August | 2026 | Doc's Books

Engraving depicting the closing of the doors of the New York Stock Exchange on its members, during the panic of 1873.

(Mad money)

To begin with I usually find books on economic history difficult to process and complete. However, at a time when the United States national debt has surpassed $40 trillion it is incumbent upon us to try and understand what is taking place and what are the implications of our current economic policies. An administration which has increased the debt more than any in American history apart for spending during World War II with its “Big Beautiful Bill,” tariff policies that make no sense in our interconnected world and only increases the costs to consumers, and launching a war which was not correctly planned out and budgeted for does not bode well for the future if something is not done. The result of this thought process brought me to Liaquat Ahamed’s latest book 1873: THE ROTHSCHILDS, THE FIRST GREAT DEPRESSION, AND THE MAKING OF THE MODERN WORLD. Ahamed, a Pulitzer Prize winner for his previous work, LORDS OF FINANCE: THE BANKERS WHO BROKE THE WORLD about the lead up to the 1929 Great Depression, previously an economist at the World Bank and is uniquely positioned to tackle his latest topic and integrate certain aspects of our current economic plight.

There are many watershed dates in world history, but few are as important as 1873 from an economic vantage point. When we think of the economic crisis we tend to focus on 1929 and the Great Depression which was only overcome by massive government spending accompanied by World War II, and the 2008 economic downturn, widely known as the Great Recession, officially lasting from December 2007 to June 2009. It was the longest and deepest U.S. recession since World War II, triggered by the collapse of the housing market, subprime mortgage defaults, and a severe global financial crisis. As Ahamed points out, he “Crisis of 1873” is important to explore because of the similarities of the preceding stories. “The real estate bubble, stock market mania, careless lending, cascade of defaults, financial disruptions ricocheting across the ocean, drastic austerity programs and ensuing social unrest carry a familiar ring.” The economic events of 1873, like 1929 and 2008, were preceded by an extraordinary boom and were followed by a period of economic instability and political and social upheaval.

The similarities of these crises to 1873 rests on self-inflicted wounds. Ahamed explores the pre and post 1873 period in great detail integrating commentary that relates to our contemporary economic world. In his focus on 1873 he correctly points out that the economic implications of what occurred should not have been as drastic and lasted for over two decades. In his view it was due to the major economic powers blundering into a totally unnecessary reordering of the global currency system. This resulted in a giant squeeze in the volume of global liquidity and had many unintended consequences.

According to Ahamed the major error occurred in Europe as the major economic powers abandoned silver as a foundation of its monetary system at the same time the United States suspended the use of silver as a form of money. This resulted in half the world’s monetary reserves being under a cloud of uncertainty as bimetallism ended. The situation was exacerbated as the decision was made during the 1873 crisis creating a long period of deflation, severely reducing profits and incentives for investment creating a malaise in the world economy. Further a massive redistribution of wealth occurred from debtors to creditors, businessmen and farmers to bankers and financiers inflaming populist anger. Further repercussions included the discarding of free trade replaced by protectionism, and the Grant administration’s feckless response to the economic crisis in the United States and the resulting political and social implications.

As Ahamed’s title suggests one family emerged as dominant during this period – the Rothschilds. The author takes the reader through the family history throughout the 19^th century focusing on certain family members, their economic expertise, how they accumulated their enormous wealth, and how they impacted governmental policies in the countries where the different branches of the family were deployed. The Rothschilds were spread across Europe, from London, Paris, Vienna, Berlin, to Naples, and in each office they were able to avoid or temper governmental policy errors and avoid decisions that would detract from their wealth. Ahamed delves into the attitudes of family members and their influence on the major politicians and policy makers of the period and concludes they were not always shaping global markets. They made no great push to get off silver, and they avoided bad bets on Cairo and Constantinople. They would emerge from the crashes in Berlin and Vienna unscathed, because Anselm von Rotschild cautiously avoided buying into the boom. At the same time Ahamed points to the errors the family mostly avoided and their impact on populations in general.

Muhammad Tewfik I محمد توفيق باشا
Tewfik I, c. 1882
Khedive of Egypt and Sudan

Ahamed delves deeply into the most important decisions that individual Rotschild bankers made which greatly impacted history. Beginning with Nathan Mayer Rotschild’s accumulation of a fortune through smuggling to evade the Napoleonic blockade of England to Alphonse Rotschild’s influence on the negotiation of reparation payments following the Franco-Prussian War to Lionel de Rothschilds loans to control Egyptian debt to the purchase of a controlling interest in the Suez Canal Company the author provides important commentary that the general reader will easily absorb.

