Long Depression
In the United States, economists typically refer to the Long Depression as the Depression of 1873–1879, kicked off by the Panic of 1873, and followed by the Panic of 1893, book-ending the entire period of the wider Long Depression. The National Bureau of Economic Research dates the contraction following the panic as lasting from October 1873 to March 1879. At 65 months, it is the longest-lasting contraction identified by the NBER, eclipsing the Great Depression's 43 months of contraction. In the United States, from 1873 to 1879, 18,000 businesses went bankrupt, including 89 railroads. Ten states and hundreds of banks went bankrupt. Unemployment peaked in 1878, long after the initial financial panic of 1873 had ended. Different sources peg the peak U.S. unemployment rate anywhere from 8.25% to 14%.
David Ames Wells
"Recent Economic Changes and Their Effect on the Production and Distribution of Wealth and Well-Being of Society" (1891) is a frequently cited reference for U.S. economic history of the late 19th century and is available in modern reprints. It is an account of the dramatic changes in the world economy transitioning into the Second Industrial Revolution in which Wells documented many of the changes in trade, such as triple expansion steam shipping, railroads, the effect of the international telegraph network and the opening of the Suez Canal. Wells also discussed the Long Depression and many causes of the great advances in productivity of the preceding 20 years. Wells noted that many of the government inquires on the “depression of prices” (deflation) found various reasons such as the scarcity of gold and silver. Wells showed that the U.S money supply, especially the amount of gold and silver, actually rose significantly during the deflation. Wells pointed out that deflation only lowered the cost of goods that benefited from improved methods of manufacturing and transportation. Goods produced by craftsmen did not decrease in value, nor did many services, and the cost of labor actually increased. Also, deflation did not occur in countries that did not have modern manufacturing, transportation and communications.