The Panic of 18 19

The banks issued far more paper money than they had gold to back it in their vaults. Speculation of all kinds grew intense as eye witness testimony abundantly records the country was on a sugar hie based not on real savings, but on mere paper during the years when the us Had no central bank. The economy gets taken on a wild and unhealthy ride when the money supply is dramatically increased and then suddenly reduced. That lesson was so obvious that even the political class managed to figure it out.