Railroads and related industries, like iron and steel, suffered most. Business activity was reduced to 32.8%. Data regarding gross domestic product (GDP) and unemployment weren’t collected during this third longest recession. National scandal, stock market collapse and runs on banks led to an investigation into the business practices of the Grant and Ward investment firm.
Former President Ulysses S. Grant and his son Ulysses S. Grant, Jr. were cleared of wrong doing. Their influential name was used by Ward to entice investors, and they believed they would receive 50% of the firm’s profits. Like the other investors, they lost everything.
Ferdinand De Wilton Ward, Jr. was convicted of grand larceny. It was discovered he falsified returns and audit reports. He was convicted of grand larceny and served more than six years in Sing Sing Prison in New York State. Because of his swindle and its effect on the Grants, Ward lost his title as the “Young Napoleon of Finance” and became “the Best-hated Man in the United States.”
Chicago and its surrounding communities produced 30% of the nation’s steel rails through the efforts of the Union Rolling Mill Company, the North Chicago Rolling Mill Company and Joliet Iron and Steel Company. Production of steel rails decreased by 71%, and production of iron rails was decreased by 61% during the depression.
The German National Bank, Scandinavian National Bank, Fourth National Bank, City National Bank, Third National Bank and Central National Bank, all of Chicago, went out of business in 1884 in the money panic.
The decline in railroad construction reduced production and caused a depression of business throughout Illinois. Workers lost their jobs either temporarily or permanently. Factories closed as hard times continued for thirty-eight long months.
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