On September 12, 1857, Commander William Lewis Herndon, in full uniform and with head bowed, stood by the wheel of the SS Central America as women and children evacuated the hurricane-battered vessel. Herndon, a Navy officer on leave with a distinguished record in war and exploration, would go down with the ship, along with over 400 passengers and crew. So would some precious cargo: over three tons of gold.
This gleaming payload, worth some $2 million (in 1857 dollars), had been collected in the California Gold Rush and was en route to Eastern banks. Its disappearance into the choppy waters off North Carolina meant those banks would be unable to make payments to customers. And that news, coming on top of the August shutting of doors at the New York office of the Ohio Life Insurance and Trust Co., a major firm wracked by embezzlement and bad investments, triggered the Panic of 1857.
Sunday, December 20, 2009
19th century finance
Here's my latest piece for Research: "The Tumultuous 19th Century." It's an era that offers some uncomfortable implications for Ron Paul/end the Fed/gold standard believers. Excerpt: