new york city in 1857 -- 11/26/18
Today's selection -- from The Panic of 1857 and the Coming of the Civil War by James L. Huston. Using government funds to aid the economy after a banking crisis is not an idea that arose only with the Great Depression. Witness New York Mayor Fernando Wood in the aftermath of the crisis of 1857, at a time when unemployment may have well exceeded 25 percent in urban areas:
"Certainly the Panic of 1857 generated widespread anger over the unexpected and sudden demise of national prosperity, which was quickly translated into political rhetoric. The financial debacle also left a social legacy that would haunt many individuals for several years. Although banks righted themselves quickly after the October suspension, commerce and industry required more time to resume pre-Panic levels of activity. The consequence of slow recovery for industrial and commercial pursuits was unemployment. In the fall of 1857 poverty-stricken people remonstrated against their harsh fate by instigating strikes and conducting rallies for public relief. These activities became a centerpiece for the next three years in sectional debates concerning the fate of the free laborers of the North.
"As the numbers of jobless swelled in October and November an uneasy wariness permeated the larger cities. Various individuals, like the editor of the Louisville Courier, began to fear that the state of the economy foretold a 'terrible suffering to the poor.' The unfortunate jobless were facing the approaching winter with no means to acquire shelter, food, or clothing. In Philadelphia, Peter Lesley, a statistician for the American Iron Association, wrote to the abolitionist Lydia Maria Child about social conditions in the City of Brotherly Love: 'A nightmare broods over society. The City is as still as a Sabbath day. The oldest, wealthiest houses are crashing down day by day, as their heaviest days come round. Scores of thousands are out of work. Bread riots are dreaded. Winter is coming. God alone foresees the history of the next six months.'
"New York City, with unemployment estimates ranging from 30,000 to 100,000, was the urban area with the greatest number of jobless and the most volatile social conditions. The mayor of New York in 1857, Fernando Wood, ... planned to aid the jobless by increasing employment on public works, which included the new Central Park, and to pay the men in cornmeal, potatoes, and flour. The mayor expected to finance this scheme by issuing bonds redeemable in fifty years and bearing 7 percent interest. Critics dubbed the proposal the 'bread and potatoes' message, but the attention of most journalists fastened onto one passage in which Wood seemed to sanction the robbery of the rich by the poor.
"'In the days of general prosperity they [the poor] labor for a mere subsistence, whilst other classes accumulate wealth, and in the days of general depression, they are the first to feel the change, without the means to avoid or endure reverses. Truly may it be said that in New York those who produce everything get nothing, and those who produce nothing get everything. They labor without income whilst surrounded by thousands living in affluence and splendor who have income without labor. But now, even this resource, with its poor pittance, is to be taken from them.'
"To [New York Times co-founder and journalist] Henry J. Raymond, Wood's communication was an invitation to class warfare; the 'demagogue' Wood had raised 'the banner of the most fiery communism.' "