Wild and unfounded rumors of impending financial disaster prompted large numbers of depositors to withdraw funds
Measures
Bank remained open all night paying out money on demand; posted notices to stay open; directors/wealthy backers (L. Z. Leiter, Philip Armour) guaranteed funds and paid some depositors in gold
Newspaper Excerpt
Between twelve and fifteen hundred people formed in line today at the Illinois Trust and Savings bank to withdraw their deposits
Source
newspapers
Newspaper Articles (18)
1.February 11, 1893The HeraldLos Angeles, CA
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RECEIVER J, F, CRANK RESIGNS, An Unexpected Event in the Cable Road Case. Four Supreme Court Opinions on Southern California Cases. Thomas Lynch Convicted of Petit Larceny-Both Mon Claim the Land. Court Notes-New Suits That Were Filed Yesterday. A very unlooked for denouement took place yesterday morning in Judge Van Dyke's court, where the argument is going on in the case of the Illinois Trust and Savings bank of Chicago VS. The Pacific Railway company. It was announced that Receiver J. F. Crank, who has been occupying that difficult and onerous position for about three years past, had resigned. The news came SO suddenly that it was a great surprise to those who were not on the inside workings of the cable company. The announcement of the resignation was followed by a motion for the appointment of D. K. Trask. a well-known attorney of the city, to fill the vacancy. He was duly appointed and the court fixed his bond at $25,000. Mr. Crank announced that he would be ready to turn over his accounts to his successor on the 15th of the present month. The arguments in the case were then resumed and continued throughout the day, a large portion of the time being occupied by Attorney-General Hart, representative of the heirs of the Joshua Hendy estate of San Francisco. Mr. Hart is fighting the foreclosure of the mortgages and presented his points upon the subject in an elaborate manner. The reason for the resignation of Receiver Crank is not spoken of very freely by those concerned. As far as is known the action taken seems to be regarded as having an important bearing upon electric the systems consolidation at the of termination the cable and of the foreclosure suit. however, is were case denied about it. by The those arguments who This, in questioned the will not be concluded for a day or two further, as the attorneys for the intervenors have yet to present their views upon the big case.
2.June 6, 1893San Antonio Daily LightSan Antonio, TX
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FINANCIAL CRASH In Chicago-The Run Continues On the Savings Bank. CHICAGO, June 6.-Between twelve and fifteen hundred people formed in line today at the Illinois Trust and Savings bank to withdraw their deposits, although the bank had remained open until long after midnight last night, paying out money, on demand. The crowd at 10.o'clock this morning was several times larger than at any time yesterday or last night. At other savings banks, also, a run which began yesterday seemed to have grown in proportion today. .At the Illinois Trust and Savings bank last night the last depositor in line got his money at three o'clock this morning. Then the bank closed until ten o'clock this morning. The stockholders are estimated as being worth a hundred and fifty millions. The bank has not called a loan in nine years. L.Z. Leiter, who is one of the heaviest stockholders in the bank, said last night: "I have real estate enough to pay all these claims, and it is at the service of the bank. Every person who has a dollar here may have it on demand. I am able alone to make the assertion good, and two other men are willing to do the same thing. Before going to Europe I personally examined the collaterals for loans made. It could not be better. I will guarantee every loan the bank has made for every trifling percentage.
3.June 6, 1893Deseret Evening NewsSalt Lake City, UT
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A STRONG INSTITUTION. The Illinoi's Savings Bank Stands Another Attack. CHICAGO, June 6.-In spite of the fact that the Illinois Trustand Savings bank remained open till 3 o'clock this morning to give the anxious depositore a chance to draw their funds, a new line began to form at 8 o'clock this morning and at 10 o'clock, the hour for opening, between 12,000 and 15,000 people were waiting at the doors with their savings books. The crowd was several times larger than at any time yesterday. The bank is considered absolutely sound. The assets are figured up at ever twenty-eight millions and its stock holders are estimated to be worth in the negregate fully a hundred and nity millions. At the other savings banks the runa which began yesterday seem to have increased in size.
4.June 7, 1893Daily Kennebec JournalAugusta, ME
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A BIG RUN On Some of Chicago's Wealthy Savings Banks and Institutions. CHICAGO, III., June 6.-Between 1200 and 1500 people formed in line, today. at the Illinois Trust and Savings bank to withdraw their deposits, although the bank had remained open till 3 o'clock this morning, paying out money on demand. At other savings banks also the run which was begun yesterday seemed to have increased in proportion today. The total assets of the bank are $28,114,000. The stockholders are estimated as being worth $150,000,000. L. z. Leiter, who is one of the heaviest stockholders in the bank. says: "I have real estate enough to pay all these claims, and it is at the service of the bank. Every person who has a dollar here may have it on demand."
