The Panic of 1857 for kids
The national economic depression, caused by the Panic of 1857, engulfed the country for nearly three years further increasing tension in the United States which was on the verge of American Civil war (1861-1865) over the issue of slavery.
Panic of 1857 for kids: The Collapse of the Ohio Bank
The Panic of 1857 was sparked by the collapse of a banking institution - the Cincinnati's Ohio Life Insurance and Trust Company. The New York branch of this bank folded on August 24, 1857 and the newly established Telegraph system instantly carried this news right across the nation. Newspapers carried the story, people panicked and tried to get their money, and other banks began to collapse. The picture depicts the run on the Seamen's savings bank.
Causes of the Panic of 1857
The causes of the Panic of 1857 were:
People became aware to the financial crisis due to the publicity surrounding the closure of the Ohio bank
The value of land in the west fell, the number of migrants decreased, and this caused financial problems with the railroads
Railroad securities (stocks) lost their value
Over expansion: Important railroad lines went bankrupt refer to Railroads in the 1800s
Banks that financed the railroads closed - there were 'runs' on banks and a squeeze on credit
Wheat Prices crashed: The end of the Crimean War (October 1853 – February 1856) saw the return of men to their homes and an increase in farm produce. This led to a decline in Europe's purchase of agr