When peace, like a river,
Attendeth my way,
When sorrows like sea billows roll;
Whatever my lot,
Thou hast taught me to know,
"It is well, it is well with my soul"

Horatio was a lawyer in Chicago, and friend of the famous preacher D. L. Moody.  He had invested heavily in real estate.  So when the Great Chicago Fire happened, it meant that he lost almost everything he owned.

Two years later, in 1873, Spafford decided his family should take a holiday in Europe, and knowing that Moody would preach in England in the fall, he decided to take his family there; however, he was delayed because of business, so he sent his family on ahead of him:  his wife Anna, and his four daughters Tanetta, Maggie, Annie and Bessie.

On November 21, 1873, while crossing the Atlantic on the S.S. Ville Du Havre, the ship was struck by an iron sailing vessel and two hundred and twenty six people lost their lives, including all four of Spafford's daughters.  Somehow his wife, Anna, survived. On arriving in England, she sent a telegram to Horatio with the words "Saved alone."

Spafford then took a ship to England, going past the place where his daughters had died. According to his daughter, Bertha Spafford, the hymn was written in 1873 in mid-Atlantic.

After the tragedy, the Spaffords had two more children: a son, Horatio, born in 1876, and a daughter, Bertha, born two years later.  Sadly, young Horatio contracted scarlet fever and died at the age of four.

In August 1881, the Spaffords set out for Jerusalem as a party of 13 adults and three children and set up an American Colony there.

From The Library of Congress Exhibition Overview:

Moved by a series of profound tragic losses, Chicago natives Anna and Horatio Spafford led a small American contingent in 1881 to Jerusalem to form a Christian utopian society known as the "American Colony." Colony members, later joined by Swedish Christians, engaged in philanthropic work amongst the people of Jerusalem regardless of their religious affiliation and without proselytizing motive - thereby gaining the trust of the local Muslim, Jewish, and Christian communities.  During and immediately after World War I, the American Colony played a critical role in supporting these communities through the great suffering and deprivations of the eastern front by running soup kitchens, hospitals, orphanages and other charitable ventures.

He died on October 16, 1888 in Jerusalem of malaria, four days before his 60th birthday, and was buried there.

It is Well with My Soul
(as originally written)

When peace, like a river,
attendeth my way,
When sorrows like sea billows roll;
Whatever my lot,
Thou hast taught me to know,
"It is well, it is well with my soul"

Chorus: It is well (it is well)
with my soul (with my soul)
It is well, it is well with my soul
 
Though Satan should buffet,
though trials should come,
Let this blest assurance control,
That Christ hath regarded
my helpless estate,
And hath shed His own blood for my soul.

(Repeat chorus)

 My sin, oh the bliss
of this glorious thought!
My sin, not in part but the whole,
Is nailed to His cross,
and I bear it no more,
Praise the Lord, praise the Lord, O my soul!

(Repeat chorus)

 And Lord haste the day
when the faith shall be sight,
The clouds be rolled back as a scroll;
The trump shall resound,
and the Lord shall descend,
Even so, it is well with my soul.

(Repeat chorus)