1 6 Ira Ryncr 



II 



CRISIS OF 1836-39 



Turning now from long-time to short-time causes, we encoun- 

 ter such a compb'cation of actions and reactions between these 

 two kinds of forces as to render it frequently quite difficult to 

 determine the category to which a certain force belongs or even 

 to confine it to a single category. To illustrate: A portion of 

 increased railway mileage may 'be permanent and another portion 

 temporary or occasional. Again, railway extension may increase 

 loans ; and loans upon favorable terms, on the other hand, may 

 encourage railway extension. Whenever possible, however, we 

 shall adhere to the classification given in the introduction. 



In England the cause of the crisis of 1836-39 is attributed to 

 deficient harvests at home and to certain financial measures taken 

 by the United States. The crop of 1838 is 'reported as the worst 

 since 1816 and that of 1839 was but little better.^ The "corn" 

 crop was deficient, and there was as a result an import of £10,- 

 000,000 worth of wheat for the year 1838 alone.- The issue of the 

 specie circular as part of an attempt to place the American cur- 

 rency upon a metallic basis drew gold from Europe. Some Ameri- 

 can students of crises say, however, that the trouble started in 

 England : that England had over-expanded, a reaction followed 

 which cut ofi: the demand for American cotton, thus resulting in 

 ruin to that and to other industries in the United States.' 



The weight of the argument, however, seems to be in favor of 

 the former view. F"or six or eight years the imports by the 

 United States from England had greatly exceeded her exports, 

 which shows that we were getting credit abroad in the shape of 

 security sales, time operations, etc.* Now this would certainly 

 render England decidedly sensitive to every 'change in the course 

 of events in the United States. The operation of the specie cir- 



' Macleod, A History of Bankinpr in all the Leading Nations; vol. II, 

 A Histo}y of Bankitigin Great Britain, 134. 

 '^ Juglar, Les Crises Commerciales, 347. 

 3 Sumner, History of Banking in the United States, X, 268, 

 * Monthly Suimnary of Commerce and Finance, year 1903. 



158. 



