Value of $100 in 1921, adjusted to 1959

What happened to prices between 1921 and 1959

Between 1921 and 1959, the Consumer Price Index went from 17.9 to 29.1. Cumulatively, prices increased 62.6%, which works out to an average of 1.29% per year. Put differently, a dollar in 1921 bought what $0.62 buys in 1959.

Consumer prices fell 10.5% in 1921, the mirror image of the wartime inflation that had more than doubled the cost of living between 1913 and 1920. The Depression of 1920-21, one of the sharpest contractions in U.S. history, bottomed out that July according to the National Bureau of Economic Research, even though it had lasted barely eighteen months. Unemployment climbed toward one worker in ten as businesses cut production and prices to work through wartime inventories, but the same collapse in prices also meant the recovery, once it started, had room to run without reigniting inflation. Warren Harding took office March 4, promising a return to “normalcy” after a decade of war, pandemic, labor unrest, and rapid price swings; his administration moved quickly to cut top income tax rates and federal spending. Congress also acted on immigration that year: the Emergency Quota Act, signed May 19, capped annual arrivals from each country at 3% of that nationality’s population in the 1910 census, the first time the United States had set a numerical ceiling on immigration. The law favored northern and western Europe and cut total immigration by more than half compared with prewar levels; Congress tightened the formula again in 1924. First-class postage held at 2 cents, unchanged since mid-1919.

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The destination year: 1959

Consumer prices rose 0.7% in 1959, down sharply from 1958’s 2.8% as the economy recovered briskly from the year before’s recession, with output and employment both rebounding through the year. The map of the country changed that year for the first time since 1912: Alaska joined the union January 3, and Hawaii followed August 21, completing the 50-state United States. Ninety miles from Florida, Cuba changed hands that January, when Fidel Castro’s guerrilla forces overthrew President Fulgencio Batista, who fled the country on the 1st; Castro entered Havana on the 8th, beginning a Communist government that would define Cold War tensions in the hemisphere for decades. Labor and management fought their longest battle of the postwar era that summer: the United Steelworkers walked out July 15 in a dispute over work rules, the longest strike in the industry’s history, before a federal court granted the Eisenhower administration a Taft-Hartley back-to-work order that November. Consumer prices finished the decade 193.9% above their 1913 level, up 20.7% from where they stood in 1950. First-class postage held at 4 cents, and the minimum wage stayed at $1.00 an hour.

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