Most studies of the economic impact of the War of 1812 focus on early economic growth including manufacturing, shipbuilding, and canal and road improvements, and later issues of economic decline including the failure of the First Bank, decline of-specie supply, and issuance of Treasury Notes. These macroeconomic studies target such things as the inadequacy of the banking system, depreciation, inflation, the depression beginning in 1815, the Panic of 1819, and subsequent recessions of the 1820s. Those recessions led to business failures, unemployment, trade imbalance, and a stock crash.
Certainly the British blockade that preceded the outbreak of hostilities was an important impetus for early growth. Pennsylvania experienced prosperity based on turnpike and canal building, overseas trade of farm crops, and military spending. The military spending resulted from army supply routes that ran from Philadelphia to Pittsburgh, and from supplies purchased in the state. The problems of financing the War led to increased debt at large discounts, defaulting on the national debt, a suspension of specie payments, shortage of real money, and distrust within the banking system. But what economic impact did the War of 1812 have on the local economy, and in particular, on Cumberland County individuals? The challenge is to separate the impact of the War from the depression and Panic of 1819. Impact analysis is here limited to insolvency evidence as shown by the debtors insolvency documents from Cumberland County Records. It begins by examining veterans of the War, and then non-veterans.
Veteran soldiers of the War of 1812
For this study, the population of War of 1812 veterans includes two groups. The first group consists of those who served in companies formed in Cumberland County. Company captains were William Alexander (Carlisle Light Infantry), John Creigh (Landisburg Volunteer Infantry), Joseph Halbert (Carlisle Guards), George Hendel (Volunteer Riflemen from Carlisle and Mechanicsburg), Joseph McKinney (Shippensburg unit that went to Baltimore), Andrew Mitchell, David Moreland (Volunteer Riflemen), James Piper (Light Infantry), and John Roberts (Volunteer Riflemen). The company led by Jacob Squier, called the Patriotic Blues, which marched to Baltimore, is not included in this study. It should be noted that not all soldiers in these companies resided in Cumberland County. Some came from neighboring counties including Franklin, Adams, York, and Dauphin.
The second group consists of soldiers who resided in Cumberland County before and/or after the War, but who served in companies formed in another county. Those included are found in the Cumberland County insolvency files.
Between 1816 and 1821, fourteen insolvent debtors listed the War of 1812 as a cause for insolvency. One of those, Joseph Humes, Jr., petitioned for insolvency twice during that period.
The first veteran to cite the War of 1812 as a cause for insolvency was George Mills, who began the insolvency process in February of 1816, and ended the process in March of 1816. Instituted at the suit of William Bryson, Mills, a cordwainer, stated that he was in the army for sixteen months during the War of 1812. He served under the command of Captain John Fulmer in a company largely from Berks County. The War's contributing factor was that Mills loaned money to comrades after discharge to enable them to return home. Those loans were not repaid. Often, the government's precarious financial situation prevented it from paying soldiers immediately upon discharge.
William M. Baxter also became insolvent in 1816 at the suit of John Scott, another veteran. Baxter was a Shippensburg printer who did business with printers in Carlisle, Lancaster, and Harrisburg He served four months under the command of George Henry in a Harrisburg rifle company. He did not receive pay for this service. He also received no pay for three months' duty as a member of a Baltimore mounted rifle company.
Joseph Humes, Jr. became insolvent twice in this period, in 1816 and in 1819. He became one of the more experienced insolvent debtor applicants, filing for insolvency a third time in 1821, and a fourth time in 1822. Humes, another cordwainer, was from Carlisle, and served in Robert's company that marched to the Niagara frontier in the Spring of 1814. He was already in debt before he volunteered, so his six-month tour of duty exacerbated his financial situation. While he fought in the army, his family accumulated debts for their necessary subsistence. It did not help his financial situation that he was sick for three months before he volunteered for the army.
The Panic of 1819 was the first great depression in the U.S. In this bicentennial year, the article will first present background about the event. It will then attempt to answer four questions related to the Panic of 1819 and Cumberland County, Pennsylvania.