With gasoline at 17¢ a gallon, and new Ford sedans available for a mere $450, Nina Wilcox Putnam told Post readers there was never a better time to drive to California.

The best bargain on the American market today is a trip across the country, which can now be had for practically the same price as staying at home.

Automobiles in 1931, she reports in her Post article, “What’ll It Cost Me To Drive To the Coast?” have greatly improved over the past ten years. When she first drove from New York to California in 1921—

I carried spare parts enough to make up a second car, including new magneto points, and used every darned one of them before the first California real ­estate salesman was sighted.

The roads are better, too. Back in 1921, she says, you wouldn’t think of driving across the western states without an axe “for chopping brush to get you out of gumbo roads during Missouri rainstorms” and an extra set of suspension springs “because you were practically certain to break a spring on what were playfully nick­named ‘roads’ in Arizona.”

But even in 1931, Porter says, you had better bring  better along a length of strong tow-rope, and a waterbag to hang on the front of the car so you won’t run out of water in the desert.

“And ah, yes, I almost forgot a water­proof tarpaulin. No matter how good the trunk on the back of your car, take it from me you’d better cover it with a tarpaulin. It’s a big square of treated canvas, and it really does prevent dust and moisture from working into the luggage and ruining that one good suit or dress which you’re taking along in case you feel like changing some night at a stylish hotel.

The modern driver of 1931 now has a choice of cross-country routes. Most travelers take the National Road, which runs from Atlantic City to San Francisco, but she recommends a new route between Washington, D.C., and Los Angeles.

If you are sick of cities and want a vacation from them; if you are tired of passing trucks and of being held up by traffic stop lights, let me submit the new Midland Trail. I’ll guarantee you’ll hardly meet a truck, see an advertising sign or lose a moment through traffic sig­nals.

But let’s return to the question in Putnam’s title: just how much does it cost to drive from New York in California in 1931. Before she started, a New York travel agent had told her—

“With a small car it will cost you five cents a mile, including good but not fashion­able hotels, food, gas and oil, and ordi­nary running repairs. We figure it will take you nine days.”

When she reached her destination outside Los Angeles, Putnam found that she had actually spent a little less than the predicted $165.

Before there were motels, travellers stopped overnight at rustic motor camps, whose comfort level can be guessed by the picture above.

That’s a sizeable figure for a year when unemployment had risen to 16% and was continuing to climb. Yet it’s fairly inexpensive for nine days of sightseeing, hotels, and meals.Yet you could take the same trip for much less today.

Adjusted for 80 years of inflation, $1.00 in 1931 has the purchasing power of $14.50 today. So Putnam’s trip cost her the equivalent of $2,392 in 2011 dollars.

Today, the drive from New York to Los Angeles is 500 miles shorter. Using the gas prices of this last week, AAA’s fuelcostcalculator.aaa.com, determines that a new, inexpensive car (comparable to what Putnam drove) would consume $440 in gas. Furthermore, you wouldn’t need nine days to cover that distance. While I’ve known people who drove that distance in a heroic, three-day marathon, I’ll allow a modern driver six days (450 miles/day) and a daily allowance of $80 for hotels and $50 for food.

The total cost would be $1,220. Divide that number by 14.50 to reverse inflation, and the price in 1931 dollars, would be $84.

Even with the price of gasoline so high today, our per-mile cost has dropped from 5¢ to 3¢ in 80 years. This doesn’t even factor in the three days saved by driving modern highways in more dependable cars—and three days is just as valuable in 2011 as in 1931.

The Cross-Country Drive: Cheap In 1931, Cheaper In 2011 The Saturday Evening Post

Susan Ellis, 78, a retired U.S. Department of State worker residing in Washington, D.C., lives partly on a pension and partly from her savings. Those savings are half in stocks and half in bonds, with the lion’s share of those bonds being Treasuries. While Ellis’ stocks sagged in the recent recession, her Treasuries more than held their own. “Having part of my portfolio in U.S. government bonds provides me with great comfort,” says Ellis. “It helps me to sleep at night.”

Treasuries give many investors similar peace of mind. “When there is fear and turmoil in the markets, people seek safety; Treasuries fulfill that role admirably—and they always have,” says Christopher Philips, a senior analyst with the Investment Strategy Group at Vanguard Investments. Indeed, during this past recession, Treasury bonds were the only place to seek safety, adds Philips. “U.S. stocks were down, so were foreign stocks, real estate, and corporate bonds … every kind of major investment lost value, except for Treasuries.”

According to data from Morningstar, while U.S. stocks fell in value 46 percent between October 2007 and March 2009, long-term Treasuries rose by 25 percent. In the recession prior, between March 2000 and September 2002, U.S. stocks fell by 38 percent, while long-term Treasuries soared 40 percent. This zigzagging pattern of returns between stocks and government bonds has existed for decades, which is why smart investors, wanting to dampen volatility in their portfolios, own Treasuries.

