The Panic of 1796-1797 had caused a …

Years: 1799 - 1799
The Panic of 1796-1797 had caused a pronounced commercial downturn in American port cities that will not relent until after 1800.

Investors in land schemes do not suffer alone.

Shopkeepers, artisans, and wage laborers, all of whom depend on the continuance of overseas commerce, feel the impact as businesses fail between 1796 and 1799.

The panic does not, however, evenly affect the whole economy.

Port cities along the Eastern Seaboard suffer much worse than the rural interior, which has not yet developed the intricate webs of credit and market exchange that will drag it into future panics and depressions.

The panic also reveals the young republic's economic interconnectedness with Europe.

In spite of and perhaps validating the prescient warnings of the dangers of foreign entanglement laid out in George Washington’s Farewell Address, the panic demonstrates that the nascent American economy will be subject to ripples of political turbulence on the European continent, an effect that will later prompt Thomas Jefferson to sign the Embargo Act of 1807.

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