Value of $100 in 1922, adjusted to 1934

What happened to prices between 1922 and 1934

Between 1922 and 1934, the Consumer Price Index went from 16.8 to 13.4. Cumulatively, prices declined 20.2%, which works out to an average of -1.87% per year. Put differently, a dollar in 1922 bought what $1.25 buys in 1934.

Consumer prices fell another 6.1% in 1922, the second straight year of decline, even as the broader economy climbed out of the Depression of 1920-21 and industrial production rebounded. The CPI had now given back roughly a third of its wartime runup, though it stayed well above the 1913 baseline. Congress moved to shield that recovery from foreign competition: the Fordney-McCumber Tariff Act, signed September 21, raised duties on hundreds of imported goods to some of the highest levels in U.S. history, a policy meant to protect farmers and manufacturers still adjusting to postwar prices. Labor tension flared even as prices fell. Roughly half a million bituminous coal miners struck that April over wage cuts employers had imposed as prices dropped, and hundreds of thousands of railroad shop workers walked out in July in a separate dispute over pay and work rules, together the largest strike wave since 1919. Both disputes dragged on for months and drew federal mediation before ending without full concessions for the workers. First-class postage remained at 2 cents.

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The destination year: 1934

Consumer prices rose 3.1% in 1934, the first annual increase since 1926; every year from 1927 through 1933 had been flat or falling, so the turn marked a real break after eight years without a single gain. Currency policy did some of the work. The Gold Reserve Act, signed January 30, formally devalued the dollar by raising the official price of gold from $20.67 to $35 an ounce, part of the administration’s deliberate effort to reflate prices after four straight years of deflation. Financial regulation tightened at the same time: the Securities Exchange Act of June 6 created the Securities and Exchange Commission to police stock exchanges and enforce disclosure rules, a direct response to the speculation blamed for the 1929 crash. The recovery was fragile and unevenly felt, especially on the Great Plains, where drought had turned overplowed farmland to dust. Over May 9-11, high winds lifted an estimated 350 million tons of topsoil into the air, darkening skies as far away as Washington and New York and giving city readers who had never seen a wheat field a first glimpse of the disaster building in Kansas, Oklahoma, and Texas. Consumer prices stood 35.4% above their 1913 level, still well below the 1929 peak but rising for the first time since the Depression began. First-class postage held at 3 cents.

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