4 Ira Ryner 



1 



CRISIS OF 1837 



Preliminary to the discussion of permanent environmental 

 changes, it may be well to point out the difficulty encountered in 

 determining exactly, in a particular change of environment, for 

 example railway extension, how much is permanent and how 

 much occasional. The course we shall pursue is that of treating 

 the whole change as permanent, where classification is difficult, 

 in the treatment of the first heading. In the discussion of the 

 second heading, however, we shall attempt to measure approxi- 

 mately at least how much of the change is occasional. 



A few years previous to the crisis of 1836-39 the first railroads, 

 werie constructed. This revolution, resulting in the annihilation 

 of space and time, naturally caused an overestimation of the im- 

 mediate needs for railway facilities, and the speculation beginning 

 here soon spread to other industries. In England, railway con- 

 struction began about 1830. By 1838, there had been constructed 

 490 miles at a cost of ii3,300,ooo.^ The speculation spread to 

 joint-stock banking, and it is estimated that between 1834 and 

 1836 about seventy banks were established.- Thus the mania 

 spread from business to business until, during the two years just 

 preceding the crisis, 300 companies with a capitalization of ii35,- 

 248,700 were formed. Of this whole amount £69,000,000 were 

 for railway enterprises and £23,000,000 for joint-stock banks.* 



As an indication of the variety of purposes for which com- 

 panies were formed we quote a list from Juglar, the titles of 

 which are significant : "The British-Agricultural Loan company, 

 another for supplying pure spring water, the Patent Steam Pad- 

 dle company, the Safety Cabriolet company, the British and 

 American Intercourse company, the London Whale Fishery com- 

 pany, the Liverpool British and Foreign Trading company."* In 



^ Levi, History of British Commerce, 302. 

 ^ Crump, The Key to the London Money Market, 29. 

 3 Levi, History of British Commerce, 220. 

 *Juglar, Les crises commercialese 345. 



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