The Panic of 1857
65 years later, the second financial panic began. The Panic of 1857 began when a violent hurricane destroyed the Central America, a vessel transporting much needed gold from California. Along with the loss of the gold shipment, U.S. banks invested in failing businesses. Investors lost more money when the railroads could not pay back their debt. In turn, people began to fear the possibility of a full out financial collapse. With no gold to give the customers, the banks began to collapse. The Panic of 1857 led to an economic depression in the U.S.