Value of $100 in 1934, adjusted to 1944

What happened to prices between 1934 and 1944

Between 1934 and 1944, the Consumer Price Index went from 13.4 to 17.6. Cumulatively, prices increased 31.3%, which works out to an average of 2.76% per year. Put differently, a dollar in 1934 bought what $0.76 buys in 1944.

Consumer prices rose 3.1% in 1934, the first annual increase since 1926; every year from 1927 through 1933 had been flat or falling, so the turn marked a real break after eight years without a single gain. Currency policy did some of the work. The Gold Reserve Act, signed January 30, formally devalued the dollar by raising the official price of gold from $20.67 to $35 an ounce, part of the administration’s deliberate effort to reflate prices after four straight years of deflation. Financial regulation tightened at the same time: the Securities Exchange Act of June 6 created the Securities and Exchange Commission to police stock exchanges and enforce disclosure rules, a direct response to the speculation blamed for the 1929 crash. The recovery was fragile and unevenly felt, especially on the Great Plains, where drought had turned overplowed farmland to dust. Over May 9-11, high winds lifted an estimated 350 million tons of topsoil into the air, darkening skies as far away as Washington and New York and giving city readers who had never seen a wheat field a first glimpse of the disaster building in Kansas, Oklahoma, and Texas. Consumer prices stood 35.4% above their 1913 level, still well below the 1929 peak but rising for the first time since the Depression began. First-class postage held at 3 cents.

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The destination year: 1944

Consumer prices rose just 1.7% in 1944, down from 1943’s 6.1% and the slowest increase of the war years, as price and wage controls held the cost of living nearly flat even as the conflict reached its most expensive phase. The war itself turned decisively that June, when more than 150,000 Allied troops landed on the beaches of Normandy, France, opening the long-planned second front against Nazi Germany. Congress used the same month to plan for the war’s end, passing the GI Bill on June 22 to give returning veterans money for college or vocational training, low-cost home and business loans, and unemployment benefits, a package that would reshape American housing and higher education for a generation. The following month, delegates from 44 Allied nations gathered at Bretton Woods, New Hampshire, and agreed to peg their currencies to the U.S. dollar, itself pegged to gold, creating the International Monetary Fund and the World Bank to manage the new system. Consumer prices stood 77.8% above their 1913 level, a cumulative wartime rise held down by controls that would start unwinding the following year. First-class postage held at 3 cents, and the minimum wage stayed at 30 cents an hour.

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