In the late 1860’s, central European government supported lenders issued debt for municipal, residential and commercial construction.
Amplified tales of profit increased leverage and real estate values, until Britain shifted wheat imports from Central Europe and Russia to lower priced grain from the American Midwest after 1870, followed by other foods, kerosene and livestock.
Vienna’s stock market crashed in May 1873, causing bank to bank lending declines, loss of confidence, financial distress, and higher interest rates.
After speculators built beyond utilization capacity, indebted American railroad related companies began defaulting and US stock markets crashed in late September 1873 as hundreds of banks closed.
As unemployment rose, business leaders advocated protectionism as elected officials identified and targeted scapegoats, while the working poor protested, embraced religion, established unions and rioted.
Those with enough capital reserves in the aftermath, like Andrew Carnegie and John D Rockefeller, acquired bankrupt businesses for substantial discounts.