David I. Macleod has provided a comprehensive overview of an often-overlooked period of U.S. economic history – the decade of the 1910s. This decade saw multiple inflationary episodes, beyond the well-known case of World War I. The book’s prologue covers the deflationary period of the late nineteenth century when a dearth of gold discoveries tightened monetary conditions for all gold-standard countries. The United States, under the William McKinley administration, fully committed itself to the gold standard after defeating free-silver political forces in the elections of 1896 and 1900. Ironically, this development laid the path to inflation, as the gold shortage dissipated in the wake of major new gold discoveries around the turn of the century. The winners and losers from the prior deflation found their roles reversed in the 1910s. The period between the Panic of 1907 and the onset of World War I is less well known than the war itself, yet it saw rapidly rising prices and a contentious political environment in the prelude to war.

American authors are often too parochial in the discussion of monetary affairs under the gold standard, and this book could have benefited from a longer discussion of international factors driving inflation in this period. Early chapters discuss gold discoveries in the early twentieth century, but gold inflows from the trade surplus of the late 1910s also drove inflation. Central bankers could have sterilized these inflows by selling Treasury debt, but they did not – both because open market operations were not yet a part of the Federal Reserve’s familiar toolkit and because the culture of central banking recommended against reacting to trade imbalances. Indeed, given the sharp increase in price levels within the national economies of the main belligerents in World War I, the United States likely needed to allow some inflation. If it had not, the position of the major European economies would have been untenable.Footnote ¹

I would have appreciated more structure to the book. What did it all mean in the end? There are discussions of lots of divides – between the rural areas benefiting from high farm prices, for example, and the urban dwellers seeing their grocery bills skyrocketing. After seeing their political activism against deflation successfully repelled by their political adversaries in the late nineteenth century, farmers then faced calls for a multitude of price controls, particularly on agricultural products and food, proposed when the metaphorical shoe was on the other foot. Manufacturing interests generally were harmed by higher prices, though they also were able to hike their prices, especially in the wartime boom. The middlemen transcended these dialectics, although ultimately they did not seem to have been the main villain, despite being commonly portrayed that way in popular discourse. Wage earners seemed to suffer, though the evidence was mixed. There was a struggle by different classes to keep the prices that determined their incomes (including wages) rising faster than the prices they paid. I would have liked to hear more from the author as to why some groups were more successful than others at protecting their relative position. Incumbent political parties paid the price for the high cost of living at the ballot box, that much is clear. Did progressives and conservative forces line up on different sides consistently? I cannot tell.

There is also a discussion of different economic theories of inflation, which again left me wanting more. The equation of exchange is discussed (223–224), but then not much more is made of it and the narrative continues to other topics. Which factors do the author think were more important in each period? Excess demand? Insufficient supply? Gold inflows? Excessive credit growth spurred by the Fed’s policies? Inflation is a tough nut to crack, and all of these factors played a role, but I would have liked to have seen a deeper dive into which mattered more and which mattered less. In the end, while the reader will not be able to see the man behind the curtain as far as inflation goes, it is still an engaging narrative and a comprehensive study of inflation in this decade. Inflation Decade serves as an excellent reference on the topic and should be in the library of any academic interested in this period or American inflation more broadly.