Early Recessions and Crises
Attempts have been made to date recessions in America beginning in 1790. These periods of recession were not identified until the 1920s. To construct the dates, researchers studied business annals during the period and constructed time series of the data. The earliest recessions for which there is the most certainty are those that coincide with major financial crises.
Beginning in 1834, an index of business activity by the Cleveland Trust Company provides data for comparison between recessions. Beginning in 1854, the National Bureau of Economic Research dates recession peaks and troughs to the month. But for the earliest recessions, there are no standardized indexes, and the data are considered unreliable. As the data get older, their reliability worsens.
In 1791, Congress chartered the First Bank of the United States to handle the country's financial needs. The bank had some functions of a modern central bank, although it was responsible for only 20% of the young country's currency. In 1811 the bank's charter lapsed, but it was replaced by the Second Bank of the United States, which lasted from 1816–36.
| Name | Dates | Duration | Time since previous recession | Characteristics |
|---|---|---|---|---|
| Panic of 1797 | 17961796–1799 | 36~70003000000000000003 years | 72~6 years | Just as a land speculation bubble was bursting, deflation from the Bank of England (which was facing insolvency because of the cost of Great Britain's involvement in the French Revolutionary Wars) crossed to North America and disrupted commercial and real estate markets in the United States and the Caribbean, and caused a major financial panic. Prosperity continued in the south, but economic activity was stagnant in the north for three years. The young United States engaged in the Quasi-War with France. |
| 1802–1804 recession | 18021802–1804 | 24~2 years | 36~3 years | A boom of war-time activity led to a decline after the Peace of Amiens ended the war between the United Kingdom and France. Commodity prices fell dramatically. Trade was disrupted by pirates, leading to the First Barbary War. |
| Depression of 1807 | 18071807–1810 | 36~70003000000000000003 years | 36~3 years | The Embargo Act of 1807 was passed by the United States Congress under President Thomas Jefferson as tensions increased with the United Kingdom. Along with trade restrictions imposed by the British, shipping-related industries were hard hit. The Federalists fought the embargo and allowed smuggling to take place in New England. Trade volumes, commodity prices and securities prices all began to fall. Macon's Bill Number 2 ended the embargoes in May 1810, and a recovery started. |
| 1812 recession | 18121812 | 06~6 months | 18~18 months | The United States entered a brief recession at the beginning of 1812. The decline was brief primarily because the United States soon increased production to fight the War of 1812, which began June 18, 1812. |
| 1815–21 depression | 18151815–1821 | 72~70006000000000000006 years | 36~70003000000000000003 years | Shortly after the war ended on March 23, 1815, the United States entered a period of financial panic as bank notes rapidly depreciated because of inflation following the war. The 1815 panic was followed by several years of mild depression, and then a major financial crisis – the Panic of 1819, which featured widespread foreclosures, bank failures, unemployment, a collapse in real estate prices, and a slump in agriculture and manufacturing. |
| 1822–1823 recession | 18221822–1823 | 12~1 year | 12~1 year | After only a mild recovery following the lengthy 1815–21 depression, commodity prices hit a peak in March 1822 and began to fall. Many businesses failed, unemployment rose and an increase in imports worsened the trade balance. |
| 1825–1826 recession | 18251825–1826 | 12~1 year | 24~2 years | The Panic of 1825, a stock crash following a bubble of speculative investments in Latin America led to a decline in business activity in the United States and England. The recession coincided with a major panic, the date of which may be more easily determined than general cycle changes associated with other recessions. |
| 1828–1829 recession | 18281828–1829 | 12~1 year | 24~2 years | In 1826, England forbade the United States to trade with English colonies, and in 1827, the United States adopted a counter-prohibition. Trade declined, just as credit became tight for manufacturers in New England. |
| 1833–34 recession | 18331833–1834 | 12~1 year | 48~4 years | The United States' economy declined moderately in 1833–34. News accounts of the time confirm the slowdown. The subsequent expansion was driven by land speculation. |
Read more about this topic: List Of Recessions In The United States
Famous quotes containing the words early and/or crises:
“In the true sense one’s native land, with its background of tradition, early impressions, reminiscences and other things dear to one, is not enough to make sensitive human beings feel at home.”
—Emma Goldman (1869–1940)
“Part of the responsibility of being a parent is to arrange situations in children’s lives so they are able to meet crises with a reasonable chance of coping successfully with them.... Parents who believe children are unharmed by crises and will simply bounce back in time seriously misunderstand children.”
—Donald C. Medeiros (20th century)