Washington’s Panic of 1893 returns in new book, lost local radio scripts
As the world looks back this week to mark 10 years since the Great Recession, a set of vintage local radio drama scripts that recently turned up at Washington State University, and a new book by a local journalist, are shedding light on the earlier Panic of 1893.
The Panic of 1893 was an earlier, forgotten financial crisis that gripped the world – and the Northwest – more than a century ago.
The scripts, for a circa 1940 program called “Trails of the Great Northwest,” appear to have been written and produced for Spokane radio station KHQ. Sponsor of the broadcasts was the local electric utility — known at the time as Washington Water Power Company but now called Avista.
. Washington Water Power celebrated its 50th anniversary in 1939, and these programs may have been part of that observance.
Topics covered in the scripts range from the settling of what’s now Eastern Washington, to the death of Marcus and Narcissa Whitman, to the Spokane Fire of August 1889, and the Panic of 1893. A bound paper booklet of the scripts, perhaps the only surviving copies, is part of the collection at WSU Libraries’ Manuscripts, Archives and Special Collections (MASC). Staff at the MASC scanned the booklet and provided PDFs to KIRO Radio.
The 1893 financial crisis was largely eclipsed in American memory by the Great Depression of the 1930s. It led to bank failures and unemployment for several years in the mid-1890s. Washington, having only recently achieved statehood in 1889, was dependent on borrowed capital to build private and civic infrastructure, and was hit particularly hard.
Retired local journalist Bruce A. Ramsey recently published a book called “The Panic of 1893: The Untold Story of Washington State’s First Depression,” based on years of research into newspaper archives around the Northwest.
“We were relying on bank credit and loaned money and bond money from outside the state for almost everything, and this was a time when they’re building streets and roads and city halls and jails and streetcar lines and all that stuff, and it’s all on borrowed money,” Ramsey said. “And so suddenly it just gets cut off. There’s no Federal Reserve to cushion things. Credit just stops.”
Ramsey says that, compared to what happened 10 years ago and what happened in the 1930s, the 1890s brought their own unique brand of economic hardship to Washington.
“The recession of 2008 peaked at 10 percent unemployment, and it was cushioned by federal unemployment compensation, and a bank bailout and stimulus package,” Ramsey said.
During the Great Depression of the 1930s, Ramsey says, unemployment peaked at 25 percent and “there was not much governmental support until the third and forth year, and [the Depression] lasted for 10 years.”
“In the 1890s, we don’t know what the unemployment rate was because we didn’t measure it then,” Ramsey said. “There was really no help from the federal government or the state government, [though] there was emergency feeding of the unemployed by [some] county governments and private charity.”
“The 1890s was definitely the toughest one to live through,” Ramsey said, “because we were a poorer country and there was just less help.”
The roots of the Panic of 1893 are complicated, but can be traced to shaky markets and bank failures overseas, and then collapse of the wheat market and drop in wheat prices. Like dominoes, growing concerns about the future of the economy led to falling stock prices on the major markets, and then bank runs around the country. Draining of deposits crippled local financial institutions, and dried up sources of credit and brought business investment to a halt.
“It hit really quickly,” Ramsey said, of the Panic of 1893’s effect on Washington. “The stock market panicked on May 5, 1893, and by the 25th, the first bank in Washington fails, the Bank of Puyallup. And then after that, [there was] a whole wave of bank failures.”
Some effects of the Panic lasted until 1897, when Washington, in particular, began growing its economy by exporting more goods to Asia. It was that same year that the Klondike Gold Rush also contributed to the state’s rebound, as thousands of aspiring miners on their way north stopped in Seattle to purchase supplies.
An ensemble from KIRO Radio’s famous early-morning drama troupe, The Bonneville Hams, performed an excerpt from one of the lost scripts on Seattle’s Morning News. Dave Ross and Colleen O’Brien were narrators, and Chris Sullivan played failed Bank of Spokane owner A.M. Cannon.