Yet there were over 12,000 state banks at the outset of the Panic of 1907.
One very fragmentary and incomplete estimate of total bank suspensions (rather than failures) in (1975), including both state and national banks, puts the number during that panic at 153.
Second, I have included the more pronounced global financial crisis at the outbreak of World War I, in which the U. stock market was shut down for four months, although the emergency currency authorized under the Aldrich-Vreeland Act prevented bank suspensions.
The monthly dating of other panics listed is confined to the period during which major suspensions or runs occurred and does not always reflect how long banks suspended, which for the War of 1812 was until January 1817.
I have almost entirely confined the list of major recessions to those constituting part of a standard business cycle, omitting periods of economic dislocation resulting from U. But prior to 1929, the NBER notoriously exaggerates the volatility of the U. For the pre-1929 period, therefore, I have only listed recessions that can be documented with unemployment data or more traditional historical evidence. I have still accepted NBER dating, which only goes back to 1857, for those pre-1929 recessions that I consider genuine, with the notable exception of 1873.
Thus, 1839-1843 appears to be another case were deflation (in this case, quite severe) is confused with depression. But Elmus Wicker (2000) has persuasively demonstrated that the alleged Panics of 18 were really only incipient financial crises nipped in the bud by the actions of bank clearinghouses.
This is one of the most striking cases in which some observers at the time and many economists today have confused mild secular deflation with a depression – a confusion exposed by George Selgin in (1997). GDP prior to the Civil War are even more problematic, making precise monthly dating of recessions impossible.
Even the Kuznets-Kendrick estimates show no decline in real net national product during this recession, and an acceleration of its growth after 1875. Davis’s (2006) revised dating, shortening this recession to not more than 27 months, and probably less if he had attempted a monthly rather than just an annual revision of the depression’s end point. So I have relied upon the consensus of standard historical accounts along with the GDP statistics in (Carter 2006) to determine what qualifies as an actual recession and its annual dating.
Of course the Panic of 1907 was concentrated among state banks and trust companies.
Unfortunately, as far as I can tell, there are no good time series on the failures of state banks for the period prior to the creation of the Federal Reserve.
So I have created a revised chronology in the table below.