Relative cost of ammunition


#1

I just read the latest IAA journal and the article about U.S. manufactured ammuntion for Great Britain during WWII. The article mentions various prices paid per thousand for small arms ammunition. I tried converting 1940 dollars to 2012 dollars to get a relative comparison, but the cost seems unrealistic. For example, a contract for 10 million rounds of.303 Ball ammuntion @ $40 US per thousand in 1940 equals about $600 US per thousand in today’s dollars. Seems extremely expensive, especially for such a large order. Am I missing something here? Was ammunition really that expensive back in the 1940s?

AKMS


#2

Maybe the cost included shipping? With destroyer escorts guiding Liberty ships through the U-boat areas, that would be expensive.


#3

When Coimparing costs of Items in Historical time with current costs, how does one do it???
Does one use the compariosn of Wages of the two different times, or the adjusted value of money, or the base cost of the raw materials then and now, and so on.

It is very difficult to make a comparison, between Historical times.

Wages were lower then (In real terms) as wewre some production costs…others were higher, due to Modern improvements intechnology…EG, in 1942, the manufacture of Rifle calibre ammo in the USA used the "Plate " system, which was very “hand work” intensive, even though “machine assisted” in various points…Today, the SCAMP system is used, with less workers, and higher productivity…( and subsequently Lower costs, in an actual comparison)

If one does the simplistic comparison, what does $40 buy in 1942 (say) one could say, 1,000 rounds of .30/06, or so many hour’s work, or so much gasoline, ( at the price current at that time, etc.) Then to convert that to todays prices, the problems begin, because all the Baselines have changed, some in the same way, others differently. Even comparing the “Value” of money to a fixed standard, such as Gold, can give problems, as the Value of Gold also changes (NO longer a Fixed “Gold Standard”, as it was in 1940-42, when britain paid for ammunition etc, in Gold bars. (Until Lend-lease was proclaimed).

Yes, $40 a thousand seem little, and in the 1940s scheme of things ot was “Little” when compared with the Local values and costs at the time.
But, for a worker to get $40.00, he probably had to work for 10 or more days ( before Tax) so it wasn’t really “Cheap”…Just as a “2012 cost” of $600 a Thou., is not Cheap, either, in absolute terms…What workers, outside of Specialised Mining etc Industries, make $600 a week? ( in the US, that is…I know Aussie Mine workers do get over $1,5-2K clear a week, plus Fly-in Fly-out, and they are only basic truck drivers and mechanics.). Specialists get much more.

A very difficult problem, that of Historical Cost comparison.

Doc AV


#4

As Doc says, the historic value of money is notoriously difficult to calculate, as there are so many different ways of defining inflation. Using one of the financial websites, the current value of $40 in 1940 is:

    $641.00 	using the Consumer Price Index
$522.00 	using the GDP deflator
$1,260.00 	using the unskilled wage
$1,600.00 	using the Production Worker Compensation
$2,520.00 	using the nominal GDP per capita
$5,950.00 	using the relative share of GDP 

When I was writing that article for the Journal I checked back on the dollar conversion rates and the prices historically paid for large military ammunition contracts.

In 1940 $40 equated to around £9.0.0 Sterling. In WWI Britain had contracted with the American ammunition companies for large volumes of .303 inch ammunition on almost exactly the same terms as later in 1940. At that time the Ministry of Munitions had cancelled many of these contracts on the grounds that they were too expensive, costing on avarage about £8.10.0 per 1000 compared to domestic costs of about £6.10.0 per 1000. Ordinary commercial prices at that time fro .303 were about £9.10.0 per hundred.

Thus ammuniton prices seem to have been broadly stable at around $40 per 1000 (for large quantities) from WWI to at least WW2. This is actually not too surprising since historically there was little inflation when averaged over the previous two hundred years apart from spikes around the many wars (Napoleonic, Crimea, Boer, WWI, WW2 etc).

Regards
TonyE


#5

Interesting thread. In my Gyrojet book I offer several examples of what various MBA things that sold in the 1960s would cost today (2010 dollars). Just heard on the network news that with all hell continuing to break loose in Syria, the cost to “rebels” of smuggled-in AK-47s has dropped from $2,000 USD to a bargain $1,000 USD. More to the point of this thread, the cost per single round of smuggled-in 7.62X39 ball ammunition has dropped from $5 USD per single round to a “bargain” $2 USD per single round. It is not clear whether quantity discounts are available. I suppose this has to do with a free market and supply and demand, but $2 USD a pop does seem a bit pricey, even in a strong seller’s market.


#6

Watching this 2$ ammo being fired in unaimed full auto bursts I wonder if the prices we are being told by the media have an actual relation to reality.

And then still, use one 2$ round well (and aim) and you get another gun + a full combat load of ammo + a pair of used army boots for free.


#7

The U.S. Federal Reserve publishes on their website what is essentially a yearly cost-of-living (consumer price) index comparison, going back into the early 19th century, and it makes very interesting reading, principally because it shows that there was a very low average inflation rate in the US until the mid-20th century, and especially to a little later in the 20th Century when the first oil price shocks hit during the Carter administration. Like all indexes, it cannot be applied accurately to any specific product - however, at least in the US, the differences in the current index and that of the pre-WWII period is about 17X. Regarding applicability of such information to other countries, there is none, as different economic forces are in play. For example,consider the astronomical hyperinflation rates in Germany and Eastern Europe during the Weimar Republic, and more recently, in Brazil during the 1970s-80s, and in some third-world countries today. I recently found a sales receipt for my very first new car, which was $1,645 for a 1967 VW Beetle. I remember gasoline at that time was about 25-30 cents per gallon and cigarettes were 25 cents per pack (I smoked back then). Those figures provide a good idea of price inflation over the last 45 years, well over 10X, and more like 12-15X if not more.

I remember an article in one of the older issues of Gun Digest about the inflation of firearms prices over a long period of time, which used the retail price trends of various basic guns which had been in production for a great many years up until the present, such as the Winchester Model 94, the S&W M&P revolver, the Colt Model 1911, H&R break-open shotguns, etc., so good comparisons could be made.

Regarding ammunition cost inflation during wartime, all assumptions are void, as governments must pay whatever it takes to ensure an adequate supply of all weapons and munitions.