A Recessionary Blast From the Past

The President had been in office only two years when the nation was overtaken by a major economic crisis. The first peacetime depression to confront the USA was compounded of many factors:

• Overexpansion of credit during the pre-war years
• The collapse of the export market
• Low prices of imports, which forced American manufacturers to close
• Financial instability resulting from both the excessive expansion of state banking and the unsound policies of the Second Bank of the United States and
• Widespread unemployment

From all sides, Americans were urged to work harder and spend less — a rule considered applicable to Federal agencies as well as private citizens. The depression had a direct impact on the government in that it produced a decline in revenues, which were largely derived from the (decrease) in customs duties. There was also a marked decrease in the income from the sale of real estate, for many purchasers now defaulted.

It was in connection with the falling government receipts that the President referred to the general economic distress in his annual address to the nation. After commenting on the great number of bankruptcies, which he attributed to the rapid contraction of credit and to the scarcity of money, as well as the lack of confidence on the part of the business community, he turned to the specific problem created by the numerous failures among manufacturers. . .

Sound familiar? This depression occurred during President James Monroe’s first term in office and was the most interesting passage from Harry Ammon’s book, James Monroe: The Quest for National Identity.

The more things change, the more they stay the same.