Why are mad hatters mad?

Madness in hatters was an occupational disease. Hatters used a variety of extremely toxic dies, including dyes containing lead and mercury, to make hats. Handling the hats resulted in contact poisoning, which led to a higher rate of madness among hatters than in the general population.

Lead poisoning was also a probable cause of the failure of the Franklin expedition that may have been the first to discover a Northwest Passage. His expedition spent years in the Arctic, at one point having to resort to cannibalism. Subsequent expeditions were puzzled by some of the decisions made by Franklin's expedition, including their lugging a piano for miles through the Arctic after unexplainably deciding to abandon their ship. An autopsy indicated madness from lead poisoning may have been to blame. Canned food was new at that time, and the tin cans were soldered closed with lead, which over time would result in the lead leaching into the food, causing lead poisoning.

See http://www.epa.gov/history/topics/perspect/lead.htm for an excellent essay on the lead poisoning (the word plumbing comes from the latin word for lead) common in the Roman Empire, diagnosed by physicians at that time and blamed by some historians for the sterility, madness and cretinism among Rome's elite families which contributed to the fall of the Empire. Lead was used for plumbing, as a preservative for wine, a flavoring for foods, a medicine, and for makeup.

!!! Great answer!

You are SO smart!

the mercury was used in the process of making felt from wool. In places where there were a lot of hatters or hat factories in the 18 and early 1900s, there's still a really high level of mercury contamination.