forced the speculative western banks to the wall

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HolyUnicorn

Senior Member
Mandarin / the Shanghai Dialect
Hello,

Financial paralysis from the panic, which lasted in some degree for several years, gave a rude setback to the nationalistic ardor. The West was especially hard hit. When the pinch came, the Bank of the United States forced the speculative (“wildcat’’) western banks to the wall and foreclosed mortgages on countless farms.

Chapter 12 The American Pageant by Thomas A. Bailey

Context: the writer is talking about the economic panic of 1819.

How can I interpret the part in bold ?

force someone to the wall:
Fig. to push someone to an extreme position
 
  • Thomas Tompion

    Senior Member
    English - England
    Hello,

    Financial paralysis from the panic, which lasted in some degree for several years, gave a rude setback to the nationalistic ardor. The West was especially hard hit. When the pinch came, the Bank of the United States forced the speculative (“wildcat’’) western banks to the wall and foreclosed mortgages on countless farms.

    Chapter 12 The American Pageant by Thomas A. Bailey

    Context: the writer is talking about the economic panic of 1819.

    How can I interpret the part in bold ?

    force someone to the wall:
    Fig. to push someone to an extreme position
    Banks make money, among other ways, by lending at higher rates and at longer terms than they borrow.

    When you put money in your bank you are lending to it, they are borrowing from you. Your reason for doing this is that your money is safe in the bank, you think, and you can transfer it to others using cheques; banks provide services of various kinds to their customers.

    A bank's ability to lend depends largely on the customers being happy to leave their money with the bank, not coming in and asking for it back. The Central Bank stands behind the banks: if they find that customers want their money back, the central bank will lend to them at low rates, so that they can meet the demand for cash.

    If people lose confidence on the banks' ability to return their money, they go to the bank in large numbers to ask for it back. The bank needs to borrow from the Central Bank; it the Central Bank refuses to lend, the bank is forced to call back all its loans (like mortgages) in a wild effort to obtain cash to pay its anxious and, in many cases, angry customers.

    Being forced to the wall means being taken near to bankruptcy or being actually ruined by this sudden loss in confidence.
     
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