Today, it could take you 3 days to get from Philadelphia to San Francisco by train. A plane could get you there in a few hours. You can even drive across country and it would take 3 – 5 days, depending whether you take the direct route or the scenic route.
Travelling Cross Country in 1857
Of course, back in 1857, you couldn’t fly across country and it would be years before the US had a transcontinental railroad. So, if you planned on going past St. Louis, you took a stagecoach or went on your own horse drawn wagon. Heading west back then was not an easy process. You had to get past thieves and American Indians and survive hot desert conditions. Now, imagine trying to take Gold Coins minted in San Francisco to the east.
Finding a Gold Route to the East
With the discovery of gold in California, the San Francisco mint was opened in 1854. To bring Gold Coins and Bars across the country to Eastern banks was nearly impossible. Back then, gold was the standard. One way to get the gold east was taking a ship from San Francisco to the isthmus of Panama, which was part of Columbia at the time, cross the isthmus by land, than take another ship from Panama to the eastern US.
In 1857, over 570 passengers and crew and tons of California gold worth $2,000,000 back then to a ship from San Francisco to Panana. On September 3th, they boarded the USS Central America from what is now Colon to New York. Along the way, they would stop in Havana, Cuba and proceed north, not knowing what was heading their way. On September 9th, the ship was near the North Carolina/South Carolina coast when it met up with a hurricane. It was said the hurricane had winds up to 105 mph. In two days the ship would start taking water and the boiler was failing. On September 12th, two ships were spotted in the distance and 153 people were able to reach them through lifeboats. The people left on the ship tried to bail it out and get the boiler working, but were unsuccessful. By evening, the ship finally sank and over 425 passengers and crew died. It was thought that the Central America sank about 160 miles off the coast of Cape Hatteras, NC.
The Panic of 1857
Even before the Central America sank, the United States was in a financial crisis. With gold found in California in 1848, there was more investing out west and railroad stocks had been on the increase. In August, 1857, railroad stocks declined and banks were failing. The hope was the gold from the Central America would had helped these banks. With banks closing, businesses failed and people lost this money. Supposedly, things were not much better across the water in Europe, making the Panic of 1857 the first international economic crisis. The Mint would stop minting Half and Large Cents. The country would slowly recover up to the beginning of the Civil War, but what of the Central America.
In 1988, Tommy G. Thompson set out to find the remains of the Central America. Given millions of dollars from investors, he used a device he called Nemo to search the bottom of the Atlantic Ocean where it was thought the Central America sank. He would discover the ship’s bell, two Gold Coins and a Gold Bar and show it his investors. They kept it quiet and Thompson improved the Nemo with video cameras. He would end up finding more gold down there. When the public found out what Thompson was doing, the trouble began. A number of insurance companies that claimed they insured this gold back in the 1850s sued Thompson. Then, the investors sued Thompson after finding out that he had sold many of the gold coins and bars to a marketing company for 50 million dollars and they received hardly anything. When a judge issued a warrant for not appearing to a court case involving the Central America in 2012, Thompson and his assistant disappeared. It wouldn’t be until 2015 that investigators saw Thompson’s assistant in Florida and followed her to the hotel where Thompson was. They were arrested without any resistance.
Moral: “For the Love of Money is the Root of all Evil”
An often misused quote from the Bible, greed is often a person’s downfall, as shown by Tommy Thompson. If you were in his shoes, would you had done the same thing for 50 million dollars? Very tempting indeed.
Anyway, it is an interesting story how one ship that was sunk by hurricane helped create one of the worst economic crisis’s in US history.