The depression of 1893
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- The Great Depression and the Panic of 1893. In October 24, 1929, the day came to be known as ‘’Black Thursday’’ as stock prices plummeted. This extreme event deprived millions of Americans of their jobs, savings, homes, security, pride, and hope, while investors went bankrupt and hundreds of banks failed.
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Drawing in Frank Leslie's of panicked stockbrokers on May 9, 1893. The Panic of 1893 was a serious economic depression in the United States that began in 1893 and ended in 1897. It deeply affected every sector of the economy, and produced political upheaval that led to the political realignment of 1896 and the presidency of William McKinley.
- David O. Whitten, Auburn University
- Economic Trends Preceding The 1890s
- Onset and Causes of The Depression
- European Influences
- Response to The Depression
- Selected Bibliography
The Depression of 1893 was one of the worst in American history with the unemployment rate exceeding ten percent for half a decade. This article describes economic developments in the decades leading up to the depression; the performance of the economy during the 1890s; domestic and international causes of the depression; and political and social responses to the depression.The Depression of 1893 can be seen as a watershed event in American history. It was accompanied by violent strikes, the...
Between 1870 and 1890 the number of farms in the United States rose by nearly 80 percent, to 4.5 million, and increased by another 25 percent by the end of the century. Farm property value grew by 75 percent, to $16.5 billion, and by 1900 had increased by another 25 percent. The advancing checkerboard of tilled fields in the nation’s heartland represented a vast indebtedness. Nationwide about 29% of farmers were encumbered by mortgages. One contemporary observer estimated 2.3 million farm mor...
The depression, which was signaled by a financial panic in 1893, has been blamed on the deflation dating back to the Civil War, the gold standard and monetary policy, underconsumption (the economy was producing goods and services at a higher rate than society was consuming and the resulting inventory accumulation led firms to reduce employment and cut back production), a general economic unsoundness (a reference less to tangible economic difficulties and more to a feeling that the economy was...
European depression was a further source of weakness as 1893 began. Recession struck France in 1889, and business slackened in Germany and England the following year. Contemporaries dated the English downturn from a financial panic in November. Monetary stringency was a base cause of economic hard times. Because specie — gold and silver — was regarded as the only real money, and paper money was available in multiples of the specie supply, when people viewed the future with doubt they stockpil...
The financial crises of 1893 accelerated the recession that was evident early in the year into a major contraction that spread throughout the economy. Investment, commerce, prices, employment, and wages remained depressed for several years. Changing circumstances and expectations, and a persistent federal deficit, subjected the treasury gold reserve to intense pressure and generated sharp counterflows of gold. The treasury was driven four times between 1894 and 1896 to resort to bond issues t...
*I would like to thank Douglas Steeples, retired dean of the College of Liberal Arts and professor of history, emeritus, Mercer University. Much of this article has been taken from Democracy in Desperation: The Depression of 1893 by Douglas Steeples and David O. Whitten, which was declared an Exceptional Academic Title by Choice. Democracy in Desperation includes the most recent and extensive bibliography for the depression of 1893.Clanton, Gene. Populism: The Humane Preference in America, 18...
- Event and Its Context
- Key Players
A financial panic in May 1893 led the United States into the worst economic depression it had experienced up to that point in its history. Following the collapse of several Wall Street brokerage houses, over 600 banks and 16,000 businesses failed by the end of the year. National unemployment reached an estimated 20 percent in the first year of the crisis, and only a few cities managed to provide relief of any kind. The agricultural sector, already experiencing a slump, also felt the aftereffects of the panic. As thousands of farmers lost their land, the Populist Party gained momentum as a voice of reform and government intervention in the economy. The party reached a peak in 1896 when it endorsed the Democratic candidate for president, William Jennings Bryan, for office. Although he lost the election, Bryan's "Cross of Gold" speech in support of a free silvermonetary policy became the most electrifying moment in the campaign. Shortly after Bryan's defeat in the election of 1896, the...1890: U.S. Congress passes the Sherman Antitrust Act, which in the years that follow will be used to break up large monopolies.1891:Construction of Trans-Siberian Railway begins. Meanwhile, crop failures across Russia lead to widespread starvation.1895:German physicist Wilhelm Roentgen discovers X rays.1896:First modern Olympic Games held in Athens.
In Gilded Age America, there were few financial controls and little government oversight of the business sector. Although reformers had fought for the Interstate Commerce Act (1887) and the Sherman Antitrust Act (1890), both measures were quickly co-opted by businessmen to serve their own interests. Antitrust laws were rarely applied to business trusts; instead, corporations invoked them to break up labor unions. The apparent collusion of big business and the federal government also riled farmers who were convinced that the railroads were takingadvantage of them with high shipping rates and monopolistic practices. In response, Kansas farmers formed the first People's Party chapter in 1890. Two years later a St. Louis convention established a national People's (or Populist) Party to fight for a host of reforms. Chief among the Populists' demands were the unlimited coinage of silver to increase the money supply, direct elections of senators, a national income tax, and government owner...
Bryan, William Jennings (1860-1925): Trained as a lawyer, Bryan entered politics in 1890 when he won a seat representing Kansas in the U.S. House of Representatives. He won the Democratic nomination for president in 1896 after giving the "Cross of Gold" speech in support of a free silver monetary policy. His 1896 bid was unsuccessful, as were his subsequent runs in 1900 and 1908. In 1925 Bryan represented the creationist side in the Scopes Monkey Trial in Tennessee. Cleveland, Grover(1837-1908): Cleveland worked as a lawyer in Buffalo, New York, and started his political career by winning the sheriff's office in 1870. He then served as Buffalo's mayor and New York's governor in subsequent years. For his stand against political corruption, Cleveland gained a reputation as a reformer. Nominated for the presidency by the Democrats in 1884, he won a close election over James G. Blaine. He lost against Benjamin Harrison in the presidential race in 1888 but returned to office in 1892, sho...
The Depression of 1893-1898. It is clear that the U.S. went through a severe economic depression during the period of 1893 to 1898, but the statistical apparatus did not exist at the time to precisely document it. Much after the fact the economist Simon Kuznets estimated the national income accounts for the period.
In the spring of 1893, a precipitous drop in United States gold reserves triggered a national depression. Because Seattle was still rebuilding from the disastrous fire of 1889 and depended heavily on Eastern capital, the ensuing Panic of '93 hit the city hard with corporate bankruptcies, mass layoffs, bank failures, and white-collar crime.
The Great Depression and the Panic of 1893 were both characterized by the unusual high rate of unemployment with companies that were very busy holding back on production or standing idle. In both events, most banks and companies completely went out of business with Americans losing homes or savings, and the general economy was in a state of low activity (Sherman, 2006).
The Depression of 1893 In its impact on industry and employment, the depression of the 1890s was on a par with the Great Depression of the 1930s. In some places it began before 1890, in a deep agricultural crisis that hit Southern cotton-growing regions and the Great Plains in the late 1880s.
Panic of 1893 Like most major financial downturns, the depression of the 1890s was preceded by a series of shocks that undermined public confidence and weakened the economy. The Panic of 1893 provided a spectacular financial crisis the contributed to the economic recession.