On This Day In Finance: June 18 - Trade Issues Trigger Declaration of War

By Joseph Nguyen | June 18, 2009 AAA
On This Day In Finance: June 18 - Trade Issues Trigger Declaration of War

On June 18, 1812, the United States declared war on Britain in response to Britain's overreaching actions on U.S. trade and shipping. The war lasted two years and eight months and effectively ended in a draw – in the end, the U.S was unable to claim British North American (later Canada) territory. However, the War of 1812 is often referred to as America's "second war of independence" due to the nationalistic pride that culminated from the battle, and American's pride in the fact that no rights or territory were surrendered.

The Cost of Battle
The cost to fund the war was $158 million (excluding property damage), of which $16 million was paid for through interest on war loans. During the war, the U.S. found it hard to find funding, and the country's balance sheet became quite unbalanced. The war drove up U.S. national debt, which went from $45 million in 1812 to $127 million when the war ended in 1815.

Economic Costs
Although the war did not produce an economic boom like many previous American wars, the major economic impact of the War of 1812 was that nations would now give second thought before interfering with U.S. trade. In addition, military spending was also ramped up drastically as a result of the military difficulties the country faced during the short war.

For related reading, check out War's Influence On Wall Street.

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