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FINANCIAL PANIC OF 1873
The Panic of 1873 was a financial crisis that triggered a depression in Europe and North America that lasted from 1873 until 1879 and even longer in some countries (France and Britain).
The Panic of 1873 and the subsequent depression had several underlying causes, of which economic historians debate the relative importance. American post-Civil War inflation, rampant speculative investments (overwhelmingly in railroads), the demonetization of silver in Germany and the US, a large trade deficit, ripples from economic dislocation in Europe resulting from the Franco-Prussian War (1870–71), property losses in the Chicago (1871) and Boston (1872) fires and other factors put a massive strain on bank reserves, which plummeted in New York City during September and October 1873 from US$50 million to $17 million.
A similar process of over-expansion had taken place in Germany and Austria, where the period from German unification in 1870/71 to the crash in 1873 came to be called the Gründerjahre ("founders' years"). A liberalized incorporation law in Germany gave impetus to the foundation of new enterprises, such as the Deutsche Bank and the incorporation of already established ones. Euphoria over the military victory against France in 1871 and the influx of capital from the payment by France of war reparations fueled stock market speculation in railways, factories, docks, steamships, the same industrial branches that expanded unsustainably in the United States.It was in the immediate aftermath of Otto von Bismarck's victory against France that he began the process of silver demonetization. The process began on 23 November 1871 and culminated in the introduction of the gold mark on 9 July 1873 as the currency for the new united Reich, replacing the silver coins of all constituent lands. Germany was now on the gold standard. Demonetization of silver was thus a common element in the crises on both sides of the Atlantic Ocean.
Singer was not affected by the Financial Panic of 1873 until 1876. Actually they increased the sales during that period.
