Friday, February 6, 2009

USH10: Economic Currents of the Nineteenth Century

Before I push into twentieth century US history, I'd like to get an overall view of the US economy in the nineteenth century. I've talked about the Gilded Age (see my post of 1/29/09) as well as touching on the 'other Civil War' (see my post of 1/21/09) and the revolt of the farmers to their economic situation (in my last post). As I was reading up on these events, I started encountering references to various 'Panics'. I thought it would be worthwhile, as a kind of background to everything, to go over the various financial ups and downs the US economy went through, long before the Great Depression of the 1930s.

One of the earliest depressions in US history started in 1807 after Thomas Jefferson passed the Embargo Act. This led to unemployment and depression in all the states that had a shipping industry (especially the New England states). However the first major financial crisis in American history was the 'Panic of 1819', when the economic expansion that followed the War of 1812 came to a halt. There were bank failures, foreclosures, and unemployment everywhere. (Hey, that sounds like 2008!)

Bank failure as well as land speculation led to the Panic of 1837. Though Andrew Jackson's policies were blamed for the Panic, it happened right after Martin van Buren was elected--so his opponents named him 'Martin van Ruin'. Things improved with the Mexican War (I noticed that economic upturns often went with wars--as they say, 'it's good for business) and the California gold rush, but then fell apart with the Panic of 1857. Again things improved with the Civil War.

Following the Civil War there was a period of economic growth that went with the building of the railroads (see my post of 1/29/09) which was interrupted by the 'Black Friday Stock-Market Panic of 1869' (caused by gold speculation by Jay Gould--again see my post of 1/29/09--and James Fisk).

The Panic of 1873 began one of the worst financial periods in US (and world) history prior to the Great Depression of the 1930s. This depression was known as the 'Long Depression' and lasted over twenty years. Even so, railroad expansion continued and so did speculation ending in the Panic of 1893 when the 'bubble' burst--and at the same time there was a run on the gold market.

With the election of William McKinley (see my last post) and the Klondike gold rush, prosperity returned (as did war--more in my next post), at least until the Panic of 1907.

In other words, the nineteenth century was a financial rollercoaster.

Quote of the Day: "They say some men would be warriors, and some men would be kings,
And some men would be owners of land and other man-made things...
And gold would be our power, and other foolish things..." - Ferron

Kenneth Davis, Don't Know Much About History
Wikipedia, various articles (I particularly used the piece entitled List of recessions in the United States and links from it)

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