Value of $100 in 1926, adjusted to 1948

What happened to prices between 1926 and 1948

Between 1926 and 1948, the Consumer Price Index went from 17.7 to 24.1. Cumulatively, prices increased 36.2%, which works out to an average of 1.41% per year. Put differently, a dollar in 1926 bought what $0.73 buys in 1948.

Consumer prices rose 1.1% in 1926, a third straight year of mild inflation and part of the price stability that defined the middle of the decade. Florida’s real estate boom, which had peaked the previous year on speculative buying of undeveloped land, ended abruptly that September when the Great Miami Hurricane made landfall near the city, killing hundreds and wrecking the market for land whose value had rested on continued speculation rather than anything underneath it. In Detroit, Henry Ford moved his company to a five-day, 40-hour work week without cutting pay, a break from the standard six-day schedule that other large employers would gradually adopt over the following decades; Ford argued publicly that workers with more leisure time would also become better customers for the cars his factories built. Consumer prices remained low enough by historical standards that a first-class stamp still cost just 2 cents, the same price it had held since mid-1919.

More about inflation in 1926 →

The destination year: 1948

Consumer prices rose 8.1% in 1948, down slightly from 1947’s 14.4% but still the second straight year of sharp postwar inflation now that wartime price controls were fully gone. Congress moved to stabilize a different economy that April, passing the Economic Cooperation Act to fund the plan Secretary of State George Marshall had proposed the year before: more than $13 billion over four years to rebuild Western Europe and counter Soviet influence. The Cold War turned tense closer to the plan’s target that June, when Soviet forces cut off road and rail access to the Western-controlled sectors of Berlin. American and British aircraft responded almost immediately with an airlift of food, fuel, and supplies that would keep the city running for nearly a year. Domestic politics produced its own upset that November: nearly every poll and pundit had predicted a Republican win, but Harry Truman defeated New York Governor Thomas Dewey, handing the Chicago Tribune its famously wrong “Dewey Defeats Truman” headline. Consumer prices finished the year 143.4% above their 1913 level and 40.9% above 1929’s pre-Depression peak. First-class postage held at 3 cents, and the minimum wage stayed at 40 cents an hour.

More about inflation in 1948 →