Consumer prices barely moved in 1914, rising just 1.0% for the year, even as the country’s financial plumbing was rebuilt from the ground up. The Federal Reserve Banks, created by the Federal Reserve Act signed the previous December, opened their doors on November 16, giving the U.S. a central bank for the first time since the 1830s. Weeks earlier, the outbreak of war in Europe had spooked the New York Stock Exchange into closing for more than four months, the longest shutdown in its history, as officials worried European investors would dump American securities for gold. Domestically, the bigger story was labor: Henry Ford’s decision to pay factory workers $5 a day, announced in January, roughly doubled wages on his assembly lines and pushed other manufacturers to raise pay just to keep workers from leaving. A first-class stamp still cost 2 cents, a price that had held since 1885 and would keep holding for three more years, even as the war reshaping Europe began pulling the American economy toward the sustained wartime inflation of 1917.
Year in review
Inflation in 1914
The U.S. inflation rate in 1914 was 1.0% (CPI: 10). Convert 1914 dollars to today →
1.0% 1914 inflation rate
10.0% 1910s average
3.0% peak month (Aug)
0.0% lowest month (Apr)
What things cost in 1914
| First-class stamp | $0.02 |
|---|
What $100 from 1914 was worth later
| In 1920 | $200 |
|---|---|
| In 1930 | $167 |
| In 1940 | $140 |
| In 1950 | $241 |
| In 1960 | $296 |
| In 1970 | $388 |
| In 1980 | $824 |
| In 1990 | $1,307 |
| In 2000 | $1,722 |
| In 2010 | $2,181 |
| In 2020 | $2,588 |
| In 2026 | $3,317 |
Inflation in 1914, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 10 | 2.0% |
| February | 9.9 | 1.0% |
| March | 9.9 | 1.0% |
| April | 9.8 | 0.0% |
| May | 9.9 | 2.1% |
| June | 9.9 | 1.0% |
| July | 10 | 1.0% |
| August | 10.2 | 3.0% |
| September | 10.2 | 2.0% |
| October | 10.1 | 1.0% |
| November | 10.2 | 1.0% |
| December | 10.1 | 1.0% |
Economic events of 1914
- Ford doubles factory pay to $5 a day Henry Ford announced the $5 workday on January 5, 1914, roughly doubling what most of his factory workers earned. The move was meant to cut brutal turnover on the new moving assembly line, introduced the year before, and it set a wage benchmark other manufacturers had to answer.
- The stock exchange shuts down for over four months Fearing panic selling by European investors as World War I broke out abroad, the New York Stock Exchange closed on July 31, 1914. Limited, price-controlled trading resumed that December, but unrestricted trading did not return until April 1915, the longest shutdown in the exchange's history.
- The Federal Reserve Banks open for business The Federal Reserve Act had passed in December 1913, but the twelve regional Reserve Banks did not begin operating until November 16, 1914. It gave the United States its first central bank since Andrew Jackson let the Second Bank of the United States lapse in 1836.
Sources: USPS historical postage rates; U.S. Bureau of Labor Statistics, Consumer Price Index history.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.