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The crisis of the 1890s

The crisis of the 1890s - not solve the problem The federal...

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The crisis of the 1890s.  Cleveland had barely taken office when the nation was hit by the worst economic crisis  in its history up to that time. Triggered by the bankruptcy of several railroads and the  failure of a British bank that caused many British investors to exchange their American  stocks for gold, the Panic of 1893 led to a depression that lasted for four years. The  nation's gold reserves fell dramatically between January 1892 and March 1893, 600  banks had closed their doors by the end of the year, more than three million people —  about 20 percent of the workforce — were unemployed, and wheat and corn prices fell  precipitously.  Cleveland failed to comprehend the magnitude of the disaster. To stop the drain of gold,  the President asked for and received the repeal of the Sherman Silver Purchase Act.  This stopped the issuance of silver certificates that were redeemable in gold, but it did 
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Unformatted text preview: not solve the problem. The federal government was forced to secure a loan from a banking syndicate headed by J. Pierpont Morgan to buy 3.5 million ounces of gold in order to meet the Treasury emergency. Throughout the crisis, Cleveland maintained that boom-and-bust cycles were inevitable and that little could be done about them. Indeed, he strongly believed that responsibility for the social costs of depression did not fall to the government, at any level. Jacob Coxey, a Populist from Ohio, disagreed. He led a group of 400 men on a protest march to Washington, D.C., in the spring of 1894 and demanded that the federal government set up a $500 million public works project for the unemployed. Coxey's Army quickly disbanded when Coxey and other leaders were arrested for trespassing....
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