In 1893, the U.S. economy collapsed. Though little known today, the Panic of 1893 is arguably the nation’s worst economic crisis aside from the Great Depression. Like many American economic fiascoes, this one resulted from the bursting of a speculative bubble, and was compounded by corporate and political corruption.
The boom in this case had been railroads. During the 1880s, lines were overbuilt, consolidation and mergers were rampant, and stock prices were highly overvalued. Along the way, railroad companies had bribed countless government officials to gain sweetheart deals and ill-advised bailouts. Corruption ran from statehouses up to the United States Senate. When railroad stocks plunged and railroad companies collapsed in 1893, the entire economy came crashing down, and would not fully recover until the end of the decade. Five-hundred banks eventually went under (accounts were uninsured back then, meaning total loss), and some 15,000 companies went out of business.
Unemployment skyrocketed, peaking in 1894. By some estimates, nearly one-fifth of the U.S. population was out of work. Without any public social safety net, help fell to private charities, which were woefully ill-equipped to handle such deep and widespread poverty. Many Americans demanded action from their government.
One idea that quickly gained traction was for the federal government to hire unemployed Americans by putting them to work on public works projects that would benefit the nation as a whole. The most popular advocate of such an approach was a Massilon, Ohio man named Jacob Coxey.
Coxey himself was a millionaire who bred race horses and owned ranches in Kentucky and Oklahoma. But he was also a political radical who sympathized with exploited workers and farmers of the Industrial Revolution. And during the Panic of 1893, he styled himself as someone who could lead the nation back to prosperity through a new popular social movement. “What I am after,” he said, “is to try to put this country in a condition so that no man who wants work shall be obliged to remain idle.”
Coxey’s specific idea was for the federal government to generate revenue by issuing no-interest bonds, and then use that money to build a trans-national roads project. At the time, America had one of the very worst road systems in the industrializing world, while many people also now viewed railroads with resentment and suspicion. The idea proved popular, and millions of Americans supported it.
Coxey put together an organization officially named The Commonweal of Christ, but it was more popularly known as Coxey’s Army. Affectionately called Colonel by his followers, Coxey and his many “lieutenants” led marchers of unemployed workers from starting points all over the nation, with the goal of converging on Washington, D.C.
And as they marched across the country, they sang:
We are not tramps nor vagabonds
that’s shirking honest toil
But miners, clerks, skilled artisans
and tillers of the soil
Now forced to beg our brother worms
to give us leave to toil,
While we are marching with Coxey
Hurrah! Hurrah! For the unemployed’s appeal!
Hurrah! Hurrah! For the marching commonweal!
Most of the political establishment was overtly hostile towards Coxey’s Army. Many of the well-to-do accused it of being a violent mob, or anarchist or communist revolutionaries. Some called for marchers to be arrested before they reached the nation’s capital, while some fearful governors offered them free trains to speed them out of their states. The hysteria was promoted by the scandal sheet newspapers of the era, which created fabricated drama to sell newspapers.
In reality, Coxey’s Army was merely a group of unemployed men struggling in a broken economy. Instead of advocating revolution, they were loyal Americans beseeching their democratically elected politicians to try and fix a situation many of them had helped create through corruption and favoritism to private interests. Far from a mob, most of the marchers dressed in vests, collars, ties, white shirts, and derbies.
They arrived in Washington on May 1, 1894. Coxey had received permission to parade, but he was banned from the Capitol. Unbowed, he and his men marched towards the halls of Congress. They were met by police who set upon them with night sticks and billy clubs. Hundreds were injured. Coxey and his lieutenants were arrested. He was held in jail for 20 days and then given a symbolic $5.00 fine for walking on the grass.
Despite the violent repression of Coxey’s Army, thousands more came during the course of that summer. These later “armies” were less organized, and by August the movement began to fizzle. Marchers had failed to exert sufficient political pressure on a largely unsympathetic Congress or President Grover Cleveland. Instead, the powers that be clung to their laissez-faire dogma, the economy remained stagnant for years, and did not finally fully recover until Congress was shocked into action by a bloody stimulus that required deficit spending: The Spanish-American War of 1898.