Panic of 1857

In July 1857, railroad stock values reached their highest point, but on August 11, the failure of N. H. Wolfe and Company, New York City's oldest flour and grain firm, shook investor confidence. This event triggered a gradual market sell-off that continued through late August, contributing to the financial instability that culminated in the Panic of 1857. The crisis led to business failures, declines in the railroad industry, and widespread unemployment, exposing vulnerabilities in the U.S. economy and its dependence on gold reserves.

The Ohio Life Insurance and Trust Company collapsed on August 24, 1857, due to fraudulent activities, triggering the Panic of 1857. The firm, which held large mortgage assets and connected Ohio banks to New York’s financial market, had liabilities of $7 million. Its failure raised concerns about railroad investments and land speculation, leading to widespread financial panic. While some banks avoided collapse through mutual support, the crisis intensified, exposing weaknesses in the U.S. economy.