Saturday, March 7, 2009

The Panic of 1819 (4)

During the panic of 1819, real estate had depreciated to about half of its value. "In New York State, property values fell from $315 million in 1818 to $256 million in 1820. In Richmond, property values fell by half. In Pennsylvania, land values plunged from $150 an acre in 1815 to $35 in 1819. In Philadelphia, 1,808 individuals were committed to debtors' prison. In Boston, the figure was 3,500." (6)

The Pittsburg Telegraph published a review telling the story of the disaster that befell the trade that year: 1819

"Fortunes were wiped out in a day, speculative companies that stood everywhere thick as shocks in a wheat field, vanished magically, and shareholders were aghast; suburban lands and city lots that were to return a hundredfold dropped to almost worthlessness. As an example of the effect of the panic on real estate here, an old citizen says that land on Boyd's Hill held at $2,000 and more dropped to $100: lots on Forth avenue held at $2,000 fell to $100; property in the region of Market-street, on which were good brick houses, only partly paid for, were wholly abandoned, as property quite as good could be bought for less than the sums due on these. But the United States Bank with its capital of $35,000,000 weathered the storm and by furnishing the country again with a stable currency of uniform value, won back coy confidence, and again compelled the State banks to go into liquidation, or to raise the value of the notes to the standard of the national bank notes." (7)

During the Panic of 1819, economic distress was suffered by all groups within the community, though the working class was not as hard-hit as those of great wealth. Accustomed to a life where their earnings were barely more than sufficient to afford them a decent existence, they possessed little of great value. Nevertheless, their distress was not in anyway less acute.

Unable to support themselves and their families, or receive assistance from members of their church congregation, friends or relatives many would become homeless, or would turn to "Poorhouses" for relief. An act to provide the establishment of county poor houses in New York was passed on November 27, 1824.The poor house's function not only was to provide food and lodgings for the needy over a certain period of time, but to keep the recipients employed and instructed in useful labor until he or she was able to provide for himself or herself. This helped the institution to defray the expenses of their maintenance and support.


7. New York Times August 20, 1878

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