Panic of 1873

Definition

The Panic of 1873 was a financial crisis that triggered a severe economic depression in the United States, lasting until 1879. It was primarily caused by over-speculation in railroads and real estate, leading to bank failures and a collapse in credit. The crisis had widespread effects on labor markets and intensified racial and ethnic tensions, especially impacting the Chinese immigrant community and contributing to the push for exclusionary legislation.

5 Must Know Facts For Your Next Test

1. The Panic of 1873 began after the failure of Jay Cooke & Company, a major bank heavily invested in railroads, leading to a loss of confidence in financial institutions.
2. The economic downturn resulted in high unemployment rates, affecting various labor groups but particularly hitting hard on immigrant workers, including Chinese laborers.
3. During this period, anti-Chinese sentiment surged as many blamed Chinese immigrants for job competition and wage suppression, leading to increased hostility and violence.
4. The economic struggles exacerbated by the Panic contributed to the passing of the Chinese Exclusion Act in 1882, marking a significant step in restrictive immigration policies in the U.S.
5. The effects of the Panic of 1873 lingered for years, with many businesses failing and workers struggling to secure stable employment, fostering labor unrest and calls for reform.

Review Questions

• How did the Panic of 1873 influence labor issues and economic conditions for immigrant workers in the United States?
  • The Panic of 1873 led to widespread unemployment and economic instability, significantly impacting immigrant workers who often occupied low-wage jobs. As businesses closed or reduced their workforce, many immigrants found themselves out of work, facing intensified competition for remaining jobs. This environment fostered resentment among native-born workers towards immigrants, particularly targeting the Chinese community, who were often scapegoated for economic woes.
• Discuss how the economic aftermath of the Panic of 1873 contributed to the enactment of the Chinese Exclusion Act.
  • The economic downturn following the Panic of 1873 heightened anti-Chinese sentiment as many Americans blamed Chinese laborers for taking jobs from native workers during a time of high unemployment. In this context of fear and competition for scarce resources, political pressure mounted to restrict immigration from China. Consequently, this led to the passage of the Chinese Exclusion Act in 1882, which reflected broader societal fears about maintaining job opportunities for American citizens amidst economic challenges.
• Evaluate the long-term implications of the Panic of 1873 on labor movements and immigration policies in the United States.
  • The Panic of 1873 had lasting effects on both labor movements and immigration policies in the U.S. The economic hardships faced during this period galvanized labor organizations as workers sought better rights and conditions. Additionally, it established a precedent for exclusionary immigration policies that targeted specific ethnic groups during economic downturns. The negative attitudes towards immigrants, particularly following economic crises like that of 1873, shaped future legislative actions and set a pattern for how American society would respond to labor competition in subsequent decades.

Related terms

Great Depression: A prolonged economic downturn that began with the stock market crash in 1929 and lasted through the 1930s, marked by high unemployment and widespread poverty.

Chinese Exclusion Act: A federal law passed in 1882 that prohibited the immigration of Chinese laborers to the United States, reflecting growing anti-Chinese sentiment during economic hardships.

Labor Movement: A collective struggle by workers to improve their rights, working conditions, and wages, gaining momentum in the late 19th century as a response to economic hardships.