40. John Joseph Wallis, “The Depression of 1839 to 1843: States, Debts, and Banks” (working paper, 2008), p. 4, http://startabankca.com/history/200809_TheDepression/depression1839.pdf.
41. Roberts, America’s First Great Depression, 37.
42. John Clapham, The Bank of England: A History, vol. 2 (Cambridge: Cambridge University Press, 1944), 429.
43. Geoffrey Fain Williams, “ ‘Lending Money to People Across the Water’: The British Joint Stock Banking Acts of 1826 and 1833, and the Panic of 1837” (working paper, Transylvania University, Lexington, KY, 2016), p. 14, http://eh.net/eha/wp-content/uploads/2016/08/Williams.pdf.
44. Lepler, Many Panics of 1837, 64; Campbell, “Transatlantic Financial Crisis of 1837,” 7; James L. Watkins, Production and Price of Cotton for One Hundred Years (Washington, DC: Government Printing Office, 1895), 7.
45. Campbell, “Transatlantic Financial Crisis of 1837,” 8; Lepler, Many Panics of 1837, 108–10.
46. Lepler, Many Panics of 1837, 109.
47. Quoted in Roberts, America’s First Great Depression, 21.
48. Lepler, Many Panics of 1837, 198.
49. Ibid.
50. Charles Morris, “Events Preceding the Civil War,” in The Great Republic by the Master Historians, vol. 3, ed. Charles Morris (New York: Great Republic, 1913), 136.
51. Henry Graff, The Presidents: A Reference History (New York: Simon & Schuster, 2002), quoted in Roberts, America’s First Great Depression, 7.
52. Clapham, Bank of England, 429.
53. Henry Dunning MacLeod, “A History of Banking in Great Britain,” in A History of Banking in All the Leading Nations, vol. 2, ed. Journal of Commerce and Commercial Bulletin (New York: Journal of Commerce and Commercial Bulletin, 1896), 135–36.
54. Roberts, America’s First Great Depression, 47.
55. Namsuk Kim and John Joseph Wallis, “The Market for American State Government Bonds in Britain and the United States, 1830 to 1843” (National Bureau of Economic Research [hereafter NBER] Working Paper 10108, November 2003), 1–2; Mira Wilkins, The History of Foreign Investment in the United States to 1914 (Cambridge, MA: Harvard University Press, 1989), 68.
56. Kim and Wallis, “Market for American State Government Bonds,” 2.
57. Larry Schweikart and Lynne Pierson Doti, American Entrepreneur: A History of Business in the United States (New York: AMACOM, 2010), 90.
58. Roberts, America’s First Great Depression, 63–64, 19.
59. Ibid., 22.
60. Robert Sobel, Panic on Wall Street: A History of America’s Financial Disasters (New York: Macmillan, 1968; repr. Washington, DC: Beard Books, 1999), 72.
Chapter 5
1. Elroy Dimson et al., Triumph of the Optimists: 101 Years of Global Investment Returns (Princeton: Princeton University Press, 2002), 24.
2. As of October 31, 2018, information technology made up 20.7 percent of the S&P 500. See S&P Dow Jones Indices, “S&P 500,” accessed November 6, 2018, https://us.spindices.com/indices/equity/sp-500.
3. For an account of the involvement of these men in railways and other industries in the nineteenth century, see Matthew Josephson, The Robber Barons: The Great American Capitalists, 1861–1901 (San Diego: Harcourt, 1934).
4. Maury Klein, Union Pacific, Volume 1, 1862–1893 (Minneapolis: University of Minnesota Press, 1987), 226, 285–305.
5. Maury Klein, Union Pacific, Volume 2, 1894–1969 (Minneapolis: University of Minnesota Press, 2006), 12; “UP Falls into Bankruptcy,” 1893, Union Pacific Railroad Timeline, accessed November 8, 2018, https://www.up.com/timeline/index.cfm/up-bankruptcy.
6. E. V. Grabill, “The Periodicity of Commercial Crises as Exemplified in the United States,” American Magazine of Civics 13 (April 1896), 371.
