The Panic of 1873 and the Long Depression
- Date
- 1873–1896
- Category
- Economy & trade
- Region
- Europe and the Americas; global
- Era
- Modern
- Significance
In May 1873 the Vienna Stock Exchange crashed, ending a speculative boom across central Europe and igniting what has been called the first truly international financial crisis.
Within months the panic crossed the Atlantic: on 18 September 1873 the failure of the American banking house Jay Cooke and Company, overextended in railway finance, triggered a collapse that forced the New York Stock Exchange to close for ten days. The crisis ushered in the Long Depression, a prolonged period—conventionally dated 1873 to 1896—of falling prices, weak profits, business failures and recurrent unemployment across the industrial world. Contributing factors included railway overinvestment, fragile banking, the dislocations of the Franco-Prussian War, and the demonetisation of silver in Germany and the United States as economies converged on the gold standard. Although industrial output and trade continued to grow, the sustained deflation squeezed farmers and debtors, fuelling agrarian protest, bimetallist agitation and a turn toward protective tariffs and economic nationalism in many countries. The episode demonstrated how tightly the globalising economy of the late nineteenth century had become interconnected through capital markets, railways and the gold standard, so that a panic in one financial centre could propagate worldwide.
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Empires active in 1873–1896
- German Empire1871 CE – 1918 CE
- French Colonial Empire (Second)1830 CE – 1962 CE
- Empire of Japan1868 CE – 1947 CE
- Russian Empire1721 CE – 1917 CE
- British Empire1583 CE – 1997 CE
- Qing Dynasty1636 CE – 1912 CE
Related economy & trade events
- Wall Street Crash and onset of the Great Depression24–29 October 1929
- The Australian gold rushes begin1851
- The German Zollverein creates a customs union1834
- Weimar hyperinflation1922–1923 (peak November 1923)
- Britain places the pound on the gold standard1821
- Soviet First Five-Year Plan and forced collectivisation1928–1933
Further reading
The wider story
The Silk Roads: A New History of the World
Best-selling world history told through the trade routes that moved goods, faiths and ideas.
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