By 1895, Americans living in cities grew accustomed to seeing the homeless on the streets or lining up at soup kitchens.

At the height of this depression, over three million American workers were unemployed. In some states, the unemployment rate soared even higher: over 35 percent in New York State and 43 percent in Michigan. In a single year, from 1893 to 1894, unemployment estimates increased from 3 percent to nearly 19 percent of all working-class Americans. When the railroads began to fail due to expenses outpacing returns on their construction, the supporting businesses, from banks to steel mills, failed also.īeginning with the closure of the Philadelphia & Reading Railroad Company in 1893, several railroads ceased their operations as a result of investors cashing in their bonds, thus creating a ripple effect throughout the economy. Banks and investors fed the growth of the railroads with fast-paced investment in industry and related businesses, not realizing that the growth they were following was built on a bubble. The rapid proliferation of railroad lines created a false impression of growth for the economy as a whole. The causes of the Depression of 1893 were manifold, but one major element was the speculation in railroads over the previous decades. Following a brief rebound from the speculation-induced Panic of 1873, in which bank investments in railroad bonds spread the nation’s financial resources too thin-a rebound due in large part to the protective tariffs of the 1880s-a greater economic catastrophe hit the nation, as the decade of the 1890s began to unfold. As mentioned above, farmers were already struggling with economic woes, and the rest of the country followed quickly. The late 1880s and early 1890s saw the American economy slide precipitously. FROM FARMERS’ HARDSHIPS TO A NATIONAL DEPRESSION

Labor strife.