gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
185f9d523e901396
Response Measures
Accommodated withdrawals, Borrowed from banks or large institutions, Clearinghouse loan, Capital injected, Books examined
Clearinghouse involved: Yes
(loan, examination, or other measures)
Description
Some later retrospective articles call the Mercantile a failure, but the contemporary pieces describe heavy withdrawals met by Clearing House support and director resignations rather than a suspension or receivership.
Events (3)
1.April 27, 1865Chartered
Source
historical_nic
2.October 18, 1907Run
Cause
Bank Specific Adverse Info
Cause Details
Collapse of the Heinze copper corner and revelations about F. Augustus Heinze's dealings tied the bank to speculative losses and sparked depositor withdrawals
Measures
Clearing House extended assistance/advances, resignations of board and change in management, pooled support fund (~$10,000,000) pledged by other banks
Newspaper Excerpt
heavy withdrawals from the Mercantile National Bank; debit balance $1,900,000; Clearing House will extend assistance
Source
newspapers
3.June 19, 1912Voluntary Liquidation
Source
historical_nic
Newspaper Articles (23)
1.October 18, 1907The Pacific Commercial AdvertiserHonolulu, HI
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Failures Are Widespread HOUSTON, Texas, October 18.-A private bank closed its doors here yesterday, its liabilities being two million dollars. NEW YORK, October 17.-The Otto Heinze Company of brokers today suspended business. F. Augustus Heinze has resigned the presidency. The Mercantile National Bank and Haller Sochle Company, bankers of Hamburg, Germany, have failed, and the State Savings Bank, of Butte, Montana, has suspended, all as a result of the unprecedented slump in copper. HAMBURG, October 18.-The firm of Haller Sochle has failed for seven millions.
2.October 19, 1907Los Angeles HeraldLos Angeles, CA
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WALL STREET GLAD TOMORROW IS SUNDAY STOCK EXCHANGE EXPERIENCES DARK DAY Hope Expressed That Conditions Will Be Better Adjusted Before Business Is Resumed Next Week By Associated Press. NEW YORK, Oct. 18.-While by no means a "Black Friday," this was far from being a fair day in Wall street, and when trading closed genuine satisfaction was expressed that a short Saturday and a Sunday holiday would force a lull during which many things were possible of adjustment. The prompt action of the clearing house committee in eliminating the Mercantile National bank as a disquieting factor, should result by Monday in pretty well clearing the atmosphere. Today, however, this influence was offset by frequent rumors that at the committee meeting, at which the solvency of the Mercantile had been established, there had been a further discussion in which the names of other banks were involved. The clearing house committee minimized consequent fears by declaring that the condition of the banks generally was satisfactory, though the qualification was made that in some instances changes in the directorate of other banks might be necessary. It was insisted there was nothing alarming in the local banking situation. On the stack exchange the metals and affiliated stocks continued their downward movement, carrying with them the general list, particularly railway shares. The selling was heavy and the market feverish throughout, being susceptible to vague influences. Call money touched 10 per cent an hour before the close. American Smelting broke 9 3-8, selling down to 61 1-4. Amalgamated Copper broke 4 7-8, dropping to 44 1-2. Both of these stocks made new low records, as did a long list of other properties, including such prominent railroad issues as Union Pacific, St. Paul, Great Northern, Northern Pacific and Reading. Closing Rally Support and short covering assisted a closing rally after various trouble rumors had failed to materialize. Thirty railroad and industrial stocks closed today at the average price of 851/4, against yesterday's average of 86 7/8. The same stocks a month ago averaged 95%, and a year ago 139 7/3. The change in the management of the Mercantile National bank, the presidency of which was resigned by F. A. Heinze yesterday, was made complete today. Following its investigation of the institution's affairs, the clearing house committee today extended the bank cash assistance, but as a condition precedent to this demanded the resignations of the entire board of directors. These were immediately presented to the president of the Clearing House association, who will appoint a new board of directors. Some of the old board may be reappointed. William Barrett Ridgely, comptroller of the currency, it was unofficially announced today, had decided to accept the presidency. He was present today when the bank's affairs were looked into. It was said that Mr. Heinze still retained his holdings in the bank. Other developments consequent upon the collapse of the Heinze projected copper corner included an announcement that Otto Heinze & Co., at a meeting of creditors next Monday, would offer a settlement in full of all claims which the firm considers "legal." These were said tc total about $2,000,000, and did not include the claims of Gross & Kleeberg, whose failure Wednesday was declared by the firm to be due to the repudiation of orders for copper buying received by the suspended firm from the Heinze house. In the supreme court today an attachment was issued for $108,075 against property of the State Savings bank of Butte, Mont., in favor of the Mercantile National bank, for a balance alleged to be due on a demand note of $150,000, made by the State Savings bank on March 5.
BANKERS BALKED Financial Siluation Owing to the Heinze Resignation Has Raised a Perplexing Issue BANKS HELPING OUT New York, Oct 19.-A perplexing financial situation to-day faced the bankers and financiers who are trying to straighten out the affairs of the Mercantile National bank and to divorce it completely from any association with F. Augustus Heinze, its former president. With the resignations of its entire board of directors in the hands of the clearing house, that institution appeared to control the situation and was committed to the task of putting the bank on a firm footing. For this purpose nine clearing house banks had promised to contribute $200,000 each, a total of $1,800,000 to tide the Mercautile bank over any distress which it might encounter as a result of the suspension of Otto Heinze & Co and F. Augustus Heinze's desire to re-establish that firm. Public interest in the situation lay in the action to be taken by Comptroiler of the Currency William B. Ridgely, whose acceptance of the presidency of the Mercantile was still in some doubt. It is understood early to-day that Mr Ridgely's decision depended upon whether he would be allowed a free hand in reorganizing the bank and whether he would secure the support of men whom he desired to back him in the task. The stock market opened irregular, gains and losses being mixed. The clearing house committee went into session this morning to consider the affairs of the Mercantile National bank. Opening quotations of United Copper common stock, the Heinze copper property, in the curb market to-day were at $10 a share as compared with a closing price of 10 1/8 last night. Bonds of the Consolidated Steamship Co, controlled by C. W. Morse, who has been associated with Mr Heinez in the Mercantile bank, were sold at the opening at $17, as compared with $18, yesterday's close.
