PANIC of 1907, RECESSION of 1908, MASS MIGRATION

ARTICLE on the 1907-08 recession and migration: scroll down here

Book text excerpt (this page below)

1907: The trust company bubble burst

“Whereas banks had to hold 25% of their assets in cash, trust [companies] faced a 5% minimum. Able to pay higher rates of interest...by 1907 they were almost as big as the national banks, having grown by nearly 250% in ten years”.

Economist, April 12, 2014, p. 50 (Special essay on historical financial crises).

TEXT EXCERPT from

Business of Transatlantic Migration, chapter 6

(pp. 197-98, 203-04).

The immediate trigger of the 1907-08 recession was the stock and money market “panic” which occurred towards the end of 1907. “Trust companies” in New York City, overextended into risky speculations, collapsed like bowling pins following the dramatic insolvency of the Knickerbocker Trust on October 22, 1907…Falling confidence and a drying up of credit caused cancellations of industrial purchases, reductions in production, and dismissal of workers. Decreased job availability was particularly severe for low-skilled employees in economically fluctuating sectors such as mining and construction that were heavily reliant on immigrant labor. Sharp reductions in demand for immigrant labor led, within a couple of months, to a very steep decline in (seasonally adjusted) immigrant arrivals...Record shipping line profits in 1907 were followed by record losses in 1908.

About 120 thousand passengers departed the United States for Europe in steerage class during November 1907. This was not only by far the biggest monthly eastbound total ever before World War I, it was also double the size of the average monthly westbound flow during 1900-14. Measured in both directions, November 1907 was the biggest month for transatlantic steerage travel of the 1900-1914 period.

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