2. APUSH: Exam Review- Panics and Tariffs

3. The Panic of 1819
The United States' economy had already gone through a few little hiccups in the decades following the nation's founding, but the Panic of 1819 was the first broad-scale financial crisis Americans would weather.
The United States had been a major exporter of agricultural products and importer of manufactured products before the War of During the war, imports were greatly diminished and as a result, the manufacturing sector exploded to meet the new demand. This overzealous expansion, coupled with lax banking practices, government over- borrowing, returning international competition, a lack of hard currency, increased credit lending, a surging real estate boom and the widespread growth of speculation and development of public land, all helped set the stage for disaster. Sound familiar?
In response, the nation's banks entered a stiff contractionary period, calling in their vast network of loans and setting off shockwaves of bankruptcies and bank runs as people scrambled for cash. Prices of U.S.-made goods crumpled, property values plummeted and unemployment abounded in record numbers.
After a couple of rough years, things finally started to turn around, but as we'll see, the economy wouldn't stay sound for long.

4. The Panic of 1837
After the Panic of 1819, Pres. Andrew Jackson began a fierce campaign against the Bank of the United States, the large national bank that had helped spark trouble during the financial crisis. Jackson wanted 100 percent reserve-backed banking to prevent the institutions from issuing mounds of bank notes that they couldn't cover.
He vetoed an 1832 renewal of the Bank of the United States' charter and disbanded the institution, removing the public treasury deposits and distributing them among other banks. Unfortunately, in the years following the 1819 panic, the Bank of the United States had continuously amped up the country's currency supply, contributing in part to steep inflation and spurring land speculation.
Because of this and other complex economic factors, currency depreciated and contractionary pressures returned. Prices fluctuated wildly and the banking system lost stability -- and consumer confidence -- once again. A wave of deflation followed, and panic struck people across the nation. Banks closed by the hundreds, and the country was once again mired in the throes of a depression for several years.

5. Panic of 1873
When a large bank fails, vast numbers of businesses collapse. It's like a dangerous game of dominoes -- and that cause-effect relationship isn't unique to modern economics. In September 1873, after overextending its resources to support railroad development, banking house Jay Cooke and Company was forced to declare bankruptcy. Following the announcement, a surge of panic shot through Wall Street investors, and the stock exchange took a massive dive. Over the next few years, thousands upon thousands business would fail in turn.
As for Jay Cooke, his name may not be widely remembered, but he had a large impact on the history of the United States. He was instrumental in financing the Union's Civil War effort and lobbied heavily for the National Banking Acts, which laid the foundation for our current Federal Reserve System. The National Banking Acts also led to the pyramid structure of reserves that was the major linchpin of the 1873 panic -- Cooke's bank was a sizeable chunk at the very bottom of the pyramid

6. Panic of 1901
The Panic of 1901 was triggered by more competition over the railroads. Company consolidation was roaring along full swing at the turn of the 20th century and two businessmen -- James J. Hill and E. H. Harriman -- were in stiff competition for a key railway company. Hill and his backers managed to secure the deal, but not before Harriman and his associates tried to snap up one of his opponent's other main railway lines.
As Harriman snatched stocks from Hill's company, other railroad stocks started to show declines as people panicked. Soon, the whole market followed, and it wasn't long before absolute pandemonium raged across the floor of the stock exchange. Typically respectable men grew wild-eyed and violent, and the ticker tape lagged so far behind the extreme rush of transactions that the final one didn't tick by until more than 15 minutes after the closing bell rang

7. Panic of 1907
In October 1907, the New York financial world experienced a great shakeup and an extended run on several trust companies, exposing certain weaknesses in the banking system of the day. It was also a catalyst for the creation of the Federal Reserve System and other operational procedures and regulations of the banking system that we still use in the United States today.
One of the most prominent causes of the Panic of 1907 was the lack of regulations over trust companies, corporations that served as trustees for the financial assets of estates, individuals and businesses. Their freedom to trade in riskier ventures with extremely low reserves made the trust companies ticking time bombs.
Enter businessman F. Augustus Heinze. In the middle of a tight money market and a slowing economy, he attempted to corner the stock of United Copper Company and failed, causing the trust company to go bust. The absolute madness didn't break immediately, however. It wasn't until a few days later that trust companies around New York City began begging desperately for aid.
J.P. Morgan, along with James Stillman of National City Bank and George Baker of First National Bank, were among several financiers who attempted to bail out some of the trust companies being hit hardest by bank runs. The relief funds -- offered only to those institutions deemed sound enough -- helped avert a complete disaster, but the financial world of New York City would be shaken to the core by the end of the panic

8. APUSH: Exam Review- Panics and Tariffs
The Tariff of 1828 was a protective tariff passed by the Congress of the United States on May 19, 1828, designed to protect industry in the northern United States. It was labeled the Tariff of Abominations by its southern detractors because of the effects it had on the antebellum Southern economy.
The major goal of the tariff was to protect industries in the northern United States which were being driven out of business by low-priced imported goods by taxing them. The South, however, was harmed directly by having to pay higher prices on goods the region did not produce, and indirectly because reducing the exportation of British goods to the US made it difficult for the British to pay for the cotton they imported from the South.[1] The reaction in the South, particularly in South Carolina, would lead to the Nullification Crisis that began in late 1832.[2]
The tariff marked the high point of US tariffs.

9. APUSH: Exam Review- Panics and Tariffs
Enacted on July 14, 1832, this was referred to as a protectionist tariff in the United States. The purpose of this tariff was to act as remedy for the conflict created by the Tariff of Mainly, the protective Tariff of 1828 was created in such a way that it intended to protect the industry in the north. So the Tariff of 1828 was also called the Tariff of Abominations by Southern states as it seemed unfair on the part of the government to favor the North by sidelining the south. As compared to the hype created about the protective Tariff of 1832, it proved to be a far cry from fulfilling the demands of the south. Its predecessor pushed the duties on citizens which were as high as 45 percent on the value of specific manufactured goods, while 1832 act brought it down to 35%. For instance, the duty on hemp, which had been $60 a ton in 1828, was reduced to a duty of $40, as a result of compromise Tariff of Even then southerners were not happy with it. Eventually, their unrest and dissatisfaction was what led to the nullification crisis. Along with that, another bill was passed, Tariff of 1833.

10. APUSH: Exam Review- Panics and Tariffs
The southern states were displeased even after As a result, in 1833, a sectional crisis, called the Nullification Crisis happened during the presidency of Andrew Jackson. South Carolina's Ordinance of nullification. As per the ordinance, it was by the power of the state, the Federal Tariffs of 1828 and were declared unconstitutional in November As a result they were null and void within the 'sovereign' boundaries of South Carolina, because the reductions provided for in the Tariff of 1832 were too less for South Carolina. Due to the precarious economic situation during the 1820s, South Carolina was the state which had particularly borne the brunt of the economic down turn. The result was that by 1828, the politics of South Carolina increasingly revolved around the issue of tariffs. In Washington, the president and the vice president differed on the issue. John Calhoun, the vice president, later quit his office to defend the nullification process. In 1833, a bill authorizing the president for usage of military forces against South Carolina was passed as a preemptive measure. Consequently, negotiations led to a tariff satisfactory to South Carolina being passed. Finally, South Carolina repealed its Nullification Ordinance in 1833 on March 11.

11. APUSH: Exam Review- Panics and Tariffs

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