Panic of 1837

3 Key excerpts on "Panic of 1837"

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  The Panic of 1857 and the Coming of the Civil War

  • James L. Huston(Author)
  • 1999(Publication Date)
  • LSU Press

    (Publisher)

  It was not, however, in the business press or in the pamphlets that the important debate between free traders and protectionists over the Panic of 1857 took place. This more bitter controversy occurred in the halls of Congress. Not only did congressmen and administration officials reiterate the nostrums that the economic theorists had devised, they also recited in significant detail the analysis by which the protectionists and free traders had arrived at their conclusions. The political debate over the Panic of 1857 manifested a concern that was not evident in the academic one: the question of high or low tariffs awoke the instincts of sectional self-interest among the congressmen, and that in its turn thrust the question of slavery into the controversy. The Panic of 1857 reawakened the economic question of free trade or protectionism at a time when the furor over the extension of slavery was reaching its climax.

  There was an odd quality to the southern reaction to the Panic of 1857, particularly in regard to the concepts by which southerners evaluated economic phenomena. Much of their response was limited to complaining about the price drop their staples had suffered due to the Panic, and then later to exulting over the South’s swift return to prosperity while the North was mired in the swamp of unemployment and business failure. But one event associated with the financial collapse drew considerable southern comment: the northern bread riots. Southerners did not, in general, engage in the national debate over banking policies and tariff rates. They did, however, see in the workers’ demonstrations a means of justifying slavery. They therefore thrust into the debate over the Panic of 1857 the subject of the relative merits of a slave labor system as compared to a free labor system.

  Southerners gleefully contrasted the fate of the slave in the South with that of the free white worker in the North. While northern laborers were shaking the pillars of northern civilization, related the Richmond South, the southern laboring class was “content and quiet, because secure against want and suffering.” The old-line Whig editor of Tennessee, “Parson” William G. Brownlow, caustically commented that northern philanthropists would have to cease sermonizing about the fate of slaves and attend to the “ragged starving poor, and devise ways and means for furnishing them bread.” Upon receiving news of the northern labor riots, William W. Holden of North Carolina exclaimed, “How eagerly would these poor wretches devour what our well fed slaves waste!”31

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  Transatlantic Speculations

  Globalization and the Panics of 1873

  • Hannah Catherine Davies(Author)
  • 2018(Publication Date)
  • Columbia University Press

    (Publisher)

  134 In this case, however, integration was spurred on not during a time of economic growth but of stagnation.

  Conclusion

  When Jay Cooke’s bank failed in September 1873, commentators on both sides of the Atlantic had been debating the possibility of a panic for several months. European demand for American railroad securities had been falling since the first half of 1872, a fact that did not go unnoticed in American financial circles but did not prompt fears of an imminent crisis. In New York, although the usual autumn stringency had still not subsided by the beginning of 1873, the stock market for many months saw neither a panic nor was there a significant failure. In Berlin, the stock market had been on a downward trajectory since December 1872. There, too, this did not at first translate into a major crisis. In Vienna, things happened faster, and a major panic erupted—the first of that year—immediately after the Vienna exchange had registered an all time high. For a while, the decline on German stock markets accelerated, though by summer, they seemed to have regained some of their composure. In New York meanwhile, most people seemed confident that the Viennese panic would not spread across the ocean. While, during these months, there was a pronounced awareness of transnational economic connections, people on both sides of the Atlantic were reluctant to imagine the outbreak of a transatlantic crisis. Observers frequently discussed the possibility of a national panic but rarely considered the likelihood of transnational contagion; by imagining a panic as originating from within their country’s borders, financial markets were discursively endowed with a national structure, making them easier to conceptualize and contain. Well before the advent of “the economy” as a theoretical concept denoting an “emphatically national” circular flow of production and consumption, then, popular economic discourse in the 1870s imagined national borders an obstacle to the expansive nature of markets.135

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  A History of Financial Crises

  Dreams and Follies of Expectations

  • Cihan Bilginsoy(Author)
  • 2014(Publication Date)
  • Routledge

    (Publisher)

  There was much finger pointing in the aftermath of the crisis. The Whigs blamed Jackson’s financial policies for creating the liquidity crisis, and Van Buren defended the Democratic administration by holding the Whigs culpable for the promotion of paper money and the excessive expansion of credit. The federal government provided a measure of comfort to the financial system by providing liquidity in the form of Treasury-note issuance eight times between 1837 and 1843. The Specie Circular was repealed in 1848, but land sales remained dormant despite the policy shift. The widespread sentiment among borrowers was indignation; anger was directed especially at foreign banks, which asked for payment on loans. Several states, including Pennsylvania, Michigan, Indiana, and Maryland, defaulted or threatened to repudiate their international debt, which brought the inflow of foreign capital to a temporary halt. Consequently, European investors shunned the US securities markets until the mid 1840s.

  The banking panic of 1857

  After the mid 1840s the US economy experienced another period of growth and transformation. The country’s borders expanded in the 1840s when Texas was annexed, Utah and Arizona (the entire Southwest region) became territories, and settlements on the Pacific coast were developed. Migration from Germany and Ireland and the 1848 California gold rush added to the population move to the West. The tide of migration continued until 1854 and contributed to the third peak of public land sales (Figure 8.1).

  Cotton, while still important, was no longer the singular dominant commercial product in the US economy. Grains became a major export item, especially during times of war between the European powers. The Northeast and the Northwest were now more closely integrated economies, trading manufactured goods and foodstuffs. The manufacturing base had expanded to textiles, leather goods, clothing, and machinery for farms, steamboats, and railways. Samuel Morse’s invention of the telegraph facilitated commerce and finance by shrinking distances and speeding the flow of information. Telegraph wires connected all major cities by 1850. The momentous change, however, was the emergence of railroads as the principal industry to shape the future of the US. Underneath the prosperous surface, though, problems festered. The banking system and railroads were systematically overextended and undercapitalized, the securities market was vulnerable to external shocks, and, in the twilight of the Civil War, the country was sitting on a keg of political gunpowder.

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