USA HISTORY

Detailed explanation-1: -In September 1873, railway financier Jay and Cooke realized it had overextended itself and declared bankruptcy. Banks, which had lent heavily to the railroad financiers, Girard for example, followed their debtors into the abyss. A cascade of bank failures continued for four years in the US.

Detailed explanation-2: -The Panic of 1873 One of the worst happened in 1873 – during the time of the Freedman’s Bank. The panic started with a problem in Europe, when the stock market crashed. Investors began to sell off the investments they had in American projects, particularly railroads.

Detailed explanation-3: -Nearly half of all banks failed, businesses closed, prices declined, and there was mass unemployment. From 1837 to 1844 deflation in wages and prices was widespread. The lack of deposit insurance deepened the Panic.

Detailed explanation-4: -This collapse was disastrous for the nation’s economy. A startling 89 of the country’s 364 railroads crashed into bankruptcy. A total of 18, 000 businesses failed in a mere two years. By 1876, unemployment had risen to a frightening 14 percent.

Detailed explanation-5: -The Panic of 1873 was a financial crisis that triggered an economic depression in Europe and North America that lasted from 1873 to 1877 or 1879 in France and in Britain. In Britain, the Panic started two decades of stagnation known as the “Long Depression” that weakened the country’s economic leadership.