Depression - Depression, Deflation, and Inflation a. Panic...

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Depression, Deflation, and Inflation a. Panic of 1873 i. Promoters had laid more railroad track, sunk more mines, erected more factories, and sowed more grainfields than existing markets could bear ii. Bankers, in turn, had made too many unwise loans to finance those enterprises iii. When profits failed to materialize, loans went unpaid, and the whole credit-based system came down b. Results of the Panic of 1873 i. 15,000 businesses went bankrupt ii. Unemployed battled police in New York City iii. Freedman’s Savings and Trust Company went under. Blacks had entrusted $7 million to the bank and lost it all c. Debtors i. During the war, $250 million of paper money had been issued, but it quickly depreciated ii. By 1868, the Treasury had withdrawn $100 million of the paper money from circulation. Hard-money people, who wanted their debts paid by more valuable gold, wanted paper money’s complete disappearance iii. Now the debtors were wanted greenbacks to be reissued. They reasoned that more money meant cheaper money and
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Depression - Depression, Deflation, and Inflation a. Panic...

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