Across the pond in the U.S., the S&P 500 index and the Dow Jones Industrial Average did not yet exist, and the New York Stock & Exchange Board, which would become the NYSE, was only eight years old at the time.
In the U.S. election of 1824, no candidate received the majority of the electoral college votes, so the House of Representatives elected John Quincy Adams as president in February 1825. The price of a cow was roughly $12 at the time.
Out-of-control market speculation is nothing new.
Back in 1825, British speculators were borrowing massive amounts of money to trade in mining operations and commodities, particularly in South America. Once the market began to turn, the banks that extended the credit for these speculations were in trouble.
The crisis came to a head on Dec. 14, 1825, when London bank Pole & Co. failed, triggering a wave of 40 other bank failures. The resulting panic and bank run sent the London stock market tumbling 80 percent and nearly brought down the Bank of England.
Economists believe the Panic of 1825 was the first example of an economic crisis that wasn’t triggered by an external event, such as a war or other geopolitical development.
By Wayne Duggan
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