Value of $100 in 1924, adjusted to 1941

What happened to prices between 1924 and 1941

Between 1924 and 1941, the Consumer Price Index went from 17.1 to 14.7. Cumulatively, prices declined 14.0%, which works out to an average of -0.89% per year. Put differently, a dollar in 1924 bought what $1.16 buys in 1941.

Consumer prices held flat in 1924, the CPI’s annual average unchanged from 1923 after swinging from a sharp postwar drop to a modest rise the year before. That stability, extending the calm that had settled in after the deflation of 1921 and 1922, became a defining feature of the rest of the decade. Congress tightened immigration policy further with the Immigration Act of 1924, signed May 26, which cut the national-origins quota from 3% of each nationality’s 1910 census population to 2% of its 1890 population, shifting admissions further toward northern and western Europe and effectively excluding most immigration from Asia. Abroad, the U.S.-backed Dawes Plan, adopted that August, reorganized Germany’s war reparations payments and opened the way for American loans into the German economy, helping stabilize European currencies after the hyperinflation that had peaked in 1923. At home, Calvin Coolidge, who had served out the remainder of Warren Harding’s term after his death the previous year, won a full term of his own that November, campaigning on continued prosperity and limited government. First-class postage remained at 2 cents, a price unchanged since mid-1919.

More about inflation in 1924 →

The destination year: 1941

Consumer prices rose 5.0% in 1941, up sharply from just 0.7% in 1940 and the fastest annual increase since 1920, as rearmament and Lend-Lease production pushed demand well ahead of peacetime supply even before the United States formally joined the war. Congress had already tilted the country away from neutrality that March, passing the Lend-Lease Act to arm Britain, and later the Soviet Union and other Allies, without requiring immediate payment. That April, the government created the Office of Price Administration to hold down the cost of civilian goods, the start of a price-control system that would keep official inflation numbers well below what wartime demand alone would have produced over the next four years. Then, on December 7, Japan attacked the naval base at Pearl Harbor, destroying much of the Pacific Fleet and killing more than 2,400 Americans. Congress declared war on Japan the next day and on Germany and Italy three days later, ending years of debate over whether the United States should stay out of the conflict spreading across Europe and Asia. Consumer prices, already up 48.5% from their 1913 level, would climb far faster over the next two years as the economy converted fully to war production. First-class postage held at 3 cents, and the minimum wage stayed at 30 cents an hour.

More about inflation in 1941 →