1850-1859---The Panic of 1857

AUGUST 24, 1857:             

The Ohio Life Insurance and Trust Company failed, setting off the worldwide economic Depression known as the Panic of 1857. By the end of the year, over 5,000 U.S. banks closed their doors, and the Depression spread to Europe and Asia. Due to the differences in the northern and southern economies of the United States, many southern planters, though directly unaffected, found that their access to markets was severely impacted and this deepened the conviction of some that disunion was a preferable alternative. Brought on in part by rampant speculation in gold and in railroads, in part by a drought on the Great Plains that devastated food crops and drove farms into foreclosure, in part by the Dred Scott decision that threatened to upset the North’s economic balance through the possible introduction of slavery, and by falling international confidence in the political stability of the United States, the Panic of 1857 lasted until early 1859, and its longer term effects did not dissipate until the North geared up its war economy in late 1861. Many marginally middle class Americans were driven into poverty by the Panic of 1857.