Value of $100 in 1922, adjusted to 1939

What happened to prices between 1922 and 1939

Between 1922 and 1939, the Consumer Price Index went from 16.8 to 13.9. Cumulatively, prices declined 17.3%, which works out to an average of -1.11% per year. Put differently, a dollar in 1922 bought what $1.21 buys in 1939.

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: 1939

Consumer prices fell 1.4% in 1939, closing out a decade in which the CPI fell in six years and rose in four, leaving prices 18.7% below their 1929 level even after the mid-decade recovery. Measured against the start of the CPI’s modern record, prices still stood 40.4% above their 1913 level, a reminder that even a decade defined by deflation left the cost of living well above where it had been a generation earlier. The decade’s final months reset the economic picture entirely. Germany invaded Poland on September 1, and Britain and France declared war two days later; the United States stayed formally neutral under the Neutrality Acts, but Allied orders for war materiel began flowing to American factories almost immediately, a demand shock that would do more to end the Depression over the next few years than any peacetime relief program had managed. Domestic policy kept building on the New Deal’s framework, too: the federal minimum wage rose to 30 cents an hour that October, the second step in the schedule set by the 1938 Fair Labor Standards Act. Amid it all, the New York World’s Fair opened April 30 in Queens, themed “The World of Tomorrow” and drawing tens of millions of visitors with exhibits on television and other technologies promising a more prosperous decade than the one just ending. First-class postage held at 3 cents.

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