The epidemic hit what was then the nation’s capital in late summer and lasted several months. The most likely source of the outbreak is that the infection was brought to the city by refugees fleeing a slave revolt in Santo Domingo (modern-day Haiti), where mosquitoes made the fever a regular occurrence. Between August 1 and November 9, the fever killed more than 5,000 Philadelphians—about 10% of a population of 50,000 before the outbreak induced some 20,000 residents to flee. Among them was President George Washington, who went home to Mount Vernon in early September.
One person who did not flee in time to avoid the infection was Treasury Secretary Alexander Hamilton, who caught the fever in early September. His wife was also stricken. Both were quickly cured by a cold-bath treatment recommended by Dr. Edward Stevens, an old friend. But when the Hamilton family went to Albany, New York, to recuperate at Mrs. Hamilton’s father’s home, they were almost denied entry to the city because of unwarranted fears that they would bring the malady with them.
Philadelphia’s most eminent physician, Benjamin Rush, used a harsher treatment than Stevens’ method, blood-letting and mercury purges, and lost many patients. The two doctors became involved in a public debate over whose treatment was best. In 2020, we have witnessed efforts to keep possibly infected outsiders away as well as debates over treatments. They are nothing new.
Merchant-financier Stephen Girard stayed on in Philadelphia, using some of his fortune and managerial skills to tend to the sick. He espoused the Stevens treatment and became a hero to Philadelphians.
During the epidemic, the prices of the young nation’s two most important securities, US 6% bonds (Sixes) and shares in the Bank of the United States (BUS), both dipped slightly in early August before rebounding and even increasing until quotations for the Philadelphia market ceased in early September. Specifically, Sixes dropped from $90 (per $100 bond) to $88.75 before hitting $91.67, while BUS shares went from $420 to $412 to $428, suggesting a “flight to quality” scenario as some wealthy Philadelphians on the hoof sold real estate and specie for more liquid and transportable safe assets. Unlike 2020, the securities market did not crash. It simply shut down during the epidemic.
The reaction in the New York market, where both securities also traded, was similar. When quotations began again in Philadelphia on January 1, 1794, BUS shares were at $440 in Philadelphia and $444 in New York, and Sixes were at exactly $90 in both markets, suggesting that the temporary cessation of trading in Philadelphia did not damage market integration. In fact, Philadelphians eager to buy or sell those securities probably just did business via New York during the hiatus.