The 1873 Panic And How It Contributed To The Great Railroad Strike In 1877 (Research Paper Sample)

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The 1873 Panic and How It contributed to The Great Railroad Strike in 1877
The 1873 panic generated by industrial capitalism was the first global depression in the United States of America. It affected the economic system which saw many developed nations experience a transition from mercantile to industrial commercialism; this meant that a backer could lend using international currencies and own stocks (Shelton, 65). In the 1800s, most countries invested their currencies using precious metals like silver and gold to enable the capitalist compare the achievement of their investment decisions in fair terms. The aim of this paper is to analyze how this economic transition contributed the Great Railroad Strike and the impacts it had on it. While the new way might earn the country good profit, eventually the aptitude to convert the currency to those metals led to value comparison and most business people started feeling that the administration supplied less money not equivalent to the amount of gold they received earlier which resulted in the civil war in the 1860s.
At the beginning of the 1870s, several prominent industrial firms made substantial changes to their national currencies that unintentionally led started the panic. Most states ended the use of gold and silver as their fiscal metal and in 1873, America passed the Coinage Act to boost the relative value of the US dollar (Stowell, 638). The economic result was a decrease in the money available to investors and this despair affected private investment banks negatively. A particular Jay Cooke who was a significant banker and played a dynamic role in brokering state bonds during the civil war was greatly affected because his bank had devoted a lot in railroad construction (Stowell, 638). His company had in the past handled most of the regime's period of war loans, and its failure would be tragic; the US economy sputtered and in short while credit dried up leading to corporates closing and an increase in unemployment.
The anxiety persisted and even with the close of civil war, the country frequently experienced uncontrolled growth especially in the railway industry where the government gave ample land grants to railroad companies thus an overinvestment by financiers of depositor’s funds and the railroads laid the basis for the desolation that followed.
After the civil war, a bang in railroad construction supervened, and it needed a lot of capital security that meant financial threat; Cooke’s bank and other speculators fed money into the industry causing anomalous growth (Tindall, 239). In addition, as the construction of new pathway in areas where land was not available required endowments that only the management would deliver; the custom of Jay’s firm as a channel federal funding aggravated the impact that its insolvency had on the nation. Resentment between the laborers and the trade leaders started leading to 10 percent wage cut, capitalists distrust, and poor working conditions; this caused railroad strikes that prevented the train service.
The Great Railroad Strike commenced on July 1877 in West Virgini...