Born into a rich English family, William Duer settled in New York in 1769. By 1780 he was worth almost $2 million and was socially well-connected: George Washington gave his bride away.
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In 1792, though, Duer voluntarily entered the New Gaol, a debtor’s prison in downtown New York, to escape his creditors. He had borrowed money to corner the market on U.S. bonds and couldn’t cover his losses.
In addition to his prominent associates, Duer had hit up shopkeepers, widows, orphans, butchers and even the famous bawd Mrs. Macarty. All were ruined.
For days, an angry crowd gathered outside the prison, cursing Duer, threatening vengeance, throwing stones and rioting. With his fall, a financial panic ensued, the nation’s first, with Duer the most reviled deadbeat.
I spoke with Scott Reynolds Nelson, author of “A Nation of Deadbeats: An Uncommon History of America’s Financial Disasters,” on the following topics:
1. Consumer Debt
2. Periodic Crashes
3. Unsteady Borrowers
4. Shady Operators
5. Birth of Democrats
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(Lewis Lapham is the founder of Lapham’s Quarterly and the former editor of Harper’s magazine. He hosts “The World in Time” interview series for Bloomberg News.)