The Panic of 1873

The Panic of 1873 was a financial crisis that triggered a depression in Europe and North America that lasted from 1873 until 1879, and even longer in some countries (France and Britain). The Panic of 1873 and the subsequent depression had several underlying causes, of which economic historians debate the relative importance.

American post-Civil War inflation, rampant speculative investments (overwhelmingly in railroads), the demonetization of silver in Germany and the US, a large trade deficit, ripples from economic dislocation in Europe resulting from the Franco-Prussian War (1870–71), property losses in the Chicago (1871) and Boston (1872) fires, and other factors put a massive strain on bank reserves, which plummeted in New York City during September and October 1873 from $50 million to $17 million in US dollars.