A string of unfavorable international events and over-speculation in railroad securities led to stocks tumbling on the New York Exchange.
Stories circulated of investors who made and lost fortunes during a single trading session.
Savvy foreign investors withdrew funds form New York banks, followed by nervous depositors. Some banks were near collapse and newspapers began to print lists of businesses that had declared bankruptcy.
The Eastern banks relied heavily on regular shipments of California gold, and they awaited the large cargo aboard the Central America. Had they the slightest suspicion that the Central America’s gold shipment could wind up on the floor of the Atlantic, their troubles could become much worse.
As the economic situation turned dismal in New York, so did the weather around the Central America. When the steamer left Havana on Tuesday, Sept. 8, there was a strong breeze, and within hours, sheets of deafening rain spattered the ship.
They were on the edge of a whirlwind, known today as a hurricane. This marked the beginning of a tense struggle between the old wooden ship and the wild natural forces of a tropical storm.
By Thursday, the creaking steamer was losing the battle as the winds reached gale force, and the seas grew mountainous.
The passengers, said Addie Easton, became anxious but Captain Herndon remained cheerful and encouraging.
(Next Part 5)