[On September 20th, 1873, the New York Stock Exchange closed for ten days, a key moment in the developing economic crisis that came to be known as the Panic of 1873. So for the 150th anniversary of that moment this week I’ll AmericanStudy a handful of Panic contexts, leading up to a weekend post on 2023 echoes of those histories!]
On how two disasters helped set the stage for the Panic, and why they’re even more significant than that.
I wrote at length about the Great Chicago Fire of 1871 for my Saturday Evening Post Considering History column a few years back, so in lieu of a first paragraph here, I’d ask you to check out that column and then come on back here. Thanks!
Welcome back! For whatever reason (maybe it’s that damned cow), the Chicago Fire is far better remembered than the following year’s Great Boston Fire of 1872, but that latter one seems to have been just about as destructive, meaning that one of America’s oldest cities and one of its newest ones both experienced parallel, equally terrible tragedies in the early 1870s. While there are lots of contributing causes of the Panic of 1873 (including the most proximate one, a Congressional law I’ll discuss in tomorrow’s post), these two fires are definitely high on the list, as the stunning level of property damage they produced led to significant bank and financial shortages as the communities sought to respond and rebuild. Much like the Great Depression, this Panic and the subsequent depression (on which more in Wednesday’s post) really began with runs on the banks, and it’s fair to say that those runs were due both to actual financial shortages and to the widespread uncertainty and fear that can follow these kinds of disasters.
So the Chicago and Boston fires were important factors in the lead-up to the Panic of 1873, and well worth more of a place in our collective memories as a result (Boston at all, and Chicago more accurately, as I discussed in that column). But I would argue that these two fires also reflect and exemplify something else about America in the early 1870s, a related but more overarching point: its hugely rapid (and only increasing) urbanization. Obviously fires can and do occur in any community, and are hugely destructive and tragic wherever and whenever they happen. But there’s a certain kind of fire that consumes a developing urban center, as embodied most famously perhaps by the 1666 Great Fire of London and as would define another rapidly developing American city a few decades after Chicago and Boston. I’m not necessarily suggesting that fires are a given in those settings and periods—but it does seem a common (if still tragic) part of the urbanization process, a reflection perhaps of growth that outpaces infrastructure. That’s a big part of where America was in the early 1870s, a moment ripe for fires and, it seems, Panics as well.
Next 1873 contexts tomorrow,
PS. What do you think?