Value of $100 in 1924, adjusted to 1942

What happened to prices between 1924 and 1942

Between 1924 and 1942, the Consumer Price Index went from 17.1 to 16.3. Cumulatively, prices declined 4.7%, which works out to an average of -0.27% per year. Put differently, a dollar in 1924 bought what $1.05 buys in 1942.

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.

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The destination year: 1942

Consumer prices rose 10.9% in 1942, up from 1941’s already rapid 5.0% and the fastest increase since 1920, as the economy’s crash conversion to war production collided with shrinking supplies of civilian goods. The government tried to contain it: the General Maximum Price Regulation, effective May 18 and known as “General Max,” froze most retail prices at their highest March level, the broadest price control Washington had ever attempted. Rationing followed close behind. Sugar rationing began that May and gasoline rationing went nationwide in December, the leading edge of a system that would eventually cover meat, coffee, shoes, tires, and dozens of other goods before the war ended. The year’s other defining wartime measure had nothing to do with prices. Executive Order 9066, signed February 19, authorized the military to remove more than 110,000 Japanese Americans, most of them U.S. citizens, from the West Coast and hold them in inland internment camps for the war’s duration, one of the era’s starkest violations of civil liberties. Even with price controls in place, consumer prices climbed more than 10% for the first time since 1920, leaving the CPI 64.6% above its 1913 level. First-class postage held at 3 cents, and the minimum wage stayed at 30 cents an hour.

More about inflation in 1942 →