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November 30, 2012

Historical Echoes: The Aftermath of a Devastating Hurricane . . . in 1938

Jason Bram and Kara Masciangelo

More than seventy-four years ago, on September 21, 1938, a devastating hurricane—sometimes referred to as the Long Island Express—struck the southern shore of Long Island without much warning, killing fifty people and causing massive property damage. The storm would continue
and inflict severe damage to the southeastern part of Connecticut and
much of New England. This dramatic 11-minute video from the U.S. Works Progress Administration details the storm’s aftermath and rebuilding efforts.

Although storm damage estimates vary, more than 600 people
lost their lives, roughly 57,000 homes were destroyed or damaged, and a number of seaside communities lay in ruins. The total damages were estimated to be $306 million (or nearly $5 billion in today’s dollars).

As we now grapple with the devastation of Superstorm Sandy,
many residents of the hardest hit towns and neighborhoods are grieving and wondering what lies ahead . . . wondering if their once-cherished communities will ever be restored and if their local economies will once again become vibrant. At present, it can be instructive to go back in time—not to the immediate aftermath of the 1938 hurricane, but to the following summer—and focus on a few related news articles. How did these ravaged communities and local economies look just nine months later?

At the time that the hurricane hit, the U.S. economy was weak—in the early stages of recovery from the 1937-38 recession. Yet in less
than a year, much of the battered south shore of Long Island had been rebuilt and restored in time for the peak summer season of 1939, as noted in these articles about Fire Island and the Hamptons. During the course of the recovery, many of the demolished structures were rebuilt, and new infrastructure—such as protective sand barriers and fences, elevated roadways, and jetties—was developed to help safeguard against future disasters. Tax breaks and other state and local government incentives likely helped contribute to these towns’ economic recoveries. This
is not to say that every village that bore the brunt of the storm recovered
quickly. Some of the smaller villages with seasonal populations, such as Fire Island, did not rebuild until much later. But in most areas, the economic rebound was fairly quick and rather strong. Three of the villages that lay in ruins after the 1938 storm, Westhampton Beach, East Hampton, and Southampton—together known as the Hamptons—rebounded strongly and are still among the most affluent and vibrant local economies in the United States. In New Jersey, coastal towns such as Asbury Park, Spring Lake, Long Branch, and many others were also on the road to recovery from substantial damage by the following spring.

At the time, the physical damage (property losses) of the 1938 storm was estimated at $306 million; adjusting for inflation, that translates into $4.7 billion in today’s dollars—considerably less than most estimates for Sandy’s damage. But this comparison is somewhat misleading—after
all, the shorelines of Long Island, New Jersey, and New England are much more densely populated, built-up, and affluent today. A more “apples-to-apples” comparison would be to estimate how much damage the 1938 storm would have caused today. In that vein, a 2008 paper from the American Society of Civil Engineers takes into account not only
inflation, but also the increase in wealth and local population between 1938 and 2005. What they call “normalized” damage of the 1938 hurricane would have come to $39 billion in 2005 . . . and presumably a bit over $40 billion today—exceeding at least the preliminary estimates of Sandy’s physical damage. Another way to compare the damages from these two storms is as a share of the nation’s GDP (gross domestic
product). That $306 million in damages would have accounted for about 0.4 percent of U.S. GDP in 1938, which is actually a considerably larger share of the national economy than that from preliminary estimates of property damage from Sandy ($30 billion or 0.2 percent of U.S. GDP).

And finally, one thing that made the 1938 hurricane more deadly than Superstorm Sandy was that it moved in quickly and took an unexpected turn. While early warning systems for hurricanes did exist, the technology was far less advanced than it is today. Because most of the experts did not expect the storm to move toward Long Island—with the notable exception of Charlie Pierce, who had warned of a likely imminent landfall but was overruled by superiors—people had little advance warning, and the loss of life from the 1938 storm was much greater than that from Sandy.

The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Jason Bram is a senior economist in the Federal Reserve Bank of New York’s Research and Statistics Group.

Kara Masciangelo is a research librarian in the Federal Reserve Bank of New York’s Research and Statistics Group.

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