Wednesday, January 28, 2015

Mason Gaffney: The Canal Boom

Google led me to The U.S. Canal Boom and Bust, 1820-1842, notes by Mason Gaffney from May, 1993 (updated 2009).
The Canal Boom, which crested in 1836-37, was one of several in U.S. history, forming roughly an 18-year cycle...

The slump, when it came, was synchronized nationwide; the ensuing slump and crash even more so. Indeed, the cycle was worldwide, although the data included herein is only for the U.S. After the manic peak of 1836, depression was communicated everywhere through some universal medium. The synchronization was remarkable, considering this was before even the telegraph.

This synchronizing medium was the capital market, which turns booms on and off by advancing or denying funds. After 1836, momentum carried some works forward, regardless of crashing demand and tight funds; by 1842 most building had ground to a halt.

Following the trough of 1842, production and employment slowly picked up new steam. Railroads were the new magic, aided along by Federal land grants after 1850. Before long it all built up to a new peak and crash, in 1857.

I left a lot out.

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