We keep hearing it said that the current economic hard times afflicting the country are the worst since the Great Depression of the 1930's. That naturally raises the question: what were economic hard times like in the U.S. before the dismal days of that decade?

It turns out that the history of recessions and what were called "panics" prior to our current malaise is as American as apple pie. Before deposit insurance laws were enacted in 1933, bank panics were a recurring feature of the U.S. economy almost from the get-go. By definition, a panic is a kind of financial shock arising from sudden and unanticipated changes in expectations of loss when customers run on banks to withdraw deposits. A recession is a significant widespread decline in the economy lasting more than a few months.

In a depression, the entire bottom falls out. Sort of like what's happening today.

Familiar Path

TheU.S. sufferedits first real recession at the end of the 18th Century, and it was dubbed the Panic of 1797, lasting three years. Thecause: deflation brought on by the Bank of England, disrupting commercial real estate markets in the U.S. Britain's economy was already shaky because it was waging war with France at the time. It wasn't long before the economy slipped into another recession, this one called the Depression of 1807. President Thomas Jefferson and the Congress are pointed to as the culprits; they authorized an embargo act that year deeply affecting shipping-related industries, causing the economy to founder. The term "Depression," though, is probably a misnomer because the scale most likely didn't approach that of the Great Depression for the majority of citizens and it didn't as deeply scar the country.

Next came the Panic of 1819. Economists generally consider this the first major financial crisis to affect the relatively young U.S. economy. Foreclosures were widespread at the time, as were bank failures and high unemployment. A crisis of confidence followed in 1837 when another panic hit. Paper currency was becoming popular, which meant that transactions using gold and silver were on the way out. This rattled the population for a number of years.

In fact, twenty years after the Panic of 1837 - as you might have guessed - the Panic of 1857 occurred. This time, the trigger was the plummeting fortunes of the Ohio Life Insurance and Trust Company. Ripple effects were a precipitous drop of European confidence in the U.S. economy, financial trouble for banks and railroads, and the failure of over 5000 American businesses during just the first year.

Intermittent Repeats

There were 19th Century panics again in 1860, 1873, 1884, and 1890. Then, at the start of the 20th Century a lull occurred for awhile - until the 1907 panic. But since the 18th Century in America, none of the panics or recessions reached the dimensions of the granddaddy of them all following 1929's stock market crash. TheU.S. is now going through its lucky-number thirteenth recession since then. They've ranged anywhere from seven to 43 months. The term "panic" isn't even used anymore to describe economic downturns, though occasional runs on banks do occur, most recently when Indy Mac in Pasadena went belly up last summer.

Just how bad were things during times when the economy went south before the 1930's? Theexperiences of Americans then were very similar to those of 2009. Jobs were lost, markets dipped, foreclosures and bankruptcies occurred, and crises of confidence worsened the effects. Of course, events are relative, and, in any economic contraction, certainly some people are hit much harder than others and some lose everything. Compounding the suffering are protracted periods of uncertainty about when things might turn around, periods when it seems no traction is gained during a sluggish economy.

Ending It All

If what we're enduring now is the worst economic crisis since the Great Depression, then, looking back over all the earlier hard times, probably the previous record-holder would have to be the Depression of 1807, two-hundredtwo years ago. The economy foundered for seven years, and it was the War of 1812 combined with the reversal of the embargo that ended the difficulties.

Similarly, the consensus is that World War II ended the Great Depression when the driving engine of economic impetus created necessary jobs, products, and services leading to an Allied victory in Europe and Japan. With a recession - if that's an accurate description of what's happening today - the end is not so definitive. Recessions start and end without much notice or fanfare. So what, besides another world war, will get us out of this one?

Perhaps more than at any other time in American history, a combination of forces will have to converge. Market psychology, high-level leadership, timing, luck, and sheer force of will must all come together - positively - for significant change to occur. If we look around, we can see encouraging incipient signs of such a convergence. It's true that everything goes in cycles, so maybe the big wheel of fortune is beginning to turn in our favor. Time, as history teaches, will truly tell.

The writer is a Glendale, CA freelance writer. He has written for the Los Angeles Times, the Denver Post, and Entrepreneur Magazine.”e • BEACON NEWSPAPER,