Value of $100 in 1913, adjusted to 1945

What happened to prices between 1913 and 1945

Between 1913 and 1945, the Consumer Price Index went from 9.9 to 18. Cumulatively, prices increased 81.8%, which works out to an average of 1.89% per year. Put differently, a dollar in 1913 bought what $0.55 buys in 1945.

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: 1945

Consumer prices rose 2.3% in 1945, up from 1944’s 1.7% but still modest, a rate that understated how much pressure had built up behind wartime price and wage controls, which stayed largely in place even as the conflict that justified them came to a close. The year opened with a shock at home: Franklin Roosevelt died of a cerebral hemorrhage on April 12, less than three months into an unprecedented fourth term, and Vice President Harry Truman was sworn in that same afternoon. The war Roosevelt had led for nearly four years ended without him. Germany surrendered on May 8, and Japan surrendered on August 15, after atomic bombs fell on Hiroshima and Nagasaki that month, with the formal signing aboard the USS Missouri on September 2. Domestic policy kept moving even as the guns fell silent: the federal minimum wage rose to 40 cents an hour that October 24, the final step of the schedule Congress had built into the 1938 Fair Labor Standards Act, up from 30 cents in 1939 and 25 cents at the law’s start. Consumer prices stood 81.8% above their 1913 level, a gain that would look modest next to what followed once wartime controls actually came off. First-class postage held at 3 cents.

More about inflation in 1945 →