Section #5 - Statistical Tables
Recessions
Various economists have studied the history and causes of U.S. recessions, including Professor Thomas Vartanian in his book, 200 Years of American Financial Panics.
The Table below summarizes those occurring up to the Civil War.
The most intense setbacks seem to occur cyclically, separated by rough two decades.
First the Depression of 1815 following the War of 1812. Then the Bank Panic of 1837 after Jackson drives down the debt and issues his Species Circular undermining confidence in soft money banknotes. Followed by the Panic of 1857 again centered around “runs on the banks.”
What’s especially interesting is that this pattern continues over time, with recessions in 1873, 1893 and 1929, 1945 and soforth. While each has idiosyncratic features, analysts often associate these crashes with “business cycles” where an economy goes through periods of expansion, then hits a peak, contracts and collapses. Recognition of the collapse is typically signaled by a sudden crash in the stock market.
19.0 Early U.S. Economic Recessions and Their Causes
| Name | Dates | Degree | Causes |
|---|---|---|---|
| Copper Panic of 1789 | 1789 | Minor | Loss of confidence in the perceived value of copper coins |
| Panic of 1797 | 1797-99 | Minor | Land speculation bubble plus Britain deflation |
| Recession of 1802 | 1802-4 | Medium | Demand for supplies drops when the French Revolution ends compounded by trade piracy during the First Barbary War. |
| Depression of 1807 | 1807-10 | Severe | Sparked by Jefferson’s Embargo Act which cripples trade with Britain and France. Relief comes when Act reversed by 1810 Macon Act |
| Depression of 1815 | 1815-21 | Severe | When the War of 1812 ends suppliers are left with vast inventories of goods that cannot be sold or only at a loss. Supply speculation during the war leads to devaluation of paper currency. Banks are forced to call in loans to stay solvent. Home foreclosures and business failures follow. After 6 years stability returns. |
| Bank Panic of 1837 | 1836-39 | Severe | After President Jackson cancels the Second US Bank and issues his Species Circular which demands hard currency to buy public domain lands confidence in paper money collapses with banks unable to pay depositors causing “runs.” 600 banks close while others call in loans forcing foreclosures on homes and businesses. |
| Recession of 1847 | 1847-48 | Minor | A slowdown following victory in the Mexican War of 1846-47. |
| Panic of 1857 | 1857-8 | Sizable | Delays in the timing and routes for the Intercontinental Railway bite speculators and when the Ohio Life and Insurance Company folds a run on the banks by depositors cause the usual loss of banks businesses and homes. |
| Recession of 1865 | 1865-7 | After the Civil War ends a period of “deflation” sets in whereby prices for goods and services fall and businesses suffer losses in profitability. Stability gradually returns as Reconstruction plays out. |