National Bank Crisis
The KSS failure, although unique in some ways, was part of a national bank crisis known as the Panic of 1837 that began in May of that year. Underlying causes of the nationwide financial panic included speculative and inflationary selling of public lands in western states like Michigan, Ohio and Missouri. The economic policies of the previous President Andrew Jackson, including the Specie Circular and the withdrawal of government funds from the Second Bank of the United States, also contributed to the crisis.
On May 10, 1837 in New York, every chartered bank stopped payment in specie (gold and silver coinage), leaving banks and local institutions like the KSS holding notes without adequate liquid assets. Within two months the failures in New York alone aggregated nearly $100,000,000 in value. "Out of eight hundred and fifty banks in the United States, three hundred and forty-three closed entirely, sixty-two failed partially, and the system of State banks received a shock from which it never fully recovered." Smaller, privately held financial institutions, like the KSS, also failed in droves. The Panic was followed by a five-year depression, characterized by ongoing failures of banks and financial institutions and record unemployment levels.
Read more about this topic: Kirtland Safety Society
Famous quotes containing the words national, bank and/or crisis:
“I, with other Americans, have perhaps unduly resented the stream of criticism of American life ... more particularly have I resented the sneers at Main Street. For I have known that in the cottages that lay behind the street rested the strength of our national character.”
—Herbert Hoover (1874–1964)
“The prairies were dust. Day after day, summer after summer, the scorching winds blew the dust and the sun was brassy in a yellow sky. Crop after crop failed. Again and again the barren land must be mortgaged for taxes and food and next year’s seed. The agony of hope ended when there was not harvest and no more credit, no money to pay interest and taxes; the banker took the land. Then the bank failed.”
—Rose Wilder Lane (1886–1968)
“A crisis unmasks everyone.”
—Mason Cooley (b. 1927)