Monday, December 5, 2016

A Footnote to the Folger Story

The lives of both Nathan C. and Frederick F. Folger were impacted by a financial crisis in 1837. Before resuming the story of the brothers from Hudson and their business exploits in New Orleans, Gossips offers a brief explanation of the Panic of 1837, considered to be "the worst economic depression that the young nation had yet known." The story involves someone else from Columbia County: President Martin Van Buren, who took office in 1837. The principal source for this retelling is the Library of Congress website America's Story from America's Library. 

Although the Panic of 1837 happened the year Van Buren took office, its causes go back to the policies of his predecessor, Andrew Jackson, whom Van Buren had served as secretary of state, vice president, and close adviser. Jackson brought an end to the Second Bank of the United States, which he thought exercised too much control over credit and economic opportunity, by moving federal funds to smaller state banks. The reckless credit policies of these banks led to massive speculation in Western lands. By the time Van Buren took office, the banks were in trouble. They started restricting credit and calling in loans; bank depositors tried to withdraw their funds. During the five-year depression that followed the Panic of 1837, many banks closed, businesses failed, thousands lost their land, and there was unprecedented unemployment. 

Library of Congress
Van Buren was blamed for the financial crisis and given the nickname "Martin Van Ruin." When he ran for reelection in 1840, he was soundly defeated.

Click here for a comprehensive analysis of the causes of the Panic of 1837.

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