The economic stability of United States
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United States History
The economic stability of a country is depended on a wide range of intricate and augmenting factors. Thus incidences of economic depression tend to be equally triggered by complex factors. This explains depressions have far reaching implications on the holistic wellbeing of the society. The US economic depression of 1893 occurred at a time when the nation was undergoing massive economic changes. The inherent uncertainty with respect to the viability of these changes made the economy susceptible to external forces. Seemingly, the economic changes in the entire European region also contributed to the destabilization of the American economy. This underscores the fact that a nation’s economy is partly depended on the relative trends in the international sphere. From a domestic point of view, it is agreed that the depression was offset by bankruptcy that triggered panic within the population.
In their review, Berkin, Miller, Cherny and Gormly indicate that the widespread emergence of mines contributed significantly to this state of affairs (52). The rail connections led to the opening of many mines in different regions. This culminated in the flooding of relative products and particularly silver in the market. Coupled with the 1890’s Sherman Silver Purchase Act that required that the government purchases this metal, this led to instability as the government spent a significant amount of resources on the metal. The poor Agricultural production has also been cited as the main cause of this depression. In this regard, the persistent drought especially in the Midwest made it difficult for the farmers to cater for their financial wellbeing. Furthermore, the drought not only limited the ability of the farmers to finance their debts but it also significantly reduced the financial value of their main resource-land. This influenced them to support the silver economy in a bit to trigger inflation and be able to repay their debts accordingly (Berkin et al 55). Ultimately, it culminated in an economic depression that affected the entire society adversely.
From an international standpoint, the problematic European economy also triggered the American depression. In this respect, the collapse of Baring Brothers of England offset these occurrences by making wrong investment in Argentina. In order to counter the ensuing negative impacts, the Bank of England got financial help from the bank of France and injected in this. The Bank of France in return borrowed finances from Russia. This culminated in poor performance of banks in the region as well as poor economic performance. As a result, Europeans stopped making investments in the US, reduced the purchases of US goods and resorted to selling their US stock in a bit to obtain hard currency.
At the time of the depression the US was undergoing massive changes that could enable it to grow and prosper. The economic expansion was characterized by development and expansion of rail that enhanced economic activity. Reportedly, the economy improved significantly and companies grew and expanded their operations too. Furthermore, the mining of the invaluable silver metal made the future prospective as it diversified the economy. This enabled the farmers that were suffering immense economic problems as a result of persistent drought to have a viable option that enabled them to address the problem accordingly. Nonetheless, the glamour was a facade as the results of the expansion had detrimental effects on the economy.
Work Cited
Berkin Carol, Miller Christopher, Cherny Robert and Gormly, James. Making America: A History of the United States-Volume 2: Since 1865. USA: Wadsworth Publishing, 2007.
