1894 by Edward Drobinski - HTML preview
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Page 19
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.
As concern for the state of the economy deepened, people rushed to withdraw their money from banks, and caused bank runs. The credit crunch rippled through the economy. 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.
A series of bank failures followed. The Northern Pacific Railway, the Union Pacific Railroad and the Atchison, Topeka & Santa Fe Railroad failed. This was followed by the bankruptcy of many other companies. In total over 15,000 companies and 500
banks, many of them in the West, failed. According to expert estimates, about 17–19% of the workforce was unemployed at the panic's peak.
President Grover Cleveland was blamed for the depression. Gold reserves stored in the US Treasury fell to a dangerously low level. This forced President Cleveland to borrow $65 million in gold from Wall Street banker JP Morgan and the Rothschild banking family of England. His party suffered enormous losses in the 1894 elections, largely being blamed for the downward spiral