The Panic of 1893 was a serious [economic](https://doctorparadox.net/category/economics/) depression in the United States that lasted from 1893 to 1897. It was marked by the over-building and shaky financing of railroads, resulting in a series of bank failures. Compounding market overbuilding and the resulting financial market instability was a run on the gold supply and a policy of using both gold and silver metals as a peg for the US Dollar value. The panic began when the Philadelphia and Reading Railroad and the National Cordage Company, one of the most actively traded stocks on the New York Stock Exchange, went into receivership. The railroad's failure set off a chain reaction of bank failures throughout the country and led to a significant decline in the stock market. Simultaneously, a series of events, including the coup in Buenos Aires, led to a withdrawal of British investments from American markets. This helped to push the United States into a deeper economic crisis. ## Growing pains of industrialization At the time of the Panic, the United States was in a state of transition. The country was moving away from an agricultural economy and becoming more industrialized. This transition was not smooth, and it created financial instability. The Panic of 1893 was a reflection of this instability. Furthermore, the United States was also in the midst of a serious debate over monetary policy. The country was split over whether to back the dollar with gold or silver, a debate that was part of a wider political conflict between those who favored a policy of [[inflation]] and those who did not. The Panic of 1893 led to a deepening of this political conflict. The depression that followed the Panic of 1893 was severe, with unemployment rates in many states reaching 20-25%. The depression lasted until 1897 and led to a realignment of American politics, with the Democrats becoming the party of silver and the Republicans becoming the party of gold. It also led to increased labor unrest, including the Pullman Strike of 1894.