William Duer’s arrest helped trigger the Panic of 1792 in the young United States securities market.
Duer was a former Treasury official who borrowed heavily to speculate in government securities and bank shares. When he could not repay creditors, his default contributed to a rush to sell securities and a shortage of credit in New York.
The panic began in March 1792 and spread through markets connected to the new Bank of the United States and government debt. Prices of securities fell sharply, and many brokers faced insolvency or suspended payments.
Treasury Secretary Alexander Hamilton responded by arranging government purchases of securities and encouraging banks to lend. His intervention helped stabilize the market. The episode showed how vulnerable the early American financial system was to leverage, concentrated speculation, and limited banking liquidity.