For more than 50 years, the phrase Great Depression did not mean 1929. It meant the collapse that began in the 1870s. This episode traces how the boom was built: France paid five billion francs in reparations after the Franco-Prussian War, Germany retired its government bonds, and the freed cash poured into the speculative Founder’s Years and then across the Atlantic into American railroad bonds. Between 1868 and 1873 the United States laid 33,000 miles of track, much of it into wilderness with no customers yet, financed on the hope that towns would follow.

Then the pressure mounted. Germany moved to gold, Congress passed the Coinage Act of 1873, fires in Chicago and Boston drained New York bank reserves, and the Suez Canal undercut Britain’s sailing fleet and warehouses. The Vienna Stock Exchange crashed on May 9th, 1873, European money vanished, and on September 18th Jay Cooke and Company declared bankruptcy. What followed was a long depression that reshaped labor, ended Reconstruction, and fed antisemitism in Germany and Austria.

• Angry farmers and miners called the Coinage Act the Crime of 73 because dropping silver shrank the money supply and made fixed debts far harder to repay.
• Jay Cooke, who financed the Union with war bonds, had borrowed heavily for the Northern Pacific and could not sell its bonds to a Europe in meltdown.
• The New York Stock Exchange suspended trading for 10 days, 60 railroads went bankrupt within a year, and 18,000 businesses failed between 1873 and 1875.
• The Great Railroad Strike of 1877 began in Martinsburg, West Virginia after the B&O cut wages for the third time in a year while still paying dividends.
• Democrats took the House in 1874, Northern support for Reconstruction collapsed, and the withdrawal of troops opened the way to Jim Crow.