Panic Of 1873 Analysis

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Iluta Urka History 220 The panic of 1873 set off a depression that lasted six years, the longest and most severe that Americans had yet suffered. Thousands of businesses went bankrupt; millions of people lost their jobs, and as usually occurs, voters blamed the party in power for their economic woes. The primary cause of the price depression in the United States was the tight monetary policy that the US followed to get back to the gold standard after the US Civil War. The US government was taking money out of circulation to achieve this goal; therefore there was less available money to facilitate trade. Because of the Panic of 1873, governments depegged their currencies, to save money. After the Civil War cotton that had escaped destruction was sized by federal troops. As with the Great Depression, the private investment banks felt the change first. Bankruptcy…show more content…
In 1873 the Wall Street Journal article noted that cotton prices had not been this high since the 1870. Since this Wall Street Journal article was published, cotton prices have continued to approach US$2/lb. The historical context of the painting is not encouraging, so there may be an unintended irony in using this painting to illustrate historical analogies to the present time. An additional irony of the portrait is that around the time of its completion, the family business dissolved, likely because of the dislocations in finance at the time. The family business was already fragile because of important changes in competitiveness that resulted from various communications improvements. We find out about the disastrous foray into cotton futures trading by René Degas as well as the family’s ill-fated investments in Confederate bonds (of the US Civil War era.) In present terms, one might refer to the latter speculation as a disastrous foray into sovereign-credit
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