How Did The Panic Of 1873 Have Its Effects On The Reconstruction Period Of The United States
Maria Thao
Period 5
To what extent did the Panic of 1873 have its effects on the reconstruction period of the United States?
The Panic of 1873 also known as the “Great Depression” until the 1930s, lasted from 1873 to 1879. The Panic became a financial crisis that caused a significantly large depression affecting in not just the United States but also in various countries in Europe.
After the American Civil War, 35,000 miles of new railroad tracks were placed across the United States between the years of 1866 and 1873. The railroad industry had become the nation’s largest employer, excluding agriculture, the industry included large investments and high risks. James Ford Rhodes, a historian who lived during the 19th century said the following,
“Prosperity was written all over the face of things. Manufacturers were busy workmen in demand. Streets and shops were crowded and everywhere new buildings going up. Prices of commodities were in high, demand pretty good. Everybody seemed to be making money.”
In the fall of 1873, the nation was
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Jay Cooke and Co. became largely invested in railroad construction, such as the Northern Pacific Railroad and the Union Pacific line. The companies were supplied by federal land grants, including over 60 million acres that were signed over to Jay Cooke’s firm. The firm uses the land as a collateral to secure more loans and sell more stock. Jay Cooke’s firm closed their doors in the fall of 1873, declaring bankruptcy and unable to repay its debts. Following the fall of the firm, many banking firms and industries who’ve also invested had mirrored the decline of Jay Cooke and Co. About 24 percent of the United State’s railroads had declared bankruptcy and within two years, around 18,000 businesses had failed. The rate of unemployment had quickly risen to 14 percent by the year
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