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.
Herbert Hoover
Hoover pursued many policies in an attempt to pull the country out of depression, while attempting to restrain the federal government from becoming directly involved in commercial affairs. In the days following Black Tuesday, Hoover gathered business and labor leaders, asking them to avoid wage cuts and work stoppages while the country faced what he believed would be a short recession similar to the Depression of 1920–21. Some economists, such as Lee Ohanian, point to the resulting wage rigidity as a key cause of the severity of the Great Depression.