Eyewitness 1820: Tough times and talk during long recession
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President James Monroe benefited from good timing in making his 1817 visit to Pittsburgh. Contemporary newspaper reports indicated he was greeted by friendly crowds and observed many prosperous businesses.
Had he delayed his trip until 1820, the "Era of Good Feelings" linked to his administration likely would have evaporated. Pittsburgh was among the victims of the Panic of 1819.
"DURING the present period of difficulty and distress, a number of individuals have conceived the idea of an Association which by concentrating and systematizing the benevolence of our citizens, might serve to combine the relief with the useful employment of the poor," the Pittsburgh Gazette reported on Jan. 28, 1820.
There were plenty of poor people in need of help. Two weeks earlier, on Jan. 11, the Gazette ran a chart that quantified how bad things had become for employers and employees.
Employment at Pittsburgh's "manufactories" had plummeted almost two-thirds, from 1,960 in 1815 to 672 by the end of 1819, according to the compilers of a census of economic activity. The value of goods produced in the city had dropped even more, from $2.6 million -- about $55 million in modern currency -- to slightly more than $800,000, or $17 million today, during the same period.
Almost two centuries after the events, economists still disagree as to the major causes of the long economic downturn. It had been preceded by a period of easy money, with banks eager to lend for land purchases and industrial expansion.
When the quasi-public Second Bank of the United States began to call in its loans, credit tightened across the country. Smaller banks and businesses, unable to cover their debts, failed in large numbers. The effects of the panic lasted for almost four years.
In Pittsburgh, employment in steam engine factories dropped by more than 90 percent, from 290 to 24, according to the local survey. Employment of shoemakers declined from 140 to 50, while jobs for linen and cotton workers and umbrella makers completely disappeared.
First Published August 22, 2010 12:00 am
