Panic of 1837: Difference between revisions
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The price inflation began long before the '''panic of 1837'''. The wholesale prices reached a trough of 82 in July 1830 and then rose by 20.7 percent in three years to reach 99 | The price inflation began long before the '''panic of 1837'''. The wholesale prices reached a trough of 82 in July 1830 and then rose by 20.7 percent in three years to reach 99 in the fall of 1833. The reason for the price rise is simple: The total money supply had risen from $109 million in 1830 to $159 million in 1833, an increase of 45.9 percent, or an annual rise of 15.3 percent. Breaking the figures down further, the total money supply had risen from $109 million in 1830 to $155 million a year and a half later, a spectacular expansion of 35 percent. This monetary expansion was spurred by the still-flourishing [[Second bank of the United States|Bank of the United States]], which increased its notes and deposits from January 1830 to January 1832 from a total of $29 million to $42.1 million, a rise of 45.2 percent. The total money supply rose from $150 million at the beginning of 1833 to $267 million at the beginning of 1837, an astonishing rise of 84 percent, or 21 percent per annum.<ref name="Rothbard_History">Murray N. Rothbard. [http://mises.org/books/historyofmoney.pdf A History of Money and Banking in the United States: The Colonial Era to World War II] (pdf), p.101. Referenced 2011-01-13.</ref> | ||
During the first three weeks of April 1837, 250 business houses failed in New York. Within two months the losses from bank failures in New York alone aggregated nearly $100 million. "Out of 850 banks in the United States, 343 closed entirely, 62 failed partially, and the system of State banks received a shock from which it never fully recovered." <ref name="Bancroft_panic">Hubert H. Bancroft. [http://www.publicbookshelf.com/public_html/The_Great_Republic_By_the_Master_Historians_Vol_III/thepanic_ce.html The financial panic of 1837], from the ''The Great Republic By the Master Historians Vol. III''. Referenced 2011-01-13.</ref> | During the first three weeks of April 1837, 250 business houses failed in New York. Within two months the losses from bank failures in New York alone aggregated nearly $100 million. "Out of 850 banks in the United States, 343 closed entirely, 62 failed partially, and the system of State banks received a shock from which it never fully recovered." <ref name="Bancroft_panic">Hubert H. Bancroft. [http://www.publicbookshelf.com/public_html/The_Great_Republic_By_the_Master_Historians_Vol_III/thepanic_ce.html The financial panic of 1837], from the ''The Great Republic By the Master Historians Vol. III''. Referenced 2011-01-13.</ref> | ||
Revision as of 20:14, 21 January 2011
The price inflation began long before the panic of 1837. The wholesale prices reached a trough of 82 in July 1830 and then rose by 20.7 percent in three years to reach 99 in the fall of 1833. The reason for the price rise is simple: The total money supply had risen from $109 million in 1830 to $159 million in 1833, an increase of 45.9 percent, or an annual rise of 15.3 percent. Breaking the figures down further, the total money supply had risen from $109 million in 1830 to $155 million a year and a half later, a spectacular expansion of 35 percent. This monetary expansion was spurred by the still-flourishing Bank of the United States, which increased its notes and deposits from January 1830 to January 1832 from a total of $29 million to $42.1 million, a rise of 45.2 percent. The total money supply rose from $150 million at the beginning of 1833 to $267 million at the beginning of 1837, an astonishing rise of 84 percent, or 21 percent per annum.[1]
During the first three weeks of April 1837, 250 business houses failed in New York. Within two months the losses from bank failures in New York alone aggregated nearly $100 million. "Out of 850 banks in the United States, 343 closed entirely, 62 failed partially, and the system of State banks received a shock from which it never fully recovered." [2]
References
- ↑ Murray N. Rothbard. A History of Money and Banking in the United States: The Colonial Era to World War II (pdf), p.101. Referenced 2011-01-13.
- ↑ Hubert H. Bancroft. The financial panic of 1837, from the The Great Republic By the Master Historians Vol. III. Referenced 2011-01-13.
Links
- Democracy and Laissez-Faire: A New York Case Study by Arthur A. Ekirch Jr., 1977
- The Jacksonians, Banking, and Economic Theory: A Reinterpretation (pdf) by Jeffrey Rogers Hummel, 1978
- An Austrian Perspective on Some Leading Jacksonian Monetary Theorists (pdf) by James P. Philbin, 1991
- The Panic of 1837 and the Contraction of 1839-43: A Reassessment of its Causes from an Austrian Perspective and a Critique of the Free Banking Interpretation (pdf) by H.A. Scott Trask, March 2002
- The Independent Treasury: Origins, Rationale, and Record, 1846-1861 (pdf) by H.A. Scott Trask, March 2002
- In Defense of Bank Failures by H.A. Scott Trask, December 2003
- The 19th-Century Bernanke by Daniel James Sanchez, September 2009
- Martin Van Buren: The American Gladstone by Jeffrey Rogers Hummel, from Reassessing the Presidency: The Rise of the Executive State and the Decline of Freedom
- Panic of 1837 on Wikipedia