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Panic of 1857

Events leading to the American Civil War
  1. Northwest Ordinance
  2. Kentucky and Virginia Resolutions
  3. End of Atlantic slave trade
  4. Missouri Compromise
  5. Tariff of 1828
  6. Nat Turner's Rebellion
  7. Nullification crisis
  8. End of slavery in British colonies
  9. Texas Revolution
  10. United States v. Crandall
  11. Gag rule
  12. Commonwealth v. Aves
  13. Murder of Elijah Lovejoy
  14. Burning of Pennsylvania Hall
  15. American Slavery As It Is
  16. United States v. The Amistad
  17. Prigg v. Pennsylvania
  18. Texas annexation
  19. Mexican–American War
  20. Wilmot Proviso
  21. Nashville Convention
  22. Compromise of 1850
  23. Uncle Tom's Cabin
  24. Recapture of Anthony Burns
  25. Kansas–Nebraska Act
  26. Ostend Manifesto
  27. Bleeding Kansas
  28. Caning of Charles Sumner
  29. Dred Scott v. Sandford
  30. The Impending Crisis of the South
  31. Panic of 1857
  32. Lincoln–Douglas debates
  33. Oberlin–Wellington Rescue
  34. John Brown's raid on Harpers Ferry
  35. Virginia v. John Brown
  36. 1860 presidential election
  37. Crittenden Compromise
  38. Secession of Southern states
  39. Peace Conference of 1861
  40. Corwin Amendment
  41. Battle of Fort Sumter
An illustration of a bank run on Seamen's Savings Bank during the Panic of 1857

The Panic of 1857 was a financial crisis in the United States caused by the declining international economy and over-expansion of the domestic economy. Because of the invention of the telegraph by Samuel F. Morse in 1844, the Panic of 1857 was the first financial crisis to spread rapidly throughout the United States.[1] The world economy was more interconnected by the 1850s, which made the Panic of 1857 the first worldwide economic crisis.[2] In Britain, the Palmerston government circumvented the requirements of the Bank Charter Act 1844, which required gold and silver reserves to back up the amount of money in circulation. Surfacing news of this circumvention set off the Panic in Britain.[3]

Beginning in September 1857, the financial downturn did not last long, but a proper recovery was not seen until the onset of the American Civil War in 1861.[4] The sinking of SS Central America in September 1857 contributed to the panic, since New York City banks were waiting on a much-needed shipment of gold that was being transported by the ship. After the failure of Ohio Life Insurance and Trust Company, the financial panic quickly spread with businesses beginning to fail, the railroad industry experiencing financial declines, and hundreds of thousands of workers being laid off.[5]

Because the years immediately preceding the Panic of 1857 were prosperous, many banks, merchants, and farmers had seized the opportunity to take risks with their investments, and, as soon as market prices began to fall, they quickly began to experience the effects of financial panic.[4] American banks did not recover until after the Civil War.[6]

  1. ^ Fulfer, Johnny (January 6, 2022). "Panic of 1857: A Story of Speculative Finance". The Economic Historian. Retrieved August 9, 2022.
  2. ^ See the "Preface" contained in the Collected Works of Karl Marx and Frederick Engels Volume 28 (International Publishers: New York, 1986) p. XIII.
  3. ^ See note 238 contained in the Collected Works of Karl Marx and Frederick Engels Volume 12 (International Publishers: New York, 1979) p. 669-670.
  4. ^ a b Glasner, David (1997). Business Cycles and Depressions: An Encyclopedia. Philadelphia, Pennsylvania: Library of Congress. pp. 128–132. ISBN 978-0-8240-0944-1.
  5. ^ "A House Divided". Dickinson College. Retrieved March 4, 2011.
  6. ^ Burlingame, Liz (August 23, 2013). "Sunken Treasures: The World's Most Valuable Shipwreck Discoveries". The Weather Channel. Archived from the original on October 6, 2014.

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