Value of $100 in 1934, adjusted to 1975

What happened to prices between 1934 and 1975

Between 1934 and 1975, the Consumer Price Index went from 13.4 to 53.8. Cumulatively, prices increased 301.5%, which works out to an average of 3.45% per year. Put differently, a dollar in 1934 bought what $0.25 buys in 1975.

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: 1975

Consumer prices rose 9.1% in 1975, easing slightly from 1974’s 11.0% but still running far above anything the country had experienced before the decade began. The recession that started in November 1973, the deepest since the Great Depression, bottomed out that March, yet unemployment kept climbing through the year and touched 9%, a combination of high inflation and high joblessness that had no precedent in the postwar data. Vietnam ended that April 30, when North Vietnamese forces captured Saigon and the last Americans were evacuated by helicopter from the U.S. embassy roof. Fiscal strain hit closer to home too: New York City, facing bankruptcy after years of borrowing to paper over budget gaps, asked Washington for help that October. President Ford’s initial refusal produced the Daily News headline “Ford to City: Drop Dead,” though he ultimately signed a federal loan package that December. Amid the gloom, Bill Gates and Paul Allen founded Microsoft that April in Albuquerque, New Mexico, to sell a version of the BASIC programming language for the Altair 8800, one of the first personal computers sold to hobbyists. A median household earned $11,800 in 1975, a new home sold for a median $39,300, and first-class postage held at 10 cents, unchanged since 1974’s increase. Consumer prices stood 443.4% above their 1913 level, with the decade barely past its midpoint.

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