![]() It was highly critical of capitalism, especially banks and railroads, and allied itself with the labor movement.Įstablished in 1891 as a result of the Populist movement, the People's Party reached its height in the 1892 presidential election, when its ticket, consisting of James B. It drew support from angry farmers in the West and South. From 1892 to 1896, it played a major role as a left-wing force in American politics. The People's Party, also known as the ' Populists', was an agrarian-populist political party in the United States. The economic policies of President Benjamin Harrison have been characterized as a contributing factor to the depression. A financial panic in London combined with a drop in continental European trade caused foreign investors to sell American stocks to obtain American funds backed by gold. The credit crunch rippled through the economy. Īs concern for the state of the economy deepened, people rushed to withdraw their money from banks, and caused bank runs. Upon taking office, Cleveland dealt directly with the Treasury crisis and successfully convinced Congress to repeal the Sherman Silver Purchase Act, which he felt was mainly responsible for the economic crisis. President Grover Cleveland, with the appointment of receivers for the Philadelphia and Reading Railroad, which had greatly overextended itself. One of the first clear signs of trouble came on 20 February 1893, twelve days before the inauguration of U.S. During the 1880s, American railroads experienced what might today be called a " bubble": investors flocked to railroads, and they were greatly over-built. In particular, the opening of numerous mines in the western United States led to an oversupply of silver, leading to significant debate as to how much of the silver should be coined into money (see below). ![]() Exacerbating the problems with international investments, wheat prices crashed in 1893. ĭuring the Gilded Age of the 1870s and 1880s, the United States had experienced economic growth and expansion, but much of this expansion depended on high international commodity prices. Specie was considered more valuable than paper money when people were uncertain about the future, they hoarded specie and rejected paper notes. Because European investors were concerned that these problems might spread, they started a run on gold in the U.S. In addition, speculations in South African and Australian properties also collapsed. However, the 1890 wheat crop failure and a failed coup in Buenos Aires ended further investments. The Panic of 1893 has been traced to many causes, one of them pointing to Argentina investment was encouraged by the Argentine agent bank, Baring Brothers. The pro-Republican Judge magazine blamed the Panic of 1893 on the Democratic victory in the 1892 election.
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