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Fifty-three banks, employing two thousand men in various positions, operated in New York City. They held assets of sixty-six million dollars.

The decade of the 1850's was a time of rapid economic exspansion. The nation was developing the lands recently acquired as a result of the Mexican-American War. Gold was discovered in California; this encouraged land speculation and railroad construction as people moved west. Railroads and agriculture drove commerce and industry. America became a net exporter of gold bullion,. The banking industry doubled in size between 1850-1857; they provided easy credit terms to their clients. New York City banks held a hundred twenty-two million dollars in outstanding loans.

Railroad construction was driving the economic growth. Financiers became uneasy at the growth of the loans granted to railroad and land speculators. Banks tightened credit policies and the market began to correct itself.