Value of $100 in 1913, adjusted to 1941

What happened to prices between 1913 and 1941

Between 1913 and 1941, the Consumer Price Index went from 9.9 to 14.7. Cumulatively, prices increased 48.5%, which works out to an average of 1.42% per year. Put differently, a dollar in 1913 bought what $0.67 buys in 1941.

1913 is where this site’s price history begins, because it’s where the Bureau of Labor Statistics’ own consumer price data begins. The CPI wasn’t published in real time back then; the BLS built the earliest index retroactively from retail price records collected starting in 1913, which makes every dollar figure on this site ultimately anchored to that year’s prices. It was also the year the machinery of modern federal economic policy was built. The 16th Amendment, ratified in February, cleared the constitutional path for a federal income tax, and the Revenue Act that followed in October imposed a top rate of just 7% on income above $500,000, a narrow tax that would later be reshaped into the broad-based system that funds the government today. In December, Congress passed the Federal Reserve Act, creating the central bank that would eventually take on fighting inflation as one of its core jobs, including the 19%-plus interest rates it deployed against the 1970s and early 1980s price surge. Consumer life in 1913 was correspondingly simple by later standards: a first-class stamp cost 2 cents, a price that held from 1885 all the way to 1917, and the Ford Motor Company introduced the moving assembly line at its Highland Park plant that year, a manufacturing breakthrough that would spend the next decade driving down the cost of a car faster than prices elsewhere were rising.

More about inflation in 1913 →

The destination year: 1941

Consumer prices rose 5.0% in 1941, up sharply from just 0.7% in 1940 and the fastest annual increase since 1920, as rearmament and Lend-Lease production pushed demand well ahead of peacetime supply even before the United States formally joined the war. Congress had already tilted the country away from neutrality that March, passing the Lend-Lease Act to arm Britain, and later the Soviet Union and other Allies, without requiring immediate payment. That April, the government created the Office of Price Administration to hold down the cost of civilian goods, the start of a price-control system that would keep official inflation numbers well below what wartime demand alone would have produced over the next four years. Then, on December 7, Japan attacked the naval base at Pearl Harbor, destroying much of the Pacific Fleet and killing more than 2,400 Americans. Congress declared war on Japan the next day and on Germany and Italy three days later, ending years of debate over whether the United States should stay out of the conflict spreading across Europe and Asia. Consumer prices, already up 48.5% from their 1913 level, would climb far faster over the next two years as the economy converted fully to war production. First-class postage held at 3 cents, and the minimum wage stayed at 30 cents an hour.

More about inflation in 1941 →