Question

What is the main cause of the panic of 1873?

Answer 1

Bad investments by a large banking firm forced the company to declare bankruptcy

Step-by-step explanation:

The panic of 1873 was a result of over-expansion in the industry and the railroads and a drop in European demand for American farm products and a drop off of European investment in the US.

Answer 2

Banks and other industries were putting their money in railroads. So when the banking firm of Jay Cooke and Company, a firm heavily invested in railroad construction, closed its doors on September 18, 1873, a major economic panicswept the nation.