USA HISTORY

Detailed explanation-1: -was a major bank invested in the post-war railroad construction. They accumulated millions of dollars by selling bonds to finance the construction. They had been working on the second transcontinental railroad of the Northern Pacific Railway when the company realized that they had overestimated their finances.

Detailed explanation-2: -Banks and other industries were putting their money in railroads. So when the banking firm of Jay Cooke and Company, a firm heavily invested in railroad construction, closed its doors on September 18, 1873, a major economic panic swept the nation.

Detailed explanation-3: -Jay Cooke & Company fails In September 1873, Jay Cooke & Company, a major component of the country’s banking establishment, found itself unable to market several million dollars in Northern Pacific Railway bonds. Jay Cooke’s firm, like many others, had invested heavily in the railroads.

Detailed explanation-4: -The Panic of 1873 triggered the first ‘Great Depression’ in the United States and abroad. Lasting from September 1873 until 1878/9, the economic downturn then became known as the Long Depression after the stock market crash of 1929.

Detailed explanation-5: -A series of bank failures followed, and the Northern Pacific Railway, the Union Pacific Railroad and the Atchison, Topeka & Santa Fe Railroad failed. This was followed by the bankruptcy of many other companies; in total over 15, 000 companies and 500 banks, many of them in the West, failed.