Panic of 1873

Question

What was the economic and social impact of the Panic of 1873?

Textbook Excerpt

Textbooks differ in their treatment of the Panic in significant ways. Most tie the depression to the national political controversies surrounding Reconstruction. Too often, textbooks combine the Panic with the political scandals which rocked the Grant administration. While certainly a source of the political crisis facing Republicans in the 1870s, the roots of the Panic run far deeper than merely Grant’s poor political skills.

Source Excerpt

Limited by the amount of gold held in the U.S. Treasury, access to currency and credit contracted sharply, interest rates skyrocketed, and investors were forced to pay off their high stakes gambles (made with cheap paper dollars) with hard-earned gold. Sources bring to light the integral nature of bimetallist theory and its effect on the economy rather than the political climate and scandal that surrounded the Federal Government.

Historian Excerpt

The Panic of 1873 stands as the first global depression brought about by industrial capitalism. It began a regular pattern of boom and bust cycles that distinguish our current economic system and which continue to this day. While the first of many such market “corrections,” the effects of the downturn were severe and, in 1873, unexpected. In 1873 modern economic adjustments were unknown and the ability of national authorities to control the money supply was immature. As a result, the Panic of 1873 led to the longest recorded economic downturn in modern history.

Abstract

Most Americans are familiar with the Great Depression, beginning in 1929, and the economic safety nets established in response to the crisis, such as Social Security and the right to collective bargaining, from 1933 to 1938. Some know of the equally dire economic conditions, starting in 1893, and how this spurred federal progressives like Teddy Roosevelt, William Howard Taft, and Woodrow Wilson to strengthen public oversight of corporate trusts, child labor, banking, monetary policy, and tariffs. Yet almost no one knows of the profound economic collapse that struck the United States following the Civil War or its equally substantial effect upon the social and political trajectory of the nation. The Panic of 1873 began in Europe, but quickly spread to the United States producing 65 months of depressed economic conditions.

Slave Badges

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slave badge
Question

I am attempting to make a lesson plan for 4th graders about slave badges. I was wondering how I could make this lesson tangible for this age group, and how to make the information come across clearly. What types of activities could I use? I also intend to compare slavery and indentured servitude. I would be using SC Standard 4.2 and indicator 4–2.6.

Answer

Slave badges, which served as a kind of work license for slaves in the Charleston area, are unique historical artifacts. As such, beginning a lesson with an image of the artifact—something that can be found with relative ease online—is a great way to raise historical questions.

So, beginning with an image, ask your students what they see. There is much to observe here: a date, a number, a year, a job description. It is made of copper and is 1.5 inches square; there is a hole at the top.

Once students have listed all of their observations, ask them what questions they have. Even 4th graders will likely ask some fundamentally historical questions, like “what was this used for?” or “where was it placed?”

Once students have compiled a list of questions, provide them with the materials that they need to find answers. Whether this means sending them to their textbooks or to excerpts of articles like this from the Smithsonian magazine, students will be motivated to piece together the historical puzzle you have presented.

Bringing them back together as a class, you might ask them to present their findings. If they already know about indentured servitude, this might be a good time to discuss the two systems of bondage in comparison with each other. There are several comparisons of slavery and indentured servitude on the web, including one from the Library of Congress and one from History Now.

You might also ask new questions as a class—“who benefitted from the use of slave badges”—that require a bit more coaching from an adult.

Good luck!

Home Sales During the Great Depression

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Home sales ad from pre-World War Two
Question

How can I find out about the number of home sales per year during the Great Depression?

Answer

Plenty of information about the housing market during the Depression has been collected and is easily available. Some of it is online and some of it is contained in Depression-era government publications. Nevertheless, statistics on the number of U.S. home sales during that time are not easily available, at least in a comprehensive, aggregated form.

Sales Figures, Then and Now

Nowadays, the housing market is primarily tracked through three reports:

  • Existing-home sales: The National Association of Realtors (NAR) collects and reports these figures. Existing-home sales typically comprise 85 percent of transactions, although recently they have been at 90 percent). The NAR reports are available online.
  • New-home sales: The U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD) collect and report these figures. New-home sales typically comprise 15 percent of housing transactions. These reports are also available online.

These first two reports describe housing sales, which is a demand-side indicator of the market.

  • Housing starts: The supply-side indicator is reflected in the number of housing units begun (foundations started or building permits issued). The U.S. Census Bureau and HUD provide these figures online.
Comprehensive data collection about housing developed in stages.

