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State bankruptcies in the 1840s
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State bankruptcies in the 1840s : ウィキペディア英語版
State bankruptcies in the 1840s

State Bankruptcies in the 1840s occurred in Arkansas, Illinois, Indiana, Louisiana, Maryland, Michigan, Mississippi, Pennsylvania, and the territory of Florida. The end of an inflationary period from 1834–1839 and the Panic of 1837 led to a tightening of credit lending from the Bank of England. By 1841, nineteen of the twenty-six U.S. states and two of the three territories had issued bonds and incurred state debt.〔U.S. Congress, House of Representatives, 1843b, Report No. 296, pp. 48-49).〕 Of these, the aforementioned states and territory were forced to default on payments and enter bankruptcy. The states were borrowing to fund transportation investments as well as raising capital to start new banks. Northern states, such as Pennsylvania and Maryland, incurred debt through the building of canals to connect the Midwest to ports on the Atlantic Ocean. Midwest states, including Ohio, Indiana, Illinois, and Michigan, built railroads and canals throughout the region, while Southern States raised capital to fund new banks to improve a weakened banking system. The majority of state debt was owed to parties outside the U.S., primarily Europe.〔McGrane, Reginald C. ''Foreign bondholders and American state debts''. New York: MacMillan, 1935.〕 State debts were largely paid off in full by the late 1840s, although no direct sanctions were enacted to force repayment. The state bankruptcies led to The Bankruptcy Act of 1841, which was later repealed in 1843.〔5 Stat. 440〕
==Inflationary Period Pre-1837==
The years from 1834–1837 leading up to the State bankruptcies were inflationary until the Panic of 1837. Prices for cotton and other exports sent overseas were rising. Through trade and state-backed bonds, the United States had a strong inflow of capital from the Bank of England and other European parties. Large infrastructure investments were being made domestically with the excess inflow of monetary value to the U.S. Much of the westward expansion of the United States was brought about from overseas funding for railroads and canals. Increasing the efficiency of transportation made it easier for people to move away from the large ports on the East coast.〔Jenks, Leland Hamilton (1927). The Migration of British Capital to 1875. Alfred A. Knopf. pp. 66–95.〕

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