The difficulties of the last months of 1836 continued and culminated in 1837. What began in Great Britain finally affected the United States, and illustrated unmistakenly that the economic ties of the two countries, so long in place across the Atlantic ocean, remained close.

American business failures began in March 1837, first in the south, then the north and west. Prices, including cotton, dropped sharply in late April. Undetected before the price declines, overadvances on commodities now became apparent. Proceeds from commodity sales to pay bills drawn months earlier in the United States were now insufficient. British and American financial institutions tried to stabilize the situation, but all plans proved unsuccessful. Intact through foresight, caution, its own prejudices and luck, Barings used its resources to continue the pattern of helpfulness to the transatlantic economy it began three decades earlier.

Tense Calm

‘Within a few weeks we'll know where we stand’, wrote Thomas Ward to London at the start of 1837. He was confident of Barings’ prospects, despite pressures on both sides of the Atlantic. Few, however, knew how these boom years – this ‘American experiment’ as The Times of London called them – would end.

The retired civic leader and financier Philip Hone – a man of means – certainly knew where he stood at the start of the new year. He could not convert anything he possessed into cash without great sacrifice.