¹ For a day-by-day account of the financial crises in New York City in late 1907, and the attempts made by J. P. Morgan to halt the chain of banking collapses, see Sobel, Robert, Panic on Wall Street (London, 1968), pp. 297–321Google Scholar. The failure of the Knickerbocker Trust Company was, of course, only the proximate cause of the panic. The enormous losses sustained by insurance companies as a result of the San Francisco fire of 1906; the manner in which the railroads had financed capital expenditure on equipment by borrowing on short-term notes; the refusal of London to discount any more American finance bills, thereby necessitating the contraction of loans by New York banks; and the speculative activities in the copper market – all contributed to the crisis. See Goodhart, C.A.E., The New York Money Market and the Finance of Trade, 1900–1913 (Cambridge, Mass., 1969), pp. 107–11Google Scholar; and Myers, Margaret G., A Financial History of the United States (Columbia, 1970), pp. 245–6Google Scholar.

² Faulkner, Harold Underwood, American Economic History (8th ed., Tokyo, Japan, 1963), p. 524Google Scholar.

³ For a brief account of the weaknesses (and merits) of the American banking system under the National Currency Act of 1863, see Cagan, Phillip, ‘The First Fifty Years of the National Banking System – an Historical Appraisal’, in Carson, Deane, ed., Banking and Monetary Studies (New York, 1963), pp. 15–42Google Scholar. For particular details on the 1907 panic see Friedman, Milton and Schwartz, Anna Jacobson, A Monetary History of the United States, 1867–1960 (Princeton, 1963), pp. 156–68Google Scholar. The authors, p. 156, note that the ‘business contraction from May 1907 to June 1908, although relatively brief, was extremely severe, involving a sharp drop in output and employment’. One happy result of the crisis was the passage, in 1908, of the Aldrich-Vreeland Act, which allowed banks to issue emergency notes equivalent to clearing-house loan certificates: in consequence the panic of 1914 did not result in the banking system having to suspend payments.

⁴ The data upon which these calculations are based is to be found in U.S.A., Department of Commerce, Historical Statistics of the United States (Washington, D.C., 1960)Google Scholar, series P13 (Frickey's index of manufacturing production), Q81 (railway freight revenue tons originated), and N65 (Newcomb index of dollar volume of new construction).

⁵ White, Charles Henry, ‘Pittsburgh’, Harper's Magazine, 117 (11 1908), 901Google Scholar.

⁶ University of Pittsburgh, Bureau of Industrial Research, Statistical Handbooks, No. 2, Industrial Databook for the Pittsburgh District (Pittsburgh, 1936), pp. 29–35Google Scholar.

⁷ Statistics as to new building permits are derived from three sources: City of Allegheny, Department of Public Safety, Bureau of Building Inspection, Annual Reports, 1899–1906; City of Pittsburgh, Executive Department, Annual Report for 1912–13, Statistical Appendix, p. 30Google Scholar; Pittsburgh Board of Trade, Year Book, 1909, p. 30Google Scholar.

⁸ Data published annually in the Commercial and financial Chronicle, ‘Railway and Industrial Section’. British commentators were amazed at the severity of the depression as reflected in the reduced railway earnings. The Economist, for instance, believed that the annual report of the Pennsylvania Railroad for 1908 was ‘a striking proof of how much less stable was American than British industry’: see 68 (13 March 1909), 557.

⁹ Statistics on the sale of natural gas were derived from the Philadelphia Company, Annual Report of the Board of Directors to the Stockholders, No. 16 (year ending 31 March 1900) – No. 30 (year ending 31 March 1913). The quotation is from No. 21 (year ending 31 March 1905), p. 6. It should be noted that the name of the Philadelphia Company is misleading – it was a Pittsburgh enterprise. Data on the number of street railway passengers carried by the Pittsburgh Railway Company were published each year by the State of Pennsylvania, Department of Internal Affairs, pt. 4, Annual Report of the Bureau of Railways. Information as to the sale of beer (by Pittsburgh's two major breweries, the Independent Brewing Company and the Pittsburgh Brewing Company) were published in the Commercial and Financial Chronicle, 87 (28 11 1908), 1418Google Scholar, and 91 (12 November 1910), 1325.

