8 replies to this topic

[Highseas]

I’d love to buy a Colt Thompson, but that $25,000+ price tag chills the marrow (but, then, isn’t that what home equity loans are for?). One of the common topics on firearms forums is the high cost of the arms themselves. At the Smith & Wesson forum, where I occasionally post, there is a common refrain that new guns “cost too much”—though precisely what that means is never defined. Likewise, the costs of out-of-production revolvers that are highly valued, and consequently high-priced, are condemned incessantly. Well, I decided to look into whether or not these complaints are valid concerning our favorite firearm.

The Thompson has always been an expensive weapon compared to other firearms. When the 1921 was first marketed, it listed for $225. I haven’t been able to find income statistics for 1921, but in 1929 the median per capita income in the U.S. was $14.42 per week. Presumably it was rather less 8 years earlier. In any case, in 1921 the Colt Thompson cost 15.6 weeks’ worth of a 1929 salary. And, of course, at that time there was an indefinite supply of these weapons. Place the order and one would be made if it wasn’t in stock. Today, a Colt Thompson in excellent condition costs ~ $25,000-$30,000. In 2001 (the most recent year for which I can find data), the median per capita income for males was $606.13 per week. That translates to 49.49 weeks’ salary to purchase a Thompson now. This illustrates a fascinating fact. What formerly cost a little less than 4 months’ salary when it was new and relatively easy to acquire now costs--when it is rare, no longer made, and relatively difficult to acquire--just over 11 months’ salary. So in real dollars, the value of a Colt Thompson has slightly more than tripled (a factor of 3.17) in ~80 years. Contrary to myth, the Colt Thompson has offered, compared to other collectibles (running the gamut from coins to real estate), a very poor rate of return in real dollars over 8 decades. Therefore, by no stretch of the imagination can this be considered a disproportionately expensive collectible. The fact that the average person cannot afford to plunk 30 Gs down onto the counter does not refute that fact. The rare and highly prized Colt Thompson is worth only 3 times what it was over three-quarters of a century ago.

I only wish that made me feel better. Honey, can you pass me the application for the home equity loan . . . ?

[Sig]

Your conclusion from the analysis would only be relevant if you had other similar comparisons.
Such as items produced in the 20's that were considered collectibles and are no longer produced.

[Reenactor]

Another way to look at the pricing is from a strictly purchasing-power-of-money standpoint. The on-line inflation calculator I use to see what things cost "then" (any year since 1800) when earlier $ are quoted, versus now, shows $200 in 1921 as being equivalent to $1,800 today. The other $20,000+ in price is the scarcity/desirability factor.

[Merry Ploughboy]

Another factor is the lack of new substitutes. Some TSMG buyers just want a machine gun, not necessarily a Thompson. Before May, '86 new machine guns were still being produced for general consumption. All of the boats have risen with the tide.

[TommyFan]

Sig,

I can give you an example of one thing I know that is comparable and is no longer made. At the turn of the century railroads used big heavy brass locks which were hand tooled. The Fraim company made a lot of these. I have two examples one of which is in as close to mint condition as you can get. These locks cost the RR's $1.75 each in 1918. The one I have cost me 300$ (considered a bargain at the time). This is an increase of over 171 times since 1918.

Hope this helps. I'd like to see more examples of this too though. If we could scrounge a dozen examples and compare we might have some idea as to whether the pricing is in line or not.( Not that it matters, since price is always due to supply and demand) Since I won't own a Colt anytime soon, this might take my mind off it!

[Highseas]

QUOTE (Sig @ Dec 10 2004, 05:42 AM)

Your conclusion from the analysis would only be relevant if you had other similar comparisons. Such as items produced in the 20's that were considered collectibles and are no longer produced.

I ran down these figures in just a few minutes. A comparison with other collectibles (especially firearms) would be illuminating but not defining. Perhaps I've sparked enough interest in a few of our members to run a few more comparisons. However, my conclusion is a mathematical one and would be relevant even in a vacuum. A tripling in market value is a tripling in market value. Regardless of how expensive Thompsons might seem, nothing alters the fact that this is a rather low rate of appreciation over almost a century.

Another poster drew reference to an inflation calculator--

QUOTE

$200 in 1921 as being equivalent to $1,800 today.

Inflation calculators are deceptive, if not outright wrong. A factor of nine is far too low to be of use in this case. The median per capita income in 1929 was $750. In 2001 it was $31, 519. That's a factor of 42. Even if one were to grant that an increase in affluence is not the same as inflation, such a shockingly low inflation calculator is way off and cannot help us here. The desirability factor of Thompsons is high and ultimately intangible, but it cannot really correlate with $20,000 in light of these other figures.

P.S. Enjoyed the cybermuseum very much.

[Lancer]

QUOTE (Merry Ploughboy @ Dec 10 2004, 07:41 AM)

Another factor is the lack of new substitutes. Some TSMG buyers just want a machine gun, not necessarily a Thompson. Before May, '86 new machine guns were still being produced for general consumption. All of the boats have risen with the tide.

I think that the 86 ban is the defining factor when it comes to the escalation of MG prices in general and TSMGss in particular. I believe a Colt TSMG was worth about $1500 before the ban. There are'nt many other things you can compare with this kind of extenuating factor.

[Merry Ploughboy]

On the median income figures, the major "extenuating circumstance" may well be the taxes that one now pays that were not mandated in 1918, at the respective median income levels. E.g., income taxes (most states as well as federal), Medicare, Medicaid, FICA, and the indirect taxes (e.g., gasoline federal and state taxes). The question is not one of earning or inflation but of real purchasing power.

[Arthur Fliegenheimer]

The 1986 ban surely did impact all NFA firearms, but it wasn't the reason for the increased value in the C&R Colt & WWII TSMG's since they were long out of production and not allowed into the country since 1968. The new WH TSMG's were still languishing on the shelf for years after the 1986 law.

It is quite possible that NFA items had been horrendously under priced for so many years, especially the collectible C&R variety, and they merely joined the ranks of other firearms that have commanded huge prices for many decades.


Why is that when C&R TSMG's were selling for a few thousand and there were numerous examples of them displayed on tables at shows, nobody paid much attention to them? Now when they command upward of $30K+, they are few and far between and are rapidly grabbed up. The enormous price increase was not an immediate reaction to the 1986 law since TSMG's (all models) were still selling for under $5K for 10 years after that law went into effect.

Whether it is the internet, movies, TV, or serendipity, the buying public wants these firearms and are willing to pay the kind of money they willingly pay for an SUV that only depreciates the minute the tires hit the street.