7. For more on the first English steam railway, see Maurice W. Kirby, The Origins of Railway Enterprise: The Stockton and Darlington Railway, 1821–1863 (Cambridge: Cambridge University Press, 2002).
8. Ira Ryner, On the Crises of 1837, 1847, and 1857, in England, France, and the United States: An Analysis and Comparison (Lincoln: University of Nebraska Press, 1905), 9.
9. William Frederick Spackman, An Analysis of the Railway Interest of the United Kingdom (London: Longman, 1845), 41–44.
10. “The Beauty of Bubbles, Booms and Busts,” Economist (December 20, 2008), 116.
11. “Fraudulent Schemes—Capital Required for the Bubbles,” Bankers’ Magazine 4 (November 1845), 101.
12. “Opinion and Editorial,” Times, July 1, 1845, 4.
13. Arthur D. Gayer, W. W. Rostow, and Anna Jacobson Schwartz, The Growth and Fluctuation of the British Economy, 1790–1850: An Historical, Statistical, and Theoretical Study of Britain’s Economic Development (Oxford: Clarendon, 1953), 375.
14. J. T. Danson, “On the Accounts of the Bank of England Under the Operation of the Act 7 & 8 Vict., c. 32,” Journal of the Statistical Society of London 10 (May 1847), 152.
15. R. Thomas and N. Dimsdale, “Tab A9: Nominal compromise/balanced estimates of GDP–‘GDP(A),’ 1700–2016 including estimates of Irish GDP,” in “A Millennium of Macroeconomic Data for the UK,” Bank of England OBRA Dataset, from https://www.bankofengland.co.uk/statistics/research-datasets.
16. W. T. C. King, History of the London Discount Market (1936; repr. London: Routledge, 2006), 103, 130.
17. Gareth Campbell and John Turner, “ ‘The Greatest Bubble in History’: Stock Prices During the British Railway Mania” (MPRA Paper No. 21820, 2010), 4–5.
18. “The Railway Crisis—Its Cause and Its Cure,” Economist 6 (October 21, 1848), 1187.
19. For an account of the evolution of the transatlantic grain trade in the nineteenth century, including the role of railroads, see Morton Rothstein, “Centralizing Firms and Spreading Markets: The World of International Grain Traders, 1846–1914,” Business and Economic History, n.s. 17 (1988), 103–13.
20. John Clapham, The Bank of England: A History, vol. 2 (Cambridge: Cambridge University Press, 1966), 202.
21. D. Morier Evans, The Commercial Crisis, 1847–1848 (London: Letts, Son, and Steer, 1848), 69.
22. Ibid., 90–92.
23. King, History of the London Discount Market, 145.
24. Hubert Bonin, “France, Financial Crisis and the 1848 Revolutions,” in Encyclopedia of Revolutions of 1848, trans. James G. Chastain (Athens: Ohio University Press, 2005), https://www.ohio.edu/chastain/dh/franfin.htm.
25. Richard Spree, Die Wachstumszyklen der deutschen Wirtschaft von 1840 bis 1880 (Berlin: Duncker & Humblot, 1977), 471.
26. Albert Boime, Art in an Age of Civil Struggle, 1848–1871 (Chicago: University of Chicago Press, 2008), 324.
27. Bonin, “France, Financial Crisis and the 1848 Revolutions.”
28. David H. Pinkney, Decisive Years in France, 1840–1847 (Princeton: Princeton University Press, 1986), 33–36; Rocio Robles Tardio, “Economic Investors and Railway Advertising,” in Across the Borders: Financing the World’s Railways in the Nineteenth and Twentieth Centuries, ed. Ralf Rotha and Gunter Dinhobl (Aldershot, UK: Ashgate, 2008), 63.
29. Mark Traugott, “The Mid-Nineteenth-Century Crisis in France and England,” Theory and Society 12, no. 4 (July 1983), 457.