¹⁰ Data on the deposits of Pittsburgh's banking institutions were published in each issue of The Banker: A Bi-Monthly Magazine Devoted to the Banking Institutions of Pennsylvania and the United States. The journal was published in Pittsburgh, and devoted much of its attention to the city's affairs. Hereafter referred to as The Banker.

¹¹ Andrew, A. Piatt, ‘Substitutes for Cash in the Panic of 1907’, Quarterly Journal of Economics, 22 (08 1908), 502CrossRefGoogle Scholar.

¹² Commercial and Financial Chronicle, 84 (8 June 1907); 84 (29 June 1907); 85 (13 July 1907).

¹³ Ibid., 85 (2 November 1907), 1120; New York Times, 2 November 1907, p. 2. According to Robert A. Walker, the ‘financial stringency which had its inception in New York spread westward in October and Pittsburgh was very hard hit … In an incredibly short space of time depositors were withdrawing their money from the banks and locking it up in safe deposit vaults and other places’: see ‘The Pittsburgh Iron Trade in 1907’, The Iron Age, 81 (2 01 1908), 36Google Scholar.

¹⁴ Commercial and Financial Chronicle, 85 (26 10 1907), 1061Google Scholar; 85 (7 December 1907), 1435; 85 (14 December 1907), 1492; 86 (25 January 1908), 207. See also New York Times, 7 12 1907, p. 2Google Scholar; 9 December 1907, p. 10.

¹⁵ New York Times, 2 12 1907, p. 10Google Scholar; 21 November 1907, p. 3; Commercial and Financial Chronicle, 87 (10 10 1908), 934Google Scholar. See also The Iron Age which each week, in a section entitled ‘News of the Works’, gave details as to the number of plants in the Pittsburgh district which had been closed down.

¹⁶ New York Times, 15 11 1907, p. 16Google Scholar.

¹⁷ Ibid., 2 December 1907, p. 10.

¹⁸ Commercial and Financial Chronicle, 86 (23 03 1908), 1249Google Scholar; 86 (22 February 1908), 481.

¹⁹ New York Times, 25 11 1907, p. 12Google Scholar.

²⁰ Commercial and Financial Chronicle, 87 (28 11 1908), 417Google Scholar.

²¹ New York Times, 3 11 1907, p. 9Google Scholar; 8 December 1907, p. 4.

²² Pittsburgh Sesqui-Centennial Committee, Pittsburgh Sesqui-Centennial Celebration Official Account, Pittsburgh ? 1909? p. 92Google Scholar.

²³ Commons, John R. and Leiserson, William, ‘Wage-Earners of Pittsburgh’, in Kellogg, P. U., ed., Wage-Earning Pittsburgh (New York, 1914), p. 118Google Scholar. This was one volume of the ‘Pittsburgh Survey’ carried out in the city in 1907–8 under the direction of the Russell-Sage Foundation.

²⁴ The 25 occupations upon which Table 2 is based are those for which a continuous time series can be constructed for the 1901–3 period. Many more occupational wage rates can be found for particular years which confirm the evidence presented here: for instance, the mean (unweighted) hourly wage of 82 Pittsburgh occupations rose from 100.0 in 1907 to 101.7 in 1908. A full tabulation of the wage data upon which these indexes are based may be obtained from the author.

²⁵ National Labor Tribune, 32 (17 03 1904), 4Google Scholar.

²⁶ Ibid., 32 (24 March 1904), 1. Although Commons/Leiserson indicate that railway yardmen experienced no decrease in wage rates, trackmen employed by the Pennsylvania rail road had their rates reduced by ten to twenty per cent: see 32 (21 April 1904). No such reduction occurred in 1908.

