The Panic of 1825 was one of the first major stock market crashes. At the conclusion of the Napoleonic Wars, a period of rapid expansion followed. People were looking to the future, wanting a little nest egg, and ready to forge ahead with new ideas that would make their country stronger than ever. Investments boomed. From large cities to small hamlets, banks were writing checks (which they may or may not have been able to cash) to bring the railroad their way. It was surely an exciting time. In fact, the criminals thought so, too.
There were a number of swindlers who created “opportunities” for investment (such as the gold and silver mines of the fictitious Latin American territory of Poyais). This rush to riches and improvement created a bubble in the economy, filled with little more than false promises and hot air. Then one day, like one of Professor Faraday’s balloons, it burst.
Once it was discovered that this territory never existed, let alone the abundant wealth investors would gain, panic ensued. People scrambled to the banks for their money all at once, the stock market crashed, and banks could no longer withstand the demands.
The Panic and subsequent recession lasted to the early part of the following year. Afterward, the economy started to grow again, but more cautiously this time.
Unfortunately, the fictional Juliet Granworth was not around to offer assistance. Otherwise, I’m certain she could have sorted out the whole mess much sooner.