Sandburg's Hometown

July 13, 2014

Panic of 1893 - War on Wealth Bank RUn Poster

The Panic of 1893

by Barbara Schock

The Sandburg family knew hard times before the Panic of 1893 came into being. A quit claim deed on a property August Sandburg had purchased, forced him to pay for a previous owner's mortgage.

As a result, Carl Sandburg was unable to attend high school. He kept his newspaper delivery route and performed odd jobs wherever he could find them. His older sister, Mary, had better grades and was allowed to go to high school. She could become a teacher when she graduated in 1894.

The Philadelphia and Reading Railroad was forced into bankruptcy on February 23, 1893. It had debts of $125 million (equal to just over $3 billion in today's money). It was a major carrier on the East Coast. Many businesses and industries which depended on the railroad, went into receivership, as well as the banks which had given loans to it. Railroads, such as the Union Pacific, Northern Pacific and Santa Fe had built new tracks across the western states with borrowed money. They didn't yet have enough traffic to pay for the construction. They had to be reorganized along with about seventy other carriers.

In addition, an 1890 law, the Sherman Silver Purchase Act, passed by Congress forced the government to purchase all silver mined in the country. The market was soon flooded with silver and the price began to fall. Paper money could be redeemed for silver or gold. The paper money was then put back into circulation to be redeemed again. The gold reserves of the nation began to shrink. Europeans who had invested in American companies and the New York stock market began to pull their money out. The stock market collapsed June 27, 1893.

This series of shocks undermined the public's confidence in banks. Many people rushed to local banks to withdraw their money. Smaller banks which kept funds in larger banks were unable to replenish their funds. As a result, more than 575 banks failed or temporarily suspended operations.

Politicians of the time believed that cycles in business and banking were natural events and shouldn't be tampered with. Little was done by the government to correct the situation. President Grover Cleveland did convince Congress to end the silver act.

More than four million people lost their jobs and 15,000 companies failed. The economic depression continued for the next four years.

In Galesburg, the Chicago, Burlington & Quincy Railroad cut the hours of employees by almost half. The whistle which called workers to their jobs blew only in the morning as afternoon hours had been suspended.

During this time the Sandburg children ate lard sprinkled with salt on their bread. They spread molasses on the bread when there was no lard. The neighbors went together and purchased a hog from John Kranz, a cousin of Clara Sandburg. It was butchered and the meat and lard shared. A bumper crop of potatoes and other root vegetables in the family garden helped them get through the winter. Siftings of coal, called slack, was put into the kitchen stove for cooking and heating. The burning of the slack had to be watched carefully as it made large clinkers. If they became too large, the clinkers were difficult to get out of the stove.

August Sandburg struggled to support his family. He had little interest in the events taking place on the national level. He heard about them, but his personal financial problems were his main concern. Thriftily, he had always prepared for a rainy day. Now it had come.


Sandburg's Hometown
Date Title
July 14, 2014 The Panic of 1893
July 7, 2014 The Rev. T. N. Hasselquist
June 30, 2014 The Knox County Courthouse
June 23, 2014 The Family Photograph Album
June 16, 2014 Parades
June 9, 2014 Lingonberries
June 2, 2014 Where We Live
May 26, 2014 Old Main
May 19, 2014 Rhythms of the Railroad
May 12, 2014 Spring Tonic
May 5, 2014 The Milkmen
April 28, 2014 Gray's "Elegy..."
April 21, 2014 Off to War
April 14, 2014 Swedish Easter
April 7, 2014 A Father's Face
March 31, 2014 Secret Societies
March 24, 2014 George A. Murdock, Merchant
March 10, 2014 Trade Cards
March 3, 2014 The Demorest Medal
February 24, 2014 Rip Van Winkle
February 17, 2014 Cabbage Soup
February 10, 2014 Lincoln's Birthday
February 3, 2014  The Colonel
January 27, 2014 The Lincoln Penny - A Little History
January 20, 2014 Walking to Work
January 13, 2014  A Small Abode
January 6, 2014 Birth of a Poet
December 30, 2013 Christmas 1880
December 23, 2013 Swedish Christmas
December 16, 2013 The Reporter Sees Santa
December 9, 2013 The Coming of Christmas
December 2, 2013 The Fire Boys Talk
November 25, 2013 Galesburg Will Feast on Turkeys and Cranberries - Thanksgiving 1893
November 18, 2013  Mary Sandburg Johnson
November 11, 2013 Carl Sandburg's Bicycle
November 4, 2013  Lace Curtains 
October 28, 2013 The Front Room
October 21, 2013 A Warm Breakfast
October 14, 2013 Marion D. Shutter
October 7, 2013 Cigars and Consumption
September 30, 2013 Forrest F. Cooke & August Sandburg
September 16, 2013 Forrest F. Cooke, Mayor
September 9, 2013 Dusty Streets
September 2, 2013 Typhoid Fever
August 26, 2013 Coffee and Water
August 19, 2013 A Horse! A Horse!
August 12, 2013 Gaddial Scott
August 5, 2013 The Racetrack
July 29, 2013 John Peter Algeld - Part II
July 22, 2013 John Peter Altgeld - Part I
July 15, 2013 Tramps, Tramps, Tramps
July 8, 2013 Lady Liberty
July 1, 2013 Galesburg's Fourth
June 24, 2013 John H. Finley
June 17, 2013 The World's Columbian Exhibition
June 10, 2013 Fruit Short-Cake
June 3, 2013 Horatio Alger, Author
May 27, 2013 Memorial Day, 1887
May 20, 2013 Professor Jon W. Grubb
May 13, 2013 Beginnings of Lombard University
May 6, 2013 Young Sandburg’s View of Lombard College
April 29, 2013 Thinking
April 22, 2013 Robert Colville, Master Mechanic
April 15, 2013 The Galesburg Opera House
April 8, 2013 Grocery Stores and Sample Rooms
April 1, 2013  A Hearty  Breakfast 
March 25, 2013  The Lost Wallpaper Legend 
March 18, 2013 Martin G. Sandburg
March 4, 2013 The Edison Talking Machine
February 25, 2013 Joe Elser, Civil War Veteran
February 18, 2013 Remember the Maine...
February 11, 2013 Lincoln's Birthday
February 4, 2013 Curiosity