4.October 19, 1907The Cairo BulletinCairo, IL
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STREET TRYING TO DOWN HEINZ FOUGHT TOO HARD IN PAST TO HAVE MANY FRIENDS LEFT. HIS BANK UNDER PROBE Montana State Examiner In Butte To Look Into Condition Of Suspended Bank-Believed Salvent. New York, Oct. 18.-Following the relentless pounding of F. Augustus Heinze's mining stock, the suspension of his brother's brokerage firm, the suspension of his Bute, (Mont.) saving bank and his resignation as presi dent of the Mercantile National Bank after sacrificing his holdings, the t Clearing House Committee at a secret 1 meeting began an examination into I the affairs of the Mercantile National Bank. t t The outcome of the examination. as S declared by a member of the com i mittee, is that the bank was found I perfectly solvent. The presidency of the bank has been offered to William S f B. Ridgely, comptroller of the Cur n reney at Washington. It is believed he will accept. b The meeting of the Clearing House. a called secretly that there might be no T apprehension excited in the financial W district, was an unusual occurrence, d the last occasion of the kind having H been in 1903 in the financial emerto gency of that year. The members a went into the Clearing House singly T and met in the committee room be ti hind closed doors. The only member of the committee who failed to appear di was James T. Woodward, president of the Hanover National Bank. SI m The conference lasted one hour, and at upon the highest authority it may be In said the only subject discussed was 0) the affairs of the Mercantile National th Bank. Ways and means were considered to meet any emergency that might arise as the reult of the Heinze connection with the institution. In no direction that he might look could F. Augustus Heinze see any sig nals of sympathy or aid in Wall street. He has been a merciless fifhter all his life. and he is in a land without mercy. He has been caught, as many others have been caught, his loans have been called and his W stock has been hammered; but he has this advantage-his resources are great and he can stand hard chastisement. One nice little jolt given him was a formal notice that he must get out of Do the Mercantile National Bank in the interest of the bank. He has bought into the bank at $300 a share. He was told that a syndicate of the friends of Mr. Ridgeley insisted on the purchase of a substantial interest gra in the institution as a condition preJoi cedent to his acceptance of the presiwh dency, and this syndicate fixed the hu price of the shares at $200. That price ve was accepted.
5.October 20, 1907The Montgomery AdvertiserMontgomery, AL
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MR. RIDGELY WON'T ACCEPT Decli is Presidency of ew York Bank. THE FINANCIAL SITUATION Mercantile National Bank May Go Into Liquidation. The Distinct Lull Yesterday Was Welcomed In Wall Street And The Previous Excitment Has Materially Subsided. York, Oct. 19-There was a sigh disNew relief throughout the financial of the of when the short session marking trict, exchange ended today, panicky stock of one of the most for the weeks close that Wall Street has known a long time. of declination of the presidency by WillThe National Bank of the Mercantile Ridgely, Federal Comptroller after lam B. did not come and until therethe Currency, day was over, or the C the business no effect on the market situation in the financial may be when to say, the fore had general. market finan- What effect Monday it is impossible of opens it is the general opinion holiday will ciers that settle matters in the serve but that to the there week-end are unexpected street situation, and deunless the delicate will t velopments in in a large measure restored weekly by bank statement of $6,443,100 The addition banks, e confidence unexplained Monday. of the showed bring- above be to an cash holdings $11,180,000 the cash This is the the ing holdings reserves. preparing taken required the banks are may be themselves them next to mean that for any crisis week. that curb forced the on stock exchange stock dealt and in the sufferpractically On every decline during the week. listed ed a net Copper, which is not on the a curb stock United and is net dealt decline in only of the 38 3-8 preferred. for the closing suffered common at a and 7 3-4 exploration 1-2 and for 25 respectively. dropped 45 points. Guggenheim the exchange. Amalgameted closing today Cop- 1-8 at per On reached and showing 43 1-2, a low net point loss of roached years for 44 1-8, the the week. bottom The price for below several the high point was was 77 3-4 points year. American mark of Smelting and also showed a low net loss figure was 611-1 week. The the high price the t on 3-4 point and undeh 77 Railroads 1-2 under and indus- but and the the year for 1906. the made a new the low of weak, 12 points low for 93 case price for suffered during in almost every figfor are F. gave Heinze tonight the trials close substantially today was above the low out Augustus in a he that in said which statement he the which gave interview on to the he did not out, reflect intend His of the House. Clearing committee to he other said, referred rehad made who statements the Bank, National garding not but these members He House Clearing we Committee. of any criticising of member had the no of Intention that
6.October 21, 1907Santa Fe New MexicanSanta Fe., Santa Fe, NM
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WALL STREET TAKES A BRACE Change in Bank Directorates Has Good Effect SOME HEAVY WITHDRAWALS Clearing House Will Extend Assistance to Mercantile National. New York, Oct. 21.-Most favorable sentiment in business and banking circles resultant from yesterday's changes in the various bank managements and promises of support made by the Clearing House Association, received something of a setback today when it became known that the debit of the Mercantile National Bank at the Clearing House was $1,900,000. The debit balance of the National Bank of North America was $850,000. These figures indicated that heavy withdrawals from the two banks were being made and the totals were referred to by each member of the Clearing House as "unexpectedly large and disconcerting." It was announced in a short time, however, that the Clearing House Association would extend assistance to the Mercantile National Bank of North America. Seth M. Milliken, the newly elected president of the Mercantile National Bank said today that counting out the Heinze and Morse loans, the assets of the bank are one dollar and forty cents for every dollar of liability and that the loans in question are of face value. The stock market today opened strong and higher, all the market leaders participating in the rise. Brokerage Firms Goes Into Bankruptcy. An involuntarry petition in bankruptcy was filed in the United States District Court today against the firm of Otto Heinze and company, brokers, whose suspension from the Stock Exchange was announced last week af. ter they refused to accept a block of United States Copper Stock purchased for them by the firm of Gross and Kleeberg.
7.October 21, 1907The Evening Star and Newark AdvertiserNewark, NJ
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New York Clearing House Again Assists Mercantile National. ATMOSPHERE IS CLEARED Retirement of Heinzes, Morse and Thomas From Official Connection With Chain of Financial Institutions Restores Confidence, NEW YORK, Oct. 21.-Everyone interested in Wall Street and the financial affairs in the city in general felt much easier over the banking situatien by reason of the Clearing House announcement that aid would be extended to the Morse-Heinze-Thomas banks if assistance were required. When the United Copper corner collapsed last week and was followed by the retirement of F. Augustus Heinze from the presidency of the Mercantile National Bank disquieting rumors were circulated as to the standing not only of that bank, but as to the stability of the institutions controlled by Charles W. Morse and E. R. Thomas, who were associated with Heinze in the Mercantile. These rumors rapidly spread throughout the downtown district, and they had considerable to do with the crumbling away of stock exchange prices last week. The action of the Clearing House, however, following the retirement of Morse, Thomas and Heinze from their New York banks, cleared the financial atmosphere considerably, and sentiment in and around the Stock Exchange was more cheerful today than for some weeks. The Clearing House committee was again in session this morning to deal with the developments which might arise in the banking situation. Manager Sherer, of the Clearing House, said that institution had the situation under control, that all the undesirable elements had been eliminated, and for this reason there would begin a new era in banking in New York. It was officially denied that it would be necessary to issue Clearing House certificates in order to secure support for the banks which have been under criticism. The Mercantile National Bank today owed the Clearing House on balance $1,900,000. The National Bank of North America owed the Clearing House $850,000 on balance. These sums were unexpectedly large and indicated that I heavy withdrawals were being made from these two banks. The sum owed by the Mechanics and Traders' National Bank was $430,000 and that owed by the New Amsterdam National Bank $200,000. The Clearing House Committee decided at the meeting today to assume the responsibility for the Mercantile National Bank's large debit balance. This is the third consecutive day on which the associated banks have gone to the assistance of the Mercantile. Seth M. Milliken, the newly elected president of the Mercantile National Bank, said today that, counting out the Heinze-Morse loans, the assets of the bank are one dollar and forty cents for every dollar of liability, and that o the loans in question are of value. Besides choosing new officers for the as Heinze-Morse-Thomas banks and announeing that each and every one was in a solvent condition, a most important step has been taken here. This is the pledging of a fund of $10,000,000 by a score of individual banks to render such assistance as the Clearing House committee may think necessary. The meeting at which this was done was the most notable gathering of bankers that any occasion in recent years has brought together. The deposits of the
8.October 22, 1907The Daily BannerCambridge, MD
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BANKS RELIEVED The New York Clearing House Helps Two. SITUATION STILL SERIOUS Over $2,000,000 Was Required to Meet Debit Balances of the Mercantile and New Amsterdam Banks-Stock Market Was Steady. New York, Oct. 22.-The recent tension of the banking community was considerably relieved and no adverse developments of a serious character materialized. At the same time there was evidence that some of the banks most affected by recent events were still in need of assistance, but the promptness with which the clearing house accorded it did much to allay further alarm. The general improvement was reflected in the buoyancy of the stock market and the steady advance in prices from previous low levels. On the other hand, this conservative element deferred a too optamistic view until the relief by the clearing house had continued for several days and had permanently re-established the stability of some of the weaker institutions, notably the Mercantile National bank and the New Amsterdam National bank. The clearing house was called upon to meet debit balances of the Mercantile and New Amsterdam banks to the extent of upwards of $2,000,000, of which the Mercantile owed about $1,900,000, and the New Amsterdam $200,000. The debit balance of the national bank of North America amounted to $850,000. While there was said to have been some discussion between the clearing house committee and the officers of the latter bank as to the necessity of giving it any support, it was not found necessary to do so, and William F. Havemeyer, the new president of the institution, declared that the Bank of North America had not and and would not ask one dollar's aid from the clearing house. "The situation," Mr. Havemeyer said, "is really far better than we expected. So far only about $150,000 has been withdrawn. When the bank opened we had $1,000,000 on hand to pay all comers, but only a small portion was used.". The fact that the clearing house committee regards the situation as still serious was shown by the remark of a member of the committee that the Mercantile bank's debit balance was "unexpectedly large and discon certing." The National Bank of Commerce gave 24 hours' notice to the clearing house, of which it is a member, that it would no longer c.ear for the Knickerbocker company. The directors of the National would not comment upon their action. The National has for some time acted as clearing agent for the Knickerbocker. One development which did not tend to ease the prevailing conditions was the application for a receiver for the firm of Otto Heinze & Co., the brokers, who were suspended from the New York Stock Exchange last week, after a disagreement between that firm and Gross & Kleeberg, over the acceptance of a block of stock of the United Copper Co., Argument on the motion for the appointment of a receiver was deferred until Wednes day.