5.June 7, 1893The Indianapolis JournalIndianapolis, IN
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THE PANIC SUBSIDING. Confidence Partly Restored Among Chicago's Saving Banks Depositors. Special to the Indianapolis Journal. CHICAGO, June. 6.-To-day's developments in the financial situation showed an increased steadiness among the monetary instructions of Chicago. True, the people continued to walk up to the wickets of the paying tellers to demand their deposits, but the numbers were reduced and a more widespread feeling of confidence assumed the place of the panicky outburst of yesterday. Those banks upon which the run was continued to-day were the Illinois Trust and Savings. the Hibernian, the Union Trust and Savings, the Globe Savings, the Dime Savings and the Bank of Commerce. Those that demanded the lawful notice of withdrawal of deposits were the Union Trust and Savings, the Dime Savings and the Globe Saving. At the Illinois Trust and Savings Bank last night the last depositor in the line got his money at 3 A. M. then the bank closed until 10 o'clock this morning. The assets of the bank are placed at $28,114,000. The stockholders are estimated as being worth $150,000,000. The bank has not called in a loan in nine years. L. Z. Leiter, who is one of the beaviest stockholders in the bank, says: "I have real estate enough to pay all these claims, and it 18 at the service of the bank. Every person who has a dollar here may have it on demand. I am able alone to make that assert a good, and two other men are willing 10 do the same thing. Before going to Europe I personally examined the collateral for loans made; it could not be better. I will guarantee every loan the bank has made for a very trifling percentage." " This afternoon it was easy to see the excitement was dying out. Philip Armour was responsible for the allaying of the fears of many of the depositors of the Illinois Trust and Savings, by walking up to the people and saying that he would guarantee their savings. About one hundred took advantage of the millionaire's offer, and some accepted a written guaranty. One woman received $1,800 in gold. The banks closed their day's business at the usual hour, and the directors make the statement that they are prepared to stand the run for an indefinite period, and are satisfied with the condition of affairs as sho wn by to-day's signs of returning confidence. Little more than the usual daily demand for currency in exchange for coin was made at the subtreasury to-day by the local banks. The Clearing House Association discussed the general situation. and gratifying reports were received, indicating that the savings banks were in good shape to meet all requisitions.
6.June 7, 1893The Anaconda StandardAnaconda, MT
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IN BUSINESS CIRCLES. The Feeling of Uneasiness Seems to Be Increasing in the East. CHICAGO, June 6.-In spite of the fact that the Illinois Trust and Savings bank remained open till 3 o'clock this morning to give anxious depositors a chance to draw their funds. a new line began to form before 8 this morning and at 10, the hour for opening. between 1,200 and 1,500 people were waiting at the doors with their savings books. The crowd was several times larger than at any time yesterday. The bank is considered absolutely sound. The assets figure up over $28,000.000 and its stockholders are estimated to be worth in the aggregate fully $150,000,000. At other savings banks the runs which began yesterday seem to have increased in size.
7.June 7, 1893The Dalles Daily ChronicleDalles, OR
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Run on Chicago Banks. CHICAGO, June 6.-In spite of the fact that the Illinois Trust & Savings bank remained open until 3 o'clock this morning to give anxious depositors a chance to draw funds, a new line began to form before 8 o'clock this morning, and at 10, the hour of opening, between 1,200 and 1,500 people were waiting at the doors with their savings books. The crowd was several times larger than at any time yesterday. The bank is considered absolutely sound. The assets are figured up at over $28,000,000 and its stockholders are estimated to be worth fully $150,000,000. At the other savings banks the runs which began yesterday seem to have increased in size.
