Run on the Fourth National Bank, No. 20 Nassau Street (New York City, 1873)

The Panic of 1873 was a severe nationwide economic depression in the United States that lasted until 1877. It was precipitated by the bankruptcy of the Philadelphia banking firm Jay Cooke and Company on September 18, 1873 along with the meltdown of the stock market in Vienna, Austria on May 9, 1873. It was one of a series of economic crises in the 19th and early 20th centuries. Image File history File links Download high resolution version (494x640, 64 KB) Summary LOC info: TITLE: The Panic - Run on the Fourth National Bank, No. ... Image File history File links Download high resolution version (494x640, 64 KB) Summary LOC info: TITLE: The Panic - Run on the Fourth National Bank, No. ... Theatrical promotional poster depicting a bank run A bank run is a type of financial crisis. ... Jay Cooke (August 10, 1821-February 8, 1905), American financier, was born at Sandusky, Ohio, the son of Eleutheros Cooke (1787-1864), a pioneer Ohio lawyer, and Whig member of Congress from that state in 1831-1833. ... September 18 is the 261st day of the year (262nd in leap years). ... 1873 (MDCCCLXXIII) was a common year starting on Wednesday (see link for calendar). ... This article is about the city and federal state in Austria. ... May 9 is the 129th day of the year in the Gregorian calendar (130th in leap years). ...

Causes

At the end of the Civil War, there was a boom in railroad construction, with 35,000 miles (56,000 km) of new track laid across the country between 1866 and 1873. The railroad industry, at the time the nation's largest employer outside of agriculture, involved large amounts of money and risk. A large infusion of cash from speculators caused abnormal growth in the industry. Cooke's firm, like many others, was invested heavily in the railroads. This article is becoming very long. ...

President Ulysses S. Grant's monetary policy of contracting the money supply made matters worse. While business was expanding, the money they needed to finance it was becoming more scarce. Ulysses S. Grant[2] (born Hiram Ulysses Grant, April 27, 1822 – July 23, 1885) was an American general and the 18th President of the United States (1869–1877). ...

Cooke and other entrepreneurs had planned to build a second transcontinental railroad, called the Northern Pacific Railway. Cooke's firm provided the financing. But on September 18, the firm realized it had become overextended and declared bankruptcy. The Northern Pacific Railway (AAR reporting marks NP) was a railway that operated in the north-central region of the United States. ... September 18 is the 261st day of the year (262nd in leap years). ...

Effects

The firm's bankruptcy created a domino effect, causing major upset to the economy of the United States. The New York Stock Exchange closed for 10 days. Of the country's 364 railroads, 89 went bankrupt. A total of 18,000 businesses failed between 1873 and 1875. Unemployment reached 14% by 1876, during a time which became known as the Long Depression. The New York Stock Exchange (NYSE), nicknamed the Big Board, is a New York City-based stock exchange. ... 1873 (MDCCCLXXIII) was a common year starting on Wednesday (see link for calendar). ... 1875 (MDCCCLXXV) was a common year starting on Friday (see link for calendar). ... This article or section does not cite any references or sources. ... 1876 (MDCCCLXXVI) was a leap year starting on Saturday. ... The Long Depression (1873 – 1896) affected much of the world from the early 1870s until the mid-1890s and was contemporary with the Second Industrial Revolution. ...

By 1877, wage cuts and poor working conditions caused workers to strike, preventing the trains from moving. President Ulysses S. Grant sent in federal troops in an attempt to stop the strikes. Fights between strikers and troops killed more than 100 and left many more injured. The tension between workers and the leaders of banking and manufacturing lingered on well after the depression lifted in the spring of 1879, the end of the crisis coinciding with the beginning of the great wave of immigration into the United States which lasted until the early 1920s. 1877 (MDCCCLXXVII) was a common year starting on Monday (see link for calendar). ... Ulysses S. Grant[2] (born Hiram Ulysses Grant, April 27, 1822 – July 23, 1885) was an American general and the 18th President of the United States (1869–1877). ... 1879 (MDCCCLXXIX) was a common year starting on Wednesday (see link for calendar). ... The 1920s is a decade that is sometimes referred to as the Jazz Age or the Roaring Twenties, usually applied to America. ...

The Panic of 1797 was a depression of the commerce markets that began in the Bank of England in 1797 and had developing disflationary repurcussions in the financial, commercial, and real estate markets of the coastal United States and the Caribbean through the turn of the century. ... The Panic of 1819 was the first major financial crisis in the United States. ... The Panic of 1825 was a stock market crash that started in the Bank of England arising in part out of speculation investments in Latin America including in the fabled imaginary country of Poyais. ... 1840 Whig campaign poster blames Van Buren for hard times The Panic of 1837 was an economic depression, one of the most severe financial crises in the history of the United States. ... The Panic of 1847 was started as a collapse of Brittish financial markets associated with the end of the 1840s railroad boom. ... The Panic of 1857 was a sudden downturn in the economy of the United States. ... The Panic of 1866 was an international financial downturn that accompanied the failure of Overend, Gurney and Company in London, and the corso forzoso abandonment of the silver standard in Italy. ... The Panic of 1884 was an acute financial crisis associated with a stock market crash caused by speculation. ... The Panic of 1890 was an acute depression that was less serious than other panics of the era precipitated by the near insolvency of the Baring Brothers bank in London due mainly to poor investements in Argentina. ... The Panic of 1893 was a serious decline in the economy of the United States that began in 1893 and was precipitated in part by a run on the gold supply. ... The Panic of 1896 was an acute depression that was less serious than other panics of the era precipitated by a drop in silver reserves and market concerns on the effects it would have on the gold standard. ... The Panic of 1901 was a stock market crash on the New York Stock Exchange caused in part by struggles between E. H. Harriman, Jacob Schiff, and J. P. Morgan/James J. Hill for the financial control of the Northern Pacific Railroad. ... The Panic of 1907 was a financial crisis in the United States. ... The Panic of 1910-1911 was a slight economic depression that followed the enforcement of the Sherman Anti-Trust Act. ...

See also

• Long Depression
• Great Depression

The Long Depression (1873 – 1896) affected much of the world from the early 1870s until the mid-1890s and was contemporary with the Second Industrial Revolution. ... The Great Depression was a time of economic down turn, which started after the stock market crash on October 29, 1929, known as Black Tuesday. ...

References

• Rendigs Fels, "American Business Cycles, 1865-79", The American Economic Review Vol. 41, No. 3 (Jun., 1951), pp. 325-349 at JSTOR
• Edward Chase Kirkland. Industry comes of age: Business, Labor, and Public Policy 1860-1897 (1967)
• W.M. Persons, P.M. Tuttle, and E. Frickey, "Business and Financial Conditions Following the Civil War in the United States," Review of Economic Statistics, vol 2 supp 2 (July 1920), the most detailed account