BOSTON — A new exhibit, "Bubbles, Panics, and Crashes: A Century of Financial Crises, 1830s-1930s," has opened in the Baker Library I Bloomberg Center on the Harvard Business School campus in Boston. Organized by Baker Library Historical Collections, part of the School's Knowledge and Library Services, the exhibit runs through May 3, 2010.
Opening one year after the subprime mortgage crisis, the exhibit documents four major crises that occurred in an earlier, particularly volatile century of economic history. The four crises were so far-reaching that they affected virtually everyone involved in the U. S. market economy. Yet each was so complex that their causes and consequences remain subjects of debate generations later.
The financial crises covered in the exhibit include:
- The Panic of 1837: Historians have traditionally attributed the Panic of 1837 to a real estate bubble and erratic American banking policy.
- The Panic of 1873: This crisis originated in the rapid expansion of the American securities market in response to the capital demands of the U.S. Civil War effort and railway development.
- The Bankers' Panic of 1907: The investigation and reform of the life insurance industry in 1905-1906 had chilling effects on the stock market, eventually contributing to the Panic of 1907.
- The Great Crash of 1929: Unique historical materials from Harvard University collections help explain the role of the regional exchanges in the stock market crash of 1929 (particularly the Boston Stock Exchange) and the regulation of the securities industry during the New Deal.
The collections' vast array of holdings--including original documents and personal papers--reveal the voices, actions, and experiences of individuals who played a role in precipitating each crisis, those who suffered its ill effects, and those who seized an opportunity to profit from it.
"This exhibit debuts at a propitious time," said Caitlin Anderson, a Visiting Fellow at the Center for History and Economics at Harvard University, who serves as guest curator of the exhibit. "We have had time to gain perspective on the subprime mortgage meltdown, but we're still feeling its impact on many aspects of our lives. Although these prior crises differ in fundamental ways from the current recession, they make it clear that these kinds of events are very much a part of American history."
According to the exhibit catalog, "As dramatic as these events were, 1837, 1873, 1907, and 1929 do not even begin to exhaust the list of financial crises. The U. S. Constitution was only a few years old when the new nation suffered its first financial upheaval in 1792; Americans weathered more than a dozen serious banking panics, stock market crashes, and other asset price collapses over the next century and a half. Speculative bubbles date at least as far back as the Dutch tulip mania of the 1630s. Recent history offers the examples of the Japanese real estate crisis of the early 1990s and the American dot-com bust later in the decade.
(Note: The trigger for the Panic of 1873
was the failure of J. Cooke & Co.,
America's premier banking house).
Jay Cooke & Co. Records, 1832-1915
Photo: Baker Library Historical Collections
"Economists have studied features common to all financial crises. A period of economic growth and rising prices precedes a period of intense speculation enabled by an expansion in the supply of money or credit or both. Then an exogenous shock, or perhaps just a pause in the increase of asset prices, occasions a loss of confidence and a rush to liquidity. Growing numbers of banks, firms, and individuals cannot meet their obligations, and a crisis ensues. The financial crises documented here passed through each of these phases in turn.
"…The months since the subprime mortgage crisis of 2008 have seen many earnest entreaties to learn the lessons of history. But given that crises have never developed in precisely the same way twice that may prove a difficult task.
"…Historical material can also yield quantitative data that illuminate underlying conditions of which contemporaries may have been unaware. It can challenge traditional interpretations of past crises and may help in understanding our present choices."
For more information on the exhibit, "Bubbles, Panics, and Crashes: A Century of Financial Crises, 1830s-1930s" visit www.library.hbs.edu/hc/crises
About Baker Library Historical Collections
Baker Library Historical Collections is a rich resource for scholarship in business and economic history and cross-disciplinary studies. Thousands of items - including business records, diaries and correspondence, research papers, rare books, ephemera, and visual materials - provide the documentary evidence that allows scholars to investigate firsthand the important business theories, organizations, movements, and individuals that have shaped our nation's history and globally influenced progress and developments today. For more information about Baker Library Historical Collections visit www.library.hbs.edu/hc/.