The Heinze failure in New York last week was a much greater one than the first news of it led the people to believe. The total losses of the syndicate, which include the depreciation in stock values, is placed at 65 millions. The most notable slump is in the price of the capital stock of the Mercantile National Bank, of which F. A. Heinze was the president. When the syndicate purchased the stock of the bank the price paid was $300 per share. On Saturday it was offered at $180. It is feared that the bank may *find its resources badly impaired. The Clearing House has already advanced more than a million dollars to tide the bank over its present distress, but a run, which seems probable, is certain to precipitate its ruin. Heinze's chief associate in the bank was one C. W. Morse, who acquired prominence a few years ago as a figure in a domestic scandal, which had its final denouement in the conviction and imprisonment in the penitentiary of Abe Hummel, a notorious lawyer.-Parkersburg Sentinel.
10.October 24, 1907The CitizenBerea, KY
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DANGER OF PANIC Confidence Threatened by Heinze Troubles-Stock Exchange Firms Fail-Run on Big Banks. A financial panic has been threatening New York, and as we go to press the danger is acute. One great bank, the Mercantile National, was found to have been put over a million dollars in debt by its president, F. A. Heinze, and was only saved by help from other banks. Another, the Knickerbocker Trust Company, closed after many depositors had withdrawn money, and the Trust Company of America, one of the largest in this country, lost the confidence of its depositors, so that thousands of them tried to get their money at once. Two big stock dealing firms failed. This does not mean that hard times are likely. Big business depends on the confidence of the dealers in certain banks and in each other. There is not nearly enough money to do the world's business, and the banks' notes and business-men's promises to pay re used instead. When men get afraid to trust each other and demand cash, there is a panic, because men cannot always get cash for their property and so are bankrupt. A bank loans a great deal of money, and when its depositors all at once demand back what they have put in, the bank is almost sure to fail, because it cannot get the cash from the borrowers soon enough to keep on paying. For that reason "confidence" is very needful for business, and it is this that is gone in New York. The trouble was started this time by a family of people who have much more money than brains. They are the Heinzes, and got rich by happening to have a copper mine. They have been speculating in copper company stocks, and involved the banks that they controlled, so that when the price of copper fell, because of their mismanage"ment, they could not pay up. It is thought they lost $65,000,000 They controlled several banks, which almost failed. As all business is bound up together this made people afraid that other banks would fall, and there was a "loss of confidence." Nothing in the business conditions called for any such disturbance, but It is possible that the general conditions in the money market, where loans are made, helped along. This market has been unsettled by the men who are hoping that they can cause a panic and blame It on the President's fight to make the corporations obey the laws. The present trouble, however, seems only an example of the danger of having great amounts of money in the hands of gamblers and foolish people.
11.October 30, 1907The Madison Daily LeaderMadison, SD
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SCARE IS SUBSIDING Runs Upon New York Banks Practically Cease. STOCK MARKET UNSTEADY Calling in of Loans Causes a Decline in Prices, Canadian Pacific Leading in the Slump-Worldwide Scramble for Gold. New York, Oct. 30.-The financial situation is without notable developments. and the abating interest indicates that the public has pretty well gotten over its scare. The stock markets is a little unsteady, but without extreme agitation. The announcement at the ImpeS rial bank of Germany a raised its discount rate from 5 1/2 to 6 1/2 per cent in order to protect its gold holdings was not unexpected by bankers here. It is thought quite likely that the Bank of England will follow suit by raising its rate at the regular meeting on Thursday. The scramble for gold is such at all the financial centersLondon, Paris, Berlin and New York -that the metel will go to the highest bidder and under present conditions New York is likely to appear for a time in this role. Her ability to get gold is due not only to the need for it, but to the large credits which are being established by the movement of the crops and other products-notably wheat, cotton, copper, tobacco and meats-and by the sale of American securities. These influences are usually more potent than artificial measures to obtain the yellow metal. It is believed this will be effective to place sufficient gold at the command of the New York market and to maintain credit and cause the resumption of banking operations in the usual manner within a few days. Runs upon the banks here have practically ceased since the banks adopted the policy of paying large depositors in checks. Some transfers of accounts are being made from the smaller to the larger banks, which resulted in adverse balances against the former, but strengthening the ability of the larger institutions to meet pressure and to support the market.
"The current number of Harper's Weekly contains an editorial 'roast' of the clearing house certificates issued in Las Vegas, New Mexico. In view of the fact that the financial difficulties of the West were wholly due to the suspension of payment by the New York banks, and the issue by these banks of clearing house certificates and other forms of 'Johnsmith' currency—as it is now called—it would seem that the Weekly might have found a target for its ammunition nearer home.—Socorro Chieftain.
13.December 3, 1907Deseret Evening NewsSalt Lake City, UT
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# RESUMPTION.
Horace Greely was wont to say that "the way to resume is to resume." The New York banks have been announcing for some time that specie payments are about to be resumed.
It appears that the bankers elsewhere are ready to pay cash as soon as New York decides to keep its promises. It is noted as one peculiar feature of the present panic that some of the New York bankers will become rich because of it.
