Like the stock market crash of 1929, which is commonly viewed as the beginning of the Great Depression, the so-called "Panic of 1893" is usually seen as ushering in the terrible financial depression that followed. The Panic was set off by the collapse of a large railroad company, the Philadelphia and Reading Railroad, which panicked investors who then flooded the New York Stock Exchange with sell orders. The effects of this rippled through the economy, with the familiar pattern of bank closings, foreclosures, and layoffs bringing the disaster to all corners of the nation.
The causes of this were complex and not really reducible to "liberal" or "conservative" policies as we understand them today. Modern liberalism, which is based in part upon the idea of a welfare state and government intervention in the economy, was nonexistent in the late 1800s. If anything, the Panic gave momentum to the Populist movement, which led to calls for what we might call "liberal" policies. The causes included a decline in gold reserves, which was a severe problem for an economy based on the "conservative" principle of a gold standard. Conservatives at the time, including President Grover Cleveland, blamed the crisis on the Sherman Silver Purchase Act, which caused fears of inflation resulting from the influx of money into the economy.
However, the underlying factors that led to the collapse could be seen in a variety of places, including the completely unregulated banking system mentioned above. In fact, the Panic of 1893 was the fourth such panic in twenty years—there had been financial collapses in 1873, 1884, and 1890. One major issue in the United States was the proliferation of debt among Western and Southern farmers, who struggled to make ends meet when crop prices declined, as they did in the five years or so preceding the economic collapse. Their struggles gave rise to the Populist movement of the period. The years before 1893 had also witnessed a decline in several key economic sectors, including textiles, railroads, and capital goods like steel and coal. Part of this was tied to an economic slowdown in Europe, which dampened the demand for American crops and led to a decrease in European capital investment in American businesses.
Overall, it is difficult to say that "liberal" or "conservative" economic policies caused the Depression, in many ways because the United States lacked a federal economic policy to begin with and because these political categories had completely different meanings in the 1890s than they do today. Liberals today still contend that many of the economic downturns of the period—and as mentioned above, they happened often—were a consequence of the laissez-faire economic approach that libertarian-minded conservatives advocate today. Conservatives, on the other hand, point to fears about monetary policy and about advancing radicalism that frightened investors.