The key events were brought about by the losses suffered by hundreds of thousands of novice investors who lost their savings in the Berlin and Viennese stock markets who then sought scapegoats for their losses leading to a wave of antisemitism. The role of the Rothschild family is interesting here in that they were substantial players in this period, but they were deliberately conservative in their loans and largely hidden from public view. But over and over, when markets crashed, when economies collapsed, there were always people making their fame or fortune by accusing the Jews. Meanwhile the debt defaults by the Ottoman Empire and Egypt, were not due to Jewish bankers but the incompetence and avarice of Sultans in the Ottoman Empire and Pashas in Egypt which upended the strategic map of Europe which in the end resulted in the spread of the British Empire into the area as it took control of the Suez Canal Company.

Gerson von Bleichröder
Gerson von Bleichröder

A cartoon of a giant figure named 'Panic' clearing garbage on Wall Street, 1873

The impact of the post-Civil War railroad expansion in the United States plays an especially important role in the boom and bust cycle which will emerge. The financing of the transcontinental railroad in the United States and the machinations of Jay Gould and James Fiske to build a Northern route are delved into as these men mirrored the actions of the Rothschilds in Europe turned to the low margin business of underwriting government bonds in order to finance railroad construction. Scandals such as the Credit Mobilier receive their just do. Ahamed discussion of Mark Twain is priceless as the American writer coined the term the “Gilded Age” to describe this period of opulence and corruption.

Personality studies abound, some have been told before and offer little that is new, for example, German policy under Otto von Bismarck and how he relied on a Jewish banker for decisions, then turned to antisemitism when it was politically expedient, or how English Prime Minister William Gladstone, a liberal anti-imperialist agreed to send troops to Egypt to protect the Suez Canal to protect his own personal financial investments which helped touch off the “Scramble for Africa.” President Ulyssess S. Grant does not escape Ahamed’s microscope though once again little that has not been presented previously is discussed. However, a strong synthesis of Grant’s inability to make the proper decisions, his fecklessness in appointing cronies to important positions, and the resulting corruption are all discussed. In the end the American political system would suffer with the “Corrupt Bargain of 1876” ending Reconstruction and harboring the return of southern racism towards blacks as the region recaptured much of its influence lost because of the Civil War.

The author possesses a unique ability to make economic history interesting and almost fascinating! His ability rests on his command of history, though he relies too much on secondary sources, insightful analysis and easy to digest writing style. Further he has the ability to integrate statistics to support his conclusions without becoming overly pedantic. If there is one drawback to the narrative is that Ahamed never really conveys proof that the Great Depression of 1873 made the modern world as he strongly implies, however he presents fascinating details about important historical decisions that make his work of economics interesting and understandable for the general reader.

(Mount Vernon, Va.)

At a time when the President of the United States orders the Smithsonian Institution to post signs at exhibits reflecting his own distorted view of American history it is important to be cognizant of what really occurred in the past, its significance, and not allow a misrepresentation of what America has experienced because of the whims of one man. We must do our best to present history in an objective and factual manner and allow people to make up their own minds when thinking about our history. Describing museums, national parks, and other representations of American history and culture as woke, whatever that means, is devious and has no place in our lexicon as we celebrate our country’s 250^th anniversary. In our current bifurcated political environment, it is important for historians to present our history in a meaningful and honest way a task that Yale University historian Beverly Gage and author of a phenomenal biography of J. Edgar Hoover has done with her latest work, THIS LAND IS YOUR LAND: A ROAD TRIP THROUGH US HISTORY.

Gage presents a historical travelogue encompassing thirteen sites she visited as she traveled across America. She describes it as “a guide for anyone who wants to get out there and see the American past for themselves.” Gage follows her own advice and offers a description of places on her itinerary and for each site, character, or important historical event she revisits she offers a concise historical background, an explanation of any controversies involved in the presentation of where she is visiting, and insightful commentary. Gage encourages the reader to explore our imperfect past despite the pressures to downplay the “negative aspects” of our history and put forth the courage and intellectual curiosity to ask important questions and reach their own conclusions.

