The Panic of 1796-1797 was a series of downturns in Atlantic credit markets that led to broader commercial downturns in both Britain and the United States.The recession lasted for six years.
In the US, problems first emerged with the Bubble of land speculation bursting in 1796. The crisis deepened into a broader depression when the Bank of England, which faced insolvency due to the exploding cost of the French Revolutionary Wars, suspended specie payments in February 1797. In combination with the unfolding collapse of the U.S. real estate market, the Bank of England's action had developing disflationary repercussions in the financial and commercial markets of the coastal United States and the Caribbean through the turn of the century.
By 1800, the crisis had resulted in the imprisonment of many American debtors including the famed financier of the revolution Robert Morris and his partner James Greenleaf who were investors in a large tract of land in the Adirondacks of upstate New York. James Wilson was forced to spend the rest of his life literally fleeing from creditors until he died at a friend's home in Edenton, North Carolina.
George Meade, the grandfather of the American Civil War general George Gordon Meade was ruined by investments in Western land deals and died in bankruptcy due to the panic. The scandals associated with these and other incidents resulted in the U.S. Congress passing the Bankruptcy Act of 1800, which basically ended this panic; the Bankruptcy Act of 1800 would later be repealed after its three-year duration expired in 1803.
Britain's economy was also hurt, as Britain was fighting France in the French Revolutionary Wars.
The names change, but not the circumstance. What goes around, comes around. And again, we can blame it all on the French and the EU. Why? I don't know. How about 'bad wine' that inhibited our real estate investment strategy.
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