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Financial Panics
In both 1873 and 1893, the United States experienced financial panics that resulted from the failures of banks and railroads. These resulted in a domino effect of more bank or railroad failures, causing an economic depression.
These panics led to a debate about the nation’s money supply. It wasn’t very flexible, so it was unable to grow as the economy expanded. On one side of the debate were the Silverites, who called for the unlimited coinage of silver (in addition to gold) to increase the money supply. Though this would cause inflation, it would make it easier to borrow money and be “cheaper” to pay back loans (which had been made in gold). On the other side were the “gold bugs,” who wanted to limit or eliminate the coinage of silver. This would limit the money supply overall and would make money worth more, though it would be more expensive for borrowers to take out loans. This battle would continue to be a political issue.
Sherman Antitrust Act
In 1890, Congress passed the Sherman Antitrust Act, which was the first federal legislation made in an attempt to combat corporate trusts. This legislation stated that any combination “in the form of trust or otherwise that was in restraint of trade or commerce among the several states, or with foreign nations” was illegal. The problem with this law was that it didn’t define what a “trust” was, so it was difficult to enforce.
