smashing victory of Prussia over France in 1870 touched off a shortlived boom based on (1) unification of the German states under Prussian leadership; (2) receipt of a substantial sum in cash 742 million marks of gold, silver and French and German banknotes under the Franco-Prussian indemnity; (3) unification of German money with bimetallism giving way to the gold standard; but above all (4) a nationalist euphoria which produced a speculative rise in prices of commodities and securities. In the course of the transfer of the full indemnity of 5 billion marks, Germany accumulated 90 million in short-term claims on London. When the Jay Cooke failure in the United States led to a liquidity squeeze, the withdrawal of this amount precipitated the recession of 1873 and ushered in the "Great Depression" in England. After the collapse of stock markets, first in Vienna, then in Berlin and Frankfurt, the German economy was quiescent for a few years, accumulating strength for the expansion of the 1880s and 1890s. Britain, on the other hand, experienced a continuation of the investment boom of the