And we doubt not that the most immediate cause of the suspension of cash payment by the banks all over the country was the stoppage of such payments by the banks in New York.
As long as the banks of that city continue to withhold payment of their obligations, there seems to be no reason why they might not be purchasing the government bonds and so making a profit out of withholding cash payments to the rest of the country. Such a suggestion is made in many quarters, and the way to negative any such suspicion is for the New York banks to pay their obligations inland in the current money of the realm.
BANK DEPOSITORS RECOVER FROM PANIC (New York. Dec. 26.-Today was the date of the expiration of most of the sixty-day withdrawal notices re. quired by the savings banks at the height of the paniè in October, but searcely a depositor called for his money
15.January 9, 1908The Free LanceFredericksburg, VA
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HEiNZE ARRESTED Banker Charged With Illegally Certifying Checks. HELD UNDER $50,000 BAIL Indictment Is the Aftermath of Collapse of Heinze Pool In Copper and the Failure of the Mercantile Na. tional Bank. New York, Jan. 8.-Indicated by the federal grand jury for the over-certification of fifteen checks, representing. in the aggregate, over $400,000. and drawn by the firm of Otto Heinze & Company on the Mercantile National bank, F. Augustus Heinze, the copper magnate and former president of the Mercantile National bank. surrendered himself to United States Commissioner Shields, and later was released on $50,000 bail. Edward Lauterbach. counsel for Heinze, stated that his client did not wilfully over-certify the checks. as he had drawn a check to the credit of Otto Heinze & Company to the amount of $400,000 which the bookkeeper of the bank possibly failed to enter on the books until a day after the ceritfication of the checks in question. The indictment of Heinze by the federal grand jury. which has been investigating the Mercantile and other banks identified with the Heinze and Charles W. Morse Interests, is the aftermath of the collapse of the Heinze pool in United Copper and which brought about the suspension of Gross & Kleeberg. stock brokers. and subsequently resulted in the resignation of F. Augustus Heinze from the presidency and the retirement of the directors of the Mercantile National bank after an examination of the institution had been made by the clearing house committee. The indictment specifically charges that Heinze, while president of the Mercantile National bank. over-certified fifteen checks. That is. that he guaranteed by the bank signature that the sums indicated in the checks were held by the Institution to the credit of the drawer. To over-certify bank paper is, under the federal statute, an offense punishable by imprisonment of not less than five years and not more than ten years. One count is devoted to each of the checks involved. It is alleged that Heinze knew that Otto Heinze & Company did not have to Its credit the sunis named in the various checks. The sixteen count in the indictment charges that Heinze intentionally applied the funds of the bank. and without the knowledge of the directorate, to the payments of the fifteen checks drawn by Otto Heinze & Company. and knowing that the company did not have on deposit with the bank a sum equal to the amount nam ed in the the certified checks. For such an offense the federal statutes provide a penalty of not less than five years imprisonment or a fine of not more than $5000 or both.
16.February 5, 1908The Birmingham Age-HeraldBirmingham, AL
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chain banking seems to have fallen into disuse in the west. But it was revived and reappeared in New York, and at one time an audacious capitalist practically owned five national and four state banks in New York. The modus operandi, says the New York Evening Post, "was to buy shares in one bank, pledge them with another bank for a loan, use the proceeds to buy shares in yet another bank, and SO on. It was a remarkably inexpensive operation at the outset, and it was used, as might be supposed, to obtain access to the funds of such institutions to help along the personal operations of the ingenious promoters. In October, eight banks and at least two trust companies were dominated by one group of experts." The Morse-Thomas-Heinze group is referred to, and it is their peculiar method of financing that recently led to the failure of two national and two state banks, as it had during the panic swept away the Mercantile National bank and the Knickerbocker Trust. While the clearing house stood behind the banks the four mentioned banks stood secure, but as soon as cash payments to depositors were resumed they were forced to close. Confidence in them had been destroyed. The case was one of chain banking and it was well understood, and the failures of the four banks surprised no one. It was simply what all had expected. It means that there will not soon again be any chain banking in New York or elsewhere.
17.March 12, 1908The Birmingham Age-HeraldBirmingham, AL
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FINANCIAL BILL HOTLY DENOUNCED Senator Clarke of Arkansas Hits Several Fierce Blows ALDRICH ATTEMPTS REPLY Investigation of Causes of the Panic Is Demanded by Senator Clarke, Who Also Denounces New York Stock Exchange. Washington, March 11.-Senator Clarke of Arkansas denounced the pending currency bill in a speech in the Senate today, declaring that no currency legislation should be enacted until an investigation is held as to the causes of the panic. "No such legislation is necessary now, said Mr. Clarke. "It is not only not necesI sary, but it may become dangerous. am not disposed to tolerate the idea of giving any support to the committee bill, nor the substitute proposed by the minority members of the Senate." If emergency currency is to be provided, Mr. Clarke said, the benefits should be extended all persons whose legitimate business demands cause them to need it. Mr. Clarke denounced the operations of stock exchanges and said the American people would not be satisfied with the proposed currency legislation without a complete knowledge of causes of the panic. "The time has arrived," he said, "when the affairs of the New .York stock exchange and other stock exchanges must be looked into." Mr. Clarke's reference to the stoppage of the payments by the New York banks called Mr. Aldrich to his feet with the remark that he did not believe the people would permit that course again to be pursued. "I trust the senator from Rhode Island as a historian," retorted Mr. Clarke, "but I do not trust him as a prophet." Mr. Clarke expressed the opinion that the majority would not pass the bill allowing the emergency circulation to be retired without limitation. Mr. Clarke said he would not only require a restriction of reserves, but he would deny to a national bank the right to pay interest on checking accounts. Senator Nelson suggested that the national banks should pay interest on the $250,000,000 of government deposits. Mr. Aldrich said that five years ago he had introduced a bill providing for the payment of interest on such deposits at the rate of 1 1/2 per cent, but, he added, senators had opposed that bill on the ground that it changed the nature of the loan. Former Senator Spooner and the late Senator Morgan, he said, opposed the bill. If that objection could be overcome he declared his willingness to again bring in such a measure. He did not know any reason unless it should be a legal one, of the kind suggested, why interest should not be charged on these deposits. Mr. Culberson, he said, had introduced a bill to require payment of interest on government deposits and it was now before the committee on finance. Mr. Bailey spoke at some length suggesting that the main purpose of his substitute was to favor the principle of government money instead of bank money He explained that he had provided for a distribution of the emergency currency in accordance with population, although he realized that business necessity was a greater measure of the amount they should have. But it was not possible to make sure of the business needs of the several sections and it was a simple matter to ascertain the population. An extended argument was made by Mr. Newlands of Nevada in favor of his view that the sending of a check from one state to another makes the business of banking interstate commerce.
