The Federal Reserve's $1 billion open-market operation in 1932 during the Great Depression was a successful precedent for recent Quantitative Easing programs. The program involved buying medium- and long-term securities over 4 months, which significantly lowered Treasury yields. By analyzing the effects of these purchases on the economy, it was found that financial market segmentation played a role in boosting output growth. If the Federal Reserve had continued these operations and used a similar strategy as in QE1, the Great Contraction could have been eased earlier. This historical analysis suggests that the actions taken in 2008 were based on a good predecessor.