August 24: Today is the anniversary of the financial panic of 1857, caused mainly by the heating of the US economy due to the excessive expansion of its domestic economic activity.

Bank run on the Seamen's Savings' Bank during the panic of 1857.

After the "revolutions of the nineteenth century," the capitalist world managed a global interconnectivity never seen before 1850.

The Panic of 1857, Subprime, Railroads, and Financial Failure.

What we call "financial bubble" was what occurred in 1857, which, when heated and exploded, affected almost everyone, except for China and Japan, because they were closed to the outside world. In fact, today's date in the fall of 1857, took place the first global financial crisis in history.

1857 Financial Panic!

The British, who ran the greatest empire ever known to humanity, had to draw on its reserves of gold and silver to support what in economics is called "money supply" or the amount of coins and banknotes circulating in the market. That was what they managed to curb the rate of fall in September, and control British panic.

Summary and Definition of Panic of 1857
Definition and Summary: The Panic of 1857 was a crisis in financial and economic conditions following a period of over expansion in the United States. The causes were a fall in land prices, the failures of railroad companies and crashing wheat prices due to the declining purchase of U.S. agricultural products in Europe.

By the collapse of the "Ohio Life Insurance and Trust Company", and the cessation of its operations in New York, the chain of disasters precipitated with the railway industry where many people had invested in the business success that became overheated.

Politician.  "I'll stop your horse, Sir."

Bank Director.  "Do it then, like a good fellow, but take care; see what I got for trying to stop him in my way."

Artist: Frank Bellew

The dismissal of workers was abrupt and purchasing power deteriorated. Companies began to break one after another.

Chart showing the share prices of railway companies, the dotcoms of their day, in 1857.

The more layoffs, fewer people have money to buy. Therefore, inventories accumulate, and more people get fired; thus, less money to spend in the economy, less production ... Finally, economic depression!