Panic of 1873

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Panic of 1873 By: Sonia Lee

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Panic of 1873. By: Sonia Lee. THESIS : The Panic of 1873, could have less of a tragedy if Jay Cooke’s Company survived. - PowerPoint PPT Presentation

Transcript of Panic of 1873

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Panic of 1873

By: Sonia Lee

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THESIS: The Panic of 1873, could have less of a tragedy if Jay Cooke’s Company survived.

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Questions:

1. What caused the Panic of 1873?2. What are different factors that affected the Panic of 1873?3. Do you think if Jay Cooke’s Bank had not of become bankrupt there would have not been a chain reaction of business failures? 4. How did other countries affect the economic downfall of the Panic of 1873 in the US?

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Panic of 1873

The Panic of 1873 was caused by many different factors such as the failure of Jay Cooke & Company and the fall in demand of silver. This set off a chain reaction of bank failures such as Henry Clew’s Bank. Also, this caused the New York Stock Exchange to close temporarily. Many factories had to lay off workers, which caused unemployment rates to raise to 14% by 1876.

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How did other countries affect the United States of America during this time?

• In 1871, Germany decided to get rid of using silver coins, this caused the drop for demand in these coins. The United States, was apart of this dilemma, because they mined and supplied there silver to Germany. Because of this the “Coinage Act of 1873” was created, also called “The Crime of 73” in the United States. People who usually had heavy amounts of debt were hurt by this because this act raised interest rates.

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How else did the Panic of 1873 affect the United States?

The Panic of 1873 affected many people who owned businesses. Over 18,000 franchises went out of business during this period of time. The U.S. had 364 railroads during this time and 89 went bankrupt. Also, the depression caused many wages to be cut, construction then stopped, and real estate value decreased.

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QUIZ TIME!

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What was the company that

started the chain reaction

bankruptcies?

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Jay Cooke & Company

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What country decided to terminate

the use of silver coins in 1871?

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GERMANY

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What year did the panic take place in?

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1873

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