Value of $100 in 1933, adjusted to 1948

What happened to prices between 1933 and 1948

Between 1933 and 1948, the Consumer Price Index went from 13 to 24.1. Cumulatively, prices increased 85.4%, which works out to an average of 4.20% per year. Put differently, a dollar in 1933 bought what $0.54 buys in 1948.

Consumer prices fell 5.1% in 1933, a smaller decline than 1932’s but enough to complete a four-year slide of 24.0% from the 1929 peak. The National Bureau of Economic Research dates the trough of that contraction to March 1933, closing out the longest downturn in its chronology, one that had run 43 months since August 1929. The bottom arrived alongside a change in government: Franklin D. Roosevelt was inaugurated March 4 and, within 48 hours, ordered every bank in the country closed to halt a fresh round of runs. Congress passed the Emergency Banking Act on March 9, letting solvent banks reopen under federal supervision, and the panic that had been building for months broke almost immediately. The administration moved on the currency next: Executive Order 6102, issued April 5, required Americans to turn in most gold coin, bullion, and certificates to the Federal Reserve, taking the country off the domestic gold standard (formal devaluation of the dollar followed the next January). Congress capped the year’s banking overhaul in June with the Banking Act of 1933, commonly called Glass-Steagall, which created the Federal Deposit Insurance Corporation and separated commercial banking from investment banking. Even after four straight years of falling prices, the CPI still stood 31.3% above its 1913 level. First-class postage held at 3 cents.

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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.

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