How one shipwreck and a cargo of lost gold sparked a U.S. financial panic

National Geographic

25-07-2025

The S.S. Central America sank off the coast of South Carolina in 1857, taking with it 425 lives and a fortune in gold rush bounty. When the Central America sank, it became the worst maritime disaster in America's history. The loss of the gold shipment in the hold contributed to a nationwide economic crisis. Photograph by Logic Images, Alamy Stock Photo
As the sun slipped below the horizon on the evening of September 8, 1857, a festive atmosphere prevailed in the first-class dining room aboard the S.S. Central America. The side-wheel paddle steamer had left Havana that morning under fair skies and was making its way to New York City on the second and final leg of a voyage that had begun five days earlier in Panama. Aboard were 477 passengers and a crew of 101.
Seated at the captain's table that night was a newlywed couple, Ansel and Adeline Easton. They'd been married in San Francisco and were taking the sea route back east for their honeymoon. For those who could afford the trip, it was the swiftest and by far the most pleasant means of traveling from coast to coast in the days before the transcontinental railroad. If the weather was favorable, one could make the journey in as little as 24 days: first by steamer from San Francisco to Panama City, then a short hop by rail across the isthmus followed by another steamer from the Caribbean side to destinations up the East Coast. 'Captain Herndon had arranged to have us at his table,' Adeline wrote later, 'and as he was a most delightful man, we enjoyed it very much.'
As well they might. Captain William Lewis Herndon was as noted for his gifts as a raconteur as he was for his distinguished naval career. At 43 years old, he'd spent 29 colorful years at sea and in 1851 led a scientific expedition along the entire length of the Amazon River.
When one of the passengers at his table that evening brought up the subject of shipwrecks and a recent news story about a crew who abandoned their passengers to save themselves, Herndon gently steered the conversation into calmer waters.
Adeline recalled it vividly: 'How well I remember Captain Herndon's face as he said, 'Well, I'll never survive my ship. If she goes down, I go under her keel. But let us talk of something more cheerful.' '
Four nights later Herndon was to live up to his words, going down with his ship after putting up a heroic fight to save his passengers. The haunting face of a young woman (left) is one of the scores of daguerreotypes found on the wreck. A popular new form of photography at the time, the portraits show the loved ones of prospectors and other passengers aboard the ship when it sank off the South Carolina coast with the loss of 425 lives. Photograph by Jason Bean, USA TODAY NETWORK via Imagn Images California or bust
Ever since 1848, when a man named James Marshall stumbled across a flake of gold at Sutter's Mill in California, the American economy had been booming, fueled by the seemingly endless wealth coming out of the Sierra Nevada. Hundreds of thousands of prospectors flocked to California, about half of them taking the sea route via Panama or Nicaragua, earning gold rush fortunes for the shipping companies, among them the U.S. Mail Steamship Company.
In 1852 it brought on a new ship for the East Coast to Central America run: a 278-foot-long side-wheel paddle steamer christened the S.S. George Law but later renamed the Central America. Over the next five years the ship would carry as much as one-third of the gold transported via the Panama route, either as consignments from the mint or in the carpetbags and money belts of homeward-bound prospectors who'd struck it rich.
The decade following the discovery of gold strengthened the U.S. economy but would prove devastating to Native Americans who were stripped of their ancestral lands, as well as Chinese immigrants who were met with discrimination and violence at the goldfields. And by 1857 there were signs that the gold rush was tapering. Worried investors feared the U.S. economy might be overheated, overextended, and overly reliant on gold rush bounty. On its September run the Central America was carrying some 15 tons of gold rush gold in bullion and freshly minted coins from the new San Francisco mint, all destined for New York City's banks, which desperately needed the gold to shore up reserves and stave off the looming financial crisis.
(These Chinese immigrants opened the doors to the American West)
The glittering wealth in the hold was far from the only fortune that came aboard the paddle steamer in Panama. Many of its passengers were returning prospectors who had hefty stashes of gold nuggets, dust, and bars secreted in their luggage. It was not for nothing that the Central America would be called the Ship of Gold. Its untimely loss contributed to what became known as the Panic of 1857, a major economic depression in the United States. This gold bar from the Central America was among the estimated 15 tons of gold aboard ship. Photograph by Jae C. Hong, AP Photo
The discovery of the wreck by treasure hunters in 1988 and subsequent salvage expeditions retrieved not only mountains of bullion and gold coins—pristine eagles ($10) and double eagles ($20)—but also an altogether more fascinating treasure of daguerreotypes and personal possessions that breathe life into the story of the ship and the backgrounds of its passengers. In one of the most striking images, a young woman in a black lace top gazes into the camera. A mother and child appear in another. There are jars of shaving cream and beauty products; a cup with the inscription 'To my mother'; the oldest known pair of denim jeans; and the steamer trunk that Ansel and Adeline Easton took on their honeymoon, still filled with their fine clothes beautifully preserved.
(Clothing from 1600s shipwreck shows how the 1 percent lived) Bailing for time
On September 9, six days after leaving Panama and now steaming up the Carolina coast, the ship was met by what modern meteorologists would describe as a Category 2 hurricane packing sustained winds of 105 miles an hour.
By the following morning the sea had risen, and the ship was being tossed. For commercial reasons the Central America had been designed to carry no ballast, using instead the weight of its coal to fulfill the same function. But with every bucket of coal burned to fire the engines, the ship grew lighter and thus rode higher in the waves. It soon became dangerously unstable.
Adding to the crew's woes, the hull developed a leak the engineer couldn't trace. As water poured into the bilge, the vessel began to list to starboard, rendering the paddle wheels ineffectual. With the loss of power, the Central America was at the mercy of the waves.
(Shipwreck of royal 'party boat' revealed)
By the morning of September 11, the crew was busy fighting a round-the-clock battle that would ultimately involve every man on board forming a bucket brigade to keep the sinking ship afloat long enough to attract the attention of a passing vessel. The well-to-do Ansel Easton pitched in, taking off his coat, kissing his new wife, and heading below to do his duty.
The following afternoon a two-masted brig, the Marine, itself damaged in the storm, spotted the Central America's distress signal and fought its way to the doomed ship. Captain Herndon had lifeboats lowered and managed to transfer all the women and children to the Marine, a terrifying ordeal for all involved. Adeline Easton initially refused to leave her husband but was persuaded when he assured her that he'd be on the next boat. He wasn't. Conditions were far too dangerous to continue the operation. As dusk fell that evening, and to the horror of those watching, the Central America sank with the loss of 425 men. Herndon was last seen standing by the rail on the wheelhouse, cap in hand, his head bowed, as his ship went down.
Over the next several hours some lucky survivors were plucked from the sea, among them Ansel, who was reunited with Adeline a week later at the National Hotel in Norfolk, Virginia. 'Great joy is too deep for words,' she wrote. 'Kindness loaded us with everything we needed. One lady insisted on presenting us with a trunk. I laughingly told her I didn't have a thing to put in it.'