The Panic of 1873

1873 CE — Global, Europe & the United States

Today: Vienna, Berlin, and New York

A building and railway boom, fed by French war reparations flooding into Germany and Austria, broke first in Vienna in May, then reached New York in September when the bank financing the Northern Pacific Railway failed. The New York Stock Exchange closed for ten days. What followed ran for years on both sides of the Atlantic and was called the Great Depression until a worse one took the name. It was the first crisis to move between continents at the speed of the telegraph — a fully synchronized global panic.

Worth knowing: Contemporaries called it the Great Depression, and the label held for sixty years — until the 1930s arrived and history quietly reassigned the title, leaving 1873 to be renamed the Long Depression by historians who needed the name back.

Pattern: Mania & panic — A speculative belief detaches asset prices from fundamentals; the belief breaks and prices collapse.

Entry 199 of 240 in Precedent, a walk through the whole human story in order.