Consequences And Consequences Of The Panic Of 1819

The Great Depression left the American banking system in shambles and left the American people broken and scared for their futures. There were several causes that led up to the enactment of the New Deal and the Social Security Act. A major cause was "Black Tuesday." This was the largest stock market crash in U.S. history that took place on October 29, 1929. The crash happened because wealthy Americans used their revenue to speculate in real estate and the stock market rather than invest in new businesses. Another cause was U.S. banks issuing loans and credits to foreign governments in the amount of billions of dollars. Prior to the Great Depression and the enactment of the FERA, relief was based on the poor laws.

The panic of 1907 and the Great Recession of 2007-2009 has both been major economic events in the United States economic history. This paper compares and contrasts these two major events and enables us to understand importance of certain financial institutions and regulations during troubled times in the financial sector. In this paper, both panics of 1907 and 2007 are historically analyzed and compared.

Since the national bank was now destroyed, Jackson did not have a place to put it, so he decided to divide the money among the states. This is where it went downhill since the states begin printing massive amounts of money and quickly got out of hand and resulted in one of the longest depression in U.S history. As a result, The United States begin borrowing money again and the debt soon begin.

The panic of 1837 was arguably more devastating than the depression of the 1930’s, yet less well known. During the period of roughly 7 years between 1837 and the mid 1840’s the U.S. economy underwent massive economic hardships and consequences which many economists ultimately believe helped lead to the American civil war in 1861. Causes for the panic include: government policies, speculative lending practices, decline in cotton prices, a collapsing land bubble, international cash flow and restrictive lending policies (Wiki).

To understand the Panic of 1893, one must look back 20 years to a very similar situation that arose with the Panic of 1873. The country was experiencing a post-Civil War hangover that caused the economy to experience inflation. After the war, efforts were increased to expand the railroad. These efforts required substantial investments that were mostly unbacked. The country was already running on a large trade deficit. The large trade deficit along with these investments put a massive strain on bank reserves, which plummeted in New York City during September and October 1873 from $50 million to $17 million. Similar causes came 20 years later with the 1893 panic.

After shutting down the Bank of the United States in 1836, President Andrew Jackson did not receive what he had hoped for in exchange. The Bank War surely had a profound effect on the future of the United States including everything that led up to the panic of 1837. Bray Hammond in his essay The Jacksonians: Expectant Capitalists states how Jackson's advisors blinded him to facts and the actual usefulness of the bank. They allowed Jackson to destroy the bank instead of correcting its flaws, a decision that would later create an economic boom in the United States. Many believe that Jackson allowed himself to also be blinded by his ego and agrarian beliefs which resulted in profound consequences in the end.

He sought to follow in Jackson’s footsteps of running the country. Immediately upon his arrival into office, the Panic of 1837 began, resulting in the country’s worse depression. The depression lasted seven years. The cause of the Panic of 1837 can be contributed to the plummeting demand of cotton, which triggered the decline in the cost of the cotton. This, in conjunction with a suddenly weak wheat crop caused a decline in revenue and income throughout the states. State bank closures and an increase in state debts were immediately seen. The national bank which had been shut down was designed to help keep the economy afloat and prevent a depression from occurring, the state banks were not equipped to do so. They continued to print paper money, yet had no actual money to back up the paper money. Van Buren felt that assistance to those individuals affected by the economy should be provided by the state government, not the federal government. He then enacted the Independent Treasurery Act, which called for the government to house its own gold and silver, and to eliminate the use of paper money by the federal government. The Act did little to help the

Andrew Jackson’s economic policies and views on banking during the mid-19th century’s impacted the United States economy negatively. The closing of the Second National Bank created an uneasy economy that put all federal funding into state banks and left the United States economy susceptible to economic depression and his creation of the Specie Circular caused the panic of 1837. Andrew Jackson economic policies and views on the national bank took an economy that was working efficiently, after the Era of Good Feelings, and weakened it immensely by removing the National Bank and implementing poor economic policies.

After a while, many businesses went bankrupt, leaving business owners with bills that went unpaid. Luckily, after World War I ended, America had become one of the world’s leading creditors. By this time, Americans, with full confidence of being prosperous forever, were increasingly investing in stocks. Unexpectedly, in the days of 29 October 1929 the stock market had crashed. Banks that had invested heavily on stock market and real estate now had lost most of their money. There is only little money left in the country by now; the period of Great Depression had arrived

The period of time including the 1850s-1860s was considered the decade of crisis. This time period consisted of many abolitionist movements, rebellions, and an election in 1860. It also included secessions of states, and eventually triggered the civil war. There were two highly influential people involved in this decade; John Brown and Abraham Lincoln. They positively affected the United States of America.

States issued new banking charter during the years following the War of 1812 as citizens required more credit. The need for more credit was fueled by better transportation with people immigrating westward in search of land. The US Congress chartered the 2nd Bank of the United States in 1816. The market expansion fueled by rising speculation of lands and rising prices brought about the panic of 1819. The economic downturn forced Congress and the courts to look harder at some of the issues on the forefront of the economy. The Supreme Court handed down a landmark opinion during this period concerning the 2nd United States Bank in McCulloch v Maryland. The case questioned the constitutionality of the bank. The Supreme Court ruled the bank was constitutional under the Necessary and Proper clause of the constitution with it “enumerated powers.” The Congress which had chartered the bank had the power to tax, borrow and regulate interstate commerce. Finally, the court ruled sovereignty of union lay with its people, not the individual states. Feller points out the “The bank, therefore, though a privately owned and managed concern was also in effect an arm of the federal government and states could not touch it” (49). The ruling brought criticism saying the court had brought legitimacy to a private

Adversity places people in challenging situation which force a person to make difficult decisions, but most people choose the easiest option and give in under pressure. The concept being presented is exemplified by the economic downturn which swept the nation in 1819, after the end of the War of 1812, the nation entered a state of hysteria because nothing similar had ever happened in the United States before. The panic was caused by the rise in American cotton prices, which “set off a decline in the demands for other American goods and suddenly revealed the fragility of the prosperity that had begun after the War of 1812” (Tindall and Shi 421). Rather than using the Panic of 1819 as a way to learn and prepare the nation for future economic

The pain the United States felt financially was matched across the ocean in Europe when the value of silver plummeted to uncontrollable levels. The panic of 1873 was a global financial crisis, it was called The Great Depression. It is important to talk about the Panic of 1873 in the United States, it was part of a larger international economic depression.

The first recession in American history triggered by the effects of capitalism, was The Panic of 1873. This crash was caused by some of the same reasons why our market continues to fail to this day. Issues such as the formation of financial bubbles, an imbalance in the regulation of currency and low interest rates all contribute to market failures such as these. In 1873, there was a severe problem with the control that the government had over money. Many people, including Jay Cooke and his investment firm, continued investing their money in railroad construction, gold, silver, stocks, and bonds, with the intention of the return being higher than the risk. Because of this, many factories and businesses had to shut down and unemployment skyrocketed.

69. The Bank proved to be very unpopular among western land speculators and farmers, especially after the Panic of 1819 because it was one of the major contributors to inflation. It held federal tax receipts and regulated the amount of money circulating in the economy. Some people felt that that the Bank, and its particular president, had too much power to restrict the potentially profitable business dealings of smaller