16053. Knickerbocker (Trust Company) (New York, NY)

Bank Information

Episode Type: Run → Suspension → Reopening
Bank Type: private
Start Date: October 23, 1907
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: 834e1236

Response Measures

Borrowed from banks or large institutions, Public signal of financial health, Capital injected, Full suspension, Books examined

Other: Reorganization using interest-bearing certificates and temporary receivership followed by resumption of business.

Description

Knickerbocker Trust experienced a run in late October 1907, suspended payments during the panic, plans for receivership and a pooling/certificate reorganization were made, and the company resumed operations under new management by March 1908 (article dated 1908-03-26 describes reopening). Cause is assigned as bank-specific adverse information and loss of confidence tied to revelations/scandals and clearinghouse actions.

Events (4)

1. October 23, 1907 Run

Cause: Bank Specific Adverse Info
Cause Details: Loss of depositor confidence after revelations/scandals and clearing-house difficulties; run on Knickerbocker precipitated the broader panic.
Measures: Directors and financiers (Morgan, Rockefeller, Treasury) mobilized funds; plans for a director pool to guarantee certificates; eventual reorganization.
Newspaper Excerpt: President Turnbull, of the Knickerbocker, that there would be a run on every bank in the city today, would prove true.
Source: newspapers

2. October 23, 1907 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Severe withdrawals and loss of confidence following runs and exposure of scandals; clearing-house refusal to support aided suspension decision; directors contemplated receivership as part of reorganization plan.
Newspaper Excerpt: An old gentleman was reaching out his hands for the amount of his deposit when the order of suspension came, and the teller drew the bills back inside the cage...
Source: newspapers

3. October 25, 1907 Other

Newspaper Excerpt: The tentative plans for the Knickerbocker... provides for the formation among the directorate of a pool of some $5,000,000 to guarantee the redemption within two years of interest bearing certificates... As a preliminary step it was said that a receiver for the company would be appointed within a couple of days with the approval of the directors, when the success of the certificate issue is assured. the board will ask that the receivership be terminated with a view to a resumption of business. Cortelyou: 'The situation seems to be steadily improving.' (paraphrase from article).
Source: newspapers

4. March 26, 1908 Reopening

Newspaper Excerpt: Charles H. Keep, the Knickerbocker's new president... When the doors swung open at the Fifth avenue building the janitor ran up the flag... In half an hour a director reported that nearly a million had been received in new accounts, while only about $50,000 had been withdrawn. In advance of opening the doors we received more than $700,000 in new deposits.... (Evening World, 1908-03-26).
Source: newspapers

Newspaper Articles (7)

1. October 23, 1907 The Washington Times Washington, DC

Article from The Washington Times, October 23, 1907

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Article Text

President Turnbull, of the Knickerbocker, that there would be a run on every bank in the city today, would prove true. Cortelyou on Scene. Secretary of the Treasury George B. Cortelyou went to the subtreasury at 9:30 o'clock, and established his headquarters there. He will remain in New York until the crisis is over, taking personal charge of the relief measures. There were early morning conferences at the office of J. (Continued on Second Page.) "Great Big" Chrysanthemums. Gude is showing excellent specimens of these sturdy fall flowers. 1214 F.-Adv.