8.June 7, 1893The HeraldLos Angeles, CA
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THE GREAT FINANCIAL UPHEAVAL Continued Runs on Chicago Savings Banks. The Baldwin Locomotive Works Forced to Assign. Three Banks Close Doors at Spokane, Wash -Bank Failures in Ohio, Indiana, Wisconsin and Other States. By the Associated Press. CHICAGO, June 6.-In spite of the fact that the Illinois Trust & Savings Bank remained open till 3 o'clock this morning to give anxious depositors a chance to draw funds, a new line began to form before 8 o'clock this morning, and at 10 o'clock, the hour for opening, between 1200 and 1500 people were waiting at the doors, with savings books. The crowd was several times larger than at any time yeaterday. The bank is considered absolutely sound. Its assets are figured upat over $28,000,000, and its stockholders are estimated to be worth in the aggregate fully $150,000,000. At other savings banks the runs which began yesterday seem to have increased in size. During the time when the run on the Illinois Trust bank was hottest this afternoon, Philip D. Armour, the millionaire pork packer, sent out some of his clerks to bring into his office 100 or more of the excited depositore, mostly women. To these Mr. Armour madea brief speech. assuring them that the bank was all right, and added that Armour & Co. will guarantee to each of them the full amount of their deposit; if any of them were not satisfied with this let them speak up and he would give them their money. Two women asked for the amount of their deposits, which were immediately paid in gold, while the remainder of the people went away satisfied. WASHINGTON, Jane 6.-Comptroiler Eckels said to the Associated Press this morning that 80 far as he was advised no national bank in Chicago has been affected by yesterday's financial flurry. The clearing house there stands ready to assist its members whenever necessary. The abstract of the condition of the Chicago national banks on the date of last call, shows a reserve of 29.45 per cent, 4.45 per cent above the legal requirement. The total resources are $160,864,804, R surplus of $11,510,700; undivided profits, $1,593,000.
9.June 7, 1893The Roanoke TimesRoanoke, VA
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FINANCIAL PANIC. Chicago Banks the Victims of Wild Unfounded Rumors. CHICAGO, June 6.-Wild and unfounded rumors of impending financial disaster caused a senseless run on many of the banks in Chicago. Those chiefly affected were the Prairie State National bank, the State Bank of Commerce, the Hibernian Savings bank, the Dime Savings bank, the Union Trust Company's bank and the Illinois Trust and Savings bank. Under the circumstances it is no small. tribute to the sagicy, soundness and foresight of Chicago bankers to say that all withstood the strain. Where the rumors sprang from is a mystery. It is a mystery how they spread, for wildfire is no quicker in its flight than rumor when she takes a fiing at the banks.
10.June 8, 1893Echo De L'ouestMinneapolis, MN
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FAILLITES DE BANQUES L "Exchange Bank" de Glad stone, Mich., a fait faillite. C'est une conséquence de la faillite d6 la "Plankinton BaLk" de Mi'waukee. MM, SAuger, Moody et Steel de Jolliet, Ill., ont fait faillite. La "Patt r's Bak" one des plus vieilles banques du comté de Paulding, Ohio, viont de fermer ses portes. Elle avait été établie en 1874 et faisait des affairea considérables. MM Ch-vraton, Martin et Cie banquiers avenue Ogden à Chra go viennent de déposer leur bilan Passif 100.000 dollare. Lq "Merchants National Bank," la plus vieille de Tacoma, Wash., a suspendu BEB paremente. Son capital était de $250,000. La Plankin'on Bai k" de Mil waukee, a fait failli'e. MM. Hermann, Schaffner et Cie banquiers de Chicago ont déposé leur bilan On dit que Schaffner B'est suicidé. La "Bank of Beresford," S. D vient de fermer ses portes. A sa tête se trouvait A. A. Amee. La "Sandusky Savings Bank Company" de S ndueky O. a suspendu 803 paiements. La "M rchants National Bank" de Fort Wo th Texas, à fermé ses portes. La "Canyon Bank" de Spokane à fait faillite. -MM. Madowaraft frères, banquiers de Chicago, ont déposé leur bilan. A Milwaukee la "South Side Savinga Bauk" et la "Second Ward Bank" sont sur le point de suivre l'exemple d - 8 banques BUB nommée3. Il en est de meme de la "Illinois Trust & Savings Bank of Chica go."
11.June 9, 1893Morning Journal and CourierNew Haven, CT
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BETTER BUSINESS FEELING. End of the Excitement in ChicagoMoney Going Back Into the Saving Banks-Cheerful Views of Business Men. CHICAGO, June 8.-The bank run here has entirely subsided. The Illinois Trust and Savings bank opened this morning with $600,000 more money in its vaulta than it had when the run started on Monday. At 11 o'clock this morning there was not the slightest evidence of a run, and a few of those who had previously drawn their money were redepositing. Like conditions were reported at all the banks on which runs had been made. Such business men as Marshall Field, T. W. Harvey, David Kiley, L. Z. Leiter, James H. Walker and Frank J. Kennett think that the splendid manner in which the banks stood the run will do much to restore confidence all over the country, as it shows that the legitimate banks are strong. In interviews just had by the Evening Post's correspondent with officials of banks doing a commercial business, the opinion was universally expressed that as the run is now over the banks here will be more liberal in assisting customers who show that they deserve help, and that failures will decrease. The cashier of a large national bank said that a good many of the failures that have recently occurred in commercial circles ought net to have been allowed, and had the banks with whom they did business extended their usual line of loans, the concerns would have gone through all right; but the banks cannot be blamed for their caution, as they did not know where lightning would strike, hence they wanted to be prepared. But the scare is over, and I look for a steady recovery of confidence. I also think that every reputable commercial bank in the city is stronger in cash means than at any time in six months." The manager of the Chicago department of the Bank of Montreal said: "We are taking care of our regular customers, but do not want any new ones just now. Our rates are 6 per cent."
