When we think of economic crises in America, two periods come to mind—the Great Depression and whatever it is we’re in the middle of right now. But the U.S. stock market has crashed more times than we’d like to admit. Historically, our economy has been brought to its knees by everything from greedy bankers to horse illnesses. So let’s take a deep breath and remember that panics are just part of the American way of life.
1. The Panic of 1873: America Stops Horsing Around
During the late 19th century, the American economy relied on horses the way it depends on gas today. Horses unloaded cargo from ports, transported goods from city to city, worked the farms, supported the army, and served as the emergency vehicles of choice. Without them, the American workforce would have ground to a halt.
And that’s exactly what happened in 1872, when an estimated 99 percent of all horses in America contracted equine influenza. The highly contagious strain started in Canada and spread through New England to the South in a matter of months, leaving horses across the country too weak to stand and coughing uncontrollably. Street buggies stopped running, paralyzing commerce in the cities. Railroads were stymied because trains run on coal—coal that was hauled out of mines by horses. And as the horse flu spread, U.S. military troops had to go into battle on foot (they were fighting Apache Indians at the time). More tragically, a fire in Boston raged for three days because there were no horses to carry water. The flames destroyed more than 700 buildings, causing an estimated $73.5 million in damages and killing at least 20 people.
The “Great Epizootic,” as it was called, spiraled out of control in less than a year. At the height of the panic, as many as 20,000 businesses failed, a third of all railroads went bankrupt, and unemployment spiked to almost 15 percent. The economy took nearly a decade to recover. Ironically, nearly all of the horses recuperated by the following spring.
2. The Winter of 1886: When the Cows Don’t Come Home
During the second half of the 19th century, cattle ranches in the American West were thriving. From the Montana grasslands to the Texas prairie, ranches were attracting investors back East and across the pond in Europe. But by 1886, things were getting dicey. Overgrazing, coupled with a hot and dry summer, had left the plains almost bare.
Then came the snow. Known as the “Winter of Death,” the following season saw one of the worst cold spells in recorded history. More than half the cattle in the West froze to death, unable to move in the thick snow. Ghoulish firsthand accounts describe the bodies of dead cows stretching for miles across the horizon. When the spring thaw and floods came, thousands of bloated corpses floated into the streams and rivers. Some ranchers quit the business entirely and didn’t even bother to round up their surviving cattle.
By the end of 1887, the disaster had wiped out more than half of the United States’ western cattle and debilitated the national economy. Most cattle investors went bankrupt, and thousands of cowboys were left unemployed. But more than anything, the winter of 1886 put an end to all those turn-of-the-century, idyllic fantasies of open-range ranching in the Wild West....MORE
Tuesday, March 9, 2010
"Nightmare on Wall Street: 4 Other Times Our Economy Tanked" (as bad as this winter was, we won't be calling it "The Winter of Death")
From Mental Floss: