Panic of 1857

Panic of 1857 (Murrin, 1999)

Textbook
A financial panic in the fall of 1857 brought on what turned out to be a short-lived but intense depression. Causes of the panic stemmed partly from the international economy and partly from domestic overexpansion…This speculative house of cards came crashing down in September 1857. The failure of one banking house sent a wave of panic through the financial community. Banks suspended specie payments, businesses failed, railroads went bankrupt, construction halted, factories shut down. Hundreds of thousands of workers were laid off, and others went on part-time schedules or took wage cutes, just as the cold winter months were arriving.
John M. Murrin, et al., eds., Liberty Equality Power: A History of the American People, 2nd ed., vol. 1 (Fort Worth: Harcourt Brace, 1999), 488.

Panic of 1857 (McPherson, 2001)

Textbook
The minimal impact of the Panic of 1857 in the South underscored Southern boasts about the superiority of their system. While many Northern businesses failed, banks closed, and factories shut down during the depression, causing unemployment and suffering among Northern workers during the winter of 1857-1858, cotton prices held firm and cotton crops set new records. This led Senator James Hammond to deliver his famous “King Cotton” speech in the Senate on March 4, 1858. Southerners were “unquestionably the most prosperous people on earth.” Only the continued exports of cotton during the Panic, Hammond told the North, “saved you from destruction.” This was conclusive proof of slavery’s virtues.
James M. McPherson, Ordeal by Fire: The Civil War and Reconstruction, 3rd ed. (New York: McGraw-Hill, 2001), 122-123.

Panic of 1857 (Tindall, 1999)

Textbook

The third crisis of Buchanan’s first half year in office, a financial crisis, broke in August 1857. It was brought on by a reduction in demand for American grain caused by the end of the Crimean War (1854-1856), a surge in manufacturing that outran the growth of markets, and the continued weakness and confusion of the state banknote system. Failure of the Ohio Life Insurance and Trust Company on August 24, 1857, precipitated the panic, which was followed by a depression from which the country did not emerge until 1859.

Everything in those years seemed to get drawn into the vortex of sectional conflict, and business troubles were no exception. Northern businessmen tended to blame the depression on the Democratic Tariff of 1857, which had set rates on imports at their lowest level since 1816. The agricultural South weathered the crisis better than the North. Cotton prices fell, but slowly, and world markets for cotton quickly recovered. The result was an exalted notion of King Cottons’ importance to the world, an apparent confirmation of the growing argument that the southern system was superior to the free-labor of the North.

George Brown Tindall and David E. Shi, eds., America: A Narrative History, 5th ed., Vol. 1 (New York:  W. W. Norton and Company, 1999), 707-708.

Panic of 1857 (Roark, 2002)

Textbook
Not only did Douglas have to content with a formidable foe, but he also carried the weight of a burden not of his own making. The previous year, the nation’s economy experienced a sharp downturn. Prices plummeted, thousands of businesses failed, and unemployment rose. The causes of the panic of 1857 lay in the international economy, but Americans reflexively interpreted the panic in sectional terms. Northern businesses and industries suffered most, and Northerners blamed the southern-dominated Congress, which had just months before reduced tariff duties to their lowest levels in the nineteenth century. Given this invitation, Northerners believed, foreign competition ravaged the northern economy. Southerners, in contrast, had largely escaped hardship because cotton prices remained high. Although Illinois suffered less than the Northeast, Douglas had to go before the voters in 1858 as a member of the freshly accused, southern-dominated Democratic party.
James L. Roark, et al., eds., The American Promise: A History of the United States, 2nd ed., vol. 1 (Boston: Bedford/St. Martin’s, 2002), 477-479.
Date Event
New York City banks suspend operations as financial panic sets in
Federal troops sent to protect the U.S. Customs House in New York City
Figures show that there were more than five thousand bank failures in the United States between December 1856 and December 1857
Philadelphia banks finally resume specie payments
Wall Street, New York, NY
Date Title
New York Times, “The Financial Panic,” September 14, 1857
New York Times, “The Hard Times in the City,” October 13, 1857
New York Times, “The American Panic,” October 14, 1857
New York Times, “The Crisis at Last,” October 14, 1857
New York Times, “The Hard Times in the City,” October 16, 1857
New York Times, “Suspension Terrors,” October 20, 1857
New York Times, “A New Bankrupt Law,” November 2, 1857
Memphis (TN) Appeal, “Land Speculations at the West,” June 5, 1859
New York Times, “Wall-Street and the Country,” August 15, 1860
Chicago Style Entry Link
Holt, Michael F. The Political Crisis of the 1850s. New York: W W Norton & Company, 1983. View Record
Huston, James L. "The Panic of 1857, Southern Economic Thought, and the Patriarchal Defense of Slavery." Historian 46, no. 2 (1984): 163-186. View Record
Huston, James L. "Western Grains and the Panic of 1857." Agricultural History 57, no. 1 (1983): 14-32. View Record
Lightner, David L. "Simon Newton Dexter and the Panic of 1857." Mid-America 69, no. 2 (1987): 61-70. View Record
Stampp, Kenneth M. America in 1857: A Nation on the Brink. New York: Oxford University Press, 1990. View Record
How to Cite This Page: "Panic of 1857," House Divided: The Civil War Research Engine at Dickinson College, https://hd.housedivided.dickinson.edu/node/9600.