²⁷ U.S.A., Department of Labor, Bureau of Labor Statistics, Bulletin 151, 1914Google Scholar, ‘Wages and Hours of Labor in the Iron and Steel Industry in the United States, 1907 to 1912’, Table iii, pp. 62–71 and 137–43. The statistical evidence from which the above conclusion is drawn is supported by the account of Fitch, John A., The Steel Workers (New York, 1911), pp. 159–60Google Scholar: although shut-downs, part-time work and lay-offs were frequent ‘there was no general horizontal decrease in pay by the Steel Corporation [in 1908] or during the depressed period of 1909’, unlike the summer of 1903 when wage reductions were made throughout the industry.

²⁸ U.S.A., Commission of Industrial Relations, Final Report and Testimony, 64 Congress, 1 Session, 1916, Senate Document No. 415, Vol. 11, p. 1503Google Scholar.

²⁹ National Labor Tribune, 36 (5 03 1908), 1Google Scholar. See also Robert A. Walker, ‘The Pittsburgh Iron Trade in 1907’, op. cit., p. 36: ‘In 1893, when the country passed through a similarly severe depression, the large steel interests in an endeavour to keep their plants running set out to force their products on the market and prices were made which resulted in a number of concerns being forced to the wall. An entirely different course is being pursued in the present depression, through the leadership of the United States Steel Corporation, the policy adopted by steel manufacturers being to keep down output and prevent ruinous competition in prices’ (my italics).

³⁰ ‘Unemployment in Pittsburgh’, Charities and the Commons (11 1908), p. 271Google Scholar. See also Commons/Leiserson, op. cit., p. 118, where it is stated that from ‘every type and class of labor came the report of a year with only half, or three-fourths or even one-third of the rime employed’.

³¹ Commercial and Financial Chronicle, 89 (25 12 1909), 1620Google Scholar.

³² The manuscript records of the Woods Run Industrial House are deposited in the Archives of Industrial Society collection of the University of Pittsburgh library. The cited information is to be found in the records of the Neighbourhood Center Association, Box 13, on loose sheets of paper enclosed within the House's Minute Book, 1901–1908; namely, handwritten notes in pencil by Jeanette Kennedy (secretary) dated January, 1908, pp. 1 and 4; February, 1908, single sheet; March ? 1908 ?, p. 4. For the general work of the House see Box 1, Miscellaneous Correspondence, 1906–22; and Kravetz, Jean A., ‘Growth of the Woods Run Settlement’, manuscript dissertation for the University of Pittsburgh in partial fulfillment of the requirements for an M.A. (undated)Google Scholar; Box 4, Elva M. Cruikshank, ‘Woods Run Settlement House. A Brief History’, typewritten manuscript, 1928

³³ Pittsburgh Association for the Improvement of the Poor, Annual Reports. Not all Reports seem to have survived the passage of time: information cited above is derived from No. 29 (year ending November 1904) – No. 35 (year ending November 1910) and No. 38 (year ending November 1914). The records of the Kingsley House settlement are deposited in the Archives of Industrial Society: evidence of co-operation with the Association may be found in Kingsley Association records, Box 1, Fourteenth Annual Report of the Kingsley House Association, 1908, p. 51Google Scholar (although page unnumbered).

³⁴ U.S.A., Congressional Record, 42, 60 Congress, 1 Session, pt. 3 (26 02 1908), p. 2549Google Scholar. Dalzell's statement was obviously greeted with some scepticism in Congress: the following speaker, Representative Sherwood of Ohio, referred to Dalzell as ‘the brilliant oracle of the now silent smokestacks of Pittsburgh’ (also p. 2549).

³⁵ City of Pittsburgh, Department of Charities, Annual Report, 1909Google Scholar; and Executive Department, Annual Report, 1912Google Scholar, ‘Statistical Appendix’. The records of the Department of Charities are, unfortunately, fragmentary: reports were only published from 1909. See Rutherford, Samuel Thayer, ‘The Department of Charities of the City of Pittsburgh, 1888–1923: Legal Basis and Organization’, manuscript dissertation for the University of Pittsburgh in partial fulfillment of the requirements for an M.A., 1938, p. 3Google Scholar.

