Post Civil War Recessions

Run_on_the_Seamen's_Savings'_Bank_during_the_Panic_of_1857

Farewell the tranquil mind! Farewell content!
Farewell the plumèd troops and the big wars
That makes ambition virtue! Oh, farewell!
Shakespeare, Othello

 

It is unsurprising that post Civil War the country entered a period of recessions.  Prior to the Civil War the nation had known periods of booms and bust, both usually short-lived.  The Civil War had been boom times in the North with war spending ensuring no recession during the War.  With the turning off of the Federal money spigot in the wake of the War, and the return of men to civilian life, the country entered a period of recession that did not end until December 1869.

The subsequent boom period was very short lived, with a new recession stretching from June 1869-December 1870.  The Panic of 1873 led to the Long Depression of October 1873-March 1879.

Demobilization after World War I led to a brief, but very sharp, recession.  With these examples, government policies in the demobilization period after World War II were geared to avoid a recession, and they were successful, although I am suspicious that other economic factors likely accounted for the lack of a recession.

Big wars always dislocate and distort economies, and wise governments plan for this when conflicts end, even if their policies are weak tools to use.

Published in: on May 31, 2015 at 5:30 am  Comments Off on Post Civil War Recessions  
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