HomeNewsNewsThis Month in History: When a Shipwreck Sank the Economy

This Month in History: When a Shipwreck Sank the Economy

Damaged by a Category 2 hurricane, the SS Central America sank on Sept. 11, 1857, killing 425 passengers and crew members. Only about 150 people survived. Lost onboard was a huge amount of gold meant to help banks manage the financial panic that had started a month earlier. The wreckage and some of the gold were found in 1988. Image courtesy of the National Maritime Museum, London/Public Domain

What: Start of the Panic of 1857
When: August 24, 1857
Where: United States 

When the Ohio Life Insurance and Trust Co.’s New York branch failed on Aug. 24, 1857 – reportedly due to bad investments and embezzlement – a financial panic began. Combined with other national and global economic events, the early days of the panic prompted banks to restrict loans.  

To create a reserve for banks, the U.S. government arranged to ship gold to the East Coast from the San Francisco Mint. Transported to Panama…

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