[67] The panic of 1837 was caused by a great expansion of banking and bank credits, and an intense speculation in real estate. In 1830 there were 329 banks in the country with a capital of $110,000,000. In 1857 there were 788 with a capital of $290,000,000. When the crisis was subsequently examined it was found that there had been an actual shrinkage of $2,000,000,000 in the value of the assets of the country, and that $600,000,000 of indebtedness had been wiped out by bankruptcy.
The panic of 1857 was due primarily to the influx of gold from California after its discovery in 1848, and to the intense passion for speculative gain which attended it. Suspension of specie payments by the banks lasted fifty-nine days. Complete recovery to the normal standard did not take place until 1860, when it was again interrupted by the events antecedent to the Civil War of 1861.
The antecedents of the crisis of 1873 were identical with every other commercial crisis—namely, speculation—the act of buying with a view to selling at a higher price, and overtrading, or the act of buying and selling too much on a given capital. Most commonly these two elements are accompanied by two others, viz.—the destruction or loss of previously accumulated capital, and the rapid conversion of circulating into fixed capital. Speculation and destruction of capital usually go together in preparing the way for a crisis.—Horace White, Fortnightly Review, Vol. XXV, p. 819.
The panic of 1893 was distinctly a currency panic. By a curious paradox it came at a time when the volume of currency was unprecedentedly large and constantly increasing. But the inception of the disaster had to do with its quality rather than its quantity. The repeal of the silver purchasing clause of the Sherman Law, November 1, 1893, restored confidence by assuring the commercial world that the existing volume of silver coin would be maintained on a parity with gold.
[68] Real Estate Record and Guide, 1906–7.
[69] Consult Bradstreet’s, 1907; the Construction News, Chicago, 1907; the Engineering News, 1907.
[70] “The New York Stock Exchange and the Panic of 1907,” by Eugene Meyer, Jr., Yale Review, May, 1909.
[71] “Credit Cycles and the Origin of Commercial Panics,” Manchester Statistical Society, December 11, 1867.
[72] Remarks of Joseph French Johnson, dean of the New York University School of Commerce, at the American Institute of Banking, October 25, 1907.
[73] Consult Burton, supra, pp. 109–110; Muhleman. “Monetary Systems of the World,” pp. 128, 130, 135, 140.