Jeffrey Rogers Hummel on the Panic of 1837

In May 1837, a major financial crisis engulfed
America’s approximately 800 banks, with all but six ceasing to
redeem their banknotes and deposits for specie (gold or silver
coins). This was followed by a short but sharp depression,
constituting only the second manifestation of the modern business
cycle in the country’s history up to that point. The panic had been
preceded by President Andrew Jackson’s famous “Bank War,” in which
the Second Bank of the United States lost its exclusive charter
from the national government. It was followed by vociferous
political disputes about the monetary system, and by a prolonged
price deflation that began in 1839 and didn’t end until 1844.

Historians and economists continue to explore the panic’s causes
and consequences, a question made all the more relevant by the
financial crisis of 2007-08. Now the University of New Hampshire
historian Jessica M. Lepler has entered the fray with The Many
Panics of 1837: People, Politics, and the Creation of a
Transatlantic Financial Crisis, based on her award-winning Brandeis
doctoral dissertation. Lepler’s book, writes Jeffrey Rogers
Hummel, is a social and business micro-history confined to the
events leading up to and culminating in the bank suspension, a work
of great detail and mixed quality.

View this article.