2. The Panic of 1893: A Railroad-Induced Recession
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The U.S. was booming economically before 1893, but risky investments in the railroad industry led to a major financial crisis. The trouble started when the Philadelphia and Reading Railroad went bankrupt, causing panic among investors. Banks and firms scrambled to collect their loans, forcing over 15,000 businesses to shut down. The impact was severe—unemployment hit 25% in Pennsylvania, 35% in New York, and a staggering 43% in Michigan.