Panic of 1873 – link to Keglevich

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A similar process of over-expansion took place in Germany and Austria, where the period from [[Unification of Germany|German unification]] in 1870{{endash}}71 to the crash in 1873 came to be called the ''{{lang|de|[[Gründerzeit|Gründerjahre]]}}'' ("founders' years"). A liberalized incorporation law in Germany gave impetus to the foundation of new enterprises, such as the {{lang|de|[[Deutsche Bank]]}}, and the incorporation of already established ones. Euphoria over the military victory against France in 1871 and the influx of capital from the payment by France of [[French indemnity|war reparations]] fueled stock market speculation in railways, factories, docks, steamships – the same industrial branches that expanded unsustainably in the United States.<ref>Masur (1970), pp. 63–65.</ref> It was in the immediate aftermath of [[Otto von Bismarck]]'s [[Franco-Prussian War|victory against France]] that he began the process of silver demonetization. The process began on 23 November 1871 and culminated in the introduction of the [[German gold mark|gold mark]] on 9 July 1873 as the currency for the new united Reich, replacing the silver coins of all constituent lands. Germany was now on the [[gold standard]].<ref name="madhouse">{{cite web |url=http://www.silver-investor.com/charlessavoie/cs_3-29-05_monetarymadhouse.htm |title=Monetary Madhouse |author=Charles Savoie |publisher=Silver-Investor.com |date=April 2005 |accessdate=10 September 2011}}</ref> Demonetization of silver was thus a common element in the crises on both sides of the Atlantic Ocean.
 
A similar process of over-expansion took place in Germany and Austria, where the period from [[Unification of Germany|German unification]] in 1870{{endash}}71 to the crash in 1873 came to be called the ''{{lang|de|[[Gründerzeit|Gründerjahre]]}}'' ("founders' years"). A liberalized incorporation law in Germany gave impetus to the foundation of new enterprises, such as the {{lang|de|[[Deutsche Bank]]}}, and the incorporation of already established ones. Euphoria over the military victory against France in 1871 and the influx of capital from the payment by France of [[French indemnity|war reparations]] fueled stock market speculation in railways, factories, docks, steamships – the same industrial branches that expanded unsustainably in the United States.<ref>Masur (1970), pp. 63–65.</ref> It was in the immediate aftermath of [[Otto von Bismarck]]'s [[Franco-Prussian War|victory against France]] that he began the process of silver demonetization. The process began on 23 November 1871 and culminated in the introduction of the [[German gold mark|gold mark]] on 9 July 1873 as the currency for the new united Reich, replacing the silver coins of all constituent lands. Germany was now on the [[gold standard]].<ref name="madhouse">{{cite web |url=http://www.silver-investor.com/charlessavoie/cs_3-29-05_monetarymadhouse.htm |title=Monetary Madhouse |author=Charles Savoie |publisher=Silver-Investor.com |date=April 2005 |accessdate=10 September 2011}}</ref> Demonetization of silver was thus a common element in the crises on both sides of the Atlantic Ocean.
   
On 9 May 1873, the [[Wiener Börse|Vienna Stock Exchange]] crashed, unable to sustain the bubble of false expansion, insolvencies, and dishonest manipulations. A series of Viennese bank failures ensued, causing a contraction of the money available for business lending. One of the more famous private individuals who went bankrupt in 1873 was Stephan [[House of Keglević|Keglevich]] of Vienna. He was a relative of Gábor Keglevich, who had been the [[master of the treasury|master of the royal treasury]] (1842–1848), and who in 1845 had founded, with some others, a financing association to fund the expansion of Hungarian industry and to protect the loan repayments, similar to the ''Kreditschutzverband'' of 1870 (Austria's association for the protection of creditors and for the protection of the interests of its members in cases of bankruptcy). That made it possible for a number of new Austrian banks to be established in 1873 after the Vienna Stock Exchange crash.<ref>{{lang|de|Fünfundzwanzig Jahre oesterreichischer Finanzpolitik: (1848 bis 1873) : ein historischer Rückblick, Wilhelm Emil Angerstein, Luckhardt'sche Verlagsbuchhandlung}}, 1874. {{de icon}}</ref>
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On 9 May 1873, the [[Wiener Börse|Vienna Stock Exchange]] crashed, unable to sustain the bubble of false expansion, insolvencies, and dishonest manipulations. A series of Viennese bank failures ensued, causing a contraction of the money available for business lending. One of the more famous private individuals who went bankrupt in 1873 was Stephan [[Keglevich]] of Vienna. He was a relative of Gábor Keglevich, who had been the [[master of the treasury|master of the royal treasury]] (1842–1848), and who in 1845 had founded, with some others, a financing association to fund the expansion of Hungarian industry and to protect the loan repayments, similar to the ''Kreditschutzverband'' of 1870 (Austria's association for the protection of creditors and for the protection of the interests of its members in cases of bankruptcy). That made it possible for a number of new Austrian banks to be established in 1873 after the Vienna Stock Exchange crash.<ref>{{lang|de|Fünfundzwanzig Jahre oesterreichischer Finanzpolitik: (1848 bis 1873) : ein historischer Rückblick, Wilhelm Emil Angerstein, Luckhardt'sche Verlagsbuchhandlung}}, 1874. {{de icon}}</ref>
   
 
In Berlin, the railway empire of [[Bethel Henry Strousberg]] crashed after a ruinous settlement with the [[Romania]]n government, bursting the speculation bubble in Germany. The contraction of the German economy was exacerbated by the conclusion of war reparations payments to Germany by France in September 1873. Coming two years after the foundation of the German Empire, the panic became known as the ''{{lang|de|Gründerkrach}}'' or "founders' crash".<ref>Manchester (1968), p. 135.</ref><ref>Marek (1974), pp. 181–182.</ref><ref>Masur (1970), pp. 64–65.</ref> Keglevich and Strousberg had come in the year 1865 in direct competition in a project in today's Slovakia, whereupon, in 1870, the Government of Hungary and finally in 1872 the Emperor-King [[Franz Joseph I of Austria]] resolved the question of these competing projects.<ref>Technické noviny, číslo 46, rok 1988, ročník 36</ref><ref>Historické štúdie, Volume 1–2, p.239, Slovenská akadémia vied, Historický ústav SAV., Československá akademie věd, Vyd-vo Slovenskej akadémie vied, Bratislava 1955.</ref>
 
In Berlin, the railway empire of [[Bethel Henry Strousberg]] crashed after a ruinous settlement with the [[Romania]]n government, bursting the speculation bubble in Germany. The contraction of the German economy was exacerbated by the conclusion of war reparations payments to Germany by France in September 1873. Coming two years after the foundation of the German Empire, the panic became known as the ''{{lang|de|Gründerkrach}}'' or "founders' crash".<ref>Manchester (1968), p. 135.</ref><ref>Marek (1974), pp. 181–182.</ref><ref>Masur (1970), pp. 64–65.</ref> Keglevich and Strousberg had come in the year 1865 in direct competition in a project in today's Slovakia, whereupon, in 1870, the Government of Hungary and finally in 1872 the Emperor-King [[Franz Joseph I of Austria]] resolved the question of these competing projects.<ref>Technické noviny, číslo 46, rok 1988, ročník 36</ref><ref>Historické štúdie, Volume 1–2, p.239, Slovenská akadémia vied, Historický ústav SAV., Československá akademie věd, Vyd-vo Slovenskej akadémie vied, Bratislava 1955.</ref>