³⁶ National Labor Tribune, 36 (20 08 1908), 1Google Scholar; U.S.A., Congressional Record, 42, 60 Congress, 1 Session, pt. 3, 25 02 1908, p. 2485Google Scholar. The second quotation is from a Pittsburgh newspaper (unnamed) of 1 February 1908.

³⁷ Manual of the Civic and Charitable Organizations of Greater Pittsburgh, Pittsburgh, 1908, p. 33Google Scholar.

³⁸ U.S.A., Congressional Record, 42, 60 Congress, 1 Session, pt. 3, 25 02 1908, p. 2485Google Scholar.

³⁹ Rees, Albert, Real Wages in Manufacturing, 1890–1914, (Princeton, 1961), pp. 4 and 18CrossRefGoogle Scholar.

⁴⁰ Wolman, Leo, ‘American Wages’, Quarterly Journal of Economics (02, 1932), pp. 401–2Google Scholar. Brown, A. E. Phelps and Hopkins, Sheila V., ‘The Course of Wage-Rates in Five Countries, 1860–1939’, Oxford Economic Papers (06 1950), pp. 227–8Google Scholar, agreed that wage rates are ‘likely to vary less with the trade cycle than do actual payments for the unit of input, and in a period when methods of payment by results are extending [they] may diverge from the trend of these actual payments’, but believed that such divergence was ‘not of much account before 1914’.

⁴¹ Rees, op. cit., p. 18, does note the deficiency of payroll data: his ‘measures of average hourly earnings are affected throughout by shifts in the composition of the work force’. But what is not made clear is that in a period of depression the occupational composition of a labour force is changed rapidly and radically: in such a situation wage indexes calculated from industry-wide payroll data are likely to prove deceptive. See Phelps Brown and Hopkins, op. cit., pp. 227–8, for a particularly good analysis of the relative merits of wage rate and payroll data. They note that average earnings do not provide an adequate basis from which to construct an index of the price of work, and that actual rates should be used when one wishes to know ‘how the composite commodity, wage-earners’ work, has been exchanging for other things in the market place', for such rates – unlike earnings – provide ‘the average realized payment per unit of wage-earners input’.

⁴² United States Steel Corporation, Annual Report, No. 4, 1905, pp. 24–5Google Scholar.

⁴³ The Iron Age, 80 (7 11 1907), 1134Google Scholar.

⁴⁴ New York Times, 15 11 1907, p. 6Google Scholar.

⁴⁵ The Iron Age, 80 (19 12 1907), 1774Google Scholar.

⁴⁶ National Labor Tribune, 36 (19 12 1907), 1Google Scholar.

⁴⁷ New York Times, 14 12 1907, p. 3Google Scholar.

⁴⁸ Meade, Edward Sherwood, ‘The Price Policy of the United States Steel Corporation’, Quarterly Journal of Economics, 22 (05 1908), 452CrossRefGoogle Scholar.

⁴⁹ The Banker, 20 (05 1908), 2–3Google Scholar.

⁵⁰ Brody, David, Steelworkers in America: The Non-Union Era (Cambridge, Massachusetts, 1960), p. 154Google Scholar.

⁵¹ Commercial and Financial Chronicle, 86 (22 02 1908), 442Google Scholar.

⁵² New York Times, 17 11 1907, p. 6Google Scholar.

⁵³ Commercial and Financial Chronicle, 86 (21 03 1908), 691Google Scholar.

⁵⁴ Ibid., 87 (22 August 1908), 442. For other comments in a similar vein see 85 (23 November 1907), 1301; 88 (1 May 1909), 1092.

⁵⁵ Ibid., 87 (25 July 1908), 196; 89 (7 August 1909), 319.

