Why is a 2x4 Actually Only 1-1/2" x 3-1/2" in Size?

Planks of wood on shelves
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It doesn't take too much experience before you learn that the actual sizes of dimension lumber are quite different than the nominal sizes by which they are classified. For example, a ​​2x4 is actually 1-1/2" by 3- 1/2" in size, while a 1x6 board, when measured, proves to be only 3/4" x 5-1/2" in actual size. And this is true for most of the lumber you buy--the actual dimensions will be reduced from the nominal dimension by which the lumber is classified.

Why is this so?  Here's a document produced by the U.S. Forest Service entitled ​History of Yard Lumber Size Standards (September 1964). While this document is over 40 years old now, it gives an interesting history of when and why lumber was reduced from the common nomenclature (2x4, for instance) to the actual sizes used today.