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==Causes==
The 1880s had seen a period of remarkable economic expansion in the United States. In time, the expansion became driven by speculation, much like the "tech bubble" of the late 1990s, except that the preferred industry was railroads. Railroads were vastly over-built, and many companies tried to take over many others, seriously endangering their own stability so to do. One of the first signs of trouble was the bankruptcy of the [[Reading Company|Philadelphia and Reading Railroad]], which had greatly over-extended itself, on [[February 23]], [[1893]].<ref>James L. Holton, ''The Reading Railroad: History of a Coal Age Empire'', Vol. I: The Nineteenth Century, pp. 323-325, citing Vincent Corasso, ''The Morgans''.</ref>
As concern of the state of the economy worsened, people rushed and caused [[bank run]]s. The credit crunch rippled through the economy. Smart european investors only took payment in gold, weakening the US gold reserve, which further dropped the US dollar's value. People attempted to redeem [[Silver Certificate|silver notes]] for gold; ultimately the statutory limit for the minimum amount of gold in federal reserves was reached and U.S. notes could no longer be successfully redeemed for gold. The investments during the time of the Panic were heavily financed through bond issues with high interest payments. The [[National Cordage Company]] (the most actively traded stock at the time) went into [[Bankruptcy|receivership]] as a result of its bankers calling their loans in response to rumors regarding the NCC's financial distress.
As the demand for Silver and Silver notes fell, its price and value dropped. Holders worried about a loss of face value of bonds, and many became worthless.
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