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Market Crash History Lesson Jim Munchbach March 20, 2022 Share This Post
On this day in 1792, Wall Street had its first major crash in history, on “Black Monday,” as Treasury bonds lost 10% of their value and shares in the Bank of the United States dropped 12%.
Prior to the Financial Crisis of 1791–92, the Bank of the United States over-expanded its credit creation, which led to a speculative rise in the securities market. When a number of speculators ultimately defaulted on their loans, it set off panic selling of securities. In response, then-Secretary of the Treasury Alexander Hamilton cajoled many banks into granting discounts to those in need of credit in multiple cities, in addition to utilizing numerous policies and other measures to stabilize U.S. markets.