2. October 25, 1907 The Montgomery Advertiser Montgomery, AL

Article from The Montgomery Advertiser, October 25, 1907

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P. Morgan and the/members of the pool which had saved the day. The aggregate amount of money which had been contributed to weather the storm and restore confidence assumed truly colossal proportions. Roughly speaking, it includes $25,000,000 which Secretary Cortalyou deposited in the New York ba ks: $25,000,000 which the Morgan paol brought to the floor; $10,000,000 which John D. Rockefeller deposited with the Union Trust Company as a means of stemming the tide of the Trust Company of America, and, finally, another fifty million which It Is understood that Mr. Rockefeller stood ready to advance to meet any further stress of conditions-in all, considerably in excess of $100,000,000. Several Conferences. The developments of the evening. during which, as was the case last night, there were several conferences, Including the issuance by State Comptroller Martin H. Glynn of a statement on the local financial situation and the announcement of plans for the rehabilitation of the suspended Knickerbocker. The tentative plans for the Knickerbocker, as outlined by one of the officials following a meeting of the board of directors late yesterday, provides for the formation among the directorate of a pool of some $5,000,000 to guarantee the redemption within two years of interest bearing certiflcates which will be offered in settlement of accounts against the company which cannot be liquidated at the present company. As a preliminary step it was said that a receiver for the company would be appointed within a couple of days with the approval of the directors, when the succes of the certificate issue is assured. the board will ask that the receivership be terminated with a view to a resumption of business. President A. Foster Higgins has offered to put $500,000 in the pool. It was given out that after investigation the security fo- the ICE leass by former President Barney had been found sufficient for the amount involved. Cortelyou Ontimistic. This evening Secretary Cortelyou said: "The situation seems to be steadily Improving. It does not seem to me that there need be any practical cause for anxiety." It was learned tonight that though there had been a steady demand for treasury funds during the day, the $25,000,000 proffered by the secretary had not been disposed of when the examination of collateral at the sub-treasury was concluded for the day.

3. November 6, 1907 The Marion Daily Mirror Marion, OH

Article from The Marion Daily Mirror, November 6, 1907

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MONEY BARONS RESCUE BIG TRUST COMPANIES New York, NOV, 6.-Wall Street sighed with relief when it read the financial king's announcement early today that money will be supplied "up to the limit'' to support the Trust company of America and the Lincoln Trust company, upon which there have been runs of varying volume ever since the Knickerbocker suspended.

4. December 4, 1907 Manchester Democrat Manchester, IA

Article from Manchester Democrat, December 4, 1907

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Article Text

SOME REAL MONEY PANICS. Episodes Which Make Recent Inconveniences Look Trifling. A community which has been confronted with closing of Institutions where it kept its money balances always considers its case one of unparalleled misfortune, says the New York Post. Yet there have been "panics," even in recent times, when circumstances were more heart-breaking even than that of depositors in the Knickerbocker and of the dozen other smaller banks which went down with it. The case of 1857, almost forgotten, was one in which not -only bank deposits, but the money in the pocket of every Individual, turned out useless for private wants. The mood of the man who learned of the closing of a string of note-issuing banks under the older system and who searched his pocket book anxiously to see if his means of paying petty bills was suddenly cut off, had a different aspect even than to-day's. Five months after our panic of 1893, the two banks in the colony of Newfoundland, whose circulating notes made up the whole currency of the Island, closed their doors, and both were completely insolvent. The community was literally left without any circulating medium until gold arrived from England; a state of barter existed and where personal credit did not survive the tinsmith took his pans to the baker to buy bread. A full year after that extraordinary event-the colonial government having in the meantime guaranteed up to 40 per cent the notes of one of the two defaulting banks-a man would get, in his dally currency at St. John's, bills for $10 stamped in red ink, "guaranteed for $4," and they bought just $4 worth of goods.

