Part 9/12:
Yet, the same daring investments that built Allen’s fortune also precipitated its downfall. By 1873, signs of trouble emerged. Allen’s empire was heavily leveraged, with extensive borrowing to finance land purchases, industry, and the railroad expansion. When the Panic of 1873 struck—a severe economic depression—Allen’s financial house of cards began to collapse.
Unable to repay the massive debts owed to railroad and banking interests, Allen made a desperate move. He acquired a controlling stake in the County Bank of Cook in Chicago, assuming presidency in hopes of stabilizing his remaining assets and covering his liabilities. However, this bold gamble failed spectacularly when the bank failed in January 1875, wiping out Allen’s remaining wealth.