The Panic of 1893
- precipitated the most severe depression the nation had yet experienced
- it began in March 1893, when the Philadelphia and Reading Railroad, unable to meet payments on loans it had secured form British banks declared bankruptcy
- Two months later, the national Cordage Company failed as well and together the two companies failures triggered a collapse of the stock market
- Since many of the major New York banks were heavy investors int eh market, a wave of bank failures soon began
- This caused a contraction of credit, which mean that at many of the aggressive businesses that had recently begun operations soon went bankrupt because they were unable to secure the loans they needed
- Were other longer-range causes as well
- Depressed prices in agriculture since 1887, had weakened the purchasing power of farmers, the larges group in the population
- Depression conditions that had begun earlier in Europe were resulting in a loss of American markets abroad and a withdrawal by foreign investors of gold invested in the United States
- Railroad sand other major industries had expanded too rapidly well beyond market demand,
- The depression reflected the degree to which the American economy was now interconnected, the degree to which failures in one area affected all other ares
- The depression showed how dependent the economy was on the heath of the railroads which remained the nations' most powerful corporate and financial institutions
- When the railroads suffered, as the did beginning in 1893, every suffered
- Within six months of the panic. up to one million people lost their jobs, the highest in America at that point
- Depression caused social unrest especially among the enormous numbers of unemployed workers
- Jacob S. Coxey, when it became clear that his proposals were making no progress n congress, put together a march of the employed to the capital to present their demands to the government known as "Coxey's Army". armed police barred them from the Capital and arrested Coxey