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Panic of 1884

A newspaper illustration from Harper's Weekly, depicting the scene on Wall Street on the morning of May 14, 1884.

The Panic of 1884 was a panic during the Recession of 1882-85. Gold reserves of Europe were depleted and the New York City national banks, with tacit approval of the United States Treasury Department, halted investments in the rest of the United States and called in outstanding loans. A larger crisis was averted when New York Clearing House bailed out banks in risk of failure. Nevertheless, the investment firm Grant & Ward, Marine Bank of New York, and Penn Bank of Pittsburgh along with more than 10,000 small firms failed.

Causes

The immediate cause of the Panic of 1884 was the failure of Grant and Ward and Marine National Bank of New York City. These two firms were joined closely together as James D. Fish was a partner in both. When these two major firms collapsed, it had a ripple effect across Wall Street causing many firms to fail. Another major cause was the Panic of 1873, in which many of the practices such as speculative bonds and over extension of credit to fund the construction of infrastructure. In addition, this failure undermined the confidence people had in Wall Street as it rebuilt after the events of 1873, especially after it became known that James C. Eno embezzled over $3 million and fled to Canada. Even though the bank replenished the missing amount and avoided failure, the news was still a huge blow to any remaining good will and confidence Wall Street had and furthered the panic. Overall, the panic was mostly contained to New York but acted as a foreshadow to the Great Depression.

See also

References


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