How Much Was 25 Cents Worth in 1920?

The value of money changes significantly over time due to economic factors like inflation and deflation. Understanding what a specific amount of money, such as 25 cents, could purchase in the past offers a tangible perspective on these shifts in purchasing power. Examining the year 1920 provides an interesting case study, as it was a period directly following a major global conflict and on the cusp of significant economic transformation. This exploration helps illustrate how the real value of currency is not static but is rather a dynamic reflection of prevailing economic conditions and the prices of goods and services.

Purchasing Power of a Quarter in 1920

In 1920, 25 cents held considerably more purchasing power than it does today, allowing consumers to acquire various common goods and services. A quarter could buy a substantial amount of groceries. For example, three pounds of macaroni were available for 25 cents. A half-gallon of milk cost around 33 cents; a pound of round steak was about 40 cents.

A dozen eggs cost about 47 cents. Other grocery items included a pound of coffee for about 50 cents, and a box of crackers for 38 cents. A quarter could buy smaller, essential items or contribute towards larger purchases.

Beyond food, 25 cents offered access to entertainment and personal services. A movie ticket typically cost around 15 cents, though some special features might be 25 cents. A quarter was sufficient for admission to a film, a popular pastime in that era. A professional manicure was also priced at 25 cents.

Transportation costs were relatively low. Gasoline averaged about 21 cents per gallon, allowing a quarter to buy more than a gallon of fuel. Some sources indicated prices as low as 20 cents per gallon. Streetcar fares were often just 5 or 10 cents, meaning 25 cents could cover multiple rides or a round trip. These examples highlight that a quarter in 1920 represented a meaningful sum capable of covering basic needs and small indulgences.

Determining Today’s Equivalent Value

To determine the equivalent value of 25 cents from 1920 in today’s currency, the Consumer Price Index (CPI) is the most widely accepted measure of inflation. The CPI tracks the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is calculated by the U.S. Bureau of Labor Statistics (BLS) from price quotes collected from various retail establishments and service providers. These prices are weighted based on their importance in typical household spending, creating an index that reflects overall price level changes.

The CPI for 1920 was approximately 20.00. As of July 2025, the CPI for all urban consumers in the U.S. City Average was approximately 323.05. To calculate the equivalent value, one can use the formula: (CPI in Current Year / CPI in Past Year) \ Past Amount. Applying this, the calculation would be (323.05 / 20.00) \ $0.25.

This calculation shows that 25 cents in 1920 would have an equivalent purchasing power of approximately $4.04 in July 2025. This figure demonstrates the significant erosion of money’s value over a century due to cumulative inflation. While the CPI is the standard for measuring inflation, used for economic indicators and cost of living adjustments, it primarily reflects changes in prices for a fixed basket of goods and services. Other factors, such as changes in average wages, technological advancements, or new goods, can influence perceived value but are not directly captured by the CPI.

Economic Conditions of the 1920s

The economic landscape in the United States in 1920 was characterized by post-World War I adjustments and the onset of a sharp, brief recession. Following the end of World War I in November 1918, the U.S. economy transitioned from wartime production to peacetime activities. This shift involved retooling factories and absorbing millions of returning soldiers into the civilian workforce, creating a surge in labor supply and economic upheaval.

The year 1920 marked the beginning of the “Recession of 1920-1921,” a significant deflationary economic contraction. This downturn, lasting from January 1920 to July 1921, saw a rapid decline in prices. Wholesale prices dropped by nearly 46% between 1920 and 1921, and consumer prices fell by 11.3%. This sharp deflation resulted partly from the Federal Reserve’s contractionary monetary policy, which involved raising interest rates to combat high inflation that had persisted since the war.

The Federal Reserve had maintained low interest rates during the war to finance military operations, leading to unchecked inflation that peaked around 1920. In response, the Federal Reserve Bank of New York raised its discount rate, reaching 7% by June 1920, making borrowing more expensive and contributing to the economic contraction. This period also saw a decline in agricultural prices as European production recovered, severely impacting farmers. Despite this challenging start, the rapid recovery from the 1920-1921 recession laid the groundwork for the subsequent economic prosperity known as the “Roaring Twenties,” characterized by impressive economic growth and stability in wholesale prices.