Panic of 1893
The Panic of 1893 has been traced to many causes, one of them pointing to Argentina; investment was encouraged by the Argentine agent bank, Baring Brothers.
[4] One of the first clear signs of trouble came on 20 February 1893,[5] twelve days before the inauguration of U.S. President Grover Cleveland, with the appointment of receivers for the Philadelphia and Reading Railroad, which had greatly overextended itself.
[9] The economic policies of President Benjamin Harrison have been characterized as a contributing factor to the depression.
Established in 1891 as a result of the Populist movement, the People's Party reached its height in the 1892 presidential election, when its ticket, consisting of James B. Weaver and James G. Field, won 8.5% of the popular vote and carried five states (Colorado, Idaho, Kansas, Nevada, and North Dakota), and the 1894 House of Representatives elections when it won nine seats.
Built on a coalition of poor, white cotton farmers in the South (especially North Carolina, Alabama and Texas) and hard-pressed wheat farmers in the Plains States (especially Kansas and Nebraska), the Populists represented a radical form of agrarianism and hostility to elites, cities, banks, railroads, and gold.
Farmers sought to invigorate the economy and thereby end deflation, which was forcing them to repay loans with increasingly expensive dollars.
Mining interests sought the right to turn silver directly into money without a central minting institution.
[9] Investments during the time of the panic were heavily financed through bond issues with high-interest payments.
The huge spike in unemployment, combined with the loss of life savings kept in failed banks, meant that a once-secure middle-class could not meet their mortgage obligations.
Facing starvation, people chopped wood, broke rocks, and sewed by hand with needle and thread in exchange for food.
To help the people of Detroit, Mayor Hazen S. Pingree launched his "Potato Patch Plan", which were community gardens for farming.
This forced President Cleveland to borrow $65 million in gold from Wall Street banker J.P. Morgan and the Rothschild banking family of England, through what was known as the Morgan-Belmont Syndicate[15] His party suffered enormous losses in the 1894 elections, largely being blamed for the downward spiral in the economy and the brutal crushing of the Pullman Strike.
People who were earlier keen to invest in the Love Canal stopped doing so, which led to the abandonment of its construction.
Ultimately the canal ended up being a large toxic waste repository, with severe negative environmental effects.
The total gross registered merchant marine tonnage employed in "foreign and coastwise trade and in the fisheries", as measured by the U.S. Census between 1888 and 1893, grew at a rate of about 2.74%.
After a series of failed attempts to restore reserves by issuing bonds and depreciating specie issued for legal tender, the Treasury negotiated a contract with the Morgan-Belmont Syndicate to restore confidence in the government's ability to maintain the convertibility of legal tender into gold.
