Louis Navellier exposes what first tech bubble says about stocks today
The first high-technology stock market crash was 200 years ago in British railroad stocks.
In 1825, the information highway ran on iron rails, in Britain at least. In 1824 and 1825, prospectuses were issued for 624 railroad companies, so in early 1825, the famous London merchant banker Francis Baring declared that "a gambling mania has seized upon all classes and is spreading in all parts of the country."
In its March 1825 issue, The Quarterly, a London publication, also proclaimed, "Nothing now is heard of but the railroads. The daily papers teem with notices of new lines in every direction; pamphlets are thrown before the public eye recommending nothing [else] throughout the Kingdom."
This high-technology market bubble predictably topped out in July 1825 in England, and many companies were in stock liquidation by late 1825, when the first British commercial railroads began operations.
Meanwhile, across the ocean, after America prevailed in two wars of Independence with Britain (the second in 1812), we trailed Britain in technology, with many frontiers to conquer. The proposed Erie Canal would link the Hudson River to the Great Lakes, in a series of locks 363 miles long, falling 555 feet in 83 locks. It was 40 feet wide and only four feet deep and was dug out entirely by hand.
On the nation's 41st birthday, July 4, 1817, New York Governor DeWitt Clinton turned the first shovelful of dirt on that great undertaking, one of the great early NYSE-funded efforts in nation building. At the time, everyone thought the canal would take decades to build, but that Clinton politician of old sounded like JFK in 1961 when he said, "The day will come in less than 10 years when we will see Erie water flowing into the Hudson." Like our 1960s moon-shot, the finished canal happened in eight years.
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America's new stock market helped kick-start that technology boom, as the building of the Erie Canal created a mania in canal securities, generating capital inflow from Europe. When opened in late 1825, the Canal was quite profitable, but canal digging was no way to transport raw and manufactured goods over the long distances of an expanding nation. After the Civil War, railroads began to proliferate, along with hundreds of bridges spanning rivers to deliver goods across America. As with many other industries, the Panic of 1873 – which lasted until 1878 – interrupted this growth, but the 1880s were boom years.
In fact, it was on July 3, 1884, that journalists Charles Dow and Edward Jones published their first stock price index. That first index was mostly composed of railroads, the dominant sector at the time. (The Dow Jones Industrial Index was not launched until 1896, and it was also dominated by railroads.)
American history can be told in terms of each dominant technology
Turning to the dominant technologies of the day – in 50-year cycles – Britain began ahead of us:
1825: Railroads and the industrial revolution dominated Britain, as America built the Erie Canal
1875: Railroads began to dominate America, as reflected in most early stock market indexes.
1925: Automobiles began to push trains aside, while radio dominated mass communications.
1975: Computers in business, and soon personal computers, began to transform businesses.
2025: Artificial intelligence (AI) begins to dominate business practices, boosting productivity.
Just as railroad stocks crashed in Britain in 1825, so they crashed in America in the 1870s and again in the 1890s, but they kept growing throughout the 1800s (reflected in blue, above). Then came cars, industrials and materials, computers, hardware then software and information tech, in waves of creative destruction.
But stocks went nowhere in several odd decades, like the 1890s, 1930s and 1970s. Few businesses could survive the choking off of liquidity by the Federal Reserve in 1930-32 – the greatest cause of The Great Depression. Starving for cash, Americans soon began starving for food and shelter some 90+ years ago.
In 1932, 25% of American workers were unemployed, and another 25% were severely underemployed. Wages (for those who worked) were 60% below 1929 levels. Stock dividends were 57% lower than in 1929, and the GDP had shrunk in half. The stock market reached its 20th-century nadir on July 8, but on July 2, 1932 (a Saturday), Franklin D. Roosevelt became the Democratic nominee for President, and the stock market began to come off its lows. After reaching its 20th-century low of 41.22 on Friday, July 8, the Dow Jones index rose 26.7% in the rest of July 1932 and gained almost fivefold by 1937, to 194.4.
As bad as things may seem today, when people compare today to the 1930s, they reveal gaps of ignorance about our history, but the great lesson is that America bounces back and creates great fortunes yet again.
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This story was originally published June 5, 2026 at 1:23 PM.