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Alexander Hamilton, Central Banker: Crisis Management during the U.S. Financial Panic of 1792


Most scholars know little about the panic of 1792, America's first financial market crash, during which securities prices dropped nearly 25 percent in two weeks. Treasury Secretary Alexander Hamilton adroitly intervened to stem the crisis, minimizing its effect on the nascent nation's fragile economic and political systems. U.S. policymakers soon forgot the crisis-management techniques Hamilton invented but failed to codify. Many of them were later rediscovered and became theoretical and practical standards of modern central-bank crisis management. Hamilton, for example, formulated and implemented “Bagehot's rules” for central-bank crisis management eight decades before Walter Bagehot wrote about them in Lombard Street.

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David J. Cowen , “The First Bank of the United States and the Securities Markets Crash of 1792,Journal of Economic History 60 (Dec. 2000): 1041–60

Stuart Banner , Anglo-American Securities Regulation: Cultural and Political Roots, 1690–1860 (New York, 1998)

Richard Sylla , “Comparing the U.K. and U.S. Financial Systems, 1790–1830,” in Jeremy Atack and Larry Neal , eds., The Origin and Development of Financial Markets and Institutions, from the Seventeenth Century to the Present (Cambridge, 2009), ch. 7, 209–40.

Richard Sylla and Jack W. Wilson , “Sinking Funds as Credible Commitments: Two Centuries of U.S. National-debt Experience,Japan and the World Economy 11 (Apr. 1999): 199222.

Douglas Irwin , “The Aftermath of Hamilton's Report on Manufactures,Journal of Economic History 64 (Sept. 2004): 800–21.

Robert E. Wright , The First Wall Street: Chestnut Street, Philadelphia and the Birth of American Finance (Chicago, 2005), 4465.

Joseph H. Davis , “An Annual Index of U.S. Industrial Production, 1790–1915,Quarterly Journal of Economics 119 (Nov. 2004): 1177–215

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Business History Review
  • ISSN: 0007-6805
  • EISSN: 2044-768X
  • URL: /core/journals/business-history-review
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