The Panic of 1847 was a minor British banking crisis associated with the end of the 1840s railway industry boom and the failure of many non-banks.
Railway Mania was an instance of speculative frenzy in the United Kingdom of Great Britain and Ireland in the 1840s. It followed a common pattern: as the price of railway shares increased, more and more money was poured in by speculators until the inevitable collapse. It reached its zenith in 1846, when no fewer than 272 Acts of Parliament were passed, setting up new railway companies, with the proposed routes totalling 9,500 miles (15,300 km) of new railway. Around a third of the railways authorised were never built – the companies either collapsed due to poor financial planning, were bought out by larger competitors before they could build their line, or turned out to be fraudulent enterprises to channel investors' money into other businesses.
As a means of stabilizing the British economy, the ministry of Robert Peel passed the Bank Charter Act of 1844.This Act fixed a maximum quantity of bank notes that could be in circulation at any one time and guaranteed that definite reserve funds of gold and silver would be held in reserve to back up the money in circulation. Furthermore, the Act required that the supply of money in circulation could only be increased when gold or silver reserves were proportionately increased. However, in 1847, the Act was suspended when the Bank of England was presented with a letter from the Prime Minister and Chancellor of the Exchequer indemnifying the Bank for a breach of the Act. The crisis in the money market ended almost immediately without any breach of the Act.
Sir Robert Peel, 2nd Baronet, was a British Conservative statesman who served twice as Prime Minister of the United Kingdom and twice as Home Secretary. He is regarded as the father of modern British policing, owing to his founding of the Metropolitan Police Service. Peel was one of the founders of the modern Conservative Party.
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of the United Kingdom, it is the world's eighth-oldest bank. It was privately owned by stockholders from its foundation in 1694 until it was nationalised in 1946.
The panic of 1847 cleared away a vast number of unsound business houses,[ citation needed ] and trade generally became much more sound and healthy;[ citation needed ] this lasted until the year 1855.[ citation needed ] The following explanation by Spanish economist Jesus Huerta de Soto of the Austrian School is based in Austrian Theory of the Business Cycle:
Jesús Huerta de Soto Ballester is a Spanish economist of the Austrian School. He is a professor in the Department of Applied Economics at King Juan Carlos University of Madrid, Spain and a Senior Fellow at the Ludwig von Mises Institute.
The Austrian School is a heterodox school of economic thought that is based on methodological individualism—the concept that social phenomena result exclusively from the motivations and actions of individuals.
As of 1840 credit expansion resumed in the United Kingdom and spread throughout France and the United States. Thousands of miles of railroad track were built and the stock market entered upon a period of relentless growth which mostly favored railroad stock. Thus began a speculative movement which lasted until 1846, when economic crisis hit in Great Britain.
It is interesting to note that on July 19, 1844, under the auspices of Peel, England had adopted the Bank Charter Act, which represented the triumph of Ricardo’s Currency School and prohibited the issuance of bills not backed 100 percent by gold. Nevertheless this provision was not established in relation to deposits and loans, the volume of which increased five-fold in only two years, which explains the spread of speculation and the severity of the crisis which erupted in 1846.
In economics, a depression is a sustained, long-term downturn in economic activity in one or more economies. It is a more severe economic downturn than a recession, which is a slowdown in economic activity over the course of a normal business cycle.
The Panic of 1873 was a financial crisis that triggered an economic depression in Europe and North America that lasted from 1873 until 1877, and even longer in France and Britain. In Britain, for example, it started two decades of stagnation known as the "Long Depression" that weakened the country's economic leadership. In the United States the Panic was known as the "Great Depression" until the events of the early 1930s set a new standard.
The Panic of 1893 was a serious economic depression in the United States that began in 1893 and ended in 1897. It deeply affected every sector of the economy, and produced political upheaval that led to the realigning election of 1896 and the presidency of William McKinley.
The Panic of 1837 was a financial crisis in the United States that touched off a major recession that lasted until the mid-1840s. Profits, prices, and wages went down while unemployment went up. Pessimism abounded during the time. The panic had both domestic and foreign origins. Speculative lending practices in western states, a sharp decline in cotton prices, a collapsing land bubble, international specie flows, and restrictive lending policies in Great Britain were all to blame. On May 10, 1837, banks in New York City suspended specie payments, meaning that they would no longer redeem commercial paper in specie at full face value. Despite a brief recovery in 1838, the recession persisted for approximately seven years. Banks collapsed, businesses failed, prices declined, and thousands of workers lost their jobs. Unemployment may have been as high as 25% in some locales. The years 1837 to 1844 were, generally speaking, years of deflation in wages and prices.
The causes of the Great Depression in the early 20th century have been extensively discussed by economists and remain a matter of active debate. They are part of the larger debate about economic crises. The specific economic events that took place during the Great Depression are well established. There was an initial stock market crash that triggered a "panic sell-off" of assets. This was followed by a deflation in asset and commodity prices, dramatic drops in demand and credit, and disruption of trade, ultimately resulting in widespread unemployment and impoverishment. However, economists and historians have not reached a consensus on the causal relationships between various events and government economic policies in causing or ameliorating the Depression.