12.June 9, 1893Carroll SentinelCarroll, IA
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THE THROES OF A PANIC
Failures Follow Each Other Thick and Fast.
RUNS ON THE CHICAGO BANKS.
Excited Depositors Clamor For Their Money—The Illinois Trust and Savings Bank Kept Open All Night—The Plankinton to Be Investigated.
CHICAGO, June 6. — Wild and unfounded rumors of impending financial disaster caused a senseless run on many of the banks in Chicago Monday. Those chiefly affected were the Prairie State National bank, the State Bank of Commerce, the Hibernian Savings bank, the Union Trust Company's bank and the Illinois Trust Savings bank. Under the circumstances it is no small tribute to the sagacity, soundness and foresight of Chicago bankers to say that they all withstood the strain. Where the rumors sprang from is a mystery. Whether malice or ignorance inspired the rumors is unknown, but whichever it was the effect was instantaneous and widespread. Fortunately the effect was confined to uncomfortable crowding in the banking rooms, to pushing and hauling among excited depositors seeking to withdraw their money, and to the gathering of curious crowds upon the sidewalks outside the banks.
Unfounded Rumors.
One of the earliest and apparently the most malicious rumor of the day was to the effect that John M. Smythe, the large furniture dealer on West Madison street had failed. There was no truth in the report and the managers of the concern could assign no reason for its having been started. Other similar rumors of financial troubles were found to be without basis when traced down, but they had spread far and wide before they could be successfully contradicted, and the movement on the city banks began.
Depositors Were Paid In Full.
It was the small depositors of savings—the people with from $50 to $500 to their credit—who soon filled many of the banking rooms and began to clamor for their money. In every case they found greatly to their comfort that the cashiers were prepared for them and ready to hand out dollar for dollar, and it then became a question merely of standing in line to await turns at the paying teller's wickets. All who came up to 3 o'clock, the regular hour for closing the banks, were ranged in line, and when the doors were shut the payments proceeded just the same until the last depositor within the bank walls had received the amount due him.
Tried to Allay the Panic.
Early Monday afternoon the Illinois Trust and Savings bank posted a notice saying the bank would remain open until 9 o'clock at night to pay depositors, and that the commercial branch of the institution would remain open until the same time to pay checks. Later it was announced that the bank would keep open all night, if necessary, to accommodate those who wished to withdraw their money. These notices had no effect, however, in allaying the panic, and the bank continued to pay off depositors as rapidly as the seven tellers could pay out the money.
Took Advantage of the Law.
The Globe Savings bank posted a notice that it would take advantage of the law requiring from 30 to 60 days notice for the withdrawal of savings deposits. There was no serious run on the bank, but its officers decided to protect themselves as far as possible. The concern is controlled by New England people.
A run was started Monday morning on the Milwaukee Avenue State bank. Along toward 11 o'clock it quieted. Then the people learned of the Meadowcraft failure and the run began again. The bank met all demands and the officers say that they are ready to withstand another run.
13.June 15, 1893The Farmers' UnionMemphis, MO
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Bank Open All Night. During the recent run on Chicago banks the Illinois Trust and Savings Bank remained open till long after midnight, paying out money on demand. The last depositor in the line got his money at 3 a m., then the bank closed until 10 o'clock in the morning. The assets of the bank are $28,114.000. The stockholders are estimated as being worth $150,000.000. The bank has not called a loan in nine years
Chicago is to be congratulated on the cool way in which her heavy bankers sat in their offices and paid out, hour after hour, money demanded of them by their panic stricken creditors, whose numbers ran up into the thousands. It shows there is a solid foundation to Chicago business deals such as the country in general does not accuse the Windy City of. The president of the bank on which there was the largest run-the Illinois Trust and Savings bank -was even able to joke about the matter. The bank carries over $10,000,000 demand deposits. "This run will save the bank more than $30,000," