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.
Long Depression
The sectors which experienced the most severe declines in output were manufacturing, construction, and railroads. The railroads had been a tremendous engine of growth in the years before the crisis, yielding a 50% increase in railroad mileage from 1867 to 1873. After absorbing as much as 20% of US capital investment in the years preceding the crash, this expansion came to a dramatic end in 1873; between 1873 and 1878, the total amount of railroad mileage in the United States barely increased at all.