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.
The Living New Deal
When President Franklin D. Roosevelt took office in 1933, America was in the depths of the Great Depression. The stock market crash of 1929 led the implosion and the downturn continued for over three years as thousands of banks and businesses failed and millions of people lost their life savings, farms, and homes. At the nadir, one-quarter of the U.S. workforce was unemployed and national output had fallen by one-third.