by The First Global Industrial Depression and Crisis of Overinvestment
This nomination for the financial actors and economic conditions that triggered the Panic of 1873, which spiraled into the Long Depression, a worldwide economic slump lasting until 1879. The panic began with the failure of Jay Cooke & Company, a major bank financing the Northern Pacific Railway, revealing massive overinvestment in railroads and other infrastructure. A collapse in European markets triggered a global credit crunch. Adherence to the gold standard propagated deflation. The depression featured widespread unemployment, labor unrest (the Great Railroad Strike of 1877), and agrarian protest. It proved that the new industrial economy was prone to severe, synchronized global crises caused by speculative overbuilding, financial interconnectedness, and rigid monetary systems. It marked the end of the post-Civil War boom and introduced the phenomenon of the industrial business cycle.
