Deflation
Deflation occurred periodically in the U.S. during the 19th century (the most important exception was during the Civil War). This deflation was at times caused by technological progress that created significant economic growth, but at other times it was triggered by financial crises — notably the Panic of 1837 which caused deflation through 1844, and the Panic of 1873 which triggered the Long Depression that lasted until 1879. These deflationary periods preceded the establishment of the U.S. Federal Reserve System and its active management of monetary matters. Episodes of deflation have been rare and brief since the Federal Reserve was created (a notable exception being the Great Depression) while U.S. economic progress has been unprecedented.
History of Minnesota
The Great Depression had several effects on Minnesota, with layoffs on the Iron Range and a drought in the Great Plains from 1931 through 1936. While the Depression had several causes, one most relevant to Minnesota was that United States businesses in the 1920s had improved their efficiency through standardizing production methods and eliminating waste. Business owners were reaping the benefits of this increase in productivity, but they were not sharing it with their employees because of the weakness of organized labor, nor were they sharing it with the public in the form of lowered prices. Instead, the windfall went to stockholders. The eventual result was that consumers could no longer afford the goods that factories were producing.