Value of $100 in 1919, adjusted to 1924

What happened to prices between 1919 and 1924

Between 1919 and 1924, the Consumer Price Index went from 17.3 to 17.1. Cumulatively, prices declined 1.2%, which works out to an average of -0.23% per year. Put differently, a dollar in 1919 bought what $1.01 buys in 1924.

The fighting in Europe ended in November 1918, but American prices kept climbing through 1919 almost as fast as they had during the war itself, rising 14.6% for the year. Wartime price and production controls were being dismantled, millions of soldiers were returning to the civilian labor market, and demand that had been held back for years ran into supply that had not caught up, a combination that kept the cost of living rising even with the guns silent. Workers, whose pay had fallen behind three straight years of double-digit inflation, pushed back: a general strike shut down Seattle in February, Boston’s police force walked out in September, and a nationwide steel strike that same month drew in roughly 350,000 workers and ran into the following January. One price did fall that year: first-class postage reverted to 2 cents on July 1, ending the wartime 3-cent rate that had funded part of the war effort since late 1917. By year’s end, prices had risen close to 75% since the CPI’s 1913 starting point, compressing more than a decade of typical peacetime inflation into six years of war and its aftermath.

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The destination year: 1924

Consumer prices held flat in 1924, the CPI’s annual average unchanged from 1923 after swinging from a sharp postwar drop to a modest rise the year before. That stability, extending the calm that had settled in after the deflation of 1921 and 1922, became a defining feature of the rest of the decade. Congress tightened immigration policy further with the Immigration Act of 1924, signed May 26, which cut the national-origins quota from 3% of each nationality’s 1910 census population to 2% of its 1890 population, shifting admissions further toward northern and western Europe and effectively excluding most immigration from Asia. Abroad, the U.S.-backed Dawes Plan, adopted that August, reorganized Germany’s war reparations payments and opened the way for American loans into the German economy, helping stabilize European currencies after the hyperinflation that had peaked in 1923. At home, Calvin Coolidge, who had served out the remainder of Warren Harding’s term after his death the previous year, won a full term of his own that November, campaigning on continued prosperity and limited government. First-class postage remained at 2 cents, a price unchanged since mid-1919.

More about inflation in 1924 →