What happened the first time the Picayune felt pressure to cut publication to three days a week?

Advance Publications, owner of the 175-year-old, Pulitzer Prize-winning Times-Picayune, announced May 24 that beginning Oct. 1, it will cease being a daily newspaper and publish only three times a week, making New Orleans the largest U.S. city without a daily newspaper. Three weeks later, management cut the staff by one-third - including slashing its newsroom staff by almost one-half - and said its emphasis going forward would be on its clunky and sometimes-impenetrable website, Nola.com.

What happened the first time the Picayune, one of the predecessors of today's Times-Picayune felt pressure to cut publication to three days a week? Professor Emeritus Larry Lorenz of the School of Mass Communication at Loyola University in New Orleans, cited this passage from T.E. Dabney's One Hundred Great Years: The Story of the Times-Picayune From its Founding to 1940:

 

"Within three months of the Picayune's founding in January 1837, a financial panic swept the country. In New Orleans, as elsewhere, businesses failed. Banks that had advanced money against the cotton crop suspended. In April, arsonists started fires throughout the city in order to plunder homes and businesses. In September came a yellow fever epidemic, and among those stricken were the Picayune's printers, and in late September, George Kendall, a co-founder of the paper, fell ill with the fever.

"Some of the city's five well-established dailies dropped to tri-weekly publication. The Picayune did not miss an issue."