Sunday, May 10, 2009

The mystific panic of 1837

On May 10, 1837, the New York City banks suspended payments in specie (gold and silver). The date is now agreed to be the start of one of the worst depressions in American history: the Bank Panic of 1837.

The Second Bank of the United States had been chartered by Alexander Hamilton. Andrew Jackson chose not to renew their charter, forcing them to close under the presidency of Martin Van Buren. The value of paper money fell to nothing, credit was refused, and payment in gold or silver was demanded. Banks, like those in New York which suspended specie payments on May 10, had more paper money circulating than the gold and silver they had to back it up. One group called for paper money under $100 to be banned completely so that only gold and silver be used permanently. The resulting "panic" was immediate. City Hall in New York was mobbed with people demanding prices on goods be forced down. A flour warehouse in that same city was robbed and the excitement had to be quelled by state militia. Mills and factories closed, banks went out of business, and even state governments were denied loans.

New York City, the center of national publishing in the United States, was hit especially hard (note that other publishing centers — including Baltimore, Hartford, and Boston — generally printed only regionally; New York was the first to print for a nation-wide audience). In addition to the panic, a severe fire in the publishing district destroyed many warehouses, printing machinery, and entire companies.

Edgar A. Poe had moved to New York in February 1837, hoping to make it big as a writer. The Panic, as you can imagine, stymied his literary output. His only major work that year was an obscure comedic short story, "Von Jung, the Mystific" — now known as "Mystification." Poe had hoped that publishing a novel would get his name out there but the panic also caused delays and other troubles for his novel The Narrative of Arthur Gordon Pym of Nantucket (which was eventually released in two volumes in 1838). He soon gave up on New York and moved to Philadelphia — his several years in that city became his most prolific writing period.

Panics happened with some regularity in the 19th century in the United States. 1818 and 1857, for example, saw difficult panics. Another popped up in 1873, ten years after a National Banking Act was passed.

This economic climate and its effect on the publishing industry are one part of my upcoming lecture, "Poe and Publishing." Sponsored by the bibliophiles of the Ticknor Society, this talk will take place on May 12 at 6:00 p.m. in the Orientation Room of the Boston Public Library. If you drop by, introduce yourself!

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