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Article: Financial Panics
- Article from:
- Dictionary of American History
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FINANCIAL PANICS
FINANCIAL PANICS,
events during which bank depositors attempt to withdraw their deposits, equity holders sell stock, and market participants in general seek to liquefy their assets.
Panic of 1785
The panic of 1785, which lasted until 1788, ended the business boom that followed the American Revolution. The causes of the crisis lay in the overexpansion and debts incurred after the victory at Yorktown, a postwar deflation, competition in the manufacturing sector from Britain, and lack of adequate credit and a sound currency. The downturn was exacerbated by the absence of any significant interstate trade. Other factors were the British refusal to conclude a commercial ...