Governor Henry Gilpin.
The Panic of 1836 was a major economic downturn in the Confederation of North America from 1836 to 1840. The panic caused widespread business failures and radical labor agitation in the Northern Confederation. Although the panic had less immediate economic effects on the other confederations of the C.N.A., indirectly it brought about the abolition of slavery in the Southern Confederation, and may have contributed to violent uprisings in Indiana and Quebec. The Panic and its economic disruptions brought about the era of North American history called the Crisis Years.
Origins and Economic Disruption[]
The panic began among the commercial banking firms of London. In the 1830s, Barings Bank found itself overextended in India and the Near East. A recession in France in 1835 caused the bank to suffer losses among its investments there. When word of the bank's reverses in France became public in October, there was a panic among its depositors, and as a result the bank was forced to close its doors on 15 October. The fall of Barings led to the collapse of a dozen public and private banks in London, the worst financial crisis in British history.
The panic spread to the C.N.A. early in 1836 when British investment capital suddenly dried up, and banks in New York City found themselves in danger of collapse. The New York banks had always been poorly capitalized, and there were many financiers who had begun working in the field after the depression of 1829 and who had no experience in dealing with financial panics. The Peoples' Bank closed its doors in March, and others followed. On 15 April New York's fourth-largest bank, the Manhattan Bank declared insolvency. On 1 May Jacob Little, one of the city's leading bankers, closed down his office and fled to the United States of Mexico. It was soon learned that he had embezzled more than N.A. £20,000 from his firms, many located in the Southern Confederation.
As the New York banks saw their reserves dropping, they called in loans from businesses they had invested in. As these businesses saw their own reserves disappear, they found themselves unable to pay their vendors and were forced into bankruptcy. This caused a chain reaction of bankruptcies among firms throughout the N.C., causing hundreds to close. Foundries and mines in Pennsylvania went under, along with textile mills in Massachusetts and shipping firms in New York and Philadelphia.
Franz Freund.
Workers who were left unemployed by the closure of their workplaces grew desperate, and they flocked to the Grand Consolidated Union, which had been founded in 1835 by Franz Freund, an Austrian immigrant. By 1839 the Grand Consolidated had locals in every major city in the N.C., and its political arm, the Workers' Coalition, was contesting elections for seats in the Northern Confederation Council. The Workers' Coalition found itself competing with the Conservative Party in trying to unseat the governing Liberal Party, and although the Liberals lost seats in the Council, they were able to maintain their majority, and incumbent Governor Daniel Webster was returned to another term in office.
The workers of the Grand Consolidated responded to the Liberal electoral victory with a massive general strike in the summer of 1840 that threatened to bring down Webster's government. Following Webster's assassination in September, the Liberal majority in the Northern Confederation Council chose Henry Gilpin of Pennsylvania as Governor. Gilpin suspended civil rights in the N.C., and used the N.C. army in coordination with private armies hired by manufacturers to attack the Grand Consolidated, crushing the N.C. labor movement and leading to the deaths of over 40,000 people, and serious injuries to 78,000 more. A popular backlash against Gilpin's excesses brought about a landslide victory by the Conservatives in the 1842 elections, and Gilpin was replaced by John Dix, who promised an administration of "healing and humanitarianism, in which the rights of all will be protected."
Rebellion and Abolition[]
Winfield Scott.
In Indiana, Chief John Miller, a Christianized Osage leader who claimed to be both the Messiah and the ghost of Tecumseh, led an uprising in which he promised to create a new heaven on earth after the destruction of the white settlers. Thousands of Indians joined Miller's army, allowing him to take Michigan City on 21 July 1839 after a two-week siege, after which he killed some 5,000 of its population of half a million. News of the fall of Michigan City led Viceroy Sir Alexander Haven to call an emergency meeting of the Grand Council, which met in Burgoyne on 15 August. The Grand Council authorized the formation of a united North American army under the command of General Winfield Scott.
Scott led his army west from Burgoyne the following month, arriving at Michigan City on 18 October and entering the city the following day. Winfield's army was able to overrun Miller's army, then proceeded to slaughter them to the last man. Scott was seen as having avenged the deaths inflicted by Miller's men in Michigan City, and was hailed throughout the C.N.A. as a hero.
News of the fall of Michigan City to Chief Joseph Miller also reached Quebec in August, where the leader of the Patriotes, Louis Papineau, decided that the time had come to rise up against the C.N.A. Papineau assembled an army of 3,000 men in Mont Michel, which was joined by an additional 800 men from Nova Scotia. Papineau attacked Quebec City on 21 September, but Governor Henry Scott had been warned of his coming, and was able to ambush the Patriote force, crushing the uprising. Although Papineau was killed, the Patriotes remained a powerful force, and the authorities in Quebec remained fearful of future uprisings.
Willie Lloyd.
In the Southern Confederation, the Panic of 1836 brought about a fall in cotton sales, which led to a collapse in the price of slaves, from N.A. £150 for a prime field hand in the spring of 1835 to less than N.A. £19 after April 1838. Willie Lloyd of South Carolina responded to the collapse of the slave market by offering the Lloyd Bill in 1840, a plan for the compensated manumission of all the S.C.'s slaves. The Southern Confederation Council passed the Lloyd Bill in April 1840, and Sir Alexander Haven ratified it on 16 May. By the end of 1841, most of the slaves in the S.C. had been freed (or presumably emigrated with their owners to the Mexican state of Jefferson, though Sobel doesn't actually say so), and the rest were freed by law on 1 January 1842.