The 1837 panic reversed state investment in railroads and forced privatization.

Evidence

State participation in business ventures, as it turned out, was only a passing phase. There were always people who felt the state had no business going into business. The business cycle made this argument compelling. The states lost money in the various crashes, panics, and depressions. The idea of state participation turned sour. States and cities, nearly bankrupted in the years after 1837, were tempted to sell off their assets for cash. In 1844, a referendum in Pennsylvania approved sale of the Main Line to private interests. As it happened, the sale was not consummated until 1857. The Pennsylvania Railroad then bought the line for cash and railroad bonds. — Lawrence M. Friedman, A History of American Law, 1065

Categorization

• XREF: connects to: The 1837 depression turned states against direct railroad investment. — Lawrence M. Friedman, A History of American Law, 980; Post-1837 state governments barred themselves from owning corporate stock and lending credit — Lawrence M. Friedman, A History of American Law, 2978

Broader Connections

• Post-1837 state governments barred themselves from owning corporate stock and lending credit #expands (0.95) — Lawrence M. Friedman, A History of American Law, 2978