Saturday, October 27, 2007

Riding It Out On The Great Financial Roller Coaster: NYC's Early Panics

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Although its reach is large,, a non-profit, educational website focuses a particularly long lens on economic events and other related matters affecting or contributing to New York City's development and growth.

Massive collapse of the economy that normally follows a period of prosperity. A depression is usually accompanied by a financial panic or a crash of the stock market as investors lose confidence and refuse to buy stocks or make loans. A staggering level of unemployment is the most immediate and debilitating result. Not all crashes reach the level of national depression, however. If the down turn in the economy is short lived and relatively mild, it is called a "recession." Three major depressions, so defined because of the depth and duration of the collapse have occurred in American history: 1837, 1893, and 1929. Some historians add to the list the downturns in 1857, 1873, and 1907. There is a lot of dispute among economic historians and economists as to the causes of economic depressions. (more)
Panics, Depressions, Economic Crisis, resulting in bankruptcies of companies and individuals, where millions are unemployed, homeless and reduced to beggary, is the greatest nightmare feared by all; the wealthy, the investors, the businessmen as well as the working class population. Over the centuries New York City, which is the financial center of the United States, has passed through several notable ones. Some attribute these panics to overexpansion and debts, overextended notes and discounts, overinvestment and falling prices, etc. The Panic of 1929 and the ensuing depression were the most terrible the nation had ever suffered. "The stock market crash on October 23, 1929 wiped out an average of more than a billion dollars worth of paper values a day. A staggering total of 15 million were unemployed, and those who continued to work did so under greatly reduced wage scales." The flow of capital into productive enterprise slowed down to a trickle. The country was suffering from under consumption not overproduction. Banks were weighted down with government bonds, real estate mortgages based on greatly appreciated valuations, and highly speculative securities. Mass hysteria reigned.

The image of the once powerful, self-confident, successful men walking briskly to and fro is now replaced by one of nervous pacing, distress and cries of despair as they witness the crumbling of their world. The arrogant egocentric individual, ignoring sound advice and warning signs of the forthcoming economic crisis, would experience the full impact of the fatal plunge. Unable to cope with their losses, there were those that suffered a heart attack, or committed suicide, leaving their families financially unprotected and homeless. Yet throughout the business world, opportunists, having foresight into the economic conditions plaguing the nation, were busy preparing themselves to ride it out. Some of these individuals were cunning, and of an unscrupulous nature, who would exploit the misfortune of others to their advantage.

For more on New York City Panics please visit the New York City's Panics 1819-1929 section found in the New York City Main Directory.

You can see the flash version by scrolling down to this section or view the printer friendly version.

Goodbye for now..............until the next time.............when "Mimi Speaks"

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