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Encyclopedia > Panic of 1857

The Panic of 1857 was a sudden downturn in the economy of the United States. The downturn was brief and the recovery strong, so that the impact was small. Over 5,000 businesses failed within a year. Unemployment was accompanied by protest meetings in urban areas.

Contents

Causes

The recession ended a period of prosperity and speculation that had followed the Mexican-American War and the discovery of gold in California in the late 1840s. Gold pouring in the economy played its part by helping inflate the currency. The immediate event that touched off the panic was the failure on August 24 of the New York City branch of the Ohio Life Insurance and Trust Co., a major financial force that collapsed following widespread embezzlement. In the wake of this event, a series of other setbacks shook the public's confidence, including: Combatants United States Mexico Commanders Zachary Taylor Winfield Scott Stephen W. Kearney Antonio López de Santa Anna Mariano Arista Pedro de Ampudia Strength 7,000 - 43,000 18,000 - 40,000 Casualties KIA: 1,733 Total dead: 13,283 Wounded: 4,152 25,000 killed or wounded (Mexican government... The California Gold Rush (1848-1855) was the first world-class gold rush. ... Official language(s) English Capital Sacramento Largest city Los Angeles Area  Ranked 3rd  - Total 158,302 sq mi (410,000 km²)  - Width 250 miles (400 km)  - Length 770 miles (1,240 km)  - % water 4. ... General Name, Symbol, Number gold, Au, 79 Chemical series transition metals Group, Period, Block 11, 6, d Appearance metallic yellow Atomic mass 196. ... August 24 is the 236th day of the year in the Gregorian Calendar (237th in leap years), with 129 days remaining. ... Nickname: Big Apple; City that never Sleeps; Gotham Location in the state of New York Coordinates: Country United States State New York Boroughs Bronx (The Bronx) New York (Manhattan) Queens (Queens) Kings (Brooklyn) Richmond (Staten Island) Mayor Michael Bloomberg (R) Area    - City 1,214. ...

  • The decision of British investors to remove funds from U.S. banks, which raised questions about overall U.S. economic soundness
  • The fall of grain prices, which spread economic misery into rural areas, because of the end of the Crimean War and Russian re-entry into global markets
  • Russia's underselling of U.S. cotton on the open market (although the cotton market was not hit nearly as hard as others)
  • The piling up of manufactured goods in warehouses, leading to layoffs
  • Widespread railroad failures, indicating an over-built status of the American railroad system
  • The collapse of land speculation programs that depended on new rail routes, ruining thousands of investors

Investor confidence was further shaken in mid-September when 30,000 pounds (13,500 kg) of gold were lost at sea in a shipment from the San Francisco Mint to eastern banks. The gold and more than 400 lives were lost when the SS Central America sank during the North Carolina Hurricane of 1857. Public confidence in the government's ability to back its paper currency with specie was shaken as well. Oats, barley, and some products made from them Cereal crops are mostly grasses cultivated for their edible grains or seeds (technically a type of fruit called a caryopsis). ... Combatants United Kingdom France Ottoman Empire Kingdom of Sardinia Russian Empire Casualties 17,500 British 90,000 French 35,000 Turkish 2,050 Sardinian killed, wounded and died of disease 256,000 killed, wounded and died of disease The Crimean War lasted from 1854 until 1 April 1856 and was... Cotton ready for harvest. ... Manufacturing, a branch of industry which accounts for about one-quarter of the worlds economic activity, is the application of tools and a processing medium to the transformation of raw materials into finished goods for sale. ... This is the top-level page of WikiProject trains Rail tracks Rail transport refers to the land transport of passengers and goods along railways or railroads. ... This page is a candidate for speedy deletion. ... The United States Mint is responsible for producing and circulating coinage for the United States to conduct its trade and commerce. ... SS Central America, sometimes called the Ship of Gold, was a 280-foot (85 m) sidewheel steamer that steamed between Central America and the eastern US Coast in the 1850s. ... It has been suggested that this article or section be merged with 1850-1859 Atlantic hurricane seasons. ... A currency is a unit of exchange, facilitating the transfer of goods and services. ...