The “catch” with Treasuries—in fact, all bonds, but especially Treasuries—is that they produce modest returns over time. Since 1926, per Morningstar data, stocks have returned 9.8 percent a year, while long-term Treasuries have generated 5.4 percent. If you mixed-and-matched, combining 60 percent stocks with 40 percent Treasuries, the average yearly gain of your portfolio would have been 8.6 percent.

To make Treasuries a part of a balanced portfolio, consider this:

• The first step in constructing a portfolio is to determine what portion you want in stocks and what portion bonds. The higher the return you desire, and the more volatility you can stomach, the more you want in stocks. Important note: Bonds in the past 20 years have done exceptionally well (see chart on page TK), but the relative return on bonds to stocks may revert to long-term norms, says Philips. “Treasuries have done very well in the past 20 years because bonds tend to shine when interest rates fall … but when rates rise, bonds tend to not fare as well.”
• Whatever your allocation to bonds, consider putting roughly 40 percent of that into conventional Treasury bonds, recommends Philips. The rest could be in corporate bonds (which tend to return slightly more than Treasuries), municipal (tax-free) bonds, foreign bonds, or inflation-protected Treasury bonds (discussed below).
• Treasuries, like all bonds, may be purchased with various maturities: short-term, intermediate-term, or long-term. In general, the longer the maturity, the higher the return, but the greater the price swings. Philips recommends that you shoot for the middle—“intermediate-term” bonds that mature in about seven years.
• You can buy individual U.S. Treasuries, free of trading costs, by going to Treasurydirect.gov. Or, you can buy a fund of Treasuries, which allows for instant diversification of maturities and ease of management. Choose a fund with low costs. Options include the SPDR Barclays Capital Intermediate-Term Treasury fund (ticker symbol ITE) or the Vanguard Intermediate-Term Treasury fund (VFITX).
• Add TIPS. Treasury Inflation-Protected Securities (TIPS) are a different breed of Treasury that offers little interest, but is adjusted for inflation twice a year. Consider allocating a part of your bond portfolio above and beyond conventional Treasuries to TIPS, suggests Philips. Like conventional bonds, TIPS can be purchased individually through Treasurydirect.gov or as a fund. Options include the Vanguard Inflation-Protected Securities fund (VIPSX) or the iShares Barclays TIPS fund (TIP).

Whichever way you decide to go to buy Treasuries, once you do, your sleep, like Ellis’, will likely improve, too.

Investing in America The Saturday Evening Post

We can count the money spent and the number of Americans wounded and dead, but the effect on society is harder to calculate. Business declines. Resources grow scarce. Opportunity shrinks. The money for non-essential industries dries up. And people just learn to get by with less. They lower their expectations. Sometimes, they never raise them again.

Americans endured such things in 1944, knowing how little they sacrificed compared to the GIs in combat. So it is rare to find an article that talks openly about the cost of living in wartime. The author of “Ouch! That White Collar Pinches” [PDF download] gives a glimpse into family life in wartime, as it was lived, not recalled through clouds of nostalgia. Owenita Sanderlin accepts that wartime austerity is inevitable. But she is dismayed that her husband’s education and profession are so poorly rewarded.

In our garage, next to a 1935 model without any rubber, is a row of wooden chairs.

We have tried glue and nails and everything else, but nothing will hold them together any more. George sits, and they split. Not that George is so hefty. He may be more than six feet tall, but he weighs only a hundred and fifty pounds. It’s just that the chairs didn’t cost very much, in the first place, and they have served their term. So now we sit around our maple table on an odd assortment of seats — George on a solid piano stool; Frea, our five-year-old princess, and I on the wobbly, last two of the chairs; Mary, fat, funny and three, on a tall kitchen stool; and David, the baby, in the remains of the high chair.

We eat the minimum essentials with just enough silverware to go around, washing the spoons between dinner and dessert — when there is any dessert. Of course, if we have company — which I have been avoiding lately — I get out my wedding-present silver: six spoons, four knives and four forks, six salad forks and a sugar spoon. We have been borrowing the chairs, ever since the time a college president folded up in one of those little maple numbers of ours. I suppose when the last two chairs are gone, we shall eat buffet style.

Surely, you are thinking, it isn’t so bad as all that. You can still buy chairs. Well, maybe you can. We can’t, because we haven’t any money.

Senator Thomas of Utah, a member of the Senate committee which recently investigated the status of white-collar workers… says there are 20,000,000 of us, living on salaries that were low before the cost of living rose 25 per cent or more. He says we are “mighty good Americans” and just as essential as factory workers. We keep the schools open, for one thing. Well, it is comforting to know that somebody appreciates us.

This makes George feel that he is of some consequence—a good teacher, with all the training a man can get, plus experience. His salary is $2000 . . .

The average income in America that year was only slightly higher: $2,400. But, as you’ll see, that $400 would make a big difference in Mrs. Sanderlin’s 1944 budget.

