My Month in 1857
When applying to Oberlin I was drawn to the idea of Winter Term: a portion of January in which students can pursue an endeavor outside of regular courses. Throughout high school I found myself trying to start projects during the summer months. However, a mixture of other demands - summer programs and speech and debate - would take up large portions of my time. Thus, I found myself in a perpetual cycle of conflicting academic demands disallowing me to pursue any of my own ideas. Winter Term seemed like the perfect opportunity to dig deep into something I cared about academically.
For my first Winter Term I wanted to conduct research in economic history, my primary academic interest. After my undergraduate studies I am planning to pursue graduate school in hopes of eventually teaching and researching in higher education. However, prior to Winter Term, I had never experienced academic research. I love economics. I love to learn. The act of exploring economics outside of previously established knowledge sounds appealing. But without actually conducting research I really had no way of evaluating if it was something I wanted to engage in professionally.
Fortunately, Professor Ellis Tallman, my academic advisor, has research interests aligned with my academic interests. A large portion of his research involves the New York Clearing House, an organization comprised of New York City banks that was created in 1853. The Clearing House was created for the purpose of settling debts between banks more efficiently and frequently.
During banking panics - which were quite frequent in the second half of the nineteenth century - the Clearing House would issue certificates which acted as IOUs between lending banks and troubled banks in need of gold. Professor Tallman had researched the use of these certificates in multiple panics, but the first use of these certificates hadn't been explicitly chronicled by economic historians.
There was some contention over whether the first issuance of these certificates was during the Panic of 1860 preceding the Civil War or the Panic of 1857. Professor Tallman wanted me to determine if certificates had been issued in 1857.
Like a giddy child with a new toy - except in my case a nifty research question - I started to compile secondary sources written by economic historians. I hoped to get an overview of the panic from these secondary sources. With this background I started reading through primary sources, mainly the New York Times, hoping I would get lucky and find useful information.
After reading every New York Times article from August 25 to December 14 of 1857 involving the economic situation of the country I had learned a few neat things about 1857 America.
First, the Times referred to the financial panic as an "embarrassment" on multiple occasions. My first thought was that the newspaper was merely using hyperbolic language to dramatize the panic. Yet I decided to punch "embarrassment" into Google. The third definition cited is "financial difficulty." That sure isn't the normal 2015 usage.
Second, on one occasion - at the bleakest point of the panic - the newspaper actually urged people who had gold to "go into the Street and help the needy by buying or lending on New York State sixes, or something equally sound." The New York State sixes refer to New York State bonds issued by the state during the period. I can't imagine any newspaper today actively urging people to physically take their money out into the streets and personally lend it to people.
Lastly, I learned a bit about the chaotic financial system in the early 1800s. In present day America we are fortunate enough to have a currency in which most place faith to represent value. In 1857 each individual bank issued their own currency backed by gold in their vaults. A storekeeper in rural Ohio would be dealing with many different currencies on a daily basis. Even worse, a large New York bank would receive numerous currencies daily for loan repayments or as deposits. Establishing trust in these currencies was a very difficult task.
On a different note, I have a few takeaways from my Winter Term experience which do not involve the technical nuances of nineteenth-century banking. In my particular case I was starting off with a project which had a very loose objective: find evidence of these certificates. Professor Tallman didn't say look at this newspaper on these particular dates or look at these secondary sources for background analysis. I was tasked with determining my own methodology. This forced me to take ownership of the project. There wasn't an outside stimulus changing my incentives to engage with the material. The learning was not toward an A on a transcript. Instead, throughout the project, the lens through which I evaluated my progress was by asking myself questions. Is the evidence I have collected sufficient to answer the research question? Can I fully explain the panic to my professor? Are there other interesting materials I am missing which would lead to richer conclusions? Winter Term - or any type of self-study in which a syllabus isn't being provided - is a wonderful opportunity for a different type of learning experience.