Value of $100 in 1933, adjusted to 1964

What happened to prices between 1933 and 1964

Between 1933 and 1964, the Consumer Price Index went from 13 to 31. Cumulatively, prices increased 138.5%, which works out to an average of 2.84% per year. Put differently, a dollar in 1933 bought what $0.42 buys in 1964.

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: 1964

Consumer prices rose 1.3% in 1964, matching 1963’s pace even as a large federal tax cut took effect that year. The Revenue Act of 1964, signed February 26, lowered individual and corporate tax rates significantly, the cut Kennedy had proposed the year before his death and Johnson pushed through Congress as a Keynesian bet that lower taxes would spur enough growth without stoking prices. Congress reshaped civil rights law that July 2, when the Civil Rights Act of 1964 outlawed discrimination based on race, color, religion, sex, and national origin in employment and public accommodations, the most sweeping civil rights legislation since Reconstruction. Vietnam policy shifted that August, when Congress passed the Gulf of Tonkin Resolution after reported attacks on U.S. Navy destroyers, authorizing Johnson to use military force in Vietnam without a formal declaration of war. American pop culture changed that February too: the Beatles landed at New York’s Kennedy Airport and played the Ed Sullivan Show two days later for an estimated 73 million viewers, igniting the “British Invasion.” Consumer prices finished 1964 213.1% above their 1913 level. First-class postage held at 5 cents, and the minimum wage stayed at $1.25 an hour.

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