SS Central America Sinks: Ship of Gold Lost at Sea

Fifteen tons of California gold sat in the hold of the SS Central America when a Category 2 hurricane drove the aging sidewheel steamer beneath the Atlantic swells on September 12, 1857. The sinking killed 425 of the 578 people aboard and sent an estimated $2 million in gold coin and bullion to the ocean floor, roughly 160 miles east of Cape Hatteras, North Carolina. The financial shock that followed helped trigger the Panic of 1857, one of the worst economic crises of the nineteenth century. The Central America operated the crucial final leg of the Panama Route, the fastest path between California’s goldfields and the banking houses of New York. Prospectors and merchants shipped their fortunes east aboard her, and banks relied on regular gold shipments to maintain reserves. When the vessel departed Havana on September 8, she carried both commercial gold and the personal savings of hundreds of returning miners. The hurricane struck on September 9, battering the ship for three days. Water poured through leaking seams faster than the pumps and bucket brigades could clear it. Captain William Lewis Herndon, a decorated naval officer, organized the passengers into shifts and managed to transfer most of the women and children to a passing brig during a lull in the storm. When the boilers finally flooded and the engines died, Herndon reportedly stood on the paddle-wheel box in full uniform as the ship went down, going to his death with the calm expected of a nineteenth-century naval commander. The loss of so much gold in transit drained Eastern banks of the reserves they needed to back their notes. Banks suspended specie payments, credit markets seized, and the resulting panic rippled through the American and European economies. The wreck remained lost until 1988, when engineer Tommy Thompson located it using pioneering deep-sea robotic technology and recovered gold bars and coins worth hundreds of millions of dollars. The subsequent legal battles over ownership lasted longer than the salvage itself.