The Long depression helped the Austro-Hungarian Empire come to an end. It brought instability to European countries, making the international relations worse. For the next two decades, ripple effect from the crisis shook the economies.
Countries adapted to the new conditions by implementing new policies, many of which were damaging. Protectionism, rejecting the free trade policies eventually led to a tariff war between France and Italy. Workers organized strikes against government, mainly in the economic areas that the crisis hit the hardest. Price of grain, price of cotton, price of iron all fell dramatically, strongly influencing the industry and farming.
The housing bubble left many homeless. Although it affected every European country at different time and in different segment, Europe suffered from the consequences until the end of the 19th century.
In the United States more than 100,000 businesses failed after the Long depression. Railroad construction was greatly slowed down, as investors lost confidence in future growth. Building and manufacturing also declined significantly.
Mass unemployment caused nationwide demonstrations and strikes. At the peak of the crisis unemployment reached 14%. One in four laborers in New York was out of work in the winter of 1873-1874. In 1874 thousands of unemployed people demonstrated in New York's Tomkins Square Park, making it the largest demonstration in New York ever.
First general strike and fortunes ruined
The first general strike in the United States started in 1877 when employers at the Baltimore and Ohio Railroad attempted to cut the worker's wages for the second time in a year. Violent riots and confrontations with police soon followed, as the strike soon spread to the rest of the country. People who lost their life savings in the financial panic were also devastated.
Some of the men who were ruined in the stock market crash cursed everyone in their way, some of them despaired, and some went out of the street without saying a word in total disbelief of the events that took place. Others talked of the trouble in a jovial way and tried to borrow money from friends, brokers, anyone that would lend them. Unfortunately, there was not any hope for their losses.
In addition to the ruined fortunes of many common people, a strong antagonism developed between workers and the industry leaders, especially of banking and manufacturing. This tension would erupt into the labor unrest that marked the following decades. The collapse of cotton prices devastated the economy of United States. Although farm prices fell dramatically, agriculture continued to expand production.
Recovery starts with railroad expansion
Thousands of American businesses failed, defaulting on more than a billion dollars of debt. The sectors which experienced the most severe declines in output were manufacturing, construction, and railroads. Between 1873 and 1878, the total amount of railroad mileage in the United States barely increased at all.
Recovery began in 1878 with the railroad expansion and an excellent season of good crops slowly. Stocks began rising again and the confidence was brought back. The mileage of railroad track laid down increased from 2,665 mi (4,289 km) in 1878 to 11,568 in 1882. Construction began recovery by 1879, the value of building permits increased two and a half times between 1878 and 1883, and unemployment fell to 2.5% in spite of high immigration. Soon another era of prosperity ensued, which of course led to the next great crisis.