The Ghost of the 1873 Crash Still Haunts Seattle
As the Seattle Weekly Dispatch reflects on the long, agonizing economic recovery from the Panic of 1873, the parallels to our modern housing and labor struggles reveal a century-old cycle of debt and instability.
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.
Our New York exchanges, in discussing the material and commercial interests of the United States, speak cheerfully of the future outlook, and feel sanguine that the cry of 'hard times' will soon cease. The present depressed condition of the financial and commercial interests of the country is having the effect to place all real and substantial values on something like a hard-pan basis. The greenback inflation caused a general rise in prices and in nominal incomes, under which people imagined they were becoming rich. This delusion led to an increase of expenditures and to reckless speculation. Credit became unduly expanded, and thousands bought other people’s property without being able to pay for it. In September, 1873, the bubble broke. Since then we have had a continuous and for the most part forced readjustment of the unnatural relations existing between debtors and creditors. The agricultural, manufacturing, and commercial interests of the country are once again in a sound, healthy condition.
“Credit became unduly expanded, and thousands bought other people’s property without being able to pay for it.”
The 'Panic of 1873' was triggered by an over-leveraged railroad boom and speculative land bubble that left thousands unable to pay for property they didn't truly own. It is a striking echo of Seattle's modern housing market, where the dream of ownership is once again often built on the shifting sand of volatile debt and speculative development.
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