Some figures on housing construction and on numbers and values of mortgages are available as far back as the Depression, but not comprehensively (the Census Bureau, for example, did not start collecting data on single family housing starts until 1959). Walter Molony of the Public Affairs Office of the National Association of Realtors points out that NAR did not begin data collection on existing-home sales until 1968 and that collection of data on new-home sales by the U.S. Census Bureau did not begin until 1963. Consequently, national figures on housing sales, comparable to those available about today's housing market, do not exist for the period of the Great Depression. However, local real estate boards and chambers of commerce sometimes collected this information locally or regionally even as far back as the Depression, so, depending on your area of interest, you might check there.

Other Housing Market Statistics from the Depression Era

The Census Bureau also makes available figures on housing vacancies and, from 1900, rates of homeownership (based on federal census figures) online. The homeownership rate declined from 1900 to 1920. During the 1920s, it increased, but then during the Depression it dropped again, and was at about 44 percent (percentage of heads of households who owned their homes) by 1940. After World War II, the rate increased dramatically, recently approaching 70 percent.

The housing market in the 1930s was fundamentally different than it is today.

Economist Robert Shiller, author of Irrational Exuberance (Princeton University Press, 2000), provides data on home prices since 1890 (in 10-year intervals), online and downloadable as an Excel file.

This data, however, was constructed, rather than collected, and, while valuable, is, as Walter Molony of NAR puts it, "academic speculation based on assumptions and modeling using sources such as the value of the dollar, or the average price of newspaper listings in Washington, D.C."

Evolution of the Housing Market

The housing market in the 1930s was fundamentally different than it is today. During the Depression, the federal government became a significant actor in the housing market (as it did in other sectors of the economy). The National Housing Act of 1934 encouraged buyer-friendly mortgages: Before this, mortgages were typically 10-year loans with 50 percent downpayments. The Federal Housing Administration and its FHA-insured loans also increased the availability of mortgages.

After World War II, the G.I. Bill (the Servicemen's Readjustment Act of 1944) increased the availability of 30-year fixed-rate mortgages. Realtors think of this as the beginning of the modern real estate era. The government began to act in the housing market through Fannie Mae (the Federal National Mortgage Association, established in 1938 as part of the New Deal) and, since 1968, Freddie Mac (the Federal Home Mortgage Corporation). Their role in the housing market, to put it very briefly, has evolved over time.

During the Depression, the federal government also intervened in the housing market by eventually dominating home building itself, both public housing and then, in the defense build-up toward the end of the 1930s, "war housing" units in areas near military bases and industrial plants. Privately funded housing construction fell by 80 percent between 1929 and 1933, and the federal government expanded its role in housing construction.

Because of this role, the government collected data on the construction of housing units. It also tracked assumed mortgages because of its involvement in insuring loans. These figures can be found in the Housing Yearbook, published annually from 1935 to 1944 by the National Association of Housing and Redevelopment Officials, with sections written by the heads of the government housing agencies who described how they implemented government housing policies and the challenges they faced.

For more information

A good place to find statistics and tables on the U.S. housing market during the Depression, as well as a discussion of the underlying nature of that market and how it has changed over time, is the U.S. Commerce Department's five-volume Historical Statistics of the United States. The Millennial Edition is available online and is fully searchable and downloadable.

Reading Ravenscroft

Description

Colonial Williamsburg staff archaeologist Meredith Poole discusses excavation at the Williamsburg Ravenscroft site, where archaeologists are using the "Frenchman's map," a map showing the layout of Williamsburg in the 18th century, to guide their search for the remains of structures.

Interested listeners can learn more about the Ravenscroft Archaeological Project by exploring the project's website.

Reconstructing the Capitol

Description

Senior Architectural Historian Carl Lounsbury tells the story of Williamsburg's Capitol's reconstruction, early in the 20th century. The architects overseeing the reconstruction at the time focused more on issues of aesthetics and polished completion than on social historical accuracy.

Click here to discover more about Colonial Williamsburg's Capitol building.

The Gunpowder Plot

Description

Gina DeAngelis, author of Colonial Williamsburg's interactive evening program, "The Gunpowder Plot," discusses the historical event on which the program is based. In the spring of 1775 in Williamsburg, VA, the royal governor of Virginia, Lord Dunmore, decided to remove the gunpowder stored in the Williamsburg powder magazine to prevent its being seized by colonists in the event of an uprising; the colonists learned about the plan, and the men sent to remove the gunpowder were met by armed militia. Click here to learn more about the gunpowder theft.

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