The late 19th century was a period of extraordinary economic growth in the United States, a growth that ultimately created a major national crisis known as the Panic of 1893. The post-Civil War generation witnessed an huge expansion of manufacturing, with industrial production rising approximately 296%, reaching a value of almost $9.4 billion dollars in 1890.
In that year the United States had over 350,000 industrial firms which employed nearly 4,750,000 workers. Iron and steel paced the progress of manufacturing, and eventually created the conditions for huge railroad speculation. Farms and forests provided raw materials for established enterprises as cotton textiles, food, and lumber production.
The modernization and machinery increased the importance of raw materials as a high priority, because of the constantly lengthening list of consumer goods that involved them.
The bankers called in their loans as the rumors regarding the financial adversity of the National Cordage Company spread. In May, the Cordage went bankrupt and the stock market collapsed to below $10 a share.
The railroad industry growth
During the transport development, large quantities of iron and steel were used in production of locomotives, railroad cars, farm implements, industrial machinery and work equipment, together with electrical equipment for commerce. More machinery meant additional use of power, and basically all energy sources gained in value. With rising economy, great national development of industry seemed to be endless and guaranteed.
However, uncontrollable growth actually led to many of the problems which created the crisis in 1893. Railroads were overbuilt, as many companies were continuing their growth by takeovers of competition, even if it meant endangering their own stability. With new railroad connections, many mines were opened nearby, and in short period of time silver began to flood the market.
Farmers, particularly in the Midwest, suffered a series of droughts which left them short of cash to pay their debts, which drove down the value of their land. From the international perspective, the swift expansion and development of manufacturing allowed a greater independence from import and new goods became leading exports of the United States. At that time the entire value of American manufactures was more than half the value of European manufactures and twice that of Britain. The country's position in international commerce was improved significantly.