Cowles Commission

The Cowles Commission for Research in Economics was founded in 1932 by economist Alfred Cowles. Among its work, in 1938 it published a volume, available at no cost online, Common-Stock Indexes, 1871-1937, as well as a 1939 second edition.

This 499-page volume was calculated by a team of several dozen student volunteers from Colorado College, using desk calculators. They say it required 25,000 "computer hours" (where "computer" refers to a human being performing computations). The word "index" means cap-weighted index, and the authors take pains to explain the exact formulas they used and to relate it to the work of Irving Fisher and his 1922 book, The Making of Index Numbers: A Study of Their Varieties, Tests, and Reliability. Dividends were included, but there was no attempt to adjust for inflation (or, in this case, deflation). Sixty seven separate indexes were calculated, by individual industry (leather, railroad equipment, retail trade--drug chains) and by some larger groups (all stocks, retail trade).

Whenever you see historical stock data that goes back to 1871, it is almost certain that this is the source. For this reason it is very interesting to read the introductory chapters bearing on the difficulty of compiling the data, and its degree of completeness and reliability.