Abstract
The decade of the 1870s began auspiciously in Europe. Germany, rich with French reparations and enlarged by the provinces of Alsace and Lorraine, embarked on an era of prosperity, expanding its railroads and industrial base. Investment in industrial and commercial sectors doubled though many of the newly-founded corporations were extremely speculative. The frenetic good times ended in the spring of 1873: a crisis developed in Austria which quickly enveloped its neighbors. Soon German banks and companies, founded in the era of easy money, collapsed. The crisis leapfrogged the Channel to England where interest rates quickly soared and business activity slowed down.

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