How Alexander Hamilton's Handling Of The Crash Of 1792 Became The Model For Central Bank Crisis
- npatel81
- May 12, 2014
- 1 min read
Panic of 1792—Wall Street’s First Crash In late 1791, a former Treasury Department assistant and later speculator and businessman William Duer conspired to corner U.S. securities. Duer and his co-conspirators borrowed heavily to do so. At the same time, the Bank of the United States opened in December 1791 and began making loans and issuing banknotes. So as Duer borrowed heavily to finance his securities purchases, and as the Bank expanded credit, the price of U.S. Sixes rose from 110 to 125 from early December 1791 to mid-January 1792. But by February 1792, depositors began returning liabilities for gold and silver specie and the Bank slowed its credit expansion, as did other banks, creating another credit crunch.
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