The breadth of Gage’s coverage takes the reader to sites pertaining to the American Revolution and the role of George Washington, a man who personally believed that he was the unifying force to unite the states after the revolution. Gage is correct in stating that he would become the great “living symbol of America.” The reader will pass through Philadelphia, Mount Vernon, Monticello, the Hermitage, the Alamo, through the Midwest, culminating in Disneyland. Along the way she offers important commentary along with lending a personal touch to her observations. One of the major themes of the book is how these sites have been transformed to reflect the vision of certain historical figures and the myths they created in order to foster their own vision of history. The Alamo is a case in point. A major defeat for Texas and a stunning victory for Mexican General Santa Ana it was quickly transformed from a military route to an inspiring myth that stresses how the Texas Revolution brought men from a dozen states and many nations to fight for democracy making no mention of racial slavery or indigenous land rights. Gage correctly argues how the history following “Remember the Alamo” leads to the Mexican War and the Treaty of Guadalupe Hidalgo and created the first anti-war movement in American history led by Abraham Linclon’s Spot Resolution and the work of Henry David Thoreau. The Mexican War produced numerous states exemplifying the extension of slavery and imperial conquest.

(The Hermitage, Nashville, TN)

Henry Ford, George Pullman, and Walt Disney are presented as men who wanted to create their own myths associated with their work. Gage presents brief biographies of all three, as she does with most important characters she explores, and goes on to describe each person’s vision of what the past or the future would look like. Ford does so in his Museum of American Innovation and Greenfield Village in Dearborn, Michigan; the Pullman National Historical Park located on the South Side of Chicago, Illinois. Established in the 1880s, it preserves America’s first planned industrial company town, the site of the 1894 Pullman Strike, and key manufacturing grounds for the Pullman Palace Car Company, lastly Disneyland with its vision of the past and future in a series of grouped theme parks.

Despite the commentary of certain politicians slavery is ingrained in our history and cannot be shuffled to the side negating its impact. Gage integrates the history of slavery through a major portion of her monograph as she explores the role of Charleston, South Carolina, the work of John C. Calhoun, the abolitionist movement, John Brown’s Raid and other important components of this aspect of our history. The controversies centering around Civil War monuments and statues to southern heroes are analyzed in terms of their meaning for local populations in addition to the people who are still negatively affected by their presence.

Another negative aspect of our history that is explored is that of Native Americans and their plight in dealing with removal from areas sought by white men seeking new territory for slavery, mining interests, ranching, and a host of others. The lives and sites devoted to accomplishing their removal is fraught with massacres and forced removal under the auspices of men like President Andrew Jackson. Further, General George Armstrong Custer and Little Big Horn are visited and are another example of myth this time perpetrated by Custer’s widow, Libbie who set out to make her dead husband an American hero.

(Greenfield Village, Dearborn, MI)

The west plays an important role in American history. After delving into Theodore Roosevelt, the Badlands, and Mount Rushmore, Gage points out that the idea that “the west is America and America is the west” dominates historical sites in the region. Further she points out that Buffalo Bill Cody did his best to ensure the meaning and identity of American history through his traveling expositions depicting a bygone era. A place Gage briefly mentions is Cody, Wyoming which houses the Smithsonian’s Buffalo Bill Center of the West, a group of five separate museums that focus on different aspects of Native American culture, America’s gun culture and other topics. Further, if you drive a few miles out of town you can visit the Heart Mountain Relocation Center, a World War II Japanese Internment camp.

(Mount Rushmore, Rapid City SD)

Perhaps my favorite aspect of Gage’s travels is her description of the importance of upstate New York intellectually and economically in the 19^th century. Her travels along the Erie Canal route and its impact are forgotten in most textbooks. In addition, Gage focuses on the work of Frederick Douglass, Harriet Tubman, Elizabeth Cady Stanton, Susan B. Anthony, among others, which produced the Underground Railroad and the Seneca Falls Convention. Interestingly as compared to sites in Virginia and Texas, sites in upstate New York are more modest.

At the end of the book Gage delves into Orange County, California and the role of Richard Nixon and Ronald Reagan’s presidential libraries. Nixon is important, in part because of Watergate, but more so because of our contemporary political world as he forged a republican coalition that took advantage of the Sunbelt’s booming population while drawing in disaffected white southern and northern working classes. He stressed limited government and also had an enemies list and voiced a great deal of hatred for intellectuals and anyone who crossed him. Though his popularity would collapse after he left office in 1974 his political coalition outlasted him and his mantle was in part taken by President Trump.

Today as we celebrate our 250^th anniversary as a nation it is rather disingenuous for the Trump administration to cut funding and chastise the very programs and institutions that preserve our heritage be it the National Park Service, the National Archives, the National Endowment for the Humanities and many others – when I thought the government was supposed to make history accessible. The key as Gage concludes is that “much of the task of celebrating the 250^th will fall to the rest of us…ordinary citizens who will have to do what we can with what we’ve got where we are,” because it appears there are forces who would like is to disregard facts and just follow along to go along.