18.October 23, 1908The Star and Newark AdvertiserNewark, NJ
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DRASTIC CHANGES ON ANNIVERSARY OF BIG FAILURE Knickerbocker Trust Closed Doors Year Ago-Now in Full Swing. NEW YORK, Oct. 23.-One year ago yesterday the Knickerbocker Trust Company failed. In Wall street memories of the panic of 1907 were revived with keen interest on the anniversary On October 22, 1907, the stock market fell 7 to 9 points. Yesterday stocks advanced. On October 22, 1907, call money was lent at 70 per cent. Yesterday it was had at 1 per cent. The failure of the Knickerbocker Trust Company, with its $60,000,000 of deposits, was the real beginning of the panic, though the Mercantile National Bank went before. Today the Knickerbocker Trust Company' is again in full swing, with its depositors almost entirely paid off. One year ago today, October 23, 1907, call money rose to 125 per cent., on the Stock Exchange, and President Thomas notified J. P. Morgan that if money was not at once forthcoming for brokerage loans the Stock Exchange would be obliged to close, or hundreds of brokers would fail. Morgan persuaded the Clearing House banks to raise a $25,000,000 fund, with which the brokers were kept from bankruptcy. As compared with the prices reached soon after the panic, the prices of fewer than two hundred stocks and bonds on the New York Stock Exchange at the present time show an appreciation of more than two billions of dollars.
19.June 5, 1909Bismarck Daily TribuneBismarck, ND
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UNITED STATES MARSHALS ARE OUTWITTED BY HEINZE was threatened for refusing to re(By Associated Press.) veal the whereabouts of the missing New York, June 4.-In an effort to books, the basis of all the present subpoena the new directors of the trouble. United Copper compapny . whom F. When Robinson came out of the grand jury room it was understood Augustus Heinze practically elected he had cleared himself and United on Wednesday, a squad of United States District Attorney Wise proStates marshalls remained at the fessed confidence that he would soon office of the copper nearly all day, be in poesession of the books. What believing there was to be a meeting information Robinson gave could not of th directors. be learned. Lte in the afternoon it was learnWith the books in the hands of the ed the directors had outwitted them, federal authorities the investigation and held a meeting elsewhere. into the affairs of the Mercantile NaOther developments in the case included the appearance of Sanford tional bank, which failed during the Robinson, a former director, before panic of 1907, will be gone into and the grand jury, to clear himself of N. augustus Heinze's transactions contempt of court, with which he will be cleared up.
20.June 6, 1909Omaha Daily BeeOmaha, NE
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COPPER BOOKS ARE COMING Director Robinson Agrees to Produce Necessary Records. OPEN SHOP IN SHEET MILLS Judge Gary of Steel Combine Explains Notices Recently Posted in Sheet and Tin Plants. NEW YORK, N. Y., June 5.-In an effort to subpoena new directors of the United Copper company, whom F Augustus Heinze practically elected on Wednesday, a squad of United States marshals remained at the offices of the company nearly all day understanding that there was to be a meeting. Late in the evening it was learned the directors had held a meeting elsewhere, just where is not known. Other developments in the case included the appearance of Sanford Robinson, a former director. before the grand jury with the idea of clearing himself of contempt of court with which he was threatened for refusing to reveal whereabouts of the missing books, the basis of all the present trouble When Robinson came from the grand jury room It was understood that he had purged himself and United States District "Attorney Wise professed confidence that he would soon be in possession of the books. What information Robinson volunteered concerning the whereabouts of the books could not be learned, but Mr. Wise indicated that he would have them in the near future. With the books in the hands of the federal authorities investigation into affairs of the Mercantile National bank, which failed in the panic of 1907, will be gone into and F. Augustus Heinze's transactions will be cleared up. His apparent effort to checkmate such a move has caused the present mix up. Open Shop in Steel Mills. In explanation of the new wage scale posted a few days ago at mills of the American Sheet and Tin Plate company, Elbert H. Hary, chairman of the United States Steel corporation, made the following statement today: "Most of the mills of the American Sheet and Tin Plate company here have for some years been operated as 'open shops,' the others were run as union mills and with these the wage scale has been signed on July 1 of each year. The management of the American Sheet and Tin Plate company has dicovered it has been discriminated against and in other ways unfairly treated by the Amalgamated association; the management also discovered beyond question that a decided majority of the men prefer to have all the mills operated as 'open shops.' Under these conditions It has become clear It is for the best interests for the operators to conform to the wishes of the majority. As a result the company posted notices accordingly and also posted the wage scale effective on and after July 1, which in all essential respects is unchanged. There is no dispute regarding