1870s Horse Flu Epidemic Brought US Economy To Its Knees

Nemo the Magnificent writes with this excerpt from the University of Arizona: "A new study (paywalled) published in the journal Nature provides the most comprehensive analysis to date of the evolutionary relationships of influenza virus across different host species over time... In the 1870s, an immense horse flu outbreak swept across North America. City by city and town by town, horses got sick and perhaps five percent of them died. Half of Boston burned down during the outbreak, because there were no horses to pull the pump wagons. In the West, the U.S. Cavalry was fighting the Apaches on foot because all the horses were sick... The horse flu outbreak pulled the rug out from under the economy.""

Comments

That outbreak had a name

[QilessQi]

Folks at the time called it the Great Epizootic* of 1872: http://en.wikipedia.org/wiki/E... . In cities where it hit hardest, men were reportedly pulling carts in the streets because of the shortage of horses.

*pronouced ep-eh-zoo-AH-tick

Re:Sure, blame the flu

[cold fjord]

The picture was pretty complex as it turns out - there was a lot going on. But I wouldn't be surprised that the flu outbreak could have had a major impact. The economy was horse driven at the time. Imagine if cars could catch the flu and you couldn't drive them, or they even "died." That could be very disruptive to many sectors of the economy.

The Long Depression (1873-1878)

The period following the Civil War in the United States from 1865-1873 is generally considered one of economic prosperity. Northern owners of industry and bankers had become wealthy in the war, while cotton exports in the south within the U.S. and abroad met the growing demands of foreign manufacturing for raw materials. In addition to a developing of manufacturing at home and abroad, technological innovations led to improvements in mining, agriculture, and infrastructure.

The Economic Costs of the Civil War

The first and most important point is that the Civil War was expensive. In 1860 the U.S. national debt was $65 million. To put that in perspective, the national debt in 1789, the year George Washington took office, was $77 million. In other words, from 1789 to 1860, the United States spanned the continent, fought two major wars, and began its industrial growth—all the while reducing its national debt.

We had limited government, few federal expenses, and low taxes. In 1860, on the eve of war, almost all federal revenue derived from the tariff. We had no income tax, no estate tax, and no excise taxes. Even the hated whiskey tax was gone. We had seemingly fulfilled Thomas Jefferson’s vision: “What farmer, what mechanic, what laborer ever sees a tax-gatherer of the United States?”

Four years of civil war changed all that forever. In 1865 the national debt stood at $2.7 billion. Just the annual interest on that debt was more than twice our entire national budget in 1860. In fact, that Civil War debt is almost twice what the federal government spent before 1860.

What’s worse, Jefferson’s vision had become a nightmare. The United States had a progressive income tax, an estate tax, and excise taxes as well. The revenue department had greatly expanded, and tax-gatherers were a big part of the federal bureaucracy.

Furthermore, our currency was tainted. The Union government had issued more than $430 million in paper money (greenbacks) and demanded it be legal tender for all debts. No gold backed the notes.