The Great Financial crisis of 1914

The financial crisis of 1914, triggered by the outbreak of World War I, saw the liquidation of about $3 billion in European-held American securities, marking a turning point that shifted the U.S. from a debtor to a creditor nation. As global stock markets reeled, Treasury Secretary William McAdoo closed the New York Stock Exchange on July 31, 1914, to prevent further economic collapse and protect the gold supply. With the Federal Reserve still in its infancy, McAdoo took emergency measures—including gold distributions, paper currency expansion, and intervention in New York City’s finances—to stabilize the banking system and prevent a repeat of the 1907 panic. The crisis underscored the fragility of international finance and the emerging power of the United States on the global economic stage.