Thursday, May 24, 2012

Panic of 1873 explained

"A world of hurt" by George McKale, © Sonoma Valley Sun, May 24, 2012. (History Article)

"... Prior to the completion of the trans-continental railroad, most exports arrived to California via ship. San Francisco merchants, in anticipation of throngs of newcomers arriving by rail, stocked their shelves to the brim. But instead of hordes of people, merchants found even more merchandise arriving via rail. ... exposed California merchants and manufacturers to intense competition from the east. ... along with the completion of the railroad in 1869, was the completion of the Suez Canal. Ships stocked full of goods simply by-passed California ports ... Real estate speculators in California had inflated land prices in anticipation of the completion of the Central Pacific railroad. The railroad did bring newcomers to California, however, most could not afford to buy land. Instead of a real estate boom, land values began to decline. ... Just prior to the completion of the trans-continental railroad, there was a shortage in labor. This prompted ... immigrants from China ... Upon completion of the railroad, as more people began to migrate from the east to the west, there were too many ... in search of work. ... " [More]

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