The Scottish traveler James Flint was touring America when the panic hit. In his letters home, he described the impact of the economic recession on banks, factories, and merchants. The following passage is from a letter he wrote from Jeffersonville, Indiana, describing the impossible conditions that many American workers faced.

Merchants in Cincinnati, as elsewhere, have got into debt, by buying property, or by building houses, but are now secure in the possession. Such people, notwithstanding complain of the badness of the times, finding that the trade of buying without paying cannot be continued. Those who have not already secured an independence for life, may soon be willing to have trade and fair dealing as formerly. Property laws deprive creditors of the debts now due to them; but they cannot force them to give credit as they were wont to do.

Agriculture languishes—farmers cannot find profit in hiring labourers. The increase of produce in the United States is greater than any increase of consumpt that may be pointed out elsewhere. To increase the quantity of provisions, then, without enlarging the numbers of those who eat them, will be only diminishing the price farther. Land in these circumstances can be of no value to the capitalist who would employ his funds in farming. The spare capital of farmers is here chiefly laid out in the purchase of lands.

Labourers and mechanics are in want of employment. I think I have seen upwards of 1,500 men in quest of work within eleven months past, and many of these declared, that they had no money. Newspapers and private letters agree in stating, that wages are so low as eighteen and three-fourth cents (about ten-pence) per day, with board, at Philadelphia, and some other places. Great numbers of strangers lately camped in the open field near Baltimore, depending on the contributions of the charitable for subsistence. You have no doubt heard of emigrants returning to Europe without finding the prospect of a livelihood in America. Some who have come out to this part of the country do not succeed well. Labourers’ wages are at present a dollar and an eighth part per day. Board costs them two three-fourths or three dollars per week, and washing three-fourths of a dollar for a dozen of pieces. On these terms, it is plain that they cannot live two days by the labour of one, with the other deductions which are to be taken from their wages. Clothing, for example, will cost about three times its price in Britain: and the poor labourer is almost certain of being paid in depreciated money; perhaps from thirty to fifty per cent. under par. I have seen several men turned out of boarding houses, where their money would not be taken. They had no other resource left but to lodge in the woods, without any covering except their clothes. They set fire to a decayed log, spread some boards alongside of it for a bed, laid a block of timber across for a pillow, and pursued their labour by day as usual. . . .

Employers are also in the habit of deceiving their workmen, by telling them that it is not convenient to pay wages in money, and that they run accounts with the storekeeper, the tailor, and the shoemaker, and that from them they may have all the necessities they want very cheap. The workman who consents to this mode of payment procures orders from the employer, on one or more of these citizens, and is charged a higher price for the goods than the employer actually pays for them. This is called paying in trade. . . .

In the district of Jeffersonville, there has been an apparent interruption of the prosperity of the settlers. Upwards of two hundred quarter sections of land are by law forfeited to the government, for non-payment of part of the purchase money due more than a year ago. A year’s indulgence was granted by Congress, but unless farther accommodation is immediately allowed, the lands will soon be offered a second time for sale. Settlers seeing the danger of losing their possessions are now offering to transfer their rights for less sums than have already been paid; it being still in the power of purchasers to retain the lands on paying up the arrears due in the land office. This marks the difficulty that individuals at present have in procuring small sums of money in this particular district.

Source: Reuben Gold Thwaites, ed., Early Western Travels, 1748–1846 (Cleveland: Arthur H. Clark, 1904), 9:226–28, 236.