Historic Pelham: More on the Impact on Pelham of the Financial Panic of 1857

On August 24, 1857, the Ohio Life Insurance and Trust Company, an Ohio Bank, failed. The failure of the bank focused attention on the financial state of the overextended railroad industry and the inflated real estate markets associated with the railroad industry. Financial confidence quickly waned and, on October 13, 1857, a financial panic gripped the New York Stock Exchange. By the time the panic settled, hundreds of banks had failed. Individual investors were ruined. Although the financial crisis began to level off and the U.S. economy began to stabilize by 1859, a true recovery was not felt until after the American Civil War.

I have written a little about the impact of the Financial Panic of 1857 on the Town of Pelham. See Thu., Nov. 20, 2014: Pelham Responds to the Financial Panic of 1857; Steps to Alleviate Plight of the Poor of the Town. As noted in that article, according to an account of the Proceedings of the Board of Supervisors of the County of Westchester following the Board's annual session in late 1857, during the annual meeting Pelham Town Supervisor George Washington Horton of City Island offered a resolution that was adopted by the Board authorizing the Town to raise $50 "for the temporary relief of the poor in said town" and to assess taxes to raise, among other sums, $20 "to defray the expenses for house for town paupers." This suggests, of course, that like many small communities in the New York region, only weeks after the panic the Town of Pelham was struggling to assist citizens who had been affected by the Financial Panic of 1857 and the subsequent financial downturn.

Shortly after the stock market panic, The New York Times complained that the oystermen in Pelham had not yet reduced the price of their oysters as should be the case to respond to the financial panic. In its report, dripping with sarcasm, the newspaper stated:

"The restaurants and the refectories of the City feel the effects of the panic almost as much as the other establishments. Men's appetites are accommodated with fewer viands, in times like these. In the oyster saloons, we are informed that the receipts are fully one-third less than they were a few weeks ago, with out taking into consideration the present propition -- season for oyster eating, when those vi valvular delicacies are most inviting, and when, consequently, the receipts under usual circumstances would be three times as large as in the latter part of August or the early part of September. Yet the merchants of oysters, who deliver them to our Broadway saloons, have not, as yet, thought it necessary to lower the wholesale prices. City Island has not, as yet, felt the effects of the panic, and as they never read newspapers in that Robinson Crusoe spot, it may be some time before they find it out. In the meantime, they keep up the price of oysters, although the appetites or the pockets of purchasers are rather turned against such luxuries."

Though it took quite some time for the American economy to recover, by late 1859 the economy had stabilized, though not yet improved. As one might expect, with the decline in shipping and rail transportation during the years following the panic, the maritime community of City Island suffered. It was not until after the Civil War that the economy of Pelham, and that of the nation, truly recovered.

"RUN ON THE SEAMEN'S SAVINGS' BANK DURING THE PANIC."

Source: Harper's Weekly, Oct. 31, 1857, Vol. I, p. 692. NOTE: This

Engraving Shows an Unruly Crowd Outside a Seamen's Bank Shoving

and Gesturing. A Ragpicker Can Be Seen Picking Up Worthless

Stock Certificates and a Pickpocket Can Be Seen Working the Crowd.

NOTE: Click on Image to Enlarge.

* * * * *

"THE HARD TIMES.
-----
RECOVERING FROM THE PANIC.
-----
The Gold Going Back to the Savings Banks --- The Effect of the Revulsion on Tradesmen, &c., &c. . . .
OYSTERS AND THE PANIC.

The restaurants and the refectories of the City feel the effects of the panic almost as much as the other establishments. Men's appetites are accommodated with fewer viands, in times like these. In the oyster saloons, we are informed that the receipts are fully one-third less than they were a few weeks ago, with out taking into consideration the present propition -- season for oyster eating, when those vi valvular delicacies are most inviting, and when, consequently, the receipts under usual circumstances would be three times as large as in the latter part of August or the early part of September. Yet the merchants of oysters, who deliver them to our Broadway saloons, have not, as yet, thought it necessary to lower the wholesale prices. City Island has not, as yet, felt the effects of the panic, and as they never read newspapers in that Robinson Crusoe spot, it may be some time before they find it out. In the meantime, they keep up the price of oysters, although the appetites or the pockets of purchasers are rather turned against such luxuries. . . ."

Source: THE HARD TIMES -- RECOVERING FROM THE PANIC -- The Gold Going Back to the Savings Banks --- The Effect of the Revulsion on Tradesmen, &c., &c., N.Y. Times, Oct. 16, 1857, p. 1, cols. 1-3 (Note: Paid subscription required to access via this link).

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Labels: 1857, City Island, Financial Panic of 1857, Oyster, Oystermen