The Panic of 1907, 2nd Edition

Chapter 19Ripple Effects

Worried over the belief that he had lost $20,000, his balance in the Knickerbocker Trust Company of New York, Valentine Hayerdahl of Mount Vernon committed suicide yesterday afternoon by shooting himself through the head at his home, 53 Rich Avenue, Chester Hill. Mr. Hayerdahl, who was formerly a salesman for the Haviland China Company of New York, resigned a short time ago to go into business for himself. All the money Mr. Hayerdahl owned was on deposit in the trust company. He told several friends that he believed that his life’s earnings were gone.

—New York Times, November 27, 1907

The Panic of 1907 reverberated in markets, governments, and the lives of individuals throughout the United States and around the world. Some measures suggested that the instability in New York had receded by January 1908. But it lingered in the financial system of the rest of the country for several more months. And the Panic proved not to be just a financial crisis—it spilled over into the real economy, society, politics, and public policy, in which the crisis proved to have a much longer influence.

Initial Views of the Panic Beyond New York City

Initially, the impact of the panic elsewhere in the United States appeared to be mild. Just as the New York trust companies were experiencing the first shock waves of instability in late October 1907, dispatches from other cities and regional money centers showed little indication that anyone expected the contagion to spread ...