Wage Rates in Pittsburgh during the Depression of 1908

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Abstract
On 22 October 1907, the Knickerbocker Trust Company, the third largest trust company in New York City, closed its door and announced itself bankrupt. Panic rapidly spread. On the New York Stock Exchange chaos reigned as a loss of confidence, fed by insistent rumours of further imminent collapses, led to waves of selling, margin calls, and a rapid lowering of share prices. Heavy pressure developed upon the Trust Company of America and the Lincoln Trust Company: through the timely intervention of J. P. Morgan they survived, but lesser banking institutions throughout America, faced with long lines of depositors anxious to retrieve savings, were less fortunate. The supply of national bank notes proved insufficiently elastic to meet the massive, short-run increase in demand. Many banks, lacking adequate emergency reserves of notes and/or specie, were forced to ignore legal requirements and to suspend payments. It is true that the establishment of a New York trust company emergency fund prevented the chain of banking failures from spiralling disastrously onward, that the panic selling on the Stock Exchange was short-lived, and that the financial crises of late 1907 were confined largely to the cities – hence the manner in which the period has been written into American history as the ‘ rich man's panic ’. It is incorrect, however, to assert that its ‘ effects were not widespread ’.

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