⁵⁶ New York Times, 22 11 1907, p. 1Google Scholar; 8 December 1907, Magazine Section, p. 6.

⁵⁷ Commercial and Financial Chronicle, 86 (22 02 1908), 445Google Scholar; and 86 (21 March 1908), 692, where it is stated that ‘the return to their home places of so many of the unemployed had to some extent shifted the zone of distress’.

⁵⁸ New York Times, 22 11 1907, p. 1Google Scholar.

⁵⁹ Ibid., 21 November 1907, p. 1. The correspondent estimated that a similar number would depart in December. See also National Labor Tribune, 36 (20 08 1908), 1Google Scholar; Peter Roberts, ‘Immigrant Wage-Earners’, in P. U. Kellogg, ed., Wage-Earning Pittsburgh, op. cit., p. 34.

⁶⁰ National Labor Tribune, 36 (20 08 1908), 1Google Scholar.

⁶¹ New York Times (21 11 1907), p. 1Google Scholar.

⁶² Ibid., 29 November 1907, p. 7, letter from G. di Palma Castiglione.

⁶³ Fitch, op. cit., p. 148.

⁶⁴ Iron City Trades Journal, 1 (18 09 1908), 2Google Scholar.

⁶⁵ National Labor Tribune, 36 (20 08 1908), 1Google Scholar.

⁶⁶ Noyes, Alexander D., ‘A Retrospect of the American Panic’, The Bankers', Insurance Managers' and Agents' Magazine, 85 (03 1908), 377Google Scholar.

⁶⁷ A. Piatt Andrew, ‘Substitutes for Cash in the Panic of 1907’, op. cit., p. 512. See also the same author's ‘Hoarding in the Panic of 1907’, Quarterly Journal of Economics, 22 (02 1908), 290–9CrossRefGoogle Scholar. According to Walker, op. cit., p. 36, most Pittsburgh concerns paid their workers 80% in such cheques, and only 20% in cash.

⁶⁸ National Labor Tribune, 35 (14 11 1907), 4Google Scholar.

⁶⁹ In 1900 an attempt was made by Pittsburgh's cashiers to keep a tab upon new circulation issued: it was quickly discontinued, however, when it was discovered that many notes immediately disappeared from circulation. ‘The inference is that it was hoarded’, The Banker, 12 (05 1900), 3Google Scholar.

⁷⁰ New York Times, 18 11 1907, p. 6Google Scholar.

⁷¹ Commons/Leiserson. op, cit., p. 118.

⁷² National Labor Tribune, 35 (21 11 1907), 1Google Scholar.

⁷³ Cassel, Gustav, The Theory of Social Economy, (London, 1923), vol. 2, pp. 545–7Google Scholar, contended that the availability of immigrant labour in times of industrial boom allowed employers readily to enlarge the scope of their operations, and the unbridled expansion which resulted increased the intensity of the subsequent depression. For a good analysis of the debate between those who believed that immigration flows accentuated downturns of the economy, and those who believed migratory labour provided a ‘safety-valve’ by which the hardship of depression was alleviated, see Jerome, Harry, Migration and Business Cycles (New York, 1926), esp. pp. 26–7, 239–44Google Scholar.

⁷⁴ The terms employed are from Noyes, Alexander D., ‘A Year After the Panic of 1907’, Quarterly Journal of Economics, 23 (02 1909), 186 and 189CrossRefGoogle Scholar.

⁷⁵ U.S.A., Department of Commerce, Bureau of the Census, Thirteenth Decennial Census, 1910, Vol. 4, Table 8, p. 590Google Scholar.

The research in this paper was originally carried out for a doctoral dissertation registered at London School of Economics: some of the conclusions were presented to the Australian and New Zealand Economic History Conference held at the Australian National University at Canberra in August, 1973. I would like to thank Mr Ian Inkster and Dr Charlotte Erickson for their helpful comments on earlier drafts of this paper.