base period; = other's share of total cost in the base period; = brick and stone's share of total cost in the base period; and w1 = the price relative of labor in period 1; pj = the price relative of wood in period 1; o1 = the price relative of other in period 1; b1 = the price relative of brick and stone in period 1.

12 For the period 1785–1830 see Adams, D. R. Jr. “Wage Rates in the Early National Period: Philadelphia, 1785–1830,” Journal ofEconomicHistory, XXVIII (September 1968), 419 and for 1840–1860 see BLS 499, pp. 159–160Google Scholar.

13 Jackson, Joseph, American Colonial Architecture (Philadelphia, 1924), p. 197Google Scholar.

14 The choice of 1828–1830 as a base period was governed by two factors: first it lies approximately mid-way in the period under consideration, and secondly it represents a period in which a large number of observations are available.

15 An exception to this rule is 1795–1796. Construction records for those years indicate a price per thousand bricks of $25.00 and $24.50 or nearly seven times the price in 1785. This extreme price seems to have been the result not so much of a general tendency for prices to rise in these years but rather an ordinance of June 6, 1795 prohibiting the erection of wooden buildings in the center city area. The ordinance was resisted successfully and soon became inoperative. Thus, these extreme values were not used to construct the long-run series since they appear to be shortlived and unrepresentative.

16 Gallman, Robert, “Commodity Output, 1839–1899,” in Conference on Research in Income and Wealth, National Bureau of Economic Research, Trends in the American Economy in the Nineteenth Century: Studies in Income and Wealth (Princeton, 1960), XXIV, 26Google Scholar, and Warren, and Pearson, , Prices (New York, 1933), pp. 196–197Google Scholar.

17 Note that we are interested here in the return on invested capital rather than capital gains.

18 Brady, “Relative Prices,” p. 189.

19 Wickens, David L.Residential Real Estate (New York: National Bureau of Economic Research, 1941), p. 6Google Scholar.

20 The appropriate formulation for computing the changing real content of housing costs is

which yields the share of labor in real housing costs in year 1. This process is then repeated for all factors in years 1 through n (1785–1860).

21 Apparently, some artisan groups took a somewhat different approach to standardization and established “work rules” rather than fixed rates. The “General Rules of Work for Housewrights in Newburyport, Massachusetts,” published in 1803 defined a day's work as:

framing wooden buildings—125 superficial ft./day

beams (not joinsted)—200 superficial ft./day

beams and plates for brick buildings—125 ft./day

all kinds of angular framing—100 ft./day

plain shingling—100 superficial ft./day

door frame for bricks building from 3–4 ft. wide and 7–8 feet high—2–½ days/frame.

22 Jackson, American Colonial Architecture, p. 198.

23 Stephen Girard Collection, Series II, reel no. 472.

24 Ibid., Series II, reel no. 216.

25 Philadelphia attempted such legislation unsuccessfully in 1795. See footnote 15 above.

26 Brady, “Relative Prices,” p. 189.

27 See Adams, “Wage Rates,” p. 419.

28 See Cole, Arthur H., Wholesale Commodity Prices in the United States 1700–1861 (Cambridge, 1938), pp. 106–107, Chart 52CrossRefGoogle Scholar.