The Influence of Depression Upon American Opinion, 1857–1859

On August 26, 1857, just two days after the New York branchthe Ohio Life Insurance and Trust Company suspended payment, of, the New York Herald predicted that the financial difficulties then beginning were certain to acquire the proportions of a great crisis. It boasted, moreover, that it had foreseen and warned of this impending calamity for the preceding twelve months, but its warnings had been spurned. The Herald's vaunted prescience perhaps stemmed chiefly from the long-standing prejudice of its publisher, James Gordon Bennett, against the operations of speculators in Wall Street. As early as 1854, when the speculative boom in railroad stocks was halted by a sharp decline of prices, the Herald had predicted the imminent approach of a crisis, one that would mark the end of the current “Fitful Spasmodic System†of American business. During the winter of 1854–1855 business stagnated, unemployment increased greatly, and there was considerable distress and popular unrest, especially in New York City. Here was an advance view, as it were, of the pattern of depression which was to develop in 1857.