The U.S. panic that followed the failure of the Philadelphia and Reading Railroad and helped trigger a severe depression was the Panic of 1893. The railroad entered receivership in February 1893 after years of overexpansion and financial strain. Investor confidence weakened further when other railroads failed and questions grew about the nation’s monetary policy.
A run on banks and withdrawals of gold reduced available credit. More than 500 banks and 15,000 businesses failed during the ensuing depression, according to contemporary estimates and later historical studies. Unemployment rose sharply, and railroad workers, farmers and industrial laborers faced prolonged hardship. The crisis also contributed to political conflict over whether the United States should maintain the gold standard or expand silver coinage.
The Panic of 1893 is distinct from the Panic of 1873 and Panic of 1907. It was one of the nineteenth century’s most serious American financial breakdowns and helped propel the 1896 presidential contest over monetary policy.