Panic of 1796–1797

The Panic of 1796–1797 was a series of downturns in Atlantic credit markets that led to broader commercial downturns in both Britain and the United States. In the U.S., problems first emerged when the Bubble of land speculation burst in 1796. The crisis deepened into a broader depression when the Bank of England suspended specie payments on February 25, 1797 under the Bank Restriction Act 1797. The Bank's directors feared insolvency when English account holders, who were nervous about a possible French invasion, began withdrawing their deposits. In combination with the unfolding collapse of the U.S. real estate market, the Bank of England's action had developing disflationary repercussions in the financial and commercial markets of the coastal United States and the Caribbean through the turn of the century.

By 1800, the crisis had resulted in the collapse of many prominent merchant firms in Boston, New York, Philadelphia, and Baltimore, and the imprisonment of many American debtors. The latter included the famed financier of the revolution Robert Morris and his partner James Greenleaf who were investors in a large tract of land in the Adirondacks of upstate New York.[1][2] James Wilson was forced to spend the rest of his life literally fleeing from creditors until he died at a friend's home in Edenton, North Carolina.[3] George Meade, the grandfather of the American Civil War general George Gordon Meade was ruined by investments in Western land deals and died in bankruptcy due to the panic.[4] The scandals associated with these and other incidents resulted in the U.S. Congress passing the Bankruptcy Act of 1800. The Bankruptcy Act of 1800 would later be repealed after its three-year duration expired in 1803.[5]

See also

Further reading

References

  1. ^ Paul Schneider (1998). The Adirondacks: A History of America's First Wilderness. Macmillan. p. 92. ISBN 0805059903. 
  2. ^ Marian S. Henry. "The Brown Tract". New England Historic Genealogical Society. http://www.newenglandancestors.org/research/services/articles_brown_tract.asp. 
  3. ^ Jean Edward Smith (1998). John Marshall: Definer of a Nation. Macmillan. p. 599. ISBN 080505510X. 
  4. ^ Edward Digby Baltzell (1989). Philadelphia Gentlemen: The Making of a National Upper Class. Transaction Publishers. p. 142. ISBN 0887387896. 
  5. ^ "Republic of Debtors: Bankruptcy in the Age of American Independence". EH.net. February 22, 2004. http://eh.net/book_reviews/republic-debtors-bankruptcy-age-american-independence. 
Banking panics in the United States
1792 · 1796–1797 · 1819 · 1825 · 1837 · 1847 · 1857 · 1866 · 1873 · 1884 · 1890 · 1893 · 1896 · 1901 · 1907 · 1910-1911 · 1929-1939 · 2007-2011
1701–1800
Panic of 1792 · Panic of 1796–1797
1801–1900
1901–2000
2001–present