Value of $100 in 1919, adjusted to 1925

What happened to prices between 1919 and 1925

Between 1919 and 1925, the Consumer Price Index went from 17.3 to 17.5. Cumulatively, prices increased 1.2%, which works out to an average of 0.19% per year. Put differently, a dollar in 1919 bought what $0.99 buys in 1925.

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: 1925

Consumer prices rose 2.3% in 1925, the CPI’s largest single-year increase since the deflationary swings of the early 1920s, though still mild next to the double-digit inflation of the World War I years. The country’s cultural fault lines were on full display that summer in Dayton, Tennessee, where high school teacher John Scopes was tried July 10-21 for violating a state law against teaching evolution, a case that drew national press coverage and pitted prosecutor William Jennings Bryan against defense attorney Clarence Darrow. Real estate speculation, meanwhile, peaked in Florida, where buyers flipped undeveloped land in the Miami area on thin down payments, driving prices far above what the land itself could support; the bubble would collapse the following year. Detroit reshuffled that June too: Walter Chrysler reorganized the struggling Maxwell Motor Company into Chrysler Corporation, the start of what would become one of the American auto industry’s “Big Three.” First-class postage held at 2 cents for the sixth straight year.

More about inflation in 1925 →