Panic! Markets, Crises, and Crowds in American Fiction

Published by EH.NET (October 2006)

David Zimmerman, Panic! Markets, Crises, and Crowds in American Fiction. Chapel Hill, NC: University of North Carolina Press, 2006. xi + 294 pp. $22.50 (paperback), ISBN: 0-8078-5687-8.

Review for EH.NET by Scott Dalrymple, Department of Business Administration, Hartwick College.

My grandmother, who came of age during the Great Depression, eventually became a bank teller. By the 1970s, she was head teller at her bank, a position that made her justifiably proud. She liked the banking world, and understood it quite well.

And yet, while she maintained a savings account at the bank where she worked, she always kept a sizeable portion of her cash in a coffee can hidden away in the closet. I once asked her about this, asked her why she would forego the potential interest from her money. “You can never be too careful,” she warned me, quite seriously. “The bank might not be there tomorrow.”

In our post-FDIC world, it’s easy to forget that generations of Americans shared this very real fear of the banking industry, and understandably so. Panics like those that occurred in 1873, 1893, and 1907 were so devastating because they caused ordinary Americans to lose trust in the banking system — trust that is essential for a capitalist economy whose engine is the lending of money to others.

In Panic!, David Zimmerman, a professor at the University of Wisconsin, Madison, has chosen a fascinating lens through which to view the phenomenon of bank panics: contemporary novels written in response to the panics. As Zimmerman points out, bank panics left people searching for answers about what had just happened, and why. And as they always do, authors of fiction stepped forward in an attempt to make sense of it all.

Zimmerman concentrates his study on novels published during the period from 1898 to 1913 — a choice that makes perfect sense, since this was the heyday of the American economic novel. Hundreds of novels on economic themes appeared during this fifteen year period, a point first made by V.L. Parrington’s Main Currents in American Thought in 1930, and later expanded in Walter Fuller Taylor’s exhaustive 1942 analysis, The Economic Novel in America.

As Zimmerman points out, novelists who tried to explain panics tended to come from two camps: those who viewed panics as evidence that capitalism as a system simply did not work; and those pro-business authors who sought to explain the mechanics of the system and “give the United States a business paternity” (p. 22). Zimmerman organizes his study into five chapters. The first chapter examines Frederic Isham’s Black Friday (1904); the second, Frank Norris’s The Pit (1903); the third, actual stock manipulator and sometime-novelist Thomas Lawson; the fourth, Upton Sinclair’s The Moneychangers (1908); and the fifth, Theodore Dreiser’s The Financier (1912).

All of these chapters are well written, insightful, and engaging. The chapter on Lawson, though, is especially interesting. As Zimmerman reminds us, Lawson was a feared stock manipulator who had a large hand in the 1899 Amalgamated Copper stock swindle. He later gained notoriety with his 1904 expos? Frenzied Finance — in which he revealed scandalous details about how the stock market actually worked, indicting numerous Wall Street figures including himself. Lawson became something of a sensation, lauded by those who appreciated his apparent turnaround … and vilified by those who thought his muckraking just another attempt at market manipulation.

Lawson is even more intriguing because in 1906, he wrote a novel, Friday, the Thirteenth. The lead character, who seems quite obviously based on Lawson himself, actually justifies the creation of market panics, which he believes will somehow cleanse the system of its problems — sort of like a bank robber claiming to have taken the money in order to help improve bank security. Zimmerman spends a few pages discussing Lawson’s novel, providing an ostensible reason for this chapter to be in the book. In truth, though, this chapter is a stretch for Panic!; it just doesn’t seem to fit. Having said that, it’s a fascinating chapter, and quite worthy of expansion into its own book.

Most of Panic! is more traditional historical/literary criticism, and quite well done at that. Zimmerman’s discussion of Frank Norris, especially, shows no small amount of insight into Norris’s psychology. Zimmerman uncovers an obscure 1897 Norris article titled “Inside the Organ” (in which Norris waxes rhapsodic about a huge pipe organ) and proceeds to show how Norris used similar language and imagery to describe financial markets in The Pit. This insight reveals much about how Norris — author of the much less business-friendly novel The Octopus — could not help but be awed by Wall Street, despite its warts. This is a very interesting piece of literary detective work on Zimmerman’s part, and it helps bolster this fine essay on Norris, who, had he lived beyond his thirties, might have become our greatest American novelist.

Zimmerman’s overall knowledge of the economic fiction of the time is impressive. He discusses not only the more obvious authors of such work — Norris, Dreiser, and Sinclair — but also some of the once-popular names since forgotten by literary history, including writers like Samuel Merwin, Henry Kitchell Webster, Will Payne, and Edwin Lef?vre.

Panic! is a well-written, well-researched study and a worthy addition to the literature of economic and literary history.

Scott Dalrymple is Assistant Professor of Business Administration at Hartwick College in Oneonta, NY. His essay on economic novelist Will Payne was awarded the James Soltow Award by the Economic and Business Historical Society in 2005.