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English crisis of 1825: there was enough money. You thought

2020-10-14T23:15:47.602Z


In 1825 England's banks collapsed for no outside reason. The crash shook all certainties, even in private.


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Photo: The Trustees of the British Museum

When, in the autumn of 1825, some banks in the green expanses of rural England ran into financial difficulties, this caused sarcastic remarks at best in the City of London and at the Bank of England.

Banks in the country - that was a relatively new phenomenon.

Hardly anyone in town was surprised that these beginners could get tangled up with the taxes due at the end of the year and with the management of their funds in general.

You didn't worry about it.

Why also?

The situation was good: the Napoleonic Wars up to 1815 had been a historic success for the United Kingdom financially and economically.

There was enough money.

The banks spent it generously in order to adequately equip the new era in which England undisputedly ruled the oceans, engaged in trade and change.

Today history shows that this period was the beginning of the pillaging of the colonies on a large scale.

Back then, the future looked like the candy store in the Pippi Longstocking film: money and gold were in abundance in early 19th century England.

Everyone was looking for lucrative investment opportunities - so the London Stock Exchange pounced on bonds from the New World, from those states that had just gained independence from Spain.

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Everyone could imagine the gold of the New World, but not much else was known about there.

Most of the information came from journalists who were paid to promote the new bonds.

But countries like Peru have not yet been able to collect taxes from their citizens and service their overseas debts.

This realization also dawned in London.

The value of the bonds fell rapidly.

Then a chain reaction developed which amazed and shocked contemporaries - and disturbed them for a long time.

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Source: spiegel

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