The 19th Century Depression  Canadian historian Francois
Furstenberg reminds us of the economic depression that America
had to struggle through in the 19th century:  Much like our
time, the Gilded Age was an era of economic booms and busts.
None was greater than the financial crisis that began in
September 1873 with the collapse of Jay Cooke & Co., the
nation’s premier investment bank. Like many other firms, Cooke &
Co. overextended itself by offering risky loans based on
overvalued real estate.   In the face of economic calamity and
skyrocketing unemployment, the government did, well, nothing. No
federal unemployment insurance eased families’ suffering and
kept a floor on demand. No central bank existed to fight
deflation. Large-scale government stimulus was a thing of the
distant future.  As demand collapsed, businesses slashed
payrolls and reduced wages, and a ruinous period of deflation
began. By 1879, wholesale prices had declined 30 percent. The
consequences were catastrophic for the nation’s many debto