<P> The Supreme Court ruling in Dred Scott v. Sandford was handed down in March 1857 . After Scott sued for his freedom, Chief Justice Roger Taney ruled that Scott was not a citizen because he was an African American and therefore did not have the right to sue in court . The ruling also made the Missouri Compromise unconstitutional by saying the federal government could not prohibit slavery, and since it controlled the territories, could not ban slavery in them . It was clear that the decision would have a significant impact on the further development of the western territories . Soon after the ruling, "the political struggle between' free soil' and slavery in the territories" began . The western territories north of the Missouri Compromise line were now opened to the possibility that slavery might expand into them, and it was quickly evident that this would have drastic financial and political effects . "Kansas land warrants and western railroad securities' prices declined slightly just after the Dred Scott decision in early March ." This fluctuation in railroad securities proved "that political news about future territories called the tune in the land and railroad securities markets ." </P> <P> Before 1857, the railroad industry was booming due to large migrations of people to the west, especially in Kansas . With the large influx of people, the railroads became a profitable industry and the banks seized the opportunity and began to provide railroad companies with large loans . Many of these companies never made it past the stage of a paper railroad, and never owned physical assets necessary to run one . Prices of railroad stocks as a whole began to experience a stock bubble, and railroad stocks saw increasingly speculative entries into the fray, making the bubble worse . In the meantime, the aforementioned Dred Scott decision lent uncertainty to railroads in general . </P> <P> In July 1857, railroad stocks saw their peak values . On August 11, 1857, N.H. Wolfe and Company, the oldest flour and grain company in New York City, failed . The failure shook investor confidence and began a slow selloff in the market which continued into late August . </P> <P> On the morning of August 24, 1857, the president of Ohio Life Insurance and Trust Company announced that its New York branch had suspended payments . Ohio Life was an Ohio - based bank with a second main office in New York City . The company had large mortgage holdings and was the liaison to other Ohio investment banks . Ohio Life failed due to fraudulent activities by the company's management, and its failure threatened to precipitate the failure of other Ohio banks or even worse, to create a run on the banks . According to an article printed in the New York Daily Times, Ohio Life Insurance and Trust Company's "New York City and Cincinnati (branches were) suspended; with liabilities, it is said, of $7,000,000 ." Luckily, the banks connected to Ohio Life Insurance and Trust Company were reimbursed and "avoided suspending convertibility by credibly coinsuring one another against runs ." The failure of Ohio Life brought attention to the financial state of the railroad industry and land markets, thereby causing the financial panic to become a more public issue . </P>

Which response to the economic crisis of 1893 threatened to bankrupt the u.s. treasury