1832 Cholera Epidemic

When cholera broke out in 1832, New York City’s population had increased to 250,000, many of them recent immigrants living below 14th Street. The epidemic killed some 3,500, a mortality rate equivalent to more than 100,000 when applied to the city’s current population. When it peaked in Manhattan in July, President Andrew Jackson was in the process of vetoing Congress’s bill to re-charter the second Bank of the United States and completely repaying the US national debt.

The most liquid US government bond paid 5% interest per year. While the cholera epidemic raged, leading to a mass exodus from the city, the Fives not only continued to trade, they traded above par, in a tight range from $103.75 to $104.125 (per $100 principal) throughout the summer. Most cholera victims were poor and not investors, but the disruption of the city’s usual business was palpable. Most trades, though, were over-the-counter and through brokers, who, like many modern knowledge workers, could conduct business even when out of the office or out of town.

Unsurprisingly, then, the stocks of private commercial banks, like the Bank of America, Butchers and Drovers, and Chemical, also remained range-bound all summer, as did the shares of New York, Neptune, Merchants Fire and other insurers. New York Gas Light also traded in a range between $145 and $155 throughout the summer.

Railroads exhibited a more complex pattern. Harlem dipped slightly at first, from $105 to $95.50 per share, in late July before rebounding to $103 by the end of August. The Mohawk and the Paterson and Hudson Railroads, by contrast, both dropped by $15 to $20 per share over the summer and recovered much more slowly, not returning to their 1832 highs until April 1833. Many railroad stocks were already considered “fancies,” the newly launched playthings of speculators, so it is not clear that any of those movements had anything to do with cholera.