ABSTRACT

This chapter discusses the economic crisis of 1810 from three aspects. First, the general causes and course of the crisis are examined briefly. Second, an attempt is made to explain the uneven distribution of bankruptcies in England and Wales between April 1810, three months before the crisis broke, and July 1811, when the panic had subsided. The third aspect concerns the responsibility of the Bank of England for the trade boom after 1808 and its reaction to the widespread economic distress of 1810. The chapter provides considerable support for the general conclusions drawn in the preceding one about the factors which influenced bankruptcy levels. The evidence thus suggests that Bank discount policy played a part of some importance in bringing on the crisis of 1810. The sharp fluctuations of the Bank's discounting in the 1810 crisis thus reflect the dilemma of an institution publicly committed to a policy about which it has serious, private doubts.