Remedies

At the suggestion of Howell Cobb, Secretary of the Treasury, President James Buchanan proposed to Congress that the Treasury be authorized to sell revenue bonds for the first time since the Mexican-American War. Howell Cobb (September 7, 1815–October 9, 1868) was an American political figure. ... John W. Snow, the current Secretary of the Treasury. ... This article is about the United States President. ... Seal of the U.S. Congress. ... The United States Department of the Treasury is a Cabinet department, a treasury, of the United States government established by an Act of U.S. Congress in 1789 to manage the revenue of the United States government. ...


In October, a bank holiday was declared in New England and New York in a vain effort to avert runs on those institutions. Eventually the panic and depression spread to Europe, South America and the Far East. No recovery was evident in the United States for a year and a half, and the full impact did not dissipate until the American Civil War. A Bank Holiday is a public holiday in the United Kingdom and also in the Republic of Ireland. ... The states marked in red show New England. ... Official language(s) English de facto Capital Albany Largest city New York City Area  Ranked 27th  - Total 54,520 sq mi (141,205 km²)  - Width {{{WidthUS}}} miles (455 km)  - Length 330 miles (530 km)  - % water 13. ... World map showing Europe A satellite composite image of Europe Europe is one of the six inhabited continents of the Earth. ... South America South America is a continent crossed by the equator, with most of its area in the Southern Hemisphere. ... The far east as a cultural block includes East Asia, Southeast Asia, Northeast Asia and South Asia. ... Combatants United States of America (Union) Confederate States of America (Confederacy) Commanders Lincoln, President Ulysses S. Grant, General Jefferson Davis, President Robert E. Lee, General Strength 2,200,000 1,064,000 Casualties 110,000 killed in action, 360,000 total dead, 275,200 wounded 93,000 killed in action...


The Tariff Act of 1857 that followed reduced the average rate to about 20% — another reduction that was warmly greeted in the South and roundly derided in the North. The tariff was one of several major issues that was dangerously increasing the tension between the two regions. The Tariff of 1857 was a major tax reduction in the United States, creating a mid-century lowpoint for tariffs. ... Insert non-formatted text hereInsert non-formatted text here Southern United States The states shown in dark red are usually included in the South, while all or portions of the striped states may or may not be considered part of the Southern United States. ... A tariff is a tax on foreign goods. ...


The South was much less hard-hit than other regions because of the stability of the cotton market.


See also

The Panic of 1819 was the first major financial crisis in the United States. ... 1840 Whig campaign poster blames Van Buren for hard times The Panic of 1837 was an economic depression, one of the most severe financial crises in the history of the United States. ... Run on the Fourth National Bank, No. ... The Panic of 1884 was an acute financial crisis associated with a stock market crash caused by speculation. ... The Panic of 1890 was an acute depression that was less serious than other panics of the era precipitated by the near insolvency of the Baring Brothers bank in London due mainly to poor investements in Argentina. ... The Panic of 1893 was a serious decline in the economy of the United States that began in 1893 and was precipitated in part by a run on the gold supply. ... The Panic of 1896 was an acute depression that was less serious than other panics of the era precipitated by a drop in silver reserves and market concerns on the effects it would have on the gold standard. ... The Panic of 1901 was a stock market crash on the New York Stock Exchange caused in part by struggles between E. H. Harriman, Jacob Schiff, and J. P. Morgan/James J. Hill for the financial control of the Northern Pacific Railroad. ... The Panic of 1907 was a relatively serious economic downturn in the United States caused by a New York credit crunch that spread across the nation and led to the closings of banks and businesses. ... The Panic of 1910-1911 was a slight economic depression that followed the enforcement of the Sherman Anti-Trust Act. ...

Further reading

  • Huston, James L. The Panic of 1857 and The Coming of the Civil War (1987)
  • Stampp, Kenneth. America in 1857: A Nation on the Brink (1990) (ISBN 0-19-503902-5)

  Results from FactBites:
 
Panic of 1857 - Biocrawler (424 words)
The Panic of 1857 was a notable sudden collapse in the economy of the United States that occurred in 1857.
The immediate event that touched off the panic was the failure on August 24 of the New York City branch of the Ohio Life Insurance and Trust Co., a major financial force that collapsed following massive embezzlement.
The Tariff Act of 1857 that followed reduced the average rate to about 20 percent -- another reduction that was warmly greeted in the South and roundly derided in the North.
  More results at FactBites »

 
 

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