The Socioeconomic Effects of the Panic of 1873

As we all learned in class, when Andrew Jackson decided to take all of the money out of the nation's national bank in order to put it in state banks in an attempt to get rid of our federal bank, this caused a major economic depression in the United States as currency became worthless, people couldn't buy or sell property, and the prices of goods were astronomical which is why this event was known as the Panic of 1837. Now, one major panic that we haven't talked about was the Panic of 1873, an event that took place during President Grant's second term as a result of many wealthy private railroad corporations investing too much money into railroads (as described by this PBS article). The reason these corporations were trying so hard to build new railroad tracks throughout the nation was because it was an extremely profitable business at the time, yet while trying to develop a second transcontinental railroad, the country's biggest railroad construction firm, Jay Cooke's firm, ended up overextending its budget and having to declare bankruptcy. This ended up causing a massive chain reaction of banking firms and railroad industry companies having to declare bankruptcy because they relied heavily on the success of Jay Cooke's firm, which inevitably caused this nationwide industry to plummet. And because the railroad business had been such a big part of American industry at the time, 18,000 private corporations ended up failing and unemployment rose astronomically. As a result, thousands of workers who got laid off or had their wages cut protested to the government which had been primarily focused on other issues such as the Reconstruction of the South at the time, causing Congress to have to turn its attention primarily towards getting the country's economy in working order. Because of this, the South's Reconstruction period ended, and African-Americans living throughout these states were no longer being focused on by the government, which was a serious issue since the state governments and whites around these areas were against the idea of minorities having any kind of power. So, as southerners realized that the national government was no longer really paying attention to their actions, they decided to try and promote white supremacy through racist organizations such as the Ku Klux Klan, by denying African-Americans their ability to vote (which they did by creating high poll taxes and difficult literacy tests at the polling stations), and by passing a series of segregational laws known as the Jim Crow laws. In the end, millions of African-Americans were treated poorly in their communities by whites taking advantage of the fact that they were no longer being directly protected by the national government (who had pardoned Confederates, allowed them to begin controlling their own governments, and ended the Freedmen's Bureau at the end of the Reconstruction period -- all of which contributed to this issue) and social progress within the United States seemed to have taken a step backwards, all as the indirect result of the overspending of a railroad corporation. Does this mean that what the national government did was wrong because they turned a blind eye to people in need of equality and federal support? After all, if they had still kept some of their attention on the African Americans of the South, the issue wouldn't have escalated to such a great extent, yet nobody at the time seemed to put the government at fault for this -- only the political extremists. Why are these sociopolitical issues directly blamed on extremists, when really they were just taking the opportunity given to them to promote the ideals that they believed in (not that I'm justifying their actions whatsoever; they were clearly inhumane) rather than the corporations and federal government that had direct roles in creating this problems? And the fact that the companies had such a big role in creating this governmental shift of attention raises the question: Was it even constitutional of them to shift their attention from the people who needed it most to a poor economy that they had contributed to (through contracting companies to build railroads for them)?