how did the panic of 1873 hasten the end of reconstruction?


n.callMethod.apply(n,arguments):n.queue.push(arguments)}; Paul Kleppner, "The Greenback and Prohibition Parties," in Arthur M. Schlesinger (ed.). As sailing vessels were not adaptable for use through the Suez Canal because the prevailing winds of the Mediterranean Sea blow from west to east, the British entrepôt trade suffered. The problem was compounded by the railroad boom, which was then in its later stages. Library of Congress, Sign up for the American Experience newsletter! Meanwhile, the Republican candidate for governor of Ohio, Rutherford B. Hayes, won big without mentioning Reconstruction, focusing instead on honest government, economic recovery, and temperance. An economic cloud settled over Ulysses S. Grant's second term, and he tried to find a solution that would drive it away. !function(f,b,e,v,n,t,s) Banks and other industries were putting their money in railroads. In March 1877, Hayes was inaugurated; in April, the remaining troops were ordered out of the South. The nation's first transcontinental railroad had been completed in 1869. That made it possible for a number of new Austrian banks to be established in 1873 after the Vienna Stock Exchange crash. The Panic of 1873 and the subsequent depression had several underlying causes for which economic historians debate the relative importance. The Great Financial Panic of 1873 - Closing the door of the Stock Exchange on its members, Saturday, Sept. 20th. Cooke's firm provided the financing, and ground for the line was broken near Duluth, Minnesota, on 15 February 1870. They focused on business, economics, political corruption, and trade, instead of Reconstruction. [19] Within a year, the effects of this second business slump reached all the way to California.[20]. [46] The U.S., still in the period after the Civil War, continued to be very protectionist.[47][48]. 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. The Compromise allowed southern Democrats to return to power, no longer fearing reprisal from federal troops or northern politicians for their flagrant violence and intimidation of black voters. The 1879 tariffs protected these interests, stimulated economic revival through state intervention and refurbished political support for the conservative politicians Otto von Bismarck in Germany and John A. Macdonald in Canada. The panic and depression hit all of the industrial nations. In the end, the fighting between strikers and troops left more than 100 people dead and many more injured. By 1875, when armed conflict broke out in Mississippi and the state’s Republican governor urged federal involvement, national Republicans felt they had no choice but to ignore the plea. Rates of growth of foreign trade dropped, external terms of trade deteriorated, declining wheat prices affected peasant producers, and the establishment of European control over Ottoman finances led to large debt payments abroad. They grew to particular influence during Ulysses S. Grant’s first term (1868-1872). Wikimedia. Despite this, Britain did not experience the scale of financial mayhem seen in America and Central Europe, perhaps forestalled by an expectation that the liquidity-constraining provisions of the Bank Charter Act of 1844 would be suspended as they had been in the crises of 1847, 1857 and 1866. His success entered him into the running as a potential Presidential candidate. On 9 May 1873, the Vienna Stock Exchange crashed since it was unable to sustain the bubble of false expansion, insolvencies, and dishonest manipulations. Between 1866 and 1873, 35,000 miles of new track were laid across the country. Public opinion made it difficult for the Grant administration to develop a coherent policy on the Southern states, and the North began to steer away from Reconstruction. Democrats responded nationally in 1874, running on sound economics and fiscal policy, which allowed them to take control of the House of Representatives. Get the latest on new films and digital content, learn about events in your area, and get your weekly fix of American history. [41], In the periphery, the Ottoman Empire's economy also suffered. Recovery from the crash occurred much more quickly in Europe than in the United States. The depression ended in the spring of 1879, but tension between workers and the leaders of banking and manufacturing interests lingered on. But when Grant left office in 1877, the cloud remained. Poor economic conditions also caused voters to turn against the Republican Party; in the 1874 congressional elections, the Democratic Party assumed control of the House for the first time since the Civil War. googletag.cmd = googletag.cmd || []; Since the end of the Civil War, railroad construction in the United States had been booming. Reconstruction ended with the contested Presidential election of 1876, which put Republican Rutherford B. Hayes in office in exchange for the withdrawal of federal troops from the South. Most capital was involved in projects offering no immediate or early returns.