August 24, 1857: The Panic of 1857 begins

On this day in 1857, the Ohio Life Insurance and Trust Company failed, setting off the Panic of 1857, an economic depression that would cripple growth at the Head of the Lakes. According to historian John Pardee, “The panic of ’57 flattened both towns [Duluth and Superior] completely, they having as yet no substance.… Superior kept a few stores open; on the Minnesota side there was not one place of business open. Then, and for ten years, the Duluth people did their necessary trading in Superior, by boat or on the ice.” Walter Van Brunt stated that “Those who stayed did anything to keep alive. They trapped beaver and mink and even muskrat, which had a trading value. … After the first year or two, the settlers raised potatoes. And the lake was full of fish and the woods of rabbits. To this day, survivors of that period … are known as fish-eaters.…Every house in Duluth, but two, had stood open and unoccupied for three years. Only the Luce warehouse in Portland sheltered the public offices. This was a fearfully lonely place in a forgotten corner of the world, and both Duluth and Superior seemed deserted and Godforsaken.” Two years later, in an effort to create jobs to maintain the population, Duluthians began making beer in a brewery financed by Sidney Luce, owner  of the Luce warehouse mentioned above. Read more about the early development of Duluth here and learn more about about the region’s brewing history here.

Illustration of the Panic of 1873 by Frank Bellew that appeared in the September 29, 1873, issue of the Daily Graphic depicting “Panic, as a health officer, sweeping the garbage out of Wall Street.” The economic depression struck the Head of the Lakes particularly hard. (Image: Library of Congress)