30. Ibid., 457–58.
31. Larry Allen, The Global Financial System, 1750–2000 (London: Reaktion, 2001), 214; Charles P. Kindleberger and Robert T. Aliber, Manias, Crashes, and Panics: A History of Financial Crises, 5th ed. (Hoboken, NJ: John Wiley, 2005), 135.
32. Alan Brinkley and Davis Dyer, The American Presidency (Boston: Houghton Mifflin, 2004), 129–38.
33. Second Report of the State Mineralogist of California (Sacramento: State Office of California, 1882), 148.
34. “Opening of the Spring Trade,” New York Herald, February 5, 1857, 4.
35. C. K. Hobson, The Export of Capital (London: Constable, 1914), 128.
36. Gavin Wright, Slavery and American Economic Development (Baton Rouge: Louisiana State University Press, 2006), 60.
<
br /> 37. Roger Ransom and Richard Sutch, “Capitalists Without Capital: The Burden of Slavery and the Impact of Emancipation,” Agricultural History 62, no. 3 (1988), 133–60, http://www.jstor.org/stable/3743211.
38. Bonnie Martin, “Slavery’s Invisible Engine: Mortgaging Human Property,” Journal of Southern History 76 (November 2010), 857.
39. Scott Reynolds Nelson, A Nation of Deadbeats: An Uncommon History of America’s Financial Disasters (New York: Vintage, 2013), 134–35.
40. Kenneth M. Stampp, America in 1857: A Nation on the Brink (New York: Oxford University Press, 1990), 215–18.
41. Timothy J. Riddiough and Howard E. Thompson, “Dèjá Vu All Over Again: Agency, Uncertainty, Leverage, and the Panic of 1857” (Hong Kong Institute for Monetary Research Working Paper No. 10/2012, April 2012), 21–23.
42. Ibid., 20–22.
43. Evans, Commercial Crisis, 1847–1848, 32. Improvements in the British economy are described in more detail in King, History of the London Discount Market, 171.
44. King, History of the London Discount Market, 171.
45. Clapham, Bank of England, 223.
46. Michael Collins, “Long-Term Growth of the English Banking Sector and Money Stock, 1844–80,” The Economic History Review 36, no. 3 (August 1983), 376.
47. D. Morier Evans, The History of the Commercial Crisis, 1857–58: And the Stock Exchange Panic of 1859 (London: Groombridge, 1859), 32–34. Evans was an early financial journalist who published several books, most notably on the financial crises of 1847 and 1857, and was also a principal contributor to the Bankers’ Magazine. See Alsager Vian, “Evans, David Morier,” in The Dictionary of National Biography, 1885–1900, vol. 18 (London: Smith, Elder, 1889), 59.
48. Evans, History of the Commercial Crisis, 1857–58, 33.
49. King, History of the London Discount Market, 182–83, 185.
50. Riddiough and Thompson, “Déjà Vu All Over Again,” 16.
51. Nelson, Nation of Deadbeats, 144.
52. Ibid., 148.
53. For an account of Forbes and Thayer’s political activities and their connection with Lincoln, see Nelson, Nation of Deadbeats, 139–48, 151.
54. George Van Vleck, The Panic of 1857: An Analytic Study (New York: Columbia University Press, 1943), 60.
55. NBER, “Wholesale Price of Wheat, Chicago, Six Markets for Chicago, IL [M04F1 AUS16980M260NNBR] and Wheat Prices for Great Britain [M04002GBM523NNBR],” retrieved from FRED, https://fred.stlouisfed.org/series/M04F1AUS16980MZ60NNBR.
56. The “thunder” quote comes from the Cincinnati Daily Gazette, August 25, 1857, as quoted in James L. Huston, The Panic of 1857 and the Coming of the Civil War (Baton Rouge: Louisiana State University Press, 1987), 14. The emotional impact is further described in J. S. Gibbons, The Banks of New-York, Their Dealers, the Clearing House, and the Panic of 1857 (New York: Appleton, 1858), 344. For data reflecting the Ohio Life Insurance and Trust Company failure’s effects on the stock market, see Riddiough and Thompson, “Déjà Vu All Over Again,” 11.
