Books and Manuscripts

Contemporary Account Ledger Related to the Panic of 1792, America's First Financial Crisis, Detailing Losses Of Three Of Its Perpetrators

(Philadelphia), July 20, 1792. One sheet, 17 3/8 x 22 3/8 in. (441 x 568 mm) Manuscript ledger sheet, titled “The Concern of William Duer, Alexander Macomb & Isaac Whippo in Account Current with Francis Ingraham”, detailing Ingraham's extensive financial activity with Duer, Macomb, and Whippo, et al., totaling $301,286.39. Endorsed on verso by Ingraham: “July 20 1792/Error Excepted/Francis Ingraham.” Unevenly toned; old folds; scattered ink stains.

Francis Ingraham (1764-1848), was a brokerage agent for many securities speculators of the time, and was the Philadelphia representative for William Duer and his stock interests. This account ledger covers the period of January through July, 1792, and mentions: Clement Biddle (1740-1814); President of the First Bank of the United States, Thomas Willing (1731-1821); John Pintard (1759-1844); former Continental Army surgeon Isaac Bronson (1760-1838); merchant John Swanwick (1760-1798); Thomas L. Moore; Richard Footman; Edward Fox; Samuel Anderson; Daniel Parker; John Williams; Joseph Boggs; Lewis Deblois; Joseph Anthony; Samuel Hays; Pearson Hunt; Benjamin Walker; E. Randolph; Thomas McEwen; George Eddy; Andrew Summers; James Glentworth; the firms of Lewis and Tilghman, Gardner and Rodman, and Hazard and Addams.

William Duer (1743-99) was a British-born Continental Congressman, Signer of the Articles of Confederation, and served as Assistant Secretary of the Treasury. Following the American Revolution, he became heavily involved in land speculating and the trading of U.S. securities. In 1791, the First Bank of the United States was founded, and shortly thereafter introduced the sale of "scrips" (stocks), as outlined in the original plan proposed by First Secretary of the Treasury, Alexander Hamilton. Duer continued land speculating but began recklessly trading bank scrips, and allied himself with Alexander Macomb (1748-1831) a wealthy fur trader and speculator who had acquired millions of acres of land in western New York dubbed “Macomb’s Purchase.” The men agreed to jointly speculate in stocks, and formulated a plan to control the U.S. market by pooling their resources to corner it, then sell the appreciated assets at huge profits later. The two had a coterie of other speculators working with them such as Isaac Whippo (1742-1807), Walter Livingston, Richard Platt, John Pintard, and George Knox. Together these men established credit by endorsing each other’s notes to continue borrowing or speculating. Duer was not a stranger to the dangers of this system, as he almost went bankrupt during the financial bubble of 1791 but survived due to a government bailout. In the first months of 1792, Duer and Macomb began trading large quantities of securities from a number of banks (Bank of the United States, Bank of North America, Bank of New York) in order to drive up prices. Brokers in cities across the country were goaded by the trading fervor, and many began closing riskier deals with shorter maturation periods. The price of bank shares reached their peak at the end of January 1792 then started to deeply fluctuate over a few weeks before eventually plummeting. In March of 1792, after exhausting all possible sources of credit available to him, Duer was forced to default on his loans. The United States Treasury department filed suit against him for a debt he incurred while Assistant Secretary, a warrant was issued for his arrest, and he was taken to debtors' prison, where he would remain for the rest of his life. Duer's total debts are estimated to have been almost $3,000,000 (roughly $95,000,000 in today's currency), and his failure caused a country-wide financial panic. Like Duer, Macomb failed and was taken to debtors' prison as well but only served a brief stint and eventually regained his wealth. Isaac Whippo was also briefly imprisoned and reportedly fled to Holland afterward to evade his creditors.

Economist Joseph Stancliffe Davis wrote in his Essays in the Earlier History of American Corporations, "He (Alexander Macomb) was just the sort of man for Duer to have as a real associate...the pooling of the capital and credit, as well as the experience, of the two men made a combination much to be respected... Others in Duer's coterie were drawn into the group...(they) came eventually to be spoken of as 'the Company'... Evidence is lacking as to which of the partners formulated a definite policy (of market manipulation). Rumour had it, at various times, that Duer sought to corner at least the United States six per cents. The purpose is variously stated. Benjamin Rush reported late in March hearing they proposed to sell these stocks to foreigners at a considerable advance. Seth Johnson, writing from intimate observation in New York early in April, 1792, referred to their plan as one 'to Command all of the floating Stock, create a Scarcity & oblige the deliverers...to settle the difference on favorable terms to the receivers;' in short to squeeze the speculators... Several reports, however, agree that a corner was attempted." (p. 280-81 Harvard University Press 1917).

Ingraham's ledger extensively lists the financial activity of numerous individuals and firms that presumably contributed to the United States's first nation-wide financial panic. Notable entries detailing the depreciation in stock values traded by Duer, Macomb, and Whippo include: March 31, 1792: Ingraham pays $7,625 to James McEvers for shares of 3% Bank of the United States stock, originally endorsed by William Duer for $10,000; April 15, 1792: Ingraham pays $27,300 worth of 3% Bank of U.S. Stock to Thomas McEwen, originally endorsed by William Duer and Alexander Macomb for $34,000; May 20, 1792: Ingraham pays $123,506 to Pearson Hunt on account of notes endorsed by Alexander Macomb; May 20, 1792: Ingraham settles his account with Isaac Whippo, who takes a loss of $12,272.74. The same day William Duer’s account is settled with Ingraham for a loss of $15,810.28. This entry is marked as "Settled by his attorney” (due to his incarceration); July 20, 1792: Ingraham pays $51,330 for accepting Alexander Macomb’s bills due for stocks of the Bank of the United States.

Secretary of State Thomas Jefferson, who was opposed to securities trading, wrote of Duer shortly after his arrest, “Here the unmonied farmer, as he is termed, his cattle & crops are no more thought of than if they did not feed us. Scrip & stock are food and raiment here. Duer, the king of the alley, is under a sort of check. The stock sellers say he will rise again. The stock buyers count him out, and the credit & fate of the nation seem to hang on the desperate throws & plunges of gambling scoundrels…” (The Works of Thomas Jefferson, ed. Paul L. Ford, p. 455). Later that year, on May 17, 1792, 24 New York stockbrokers signed the Buttonwood Agreement, the first attempt to standardize securities trading in America, but reforms to deter market manipulation would not be enacted until 1817.