The End of the Crisis
The End of the Crisis
This chapter discusses how the U.S. victory in the Mexican War marked the end of the First Great Depression. First, the war revived the nation’s spirits. For many Americans, military success restored national honor, redeemed the democratic way of governing, and gave proof to Europe of the nation’s vitality. Second, the war was an unexpected tonic for the economy, and the mechanism by which the United States was fully reintegrated into international financial markets. Within weeks of the peace settlement, Americans—and also, critically, European investors—learned of a mining bonanza in the newly acquired territory of California. The unexpected cost of the war forced the Democratic administration of President James Polk to offer U.S. bonds in London for the first time since 1842. These were taken up by European investors, an expression of renewed confidence in the American economy.
Keywords: First Great Depression, economic crisis, US economy, Mexican War, European investors, US bonds, James Polk
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