The 1890s were hardly gay for the majority of Americans. Before the decade was halfway completed an economic depression of unheard-of magnitude had swept the country and threatened the very existence of millions of blue-collar workers, small businessmen, and even bankers. Following the panic of 1893, over 600 banks closed, 16,000 business firms went bankrupt, and 2.5 million laborers were suddenly jobless. The 1,300 strikes by workers in most heavy industries, coupled with the obvious plight of thousands of workers who marched on Washington in “General” Coxey's army, led one senator to fear that the country was “on the verge of revolution.”

In New York, the effect of the Depression was extremely severe. “Times were hard,” recalled Lillian Wald, the famous founder of the Henry Street Settlement. “In the summer the miseries due to unemployment and rising rents and prices began to be apparent, but the pinch came with the cold weather.” The winter of 1893–1894, the first of a depression that was to last through 1897, was most memorable to Wald. She observed firsthand “the extraordinary sufferings and the variety of pain and poverty” of those living in the tenements of New York's lower East Side.

The city's merchants were also severely affected by the Depression, as were the small charity institutions that depended upon their contributions. Coming on the heels of a steady rise in the costs of supplies, fuel, and food, the shock of reduced support was disruptive and, for some facilities, fatal.