[5]. [22] Demonetization of silver was thus a common element in the crises on both sides of the Atlantic Ocean. Allegations of voter fraud and intimidation emerged in the three states in which Reconstruction held strong and whose outcome would decide the result: Florida, Louisiana, and South Carolina. The biggest threat to Republican power in the South was violence and intimidation by white conservatives, staved off by the presence of federal troops in key southern cities. The stage was set for an election that would end Reconstruction as a national issue. The firm then became a federal agent in the government financing of railroad construction. if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; The financial panic of 1873 and the subsequent economic depression helped bring Reconstruction to a formal end. In 1877, steep wage cuts led American railroad workers to launch the Great Railroad Strike. That same year, the depression set off railroad strikes. This event was known as "the fall of the rupee". The difference in stability between Vienna and Berlin had the effect that the French indemnity to Germany flowed into Austria and Russia, but the indemnity payments aggravated the crisis in Austria, which had benefited by the accumulation of capital not only in Germany but also in England, the Netherlands, Belgium, France, and Russia.[30]. [11][12], The New York Stock Exchange closed for ten days, starting on 20 September. In September 1873, Jay Cooke and Company declared bankruptcy, resulting in a bank run that spiraled into a six-year depression. One by one, each state fell to the Democrats in the South, and the Republicans lost power. A large infusion of cash from speculators caused spectacular growth in the industry and in the construction of docks, factories, and ancillary facilities. ' Entrepreneurs planned a second, called the Northern Pacific. Workers and businesspeople argued over what should be done. Historické štúdie, Volume 1–2, p.239, Slovenská akadémia vied, Historický ústav SAV., Československá akademie věd, Vyd-vo Slovenskej akadémie vied, Bratislava 1955. The panic and depression hit all of the industrial nations. Euphoria over the military victory against France in 1871 and the influx of capital from the payment by France of war reparations fueled stock market speculation in railways, factories, docks, steamships, the same industrial branches that expanded unsustainably in the United States. Railroads were the nation's largest non-agricultural employer. [15] Building construction was halted, wages were cut, real estate values fell, and corporate profits vanished.[16]. Within a week, similar protests had erupted in Maryland, New York, Pennsylvania, Illinois, and Missouri. t.src=v;s=b.getElementsByTagName(e)[0]; Across the country, but especially in the South business failures, unemployment, and tightening credit heightened class and racial tensions and … [citation needed] A comparison of capital formation rates in both countries helps to account for the different industrial growth rates. Between 1868 and 1877, and accelerating after the Depression of 1873, national interest in Reconstruction dwindled as economic issues moved to the foreground. One notable paper recorded a striking worker's perspective that he "had might as well die by the bullet as to starve to death by inches". On the eve of the 1876 Presidential election, the nation still reeling from depression, the Grant administration found itself no longer able to intervene in the South due to growing national hostility to interference in southern affairs. The Politics of Economic Crises: The Panic of 1873, the End of Reconstruction, and the Realignment of American Politics1 - Volume 10 Issue 4 - Nicolas Barreyre. Cooke had played a large role in financing the Union war effort by marketing federal bonds to farmers and workers. The strong increase of port traffic generated a permanent request for expansion. Yet, with its most revolutionary aims thwarted by 1868, and economic depression and political turmoil taking even its most modest promises off the table by the early 1870s, most of the promises of Reconstruction were unmet. As a cadet at West Point, Ulysses S. Grant considered General Winfield Scott "the finest specimen of manhood my eyes had ever beheld.". [24][25][26] In 1865, Keglevich and Strousberg had come into direct competition in a project in what is now Slovakia. The resulting outcry raised serious questions about how long the new policy would last. President Rutherford B. Hayes was forced to send federal troops to more than a half dozen states to stop the strikes. The process began on 23 November 1871 and culminated in the introduction of the gold mark on 9 July 1873 as the currency for the newly-united Reich, replacing the silver coins of all constituent lands. After 1873, most sources of credit vanished, forcing many landowners to default, driving them into an over-saturated labor market. Buda, the old capital of Hungary, and Óbuda were officially united with Pest,[29] thus creating the new metropolis of Budapest in 1873. Preoccupied with the harsh realities of falling farm prices, wage cuts, unemployment, and labor strikes, the North became less and less concerned with addressing racism in the South. [10], The failure of Jay Cooke's bank and soon afterward of Henry Clews set off a chain reaction of bank failures and temporarily closed the New York Stock Exchange. [1] In the United States, the Panic was known as the "Great Depression" until the events of 1929 and the early 1930s set a new standard.[2]. /* fbq('track', 'PageView'); */ In Cape Colony, the panic caused bankruptcies, rising unemployment, a pause in public works, and a major trade slump that lasted until the discovery of gold in 1886. The French also attempted to deal with their economic problems by the implementation of tariffs. The common factor of the surviving companies was that all marketed tontines. Violent conflicts erupted, including 1873's Colfax Massacre in Louisiana. [7] The Act also reduced the domestic money supply, raising interest rates and hurting farmers and others who normally carried heavy debt loads.

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