Panic+of+1893

= Panic of 1893 =

** __The Main Cause(s)__ **
The Panic of 1893 had many causes, both long term and short term. The long term causes mainly involved railroads and the currency. Railroads were spreading rapidly throughout the U.S. Many big companies, including private ones, sponsored the building of new tracks anywhere possible. The U.S. had become linked because of the spreading railroads. In fact, the railroads were spreading so quickly that they proved to hurt the United States and cause a four year depression. The downfall of railroad companies was linked to the [|Sherman Silver Purchase Act of 1890]. The act had allowed the U.S. Treasury to purchase large amounts of silver from the new western silver mines. The purchased silver would allow the government to issue notes to the public; notes that could be redeemed for silver or gold. The Panic started when two railroad companies, the Philadelphia and Reading Railroad and the National Cordage Company, went bankrupt in March 1893. The fall of the companies led to a crash of the stock market. The chaos of the stock market soon led to the struggle and failures of many banks. Since many businesses had borrowed heavy loans from banks, the bank's crisis tripped many businesses off their feet. As mentioned, the United States was linked together. As a result, a chain reaction caused a panic throughout the United States, which eventually led to a [|depression] that lasted four years.

** __The President's Effort__ **
President Grover Cleveland did not attempt to fix the chaos and crisis that arose during the Panic of 1893. He believed that crisis was a part of economics, business, and commerce, and that all the problems would soon fix themselves. Believing that the president did not have to interfere, Cleveland did not attempt to pass any bills or laws to end the chaos. He did, however, strongly react to the revolts and uprisings of angered and unsatisfied citizens. He sent federal troops to put down the Pullman Strike in July 1894. Cleveland also dealt with the Homestead Strike with force. The largest uprising arose in 1894, which Jacob S. Coxey, an Ohio Populist and businessman, gathered around 500 men and marched to Washington D.C. Coxey demanded that the government spend large sums of money for public employment, and open up jobs for the unemployed. Armed policemen arrested Coxey not long after the start of the uprising, and soon, [|"Coxey's Army"] was broken. Along with his bold and strong responses to the public opposition, President Cleveland took a major step with the money supply. Soon after the Panic of 1893, Cleveland repealed the Sherman Silver Purchase Act of 1890. The act had allowed the U.S. Treasury to purchase large amounts to silver from the western mine and issue public notes that could to redeemed for gold or silver. Soon after the repeal, Cleveland revived the hard and soft currency issue by establishing the gold standard, which meant that only gold could be used in commerce and in any other type of deals involving money. This step was applauded by large businessmen and bankers because it gave more value to their money. The poor farmers and lower class citizens, however, were horrified by Cleveland's actions. The poor had always depended on silver since silver was easier to acquire than gold. The poor wanted more money in circulation so that they could easily pay off their debts. They were also satisfied with inflation, which would, again, help them pay off their debts. A depression-like situation had been established in the United States. In fact, not long after all these events, a disastrous depression started in the U.S. and lasted for about four long years. The depression was the worst depression Americans had ever seen up to 1893.

__Effects of the Panic of 1893 and the Depression that followed__
The Panic of 1893 itself had one main effect. That effect is the four year depression that followed it. The depression, in contrast, had many effects. About 8,000 businesses, 156 railroads, and 400 banks failed or went bankrupt. These figures caused thousands of people to lose their jobs and become unemployed. In fact, unemployment reached 20% in all the workers in these years. That was a staggering sum in terms of the number of unemployed workers. The government did virtually nothing to help or improve the conditions of these people. In fact, Cleveland put down opposition revolts and appeals with force, and passed acts that actually hurt the struggling people even more. Cleveland's actions greatly weakened the Democrats as they lost popularity and support. This allowed Republicans to start a strong campaign in the Election of 1896.The depression lasted for four years. The start of the Progressive Era in the early 1900s and a transaction in American politics and economy finally ended the depression and chaos.

** __Sources__ **

 * A Survey- American History (Alan Brinkley
 * United States History: Preparing for the Advanced Placement Examination (John J. Newman, John M. Schmalbach)
 * The Princeton Review: Cracking the AP U.S. History Exam (2010 Edition)
 * Website: Travel and History - []
 * Website: Citizendium - []
 * Picture: Map - []
 * Picture: Coxey's Army - []
 * Picture: Stock Market - []

__External Links__

 * EH Encyclopedia: Info on the Depression of 1893 - []
 * Travel and History: Sherman Silver Purchase Act of 1890 - []
 * Suite101: Coxey's Army - []