5. March 26, 1908 The Evening World New York, NY

Article from The Evening World, March 26, 1908

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General Electric Company deposited nearly half a million. Other large accounts were opened. including one individual trust fund of $300,000. Depositors in Majority. Charles H. Keep. the Knickerbocker's new president. stood with an Evening World reporter in the lower Broadway branch at noon. There were just fourteen persons lined up to withdraw money. The receiving teller had a larger group at his window. The first withdrawal was that of Jos. eph Scott. a real estate dealer at No. 25 Liberty street, who took out all he had on deposit-$713. The second man was his partner, Frank Bulwinkel, who withdrew $606. The total of withdrawals desired by the fourteen men in line amounted to not quite $18,000. Mr. Keep announced that the following men, all officials of the company under the old regime, had been elected by the new directors: B. L. Allen as Second Vice-President; Joseph T. Brown as Third Vice-President, and H. A. Dunn as Secretary and Treasurer. To the reporter he said: "We are starting with thirteen directors, but if you watch us, you will see us giving the lie to the old superstition. Under the reorganization plan, we will pay over our counters-we will have no ClearingHouse connections. I am much gratified by the showing of confidence we have already had. In advance of opening the doors we received more than $700,000 in new deposits, and this sum will, I am told, be more than doubled in a little while. "It will be to the interest of deposttors to leave their money in the concern," continued Mr. Keep. "Under the plan of time payments, the 30 per cent. to which Class B deposits are entitled at the end of twenty-nine months is to be derived from our earnings. The greater the amounts left on deposit, the greater these earnings will be. "But, in any event, we will succeed. There is absolute certainty of permanency and prosperity in our reorganization. plan." When the doors swung open at the Fifth avenue building the janitor ran up the flag and a lot of handshaking followed. The lobby was full of flowers. Every official and employee in sight wore a boutonniere. There was nothing suggestive of a line. A number of fashionably dressed women gave the scene somewhat the aspect of a social function. In half an hour a director reported that nearly a million had been received in new accounts. while only about $50,000 had been withdrawn. Much of this latter was in checks held since the suspension. Among the first new accounts were the following: American Linen Thread Company. $250.000: City Trust Company, of Boston, $250,000. and Amerloan Sugar Refining Company, $200,000.

6. June 1, 1908 The Cairo Bulletin Cairo, IL

Article from The Cairo Bulletin, June 1, 1908

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there is pathos in a money scare. The hungry eagernes of the poor, the wistful and sorrowful resignstion of the aged, the bold, deflant and threatening aspect of the more callous and worldly-all go to make a scene in the forefront of the palace of gold that etches itself fadelessly upon the tables of memory. A Knickerbocker depositor drew a heap of small bills, threw his coat on the floor and the bills on the coat, rolled the whole into a loose bundle and went rapidly away. An old gentleman was reaching out his hands for the amount of his deposit when the order of suspension came, and the teller drew the bills back inside the cage, All night long throngs waited wearily, so as to be the first in line for tomorrow "run." Such are the more touching aspects of a panic In which thousands are thrust out on the brink et despair by the fear that their hard. earned savings have been recklessly swept away. The quick and generous relief work of the leading financiers of the metropolis is the brightest feature of the panic, and invites appreciative comment. Secretary Cortelyou was among the first to offer aid, coming to New York from Washington and putting $25,000,000 of government funds at the disposal of national banks; J. Pierpont Morgan and his associates placed $27,000,000 on the floor of the Stock Exchange for call loans and arrested the collapse of prices; John D. Rockefeller deposited $10,000,000 in one trust company, and pledged $50,000,000 If necessary, to relieve the strain; bankers of the highest standing, under the leadership of the clearing-house committee, co-operated. The metropolis had already been duly shocked by the revelations of the Armstrong committee and the subsequent life insurance scandals. When the results of that long-drawaout-exposure had almost gotten to the point where some one was to be haled to court, we were rent again with amazing disclosures as to embrasure of stockholders' money by some very well known. people who were supposed to be unapproachable with even a suggestion of what plainspoken folk would call larceny; and then came the third upheava. produced by the action of the New York clearing house through which it was made plain that a group of speculators had gotten possession of number of minor New York City banks by buying control of one, pawning its stock to purchase another, and so on, through the ownership of which chain of banks they were enabled to morrow of the depositors' funds to exploit their own speculative schemes steamship or other-had they been so minded: -Albert C. Stevens in Leslie's Weekly.

7. July 4, 1913 Arizona Republican Phoenix, AZ

Article from Arizona Republican, July 4, 1913

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to all sound policy. The clearing house itself could not have treated a member SO summarily; that is, the clearing house by its own rules would have had to give the Knickerbocker some decent notice, and unless it had been intent on getting rid of it for some reason, good or bad, would have felt an obligation to help it through any temporary embarrassment,-that is, as long as it was solvent,-this for the sake of its own reputation as well as for the sake of the community. That is not saying that there would have been no panic in 1907, it is simply saying that it would not have been precipitated in the unnecessary way it was; that is, the community would have been better protected if the Knickerbocker had been a member of the clearing house, than it was with the Knickerbocker subject to the will of a sister bank."