57. Charles Franklin Dunbar, Economic Essays, ed. O. M. W. Sprague (New York: MacMillan, 1904), 279; Huston, The Panic of 1857, 14; and Van Vleck, Panic of 1857, 65–66.
58. Riddiough and Thompson, “Déjà Vu All Over Again,” 7–8.
59. Huston, Panic of 1857 and the Coming of the Civil War, 15.
60. Michael A. Ross, Justice of Shattered Dreams: Samuel Freeman Miller and the Supreme Court During the Civil War Era (Baton Rouge: Louisiana State University Press, 2003), 41, 45.
61. Timothy J. Riddiough, “The First Sub-Prime Mortgage Crisis and Its Aftermath” (Bank for International Settlements Papers No. 64, 2012), 15–17.
62. Riddiough and Thompson, “Déjà Vu All Over Again,” 24–28.
63. For the reasoning behind this conclusion, see Riddiough and Thompson, “Déjà Vu All Over Again,” 13.
64. Dunbar, Economic Essays, 279; Gibbons, Banks of New-York, 363–64.
65. “News of the Day,” New York Times, September 18, 1857, 4; E. Merton Coulter, “The Loss of the Steamship Central America, in 1857,” Georgia History Quarterly 54 (Winter 1970), 467–68; Charles W. Calomiris and Larry Schweikart, “The Panic of 1857: Origins, Transmission, and Containment,” Journal of Economic History 51 (December 1991), 819.
66. Van Vleck, Panic of 1857, 71.
67. “News of the Day,” New York Times, October 14, 1857, 4. Numbers on the total value of outstanding loans are from Chamber of Commerce of the State of New York, Annual Report for the Year 1858 (New York: Wheeler and Williams, 1859), 249.
68. “Business Failures in the Panic of 1857,” Business History Review 37 (Winter 1963), 437–440; Evans, History of the Commercial Crisis, 1857–58, 134–37.
69. “The Clergy and the Crisis,” New York Times, October 14, 1857, 4.
70. Clapham, Bank of England, 226–27.
71. “America,” Times, September 7, 1857, 8.
72. Evans, History of the Commercial Crisis, 1857–58 35; Clapham, Bank of England, 226–27.
73. For Scotland, Wales, and England, see H. M. Hyndman, Commercial Crisis of the Nineteenth Century (London: Swan Sonnenschein, 1902), 82–83. In the United States, President James Buchanan reflected on the iron industry standstill in James Buchanan, “Second Annual Message to Congress on the State of the Union,” December 6, 1858, in John Bassett Moore, ed., The Works of James Buchanan: Comprising His Speeches, State Papers, and Private Correspondence, vol. 10 (1856–1860) (Philadelphia: J. B. Lippincott, 1910), 264.
74. Evans, History of the Commercial Crisis, 1857–58, 8, 40; Hyndman, Commercial Crisis of the Nineteenth Century, 85.
75. Hyndman, Commercial Crisis of the Nineteenth Century, 86.
76. William Newmarch, “On the Recent History of the Credit Mobilier,” Journal of the Statistical Society of London 21 (December 1858), 447–48.
77. Hyndman, Commercial Crisis of the Nineteenth Century, 87.
78. John Ramsay McCulloch, “Hamburg,” in A Dictionary, Practical, Theoretical, and Historical, of Commerce and Commercial Navigation, new ed. (London: Longman, Green, Longman & Roberts, 1859), 651.
79. Evans, History of the Commercial Crisis, 1857–58, 190–92.
80. Office of the Mercantile Agency, “The Failures in America,” reprinted in Evans, History of the Commercial Crisis, 1857–58, 123.
81. “Failures in America,” 122–24.
82. This relationship between the 1857 panic and the Civil War is deeply analyzed in James L. Huston’s The Panic of 1857 and the Coming of the Civil War.
