With all the news about the current financial crisis, I thought it would be interesting to do some research on financial panics of the 19th century. What I discovered is that some of the startling news this past week sounds eerily similar to what people were reading and hearing in 1819, 1837, 1873, or 1893.
The financial panics of the 1800s could be triggered by crop failures, currency problems, or rampant speculation in railroad stocks. But they all tended to dry up credit and create the same business problems we're hearing about today. Banks failed, businesses went under, even railroads stopped operating. Fortunes were lost and millions of workers lost their jobs. And the safeguards we have today simply didn't exist, making matters that much more devastating.
The depressions of the 1800s are often overlooked, perhaps because few people look back beyond the Great Depression of the 1930s. And, of course, looking back at depressions is, well, depressing. But perhaps learning the basic facts behind the parade of financial panics of the 1800s can be reassuring. If you think about it, the people enduring the Panic of 1819 or the Panic of 1837 had it far worse than we do.
Image: Worried investors in the Panic of 1873/Library of Congress
Related: Coxey's Army
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