wages. It is clear that the employes have appreciated the attitude of the company in its maintenance of the high Level of wages in the period of great business depression." Rockefeller Likes Golf. Saying that the financial situation is not half as interesting as golf, John D. Rockefeller returned here today from Hot Springs, Va., where he took Mrs. Rockefeller five months ago for her health. "We have had a splendid time," said Mr. Rockefeller, "and Mrs. Rockefeller is much better." Mr. Rockefeller was asked If he cared to say anything regarding the financial situation. "What do I know about the financial situation?" he replied. "Why, finance can't be compared with golf. I hope some day to be able to play good golf. I have played a good deal of it in my life." He spoke feelingly of the recent death of H. H. Rogers. "It is sad, very sad," he said. More Delay ir Gould Trial. Probability of a further delay in brining to trial the suit of Mrs. Katherine Clemmons Gould for a separation from her husband, Howard Gould, was indicated today when Supreme Court Justice Gildersleeve appointed Junius T. Auerbach of Boston a commissioner to examine Dr. Martin D. Moran of that city as a witness in behalf of Mrs. Gould. It was stated that Monday and Tuesday of next week might be required for the examination of Dr. Moran and that the trial of the suit would probably not be started before next Wednesday. Mayor McClellan has sent a letter to the father of George B. Duffy, the Brooklyn boy whose troubles with the police have been at the bottom of the charges brought by Supreme Court Justice Gaynor against Police Commissioner Bingham, asking that the youth be brought before the mayor next Monday.. The father is requested also to bring character witnesses. Fight With Counterfeiters. Four Italians suspected of counterfeiting were arrested in a saloon today by agents of the secret service after a fight in which bottles and glasses were thrown. The police say they found seventeen bad $2 bills on one prisoner. In his room was a rubber stamp which would print a fair imitation of a $2 bill. Bee Want Ads. are bustness boosters
21.October 19, 1909Rock Island ArgusRock Island, IL
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CENTRAL BANK EXPERIMENT ONCE WRECKED THE NATION'S CREDIT 100 New York firms went to the wall distant place to earn dividends for the BY TAV. stockholders. in one month. Every bank in the city (Special Correspondence of The Argus.) suspended. Congress was forced to The year 1791 marked the first bank Washington, Oct. 16.-That the of the United States. In that year pass an act forbidding the PennsylvaUnited States has had two unsuccessnia bank of the United States from congress chartered a bank for 20 years. ful experiences at running banks, and Its methods brought about, 18 years using the notes of the United States should therefore act slowly in considbank. Then the New York banks relater, the first bank panic in this counering Wall street's central government try. Bribery and corruption in politisumed business. But the reckless opcal affairs were the dominant features erations of the financiers who owned bank idea, will be urged by the small bankers of the country, who are anof the government's first experience in the United States bank brought on distagonistic to the program Senator Aldbanking. aster. Oct. 19, 1839, it failed, carrying In 1817 a second United States bank to ruin 343 of the 850 banks in the rich has promised to promote in a came into existence. Within a short series of speeches in the west upon union and causing 62 to suspend for a time it had 18 branches. In Novemhis return from Europe. time. Its debt to the Bank of England Attention will also be directed to the ber, 1818, it was insolvent. Forty conalone was $23,000,000, and the failure, fact that the greatest obstacle in Cangressmen who held stock in the insticoupled with the consequent repudiaada's struggle to develop has been her tion of indebtedness by several states, tution, however, enabled it to continue antiquated system of big central banks in business. For the following five destroyed American credit abroad. with branches in every country town, years there was keen financial disIn spite of the assurance given in inthrough which all surplus deposits are tress throughout the country. spired articles sent out from Washcentralized in the large cities. Vetoed Renewal of Charter. ington, that politics will play no part Pinches Small Banker. In 1823 President Jackson vetoed a in a central government bank, the The Canadian merchant or manufacrenewal of the bank's charter, the small bankers are apprehensive lest turer in the outlying town has been the contrary prevail. They can hardly bank retaliating with coercive measunable to secure bank accommodations ures. It contracted the money market conceive that it would be in keeping needed in his business, while idle and caused great distress. Other banks with the game of politics for any parmoney from his own town, which a losprang up. The United States bank ty to set up an institution such as a cally owned bank would gladly have continued operations under a charter government bank without manning it loaned him, has been sent to the head obtained by bribery from the state of with politicians, as only by taking adoffices of the big city bank with a local Pennsylvania, reissuing all its old vantage of such opportunities are great branch, perhaps to be invested in a far notes. The crash came in 1837, when political machines built up.
