The Boom Before the Bust: Seattle’s 1892 Financial Confidence
As the city shakes off the 'dull period' of reckless credit, local bankers and businessmen find newfound optimism in a stable marketplace.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
William E. Slater, assistant manager of Dun's commercial agency, said Saturday that there was a remarkable falling off in the number of failures now taking place throughout the state and in the amounts involved as compared with the record a year ago. This is especially true in Seattle. There has not been a failure of any great importance here for a number of months. This is one of the best evidences that could be desired to show that the business institutions of the city are on a solid foundation financially, and that trade is in a good, healthy condition. Mr. Slater thinks the recklessness with which credit was extended during the period of great trade activity was responsible to a great extent for the business depression which merchants have been experiencing during the dull period. Competition forced the margin of profit down and incapacity had to give way to capacity for improved methods of business. The result was several failures for which neither the creditor nor debtor classes were prepared, hence business depression and timidity. Now both sides are beginning to have faith in the future, confidence is being restored, the lenders are more ready to loan and the effect will soon be apparent.
“Competition forced the margin of profit down and incapacity had to give way to capacity for improved methods of business.”
In 1892, Seattle business leaders were diagnosing the hangover from an over-leveraged real estate boom—a familiar cycle of 'reckless credit' followed by painful contraction. Today's concern over housing affordability and commercial market volatility mirrors this late 19th-century struggle to reconcile rapid growth with fiscal sustainability.
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