Panic of 1873

The Panic of 1873 is a financial crisis that triggers a severe international economic depression in both Europe and the United States that lasts until 1879, and even longer in some countries.

The depression is known as the "Great Depression" until the 1930s, but is sometimes now known as the Long Depression.

The panic is caused by the fall in demand for silver internationally, which followed Germany's decision to abandon the silver standard in the wake of the Franco-Prussian war.

In 1871, Otto von Bismarck had extracted a large indemnity in gold from France and ceased minting silver thaler coins.

The first symptoms of the crisis had been financial failures in the Austro-Hungarian capital, Vienna, which spreads to most of Europe and North America by 1873.

It i one of a series of economic crises in the 19th and early 20th centuries.

In Britain, the result is two decades of stagnation known as the "Long Depression", which weakens Britain's economic leadership in the world .The Panic of 1873 and the subsequent depression have several underlying causes, of which economic historians debate the relative importance.

Post-war inflation, rampant speculative investments (overwhelmingly in railroads), a large trade deficit, ripples from economic dislocation in Europe resulting from the Franco-Prussian War (1870-1871), significant property losses in Chicago (1871) and Boston (1872) fires, and other factors put a massive strain on bank reserves, which plummet in New York City during September and October 1873 from $50 million to $17 million.

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