The Emergency Banking Act, Public Law 1, 48 Stat. 1, was an act passed by the United States Congress in March 1933 in an attempt to stabilize the banking system. Beginning on February 14, 1933, Michigan, an industrial state that had been hit particularly hard by the Great Depression in the United States, declared an eight-day bank holiday. Fears of other bank closures spread from state to state as people rushed to withdraw their deposits while they still could do so. Within weeks, all other states held their own bank holidays in an attempt to stem the bank runs. Following his inauguration on March 4, 1933, President Franklin Roosevelt set out to rebuild confidence in the nation's banking system. On March 6 he declared a four-day national banking holiday that kept all banks shut until Congress could act. A draft law, prepared by the Treasury staff during Herbert Hoover's administration, was passed on March 9, 1933. The new law allowed the twelve Federal Reserve Banks to issue additional currency on good assets so that banks that reopened would be able to meet every legitimate call.
The Long Depression was a worldwide price and economic recession, beginning in 1873 and running either through the spring of 1879, or 1896, depending on the metrics used. It was the most severe in Europe and the United States, which had been experiencing strong economic growth fueled by the Second Industrial Revolution in the decade following the American Civil War. The episode was labeled the "Great Depression" at the time, and it held that designation until the Great Depression of the 1930s. Though a period of general deflation and a general contraction, it did not have the severe economic retrogression of the Great Depression.
The Panic of 1857 was a financial panic in the United States caused by the declining international economy and over-expansion of the domestic economy. Because of the interconnectedness of the world economy by the 1850s, the financial crisis that began in late 1857 was the first worldwide economic crisis. In Britain, the Palmerston government circumvented the requirements of the Bank Charter Act 1844, which required gold and silver reserves to back up the amount of money in circulation. Surfacing news of this circumvention set off the Panic in Britain.
This history of central banking in the United States encompasses various bank regulations, from early "wildcat" practices through the present Federal Reserve System.
Fictitious capital is a concept used by Karl Marx in his critique of political economy. It is introduced in chapter 25 of the third volume of Capital. Fictitious capital contrasts with what Marx calls "real capital", which is capital actually invested in physical means of production and workers, and "money capital", which is actual funds being held. The market value of fictitious capital assets varies according to the expected return or yield of those assets in the future, which Marx felt was only indirectly related to the growth of real production. Effectively, fictitious capital represents "accumulated claims, legal titles, to future production" and more specifically claims to the income generated by that production.
A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults. Financial crises directly result in a loss of paper wealth but do not necessarily result in significant changes in the real economy.
The Independent Treasury was the system for managing the money supply of the United States federal government through the U.S. Treasury and its sub-treasuries, independently of the national banking and financial systems. It was created on August 6, 1846 by the 29th Congress, with the enactment of the Independent Treasury Act of 1846, and it functioned until the early 20th century, when the Federal Reserve System replaced it. During this time, the Treasury took over an ever-larger number of functions of a central bank and the U.S. Treasury Department came to be the major force in the U.S. money market.
The Baring crisis or the Panic of 1890 was an acute recession. Although less serious than other panics of the era, still it is the nineteenth century’s most famous sovereign debt crisis.
The Panic of 1825 was a stock market crash that started in the Bank of England, arising in part out of speculative investments in Latin America, including the imaginary country of Poyais. The crisis was felt most acutely in Britain, where it precipitated the closing of six London banks and sixty country banks in England, but was also manifest in the markets of Europe, Latin America, and the United States. An infusion of gold reserves from the Banque de France saved the Bank of England from complete collapse.
The Birmingham School was a school of economic thought that emerged in Birmingham, England during the post-Napoleonic depression that affected England following the end of the Napoleonic wars in 1815.
The British Banking School was a group of 19th century economists from the United Kingdom who wrote on monetary and banking issues. They were created to oppose the British Currency School; they argued that currency issue could be naturally restricted by the desire of bank depositors to redeem their notes for gold. According to Jacob Viner the main members of the Banking School were Thomas Tooke, John Fullarton, James Wilson, and J. W. Gilbart. They believed "The amount of paper notes in circulation was adequately controlled by the ordinary processes of competitive banking, and if the requirement of convertibility was maintained, could not exceed the needs of business for any appreciable length of time". Thus they opposed the requirement in the Bank Act of 1844 for a reserve requirement on banknotes.
This article details the history of banking in the United States. Banking in the United States is regulated by both the federal and state governments.
The Road is an autobiographical memoir by Jack London, first published in 1907. It is London's account of his experiences as a hobo in the 1890s, during the worst economic depression the United States had experienced up to that time. He describes his experiences hopping freight trains, "holding down" a train when the crew is trying to throw him off, begging for food and money, and making up extraordinary stories to fool the police. He also tells of the thirty days that he spent in the Erie County Penitentiary, which he described as a place of "unprintable horrors," after being "pinched" (arrested) for vagrancy. In addition, he recounts his time with Kelley's Army, which he joined up with in Wyoming and remained with until its dissolution at the Mississippi River.
The International Standard Book Number (ISBN) is a numeric commercial book identifier which is intended to be unique. Publishers purchase ISBNs from an affiliate of the International ISBN Agency.