After doing some more research, I find that it seems that the development of the canals, the rapid growth of the city of New York, the spread of banking, and land speculation were more important in the 1818-1842 period in the U.S. than the railroads. In any case, there was a lot of speculation. The telegraph was new, and perhaps distantly comparable to the Internet in communicating information.
Also, distantly comparable to today's Fed and its actions that support the stock market:
factmonster.com
When the second Bank of the United States went out of business in 1832, state governments took over the job of supervising banks. This supervision often proved inadequate. In those days banks made loans by issuing their own currency. These bank notes were supposed to be convertible, on demand, to cash—that is, to gold or silver. It was the job of the bank examiner to visit the bank and certify that it had enough cash on hand to redeem its outstanding currency. Because this was not always done, many bank note holders found themselves stuck with worthless paper. It was sometimes difficult or impossible to detect which notes were sound and which were not, because of their staggering variety. |
