The Panic of 1893 could also be called a depression. It was a time when the US economy underwent a very serious downturn. The panic, or depression, lasted for about four years. This was the first major economic downturn in the industrialized US.
There are a number of factors that caused this depression to occur. Among them were such things as:
- Excessive speculation by investors which pushed prices up in a "bubble."
- Troubles between labor unions and companies.
- A lack of foreign trust in American debt.
The panic really started when foreign banks lost faith in American loans and began to call in the loans they had made to American firms. This caused a major panic in which many American businesses went bankrupt and huge numbers of people (around 18% of the work force) became unemployed.