The financial crisis of 1837: trying to understand one of America's great economic downturns.

• Author: Hummel, Jeffrey Rogers
• Position: 'The Many Panics of 1837: People, Politics, and the Creation of a Transatlantic Financial Crisis' - Book review

The Many Panics of 1837: People, Politics, and the Creation of a Transatlantic Financial Crisis, by Jessica M. Lepler, Cambridge University Press, 337 pages, $29.95

In May 1837, a major financial crisis engulfed America's approximately 800 banks, with all but six ceasing to redeem their banknotes and deposits for specie (gold or silver coins). This was followed by a short but sharp depression, constituting only the second manifestation of the modern business cycle in the country's history up to that point.

The panic had been preceded by President Andrew Jackson's famous "Bank War," in which the Second Bank of the United States lost its exclusive charter from the national government. It was followed by vociferous political disputes about the monetary system, and by a prolonged price deflation that began in 1839 and didn't end until 1844.

Historians and economists continue to explore the panic's causes and consequences, a question made all the more relevant by the financial crisis of 2007-08. Now the University of New Hampshire historian Jessica M. Lepler has entered the fray with The Many Panics of 1837: People, Politics, and the Creation of a Transatlantic Financial Crisis, based on her award-winning Brandeis doctoral dissertation. Lepler's book is a social and business micro-history confined to the events leading up to and culminating in the bank suspension. She thus joins the ranks of those cultural historians who over the last decade or so have tried to illuminate topics usually addressed by economists. The result is a work of great detail and mixed quality.

The best feature of The Many Panics 0/1837 is the author's prodigious research. Focusing primarily on events in three locations--London, New Orleans, and New York--Lepler combs through such primary sources as Bank of England archives, contemporary newspapers, personal correspondence, sermons, and assorted forgotten books that offered advice on household economy. She exudes familiarity with a vast secondary literature as well, and the footnotes refer to several titles from libertarian authors, among them Lawrence White's Free Banking in Britain, Murray Rothbard's The Panic of 1819, and Richard Timberlake's The Origins of Central Banking in the United States.

Lepler construes the term "panic" in its literal sense to mean an increasing uncertainty and fear, particularly among businessmen, brokers, and bankers. She convincingly argues that not one but multiple

panics, arising in each of the three major commercial centers covered, preceded the American...