Eric the Green Wrote:The 1840s were not one of the worst depressions. That would be either the 1890s or 1870s.
Peter Rousseau Wrote:The financial panic that gripped the U.S. economy in the Spring of 1837 was among the most severe in this nation’s history. Failures and loan losses reduced the book assets of the state chartered banks by 45 percent during the five years that followed, while 194 of the 729 banks with charters in 1837 were forced to close their doors.
The prices of banking, railroad and industrial securities in the early stock markets plummeted. The effects on the real sector were also substantial. For example, the growth of real investment per capita fell from an annual average of 6.6 percent in the five years preceding the panic to -1.0 percent over the next five years. Among 19th century U.S. financial crises, only that of 1893 posted a larger decline in investment.
Similar calculations show the average annual growth of real per capita income falling by 1.4 percent in the decade surrounding 1837, effectively drawing one of the nation’s early growth spurts to an abrupt close. This decline is comparable to that experienced in 1873 and considerably larger than those surrounding the crises of 1857 and 1893.
Douglass North (1961) reports decreases of nearly 50 percent in real imports per head from their 1836 level in each year through 1843. Accounts of widespread unemployment abound in the contemporarypress. Indeed, one must turn to the 20th century and the Great Depression, with respective decreases of 10.2 and 5.0 percent in the annual growth of per capita investment and output, to identify a more catastrophic financial shock to the U.S. economy.
Reference Jacksonian Monetary Policy, Specie Flows, and the Panic of 1837