83. “The Foreign News—The ‘Credit System’ at Home and Abroad,” reprinted in Washington Union (October 15, 1857), 3.
84. Karl Marx, Dispatches for the New York Tribune: Selected Journalism of Karl Marx (London: Penguin, 2007), 201, 170.
85. Rhiannon Sowerbutts, Marco Schneebalg, and Florence Hubert, “The Demise of Overend, Gurney,” Bank of England Quarterly Bulletin 56 (2016), 95.
86. David Foucaud, “L’impact de la loi de 1862 généralisant la responsabilité limitée au secteur bancaire et financier sur la crise anglaise de 1866,” Revue Économique 62, no. 5 (2011), 878.
87. “Overend, Gurney and Co., Limited,” Bankers’ Magazine and Journal of the Money Market 25 (August 1865), 905–6.
88. King, History of the London Discount Market, 240–41; Sowerbutts, Schneebalg, and Hubert, “Demise of Overend, Gurney,” 97.
89. King, History of the London Discount Market, 239–40.
90. “The Situation of the Discount Companies,” Bankers’ Magazine and Journal of the Money Market 20 (October 1860), 694.
91. King, History of the London Discount Market, 237–40.
92. Sowerbutts, Schneebalg, and Hubert, “Demise of Overend, Gurney,” 98.
93. King, History of the London Discount Market, 240–44; “Overend, Gurney, and Co., Limited and Unlimited,” Economist 24 (June 16, 1866), 698.
94. Sowerbutts, Schneebalg, and Hubert, “Demise of Overend, Gurney,
” 99.
95. When it did fail, the Economist’s Walter Bagehot wrote, “We have thought [its failure] possible any time this three months.” See Bagehot, “The State of the City,” Economist 24 (May 12, 1866), 553.
96. King, History of the London Discount Market, 242; “Failures, Embarrassments, and Windings-Up,” Economist 24 (May 26, 1866), 183.
97. Sowerbutts, Schneebalg, and Hubert, “Demise of Overend, Gurney,” 99.
98. King, History of the London Discount Market, 253; Clapham, Bank of England, 263. King expands on the firm’s sloppy accounting and overall “rottenness,” writing that the “tangle of financial intrigue and almost unbelievable graft is so complex that complete unravelling will probably never be possible” (King, 248).
99. King, History of the London Discount Market, 253; Sowerbutts, Schneebalg, and Hubert, “Demise of Overend, Gurney,” 100–101.
100. Clapham, Bank of England, 269.
101. Sowerbutts, Schneebalg, and Hubert, “Demise of Overend, Gurney,” 104.
102. Bank of England, “Daily Account Book for 1866, Bank of England Archive (C1/14),” https://www.bankofengland.co.uk/-/media/boe/files/archive/daily-account-books/1800/1866.pdf.
103. Clapham, Bank of England, 268.
104. Marc Flandreau and Stefano Ugolini, “Where It All Began: Lending of Last Resort and the Bank of England During the Overend-Gurney Panic of 1866” (Norges Bank Working Papers 2011), 4. For an analysis of how Bagehot’s principle emerged out of the intellectual climate in the 1860s and 1870s, see Vincent Bignon et al., “Bagehot for Beginners: The Making of Lender-of-Last-Resort Operations in the Mid-Nineteenth Century,” Economic History Review 65 (2012), 580–608. For a discussion of how widely shared this principle was at the time, see p. 598.
105. Rondo E. Cameron, France and the Economic Development of Europe, 1800–1914: Conquests of Peace and Seeds of War (Princeton: Princeton University Press, 1961), 195.
106. For perspectives along these lines, see Karl Brunner and Allan H. Meltzer, “Money and Credit in the Monetary Transmission Process,” American Economic Review 78 (May 1988), 448; and Thomas M. Humphrey, “Lender of Last Resort: The Concept in History,” FRB Richmond Economic Review 75 (1989), 8. This was the consensus in the early twentieth century as well, as shown by Flandreau and Ugolini, “Where It All Began,” 2.
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