US recessions, Free Banking Era to the Great Depression Dates
[nb 2] Duration Time since previous recession Business activity
[nb 3] Trade & industrial activity
[nb 3] Characteristics
Panic of 1837 1836–1838 ~&0000000000000002.0000002 years ~&0000000000000002.0000002 years −32.8% — A sharp downturn in the
American economy was caused by bank failures and lack of confidence in the
paper currency. Speculation markets were greatly affected when
American banks stopped payment in
specie (gold and silver coinage).
[14][3] Over 600 banks failed in this period. In the south the cotton market completely collapsed.
[9]
Depression of 1839–43 late 1839–late 1843 ~4 years ~1 year −34.3% — This was one of the longest and deepest depressions. It was a period of pronounced
deflation and massive default on debt. The Cleveland Trust Company Index showed the economy spent 68 months below its trend and only 9 months above it. The Index declined 34.3% during this depression.
[15]
1845–46 recession 1845–late 1846 ~1 year ~2 years −5.9% — This recession was mild enough that it may have only been a slowdown in the growth cycle. One theory holds that this would have been a recession, except the United States began to gear up for the
Mexican–American War which began April 25, 1846.
[13]
1847–48 recession late 1847–late 1848 ~1 year ~1 year −19.7% — The Cleveland Trust Company Index declined 19.7% during 1847 and 1848. It is associated with a
financial crisis in Great Britain.
[15][8]
1853–54 recession 1853 –Dec 1854 ~1 year ~5 years −18.4% — Interest rates rose in this period, contributing to a decrease in railroad investment. Security prices fell during this period. With the exception of falling business investment there is little evidence of contraction in this period.
[3]
Panic of 1857 June 1857–Dec 1858 1 year 6 months 2 years 6 months −23.1% — Failure of the
Ohio Life Insurance and Trust Company burst a European speculative bubble in
United States' railroads and caused a loss of confidence in
American banks. Over 5,000 businesses failed within the first year of the Panic, and unemployment was accompanied by protest meetings in urban areas. This is the earliest recession to which the NBER assigns specific months (rather than years) for the peak and trough.
[5][16][8]
1860–61 recession Oct 1860–June 1861 8 months 1 year 10 months −14.5% — There was a recession before the
American Civil War, which began April 12, 1861. Zarnowitz says the data generally show a contraction occurred in this period, but it was quite mild.
[15] A financial panic was narrowly averted in 1860 by the first use of
clearing house certificates between banks.
[9]
1865–67 recession April 1865–Dec 1867 2 years8 months 3 years 10 months −23.8% — The
American Civil War ended in April 1865 and the country entered a lengthy period of general deflation that lasted until 1896. The United States occasionally experienced periods of recession during the
Reconstruction era. Production increased in the years following the Civil War, but the country still had financial difficulties.
[15] The post-war period coincided with a period of some
international financial instability.
1869–70 recession June 1869–Dec 1870 1 year 6 months 1 year 6 months −9.7% — A few years after the Civil War, a short recession occurred. It was unusual since it came amid a period when railroad investment was greatly accelerating, even producing the
First Transcontinental Railroad. The railroads built in this period opened up the interior of the country, giving birth to the
Farmers' movement. The recession may be explained partly by ongoing financial difficulties following the war, which discouraged businesses from building up inventories.
[15] Several months into the recession there was a
major financial panic.
Panic of 1873 and the
Long Depression Oct 1873 –Mar 1879 5 years 5 months 2 years
10 months −33.6% (−27.3%)
[nb 3] — Economic problems in Europe prompted the failure of
Jay Cooke & Company, the largest bank in the United States, which burst the post-
Civil War speculative bubble. The
Coinage Act of 1873 also contributed by immediately depressing the price of silver, which hurt North American mining interests.
[17] The deflation and wage cuts of the era led to labor turmoil, such as the
Great Railroad Strike of 1877. In 1879, the United States returned to the gold standard with the
Specie Payment Resumption Act. This is the longest period of economic contraction recognized by the NBER. The
Long Depression is sometimes held to be the entire period from 1873–96.
[18][19]
1882–85 recession Mar 1882 – May 1885 3 years 2 months 3 years −32.8% −24.6% Like the Long Depression that preceded it, the recession of 1882–85 was more of a
price depression than a production depression. From 1879 to 1882 there had been a boom in railroad construction which came to an end, resulting in a decline in both railroad construction and in related industries, particularly iron and steel.
[20] A major economic event during the recession was the
Panic of 1884.
1887–88 recession Mar 1887 – April 1888 1 year 1 month 1 year 10 months −14.6% −8.2% Investments in railroads and buildings weakened during this period. This slowdown was so mild that it is not always considered a recession. Contemporary accounts apparently indicate it was considered a slight recession.
[21]
1890–91 recession July 1890 – May 1891 10 months 1 year 5 months −22.1% −11.7% Although shorter than the recession in 1887–88 and still modest, a slowdown in 1890–91 was somewhat more pronounced than the preceding recession. International monetary disturbances are blamed for this recession, such as the
Panic of 1890 in the United Kingdom.
[21]
Panic of 1893 Jan 1893 – June 1894 1 year 5 months 1 year 8 months −37.3% −29.7% Failure of the United States
Reading Railroad and withdrawal of European investment led to a
stock market and banking collapse. This Panic was also precipitated in part by a
run on the gold supply. The Treasury had to issue bonds to purchase enough gold. Profits, investment and income all fell, leading to political instability, the height of
the U.S. populist movement and the
Free Silver movement.
[22]
Panic of 1896 Dec 1895 – June 1897 1 year 6 months 1 year 6 months −25.2% −20.8% The period of 1893–97 is seen as a generally depressed cycle that had a short spurt of growth in the middle, following the Panic of 1893. Production shrank and deflation reigned.
[21]
1899–1900 recession June 1899 – Dec 1900 1 year 6 months 2 years −15.5% −8.8% This was a mild recession in the period of general growth beginning after 1897. Evidence for a recession in this period does not show up in some annual data series.
[21]
1902–04 recession Sep 1902 –Aug 1904 1 year 11 months 1 year 9 months −16.2% −17.1% Though not severe, this downturn lasted for nearly two years and saw a distinct decline in the national product. Industrial and commercial production both declined, albeit fairly modestly.
[21] The recession came about a year after a
1901 stock crash.
Panic of 1907 May 1907 – June 1908 1 year 1 month 2 years 9 months −29.2% −31.0% A run on
Knickerbocker Trust Company deposits on October 22, 1907, set events in motion that would lead to a severe monetary contraction. The fallout from the panic led to Congress
creating the Federal Reserve System.
[23]
Panic of 1910–1911 Jan 1910 – Jan 1912 2 years 1 year 7 months −14.7% −10.6% This was a mild but lengthy recession. The national product grew by less than 1%, and commercial activity and industrial activity declined. The period was also marked by deflation.
[21]
Recession of 1913–1914 Jan 1913–Dec 1914 1 year 11 months 1 year −25.9% −19.8% Productions and real income declined during this period and were not offset until the start of
World War I increased demand.
[21] Incidentally, the
Federal Reserve Act was signed during this recession, creating the
Federal Reserve System, the culmination of a sequence of events following the
Panic of 1907.
[23]
Post-World War I recession Aug 1918 – March 1919 7 months 3 years 8 months −24.5% −14.1% Severe
hyperinflation in Europe took place over production in North America. This was a brief but very sharp recession and was caused by the end of wartime production, along with an influx of labor from returning troops. This in turn caused high unemployment.
[24]
Depression of 1920–21 Jan 1920 – July 1921 1 year 6 months 10 months −38.1% −32.7% The 1921 recession began a mere 10 months after the post-World War I recession, as the economy continued working through the shift to a peacetime economy. The recession was short but extremely painful. The year 1920 was the single most deflationary year in American History; production, however, did not fall as much as might be expected from the deflation. GNP may have declined between 2.5 and 7 percent, even as wholesale prices declined by 36.8%.
[25] The economy had a strong recovery following the recession.
[26]
1923–24 recession May 1923 – June 1924 1 year 2 months 2 years −25.4% −22.7% From the depression of 1920–21 until the Great Depression, an era dubbed the
Roaring Twenties, the economy was generally expanding. Industrial production declined in 1923–24, but on the whole this was a mild recession.
[21]
1926–27 recession Oct 1926 – Nov 1927 1 year 1 month 2 years 3 months −12.2% −10.0% This was an unusual and mild recession, thought to be caused largely because
Henry Ford closed production in his factories for six months to switch from production of the
Model T to the
Model A.
Charles P. Kindleberger says the period from 1925 to the start of the Great Depression is best thought of as a boom, and this minor recession just proof that the boom "was not general, uninterrupted or extensive".
[27]