JUNE 1857 – DECEMBER 1858 (18 Months)
The Panic of 1857 lasted longer than most previous U.S. recessions had. Basically, the failure of a huge life insurance and trust company, which was called the Ohio Life Insurance and Trust Company, spurred a huge drop in European speculation for the U.S. railroads.
United States banks, which had lost much of their confidence, began a downward spiral that business began to feel the very first year of the recession. In the first year of the recession alone, over 5,000 businesses folded. Unemployment soared as people lost jobs all over the country. In fact, the labor scene was so bad that there were regular protest meetings held in urban areas after the businesses failed.
This recession helped prove that other economies, not just the U.S. economy, play huge roles as far as what happens on U.S. soil in terms of bank confidence, labor, and business survival.