Sep

26

1873, from David Lilienfeld

September 26, 2026 |

There are four major depressions in the history of the United States, identified for our purposes by the years in which they started: 1837, 1873, 1930, and 2007. Each in sequence has been deemed "The Great Depression." Then another one hits and the Great Depression doesn't seem so great anymore by comparison and the new depression takes on the moniker. Growing up in the 1960s and 1970s, the shadow of the Great Depression of the 1930s was omnipresent in discussions of economics, politics, and investing. How much that depression related to the 1929 crash remains a subject of some debate. There was quite a crash in 1987 and the economy did fine. The depression of 1837 is thought related to an over-issuance of bonds to support the construction of canals in the US. Others have noted that the absence of a central bank may have been contributory. Regardless, it's safe to say that the depression of 1837 is one of the least known economic events for most Americans.

That brings us to our current topic, the depression of 1873. A volume about it by Liaquat Ahamed appeared this past June. The author may be familiar to listers as the author of Lords of Finance. There are several aspects worth noting about this particular inquiry. First, it's popular at the moment. My local library system has 8 copies and there were some 47 holds on it. Will it remain as such remains to be seen. Second, on the cover, there is reference to the Rothschilds. It's not unusual to see the Rothschilds pop up in something talking about mid-19th century finance. Still, it's the first time I've seen it pop up in this context. Maybe that's testimony to the lack of publications about 1873. I recall being taught that the depression of 1873 was all about the civil war overhang in the US, overexpansion of US railroads, and the collapse of Jay Cooke and Co. Not much mention of the Rothschilds. Ahamed talks about what type of a depression 1873 brought in its wake. In central Europe, the impact on bourses was considerable, with Vienna's stock exchange dropping by 40%. In the US, the economic hit was smaller. I'm really just getting into the book, so I'll have to see (and report back) where Ahamed goes with the story line. So far, it reads quite comfortably and may make for a nice beach read during the coming end of August/early September holiday period. At a little over 300 pages, it's not a long read. It may just be worth your while giving it a go. Maybe even from your library if you can get a hold of a copy.


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