Industrialization of papermaking and printing were not the only forces behind the growth of mass media in the 1820s and 1830s. Economic forces also played a role. The Panic of 1825, a stock market crash that started in the Bank of England, was felt most acutely in England where it forced the closing of six London banks, and sixty country banks, but also impacted the markets of Europe, Latin America, and the United States. The panic has been called the first modern economic crisis not attributable to an external event, such as a war, and has been considered the beginning of modern economic cycles. "The period of the Napoleonic Wars had been exceptionally profitable for all sectors of the British financial system, and the expansionist monetary actions taken during transition from wartime to peacetime economy initiated a surge of prosperity and speculative ventures. The stock market boom became a bubble and banks caught up in the euphoria made risky loans" (Wikipedia article on Panic of 1825).
With respect to the publishing industry in England, the crash did not reduce the number of publishers between 1825 and 1827, but radically altered the nature of the industry. "Publishers who followed the Romantic-era traditions of offering authors handsome advances were often in debt to banks and other creditors, and this practice left them vulnerable during the crisis. Like many businesses, many major publishing houses were forced to declare bankruptcy. Older publishers such as John Murray, Constable and Ballantyne, Hurst and Robinson, and Taylor and Hessey suffered during the crisis, and some even collapsed entirely" (Wikipedia).
Setbacks to the established houses allowed newer and perhaps less distinguished firms to change the nature of the industry. With expensive luxury books in declining demand as a result of the economic downturn, the market for less expensive publications increased, leading to a demand for cheap publications and encouraging serialization. It was this market that innovative publishers like Charles Knight exploited. Knight suffered huge financial losses in the Panic of 1825, and in the years soon after the crash was able to rebuild his business through his association with the Society for the Diffusion of Useful Knowledge, an organization established to distribute information to the masses as cheaply and widely as possible.