U. S. BANK A FAILURE Washington, Nov. 29.-That the United States has had two unsuccessful experiences at running banks, and should, therefore, act slowly in considering Wall Street's central government bank idea, is being urged by the small bankers of the country, who are avowedly antagonistic to the program of Senator Aldrich. The country bankers are directing attention to the fact that the greatest obstacle in Canada's struggle to develop has been her antiquated systerm of big central banks with branches in every country town, through which all surplus deposits are centralized in the large citires. The Canadian merchant or manufacturer in the outlying town has been unable to secure bank accomodations needed in his business, while idle money from his own town, which a locally owned bank would gladly have loaned him, has been sent to the head offices of the big city bank with a local branch, perhaps to be invested in a far distant place to earn dividends for the stockholders. The year 1791 marked the first bank of the United States. In that year Congress chartered a bank for 20 years. Its methods brought about, 18 years later, the first bank panic in this country. Bribery and corruption in political affairs were the domi nant features of the government's first experience in banking. In 1817 a second United States bank came into existence. Within a short time it had 18 branches. In No. vember, 1818, it was insolvent. Forty Congressmen who held stock in the institution, however, enabled it to continue business. For the following five years there was keen financial distress throughout the country. In 1832 President Jackson vetoed a renewal of the bank's charter, the bank retaliating with coercive measures. I: contracted the money markets and caused great distress. Other banks sprung up. The United States bank continued operations under a charter obtained by bribery from the state of Pennsylvania, reissuing all of its old notes. The crash came in 1837, when 100 New York firms went to the wall in one month. Every bank in the city suspended. Congress was forced to pass an act forbidding the Pennsylvania Bank of the United States from using the notes of the old United States bank. Then the New York banks resumed business. But the reckless operations of the financiers who owned the United States bank brought on disaster. Oct. 19, 1839. it failed, carrying to ruin 343 of the 850 banks in the Union and causing sixty-two to suspend for a time. Its debt to the bank of England alone was $23,000,000, and the failure, coupled with the consequent ren pudiation of indebtedness by several states, destroyed American credit abroad. In spite of the assurance given by Senator Aldrich in his speeches in the west, that politics will play no 1 part in a central government bank, the small bankers are apprehensive [ lest the contrary prevail. They can hardly conceive that it would be in I keeping with the game of politics for any party to set up an institution such as a great government bank without manning it with politicians, as only by taking advantage of such opportunities are great political machines built up. :
23.October 8, 1911The Washington HeraldWashington, DC
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ber marks two important American an-
niversaries. On October 12, 1492, Colum-
bus discovered America, and on October
1, 1907, began the most serious money
panic in the experience of the country,
marked by the most stupendous issue of
unauthorized or wildcat currency in the
history of modern nations. Of the two
events the latter is unquestionably of
greater concern to the average business
man, for, while Columbus is not likely
to discover America again, nothing has
been done as yet to prevent a recurrence
of the conditions that made 1907 a black-
letter year in the memory of most Amer-
ican citizens.
Events moved so rapidly and in such
confusion during the closing months of
1907 that many of the developments of
the panic and the devices used in the at-
tempt to stay its course are unknown
history to the average citizen. Probably
not one person in 10,00 is aware that the
people of the United States were carry-
ing on much of their business during the
latter part of 1907 with substitutes for
money such as had not been seen in any
other country in a century or that the
premium on coin reached a higher point
than it ever did in Europe in modern
times except on one occasion in France
during the Commune. Few except resi-
dents of the Pacific Coast are aware
that as an incident of the panic the
people of California had a continuous
holiday of more than seven weeks. These
holidays were declared from October 21
to December 21, in order to enable the
banks to decline payment and to pre-
vent the forcing of collections that would
have driven many business houses into
bankruptcy. In Nevada and Oregon sim-
ilar holidays were declared for shorter
periods.
# Pay Checks in Pittsburg.
In Pittsburg $4700.000 of pay checks
were issued by various concerns, and
throughout the country $500,000,000 of panic
money was issued-much of it real wild-
cat currency made useful only by com-
mon consent of the people. In nearly
every large city of the country bank pay-
ments were partly suspended, as they
were in a vast number of smaller pieces,
one village in Georgia of only 400 popu-
lation resorting to the issue of certifi-
cates in lieu of cash.
Up to the middle of October, 1907, the
business situation of the country was re-
garded as highly satisfactory. While there
had been predictions from financial ex-
perts of a serious recession in the expan-
sion which had been proceeding at a tre-
mendous rate for three years, there was
nothing in view to suggest to the ordi-
nary man any greater likelihood of an
immediate and serious interruption of
prosperity than there had been for a year
or more before. In fact, the bank state-
ment at the beginning of September, 1907,
was slightly more favorable than it had
been a year previously.
In the old-fashioned school readers there
used to be a story of a loose stone that
set an avalanche in motion. It was so
with the panic. The stone that set it
going was a seemingly unimportant hap-
pening in New York, an event that or-
dinarily would have caused scarcely a
perceptible local flurry.
A well-known copper speculator had
been trying to engineer a corner in the
stock of a copper company. With his as-
sociates he controlled the Mercantile Na-
tional Bank, a relatively small institution.
Four other banks, of which the largest
was the Bank of North America, were
held in speculative control by men asso-
ciated in one way or another with the
interests dominating the Mercantile Na-
tional. As a result of the collapse of
the copper corner, the withdrawal of
deposits and the fact that their funds
were tied up in unmarketable securities,
these banks were unable to meet their
balances at the clearing house. The total
deposits of the five institutions were
only $56,000,00. In response to their re-
quests for assistance a committee of the
clearing house examined their affairs, en-
forced changes in their management, and
raised a fund of $10,000,000 to tide them
over their difficulties. At various times
many banks have undergone similar reor-
ganizations without any unfavorable after
effects. These events took place in the
Bank runs are almost always and everywhere a deterioration of bank fundamentals.
But not for you.
You are the measure-zero exception: great fundamentals, solid bank, and yet the Diamond Dybvig fairy spread its rumor. Depositors woke up. Your collateral was not prepositioned. The Clearinghouse had it for you.
Do not pass Go. Do not collect $200. Go directly to jail… or worse.
