Economic history of the United States
Panic of 1873 created one of the worst and longest depressions in American history, seriously affecting every aspect of the economy and bringing the railroad expansion to a halt. The New York Stock Exchange closed for ten days. Of the country's 364 railroads, 89 went bankrupt, a total of 18,000 businesses failed between 1873 and 1875, unemployment reached 14% by 1876, during a time which became known in Britain as the Long Depression. Politically, the Democrats took control of Congress in 1874, the election of 1876 was deadlocked.
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.