Thursday, December 15, 2016

Panic of 1819

The Panic of 1819 was the first major economic crisis in America and it was called a depression. The cotton market prices failed and banks called in loans. It lasted for 2 years. Below you will find some excerpts from books found at google that will give you a basic idea of what was going on during the time of this economic crisis of the United States.

The circumstances of why the panic of 1819 occur was summarized in "What are the facts? Protection and reciprocity illustrated by Henry F. Clark ©1892 says:

The war with Great Britain (1812-1815) continued an extreme protection as to England (See Query 24), and the increased tariff rate of that war period provided protection as to other countries. During these nine years, home industries were greatly stimulated. The close of the war and the reduction of the tariff removed the protection, and there followed one of the most disastrous panics which the country has suffered.

With an eye for an overview of the history of America, "the American Nation, a History: Rise of the New West, 1819-1829 by Frederick Jackson Turner © 1906
Wrote this about the Politics of presidents at the time.

FOR eight years President Monroe had administered the executive department of the federal government—years that have been called the "Era of Good Feeling." The reader who has followed the evidences of factional controversy among the rival presidential candidates in the cabinet, and noted the wide-spread distress following the panic of 1819, the growing sectional jealousies, the first skirmishes in the slavery struggle, and the clamor of a democracy eager to assert its control and profoundly distrustful of the reigning political powers, will question the reality of this good feeling. On the other hand, in spite of temporary reverses, the nation as a whole was bounding with vigor in these years of peace after war; and if in truth party was not dead, and a golden age had not yet been given to the American people, at least the heat of formal party contest had been for a time allayed. The bitterness of political warfare in the four years which we are next to consider might well make the administration of the last of the Virginia dynasty seem peaceful and happy by contrast.

And with regard to one state it was reported in "History of Kentucky" Vol. 2 ©1922

Kentucky was fast becoming the storm center of a world-wide mone-1 tary and business disturbance, thePanic of 1819. For various reasons, many of which were not peculiar to this panic but rather common to all, world conditions were out of joint; but it seemed that in Kentucky there had been causes of a local nature almost sufficient to produce a panic. The prices of everything offered for sale came down almost to the vanishing point when compared to the high levels of a few years previously. It was reported in 1820 corn was selling in some parts of the state for 10 cents a bushel and wheat at 20 cents.38 A traveller stated that land around Lexington and Frankfort was selling for only one-sixth as much as it was bringing a few years earlier.30 The Kentucky Gazette said, "The price of property is exceedingly depressed. Real estate will not sell for one-fourth of its value." An example of the hard times resulting in forced sales was the case of a factory near Lexington costing $150,000 which with other valuable buildings and about one hundred acres of land was sold for $21,000—and on credit at that.40 A writer to the Kentucky Gazette gave this further dismal picture of the times: "Slaves which sold some time ago, could command the most ready money, have fallen to an inadequate value. A slave which hires for $80 or $100 per annum, may be purchased for $300 or $400. A house and lot on Limestone Street, for which $15,000 had been offered some time past, sold under the officer's hammer, for $1,300. A house and lot, which I am informed was bought for $10,000, after $6,000 had been paid by the purchaser, was sold under a mortgage for $1,500, leaving the original purchaser (besides his advances) $3,500 in debt. A number of sales, which excited at the same time astonishment and pity, have occurred in this town. Comparisons of local sufferings should not be indulged in, but I am told that Lexington is less afflicted than almost any part of the state." 41

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