Treaty of Mendota - Values Adjusted For Inflation

Values Adjusted For Inflation

There are numerous ways to try to estimate what the value of this treaty would be in current US dollars. Since the CPI was not initiated until the 20th Century, other measures must be used to look back on inflation and valuation levels in the United States.

Here are some different valuations in today's money of the $1,410,000 in 1851

$40,800,000 using the Consumer Price Index

$30,700,000 using the GDP deflator

$296,000,000 using the unskilled wage

$576,000,000 using the Production Worker Compensation

$578,000,000 using the nominal GDP per capita

$7,380,000,000 using the relative share of GDP

As with most economic estimates like this, that look beyond the modern, intricate tracking of national inflation, there is a dramatic range in the predicted present value of the treaty's amount. The value calculated using the "relative share of GDP" should be given extra weight since it is weighted to the state of the overall economic size and strength. Even though this measurement is imperfect, it is much less so than the other indicators which either were not correctly used for the duration of this time, or have been extrapolated back to 1851 using other data. Because of this, the CPI measurement is dramatically understating the present value of the money.

Using this same calculation range, the 10 cents per acre that was paid to the Native Americans comes out to a present value range of between $2.90 and $523 per acre. Even using the upper end of this range which is probably the most realistic, that is very low property value being assigned to the wilderness in present day standards. of course there are other effects to weigh in, such as present day advanced agricultural and foresting technologies which would affect this number by a multiple value, the evidence here shows that the United States dramatically undercut the Native Americans with their purchasing of their land, and falls in line with much of the other land purchases from Native Americans throughout the 19th century.