Value of $100 in 1922, adjusted to 1968

What happened to prices between 1922 and 1968

Between 1922 and 1968, the Consumer Price Index went from 16.8 to 34.8. Cumulatively, prices increased 107.1%, which works out to an average of 1.60% per year. Put differently, a dollar in 1922 bought what $0.48 buys in 1968.

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: 1968

Consumer prices rose 4.2% in 1968, up sharply from 1967’s 3.1% and the fastest pace in 17 years, as Vietnam War spending and a tight labor market pushed inflation higher despite the Federal Reserve’s earlier tightening. The year was marked by political violence: Martin Luther King Jr. was assassinated on a motel balcony in Memphis on April 4, touching off rioting in more than 100 cities, and Robert F. Kennedy was shot in Los Angeles on June 5, moments after winning California’s Democratic presidential primary, and died the next day. Washington tried to answer the inflation problem directly that June 28, when Congress passed a 10% income tax surcharge, the Revenue and Expenditure Control Act, temporarily raising taxes and cutting spending to cool an economy overheated by war and Great Society outlays; prices kept accelerating anyway. The cost of living rose in smaller, more visible ways too: first-class postage climbed to 6 cents that January 7, and the minimum wage rose to $1.60 an hour that February 1, the final step of the increase Congress had set two years earlier. Consumer prices finished 1968 251.5% above their 1913 level.

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