Talk:Panic of 1866
The resources are sparse on this one and focus on various aspects and countries, hence the page is a little disjointed. It would be interesting to trace the origins of the panic between various countries and where it actually begun (if there was a single point of origin).
The sources don't speak of any significant crisis in the US, but Rothbard mentions in his history the following:
- By 1866, it was clear that the national banking system had replaced the state as the center of the monetary system of the United States. The number of state banks fell from 1,466 in 1863 to 297 in 1866. The number of national banks grew in that same period, from 66 in 1863 to 1,634 three years later. Total notes and deposits in state banks fell from $733 million in 1863 to only $101 million in 1866. In 1865, state bank notes had totaled $142.9 million; by 1866 they had collapsed to $20 million. National bank notes grew from a mere $31.2 million in 1864, to $276 million in 1866.
- In order to survive, the state banks had to keep deposit accounts at national banks, from whom they could "buy" national bank notes in order to redeem their deposits. The state banks became the fourth layer of the national pyramid of money and credit. The multi-layered structure of bank inflation under the national banking system was intensified. In this new structure, the state banks began to flourish. By 1873, the total number of state banks had increased to 1,330, and their total deposits were $789 million.
A federal debt, which had tallied only $64.7 million in 1860, amounted to the huge amount of $2.32 billion in 1866.
...so there was actually quite some upheaval in the banking sector at the time. It could be interesting to check, if there was any interaction with the 'Panic' in Europe. This is pure speculation, of course. :) Pestergaines 09:07, 15 January 2011 (CST)
- Murray N. Rothbard. "A History of Money and Banking in the United States: The Colonial Era to World War II" (pdf), The War of 1812 and its Aftermath, p.144-147, 150. Referenced 2010-06-30.