The Long Depression that followed the Panic of 1873 should not be confused with The Great Depression of the 1930s. They belong to different centuries, and The Great Depression was somewhat worse. The Long Depression caused lasting changes in Chicago.
Chicagoans were filled with pride in 1873. They had just re-build their city, which had been almost totally destroyed during the Great Chicago Fire of 1871. In fact, they were so delighted they hosted the Inter-state Industrial Exposition so other states could view their progress. While they were celebrating, the Panic of 1873 was taking place.
Chicago’s growth depended on the railroad industry. Chicago was the center of the industry. Rail yards, warehouses and related industries suffered greatly when 115 railroads were bankrupted. Industrialists and entrepreneurs lost fortunes. Railroad workers lost their jobs. Workers who came to re-build the city were suddenly unemployed.
One-third of Chicago’s labor force was on the streets. In Dec., 1873, 5,000 workers marched on City Hall demanding public works jobs or distribution of fire relief funds. Weeks of demonstrations followed when City Hall refused to release the funds. The mayor and alderman believed that workers would lose their dignity and independence if they received cash.
Some workers organized the People’s Party and ran their candidates for mayor and City Council. New German immigrants organized a Socialist Party. Chicago’s business leaders responded by forming the Citizen’s Association of Chicago and started a militia to disperse demonstrations.
Farmers and agricultural businesses in Illinois also suffered. While the Civil War boosted their bottom lines, many took out loans to keep up with the pace of the boom. During The Long Depression, they were unable to repay those loans and lost money or their farms.
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