The Sanderlins, one of the thousands of white-collar families squeezed by rising prices. Their budget will not permit such "luxuries" as dining-room chairs.

We live in a small university town in Northern Maine—a town where living is cheap. Milk is only thirteen and a half cents a quart, but, on the other hand, the long winter burns up a great deal of fuel. Then, too, we have three children, but some people have even more. Although we get along, the thing that stumps me is this: How about the people who don’t live in a town like ours?

To get down to details, suppose that your budget, like ours, allowed your family less than $2.50 per person per week for food ($600 per year). Or twenty dollars a year per person for clothes.

Is your rent less than forty dollars? We are buying our house, and the payments are only $38.47 a month, including taxes and insurance. We spend $128 a year for water, electricity and a party phone.

Do you carry much insurance? We can afford only one policy on my husband’s life, which would pay me and the three children $1000. [Health] insurance premiums, in our budget, come to forty-one dollars a year. Perhaps you don’t have large fuel bills. Ours was $135 last winter, for the furnace and hot water in the morning.

How much do you contribute to the Red Cross, the War Chest, your church? And do you like to say no? We can give only thirty-two dollars a year. If we had more money, that is where most of it would go, because we know how many millions of people are far worse off than we are.

Did you ever put up with a toothache because you couldn’t afford the dentist? Or wonder what you would do if your baby were really sick enough so that you had to call the doctor? I have. All I can manage under the item Medical Care is twelve dollars a year for each of us, and it will hardly be enough, even if we are as healthy as usual. Last year, it all went for a baby.

Another difficulty of ours is that my father was a doctor, and so it would never occur to me not to pay a doctor’s bill. Ask any doctor [which patients] are the surest pay. Not the rich, not the poor, but men in white collars.

You may very well have to pay more taxes than we do. Only $3.80 a month is withheld from our check, some which will be returned, and we are glad to pay some Federal taxes; we wouldn’t feel very American if we didn’t. Then we have an extra eleven dollars in local taxes.

Do you spend much in going places-either by bus, train or automobile? We have no items at all in our budget for Transportation. We put our car away and sold the tires. George walks to college, and you should see David’s chubby face entirely surrounded by groceries piled in the baby carriage. We wheel over to the village once a week and stock up.

I suppose you contribute 10 per cent in War Bonds? We feel like heels because we can’t. We have no money to save. We have no savings because the salary was always low, and the first few years of marriage are the hardest. Furniture, babies—you know. But I do put down seventy-five dollars a year for bonds. And we keep them.

How much money do you blow in annually for birthday presents, wedding gifts, cards, Christmas, little toys for the children? We never have been able to give anyone a decent present, although we have received many beautiful things ourselves. We are limited to sixty dollars a year for gifts.

How often do you go to the movies or stop at the drugstore for a soda? Are you taking any kind of vacation this year? These things appear in our budget under the heading of Recreation, and I allow one dollar a month. This has to include the fifty cents it costs for a girl to take care of the children. Cigarettes? Luckily, we don’t smoke.

Do you ever pause beside a newsstand? I’d rather have a magazine than a new hat, but I never buy one. We take one magazine to keep us posted, and listen to the news on the radio or read the paper in the college library. And of course we can borrow from our good neighbors. But if we ever do get rich, George is going to buy – soft music, please – a book.

These miscellaneous items — which must include medicine, postage, stationery, lollipops and such- like — are supposed to come to no more than $6.30 a month in our budget.

Now, if you will add up all the expenses listed above, you should get $1956.84. Deducting this from George’s salary leaves $43.16 to cover the unforeseen. You’re right. It never does.

But we are not in debt— yet. We haven’t lost our home—yet. Right now, George is out in the garden assassinating potato bugs, which helps explain how we live on our small food allowance. And he is looking up at the sky to straighten out the crick in his back, certain the sky over our small white house is bluer than anywhere in the world. He thinks he has pretty nice children too. I agree. Of course, it was rather unreasonable of us to have so many. And, obviously, we can’t have any more.

But we feel that we are getting along fine. We compare ourselves with the privates in the foxholes and the pilots in the sky and the many war workers who are not lining their pockets with gold. Even compared with the war profiteers, we are lucky. The biggest item in our budget costs nothing at all. It’s happiness.

But I wonder about the rest of the 20,000,000 white-collar workers — most of them without gardens — with higher city rents, with transportation expenses, with more insurance, larger families, lower salaries, poorer health and old debts. And what do they do for fun, when they can’t play tennis for free and plant flowers and vegetables in their own back yards? It must be dreadful to stay in a sweltering city all summer long, without a spare cent for weekend vacations, year after year of this war. How they must worry about the future. And I can guess which question worries them most, because it’s my worst nightmare, too: What if prices go up even higher?

Read “Ouch! That White Collar Pinches”, by Owenita Sanderlin, July 22, 1944 [PDF download]

Family Life in Wartime The Saturday Evening Post