Commentary Magazine


RE: The More Things Change …

Charles Dickens, of all people, gives us an indication of just how low the financial reputation of this country was in the post-Jackson era. In A Christmas Carol, published in 1843, Dickens wrote about Ebenezer Scrooge waking up after his encounter with the Ghost of Christmas Past and being relieved to find that the world had not ended. Thus, Scrooge realized, a note that was payable to him in three days was not as worthless as “a mere United States’ security.”

Ouch, indeed.

America’s economic high-amplitude boom-and-bust cycle in the 19th century was not without its advantages, however. As booms gathered force, British capital would pour into the country to help build canals, railroads, and factories. After the inevitable crash (we had crashes in 1819, 1837, 1857, 1873, and 1893), the British owners of the by then much-depreciated stock and bonds would throw them on the American market to get whatever they could for them. Thus the United States ended up not only with the railroads and canals — but ownership of them as well.