The Depressionof the 1890's

The Depression of the 1890’s

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The depression of the 1890’s turned out to bring hostility towards the government, cities, unemployment, and reform. The “panic hit the New York stock market when investors placed one million shares of a leading company in the railroad which went bankrupt.” After that businesses and construction industries had one of the worst downward spirals in the history of the country. People ran to the market when it opened up the next day within merely minutes the top stocks plummeted to the lowest that they had ever been. History was known for this day as Industrial Black Friday. After all of this dilemma the banks decided not to loan so much money. Eventually, businesses started failing which soon caused the Erie railroad to fail one of the number one railroads. This caused for 15% or 2 million people to be without a job. During all of this the government was having its own political debate republicans blaming democrats with regards to Bimetallism. This led to the overall economic and gold driven President William McKinley. After his election this promoted confidence within the country. They called this era the Gilded Age which ended with the financial panic of 1893.

During all of this the government would convert dollars into gold but with the lack of gold the government couldn’t print very many dollars to keep up. This overall weakened the American dollar seeing as it was based off of purely a gold standard. This scared foreign investors like Britain. So what did the government depend on? They turned to silver. It seemed as the country had more access to silver than to gold. So in turn it put pressure upon Congress to issue dollars backed by silver and gold.

The Sherman Silver Purchase Act would allow the US Treasury 4.5 million ounces of silver at a market rate. This helped the farmers that needed low-interest credit and order to expand and or keep their land....