Updated: Aug 2
The Denver Depression of 1893 is one of the most epoch-making crises to ever hit the State of Colorado and the city of Denver in particular. The impact was severe, leading to the crash of 377 businesses and the shutdown of over 400 mines. Over 45,000 people lost their jobs due to the Depression, according to the Colorado Bureau of Labor Statistics.
During the 19th century, Colorado was a very important silver mining state in the U.S. Two significant bills enacted during the period – the Bland-Allison Act of 1878 and the Sherman Silver Purchase Act of 1890 – became fundamental to the growth of the mining industry during that era.
Factors that Triggered the Depression
Factors that led to the Denver Depression of 1893 include the following:
Aborting the Sherman Silver Purchase Act
Towards the end of 1893, the honeymoon enjoyed by silver investors was abruptly interrupted when the administration of President Grover Cleveland upturned the Sherman Silver Purchase Act, triggering a downward spiral in the prices of silver.
Although repealing the Act was meant to stimulate growth in the economy, its impact on Colorado's mining industry proved negative. Thousands of workers would subsequently lose their jobs, and many mines would shut down as the effect of the rapidly crashing prices of silver caught on.
Another significant event that occurred around the period of the Denver Depression was widespread panic. The uncertain times pushed thousands of people to make panic decisions on their finances. Many banks went out of business because thousands of customers withdrew their money and closed their accounts, further deepening the economic woes of Denver.
The ripple effect of the poor economy soon caught up with the real estate sector, where the value of properties fell to an all-time low. There was a myriad of other negative economic development, and in the end, the Depression of 1893 was inevitable.
Agricultural Sector Crisis
The Agricultural sector of Denver was going through a rough patch at the time; several years of droughts and bitter winters were putting some pressure on the economy. So once the silver business went down, against the backdrop of a struggling Agricultural sector, there was pretty much nothing to keep Denver going economically.
Withdrawal of Foreign Investors from Denver
The adverse effects of the economic challenges prevailing in Denver at the time hit hard on investment drive, forcing activities in that area to slow down. Many foreign investors with stakes in Denver pulled out their resources, and that was a catalyst for the Denver Depression of 1893.
Effects of The Depression
With the effect of the Depression biting hard, several aid groups moved in to help those directly impacted by the crisis. They provided temporary shelter and food. However, their intervention was not sufficient to cushion the sufferings of the masses. Aid workers were overwhelmed by the sheer number of women and children, as well as the sick that needed urgent help.
With the fall in prices of silver, other allied businesses in the State were affected. It was like a house of cards; take one out, and everything comes down. The real estate and farming industries were some of the biggest losers.
It has been hundreds of years since the Denver Depression, which lasted from 1893 – 1895, but the lessons gleaned from that historical event remain relevant today.