The Republic for Which It Stands: The United States during Reconstruction and the Gilded Age, 1865-1896 (Oxford History of the United States)

by Richard White

On September 18, 1873—another Black Friday and only a few days after Jay Cooke had entertained Grant at his estate outside Philadelphia—the New York branch of Jay Cooke & Company shut its doors. The other branches followed, triggering the Panic of 1873. If Cooke could fail, anyone could. Depositors rushed to withdraw savings. On September 20, the New York Stock Exchange closed for the first time in its history. Banks called in loans, businesses collapsed, and the United States slid into a depression, which would last until 1879. At the end of September, Huntington of the Central Pacific, overwhelmed by work and worry, wrote simply: “I stay in my office not knowing just what to do.” The federal response was tepid and inadequate: the Treasury bought bonds to inject greenbacks into the system and then began reissuing a limited number of greenbacks to inflate the currency. It proved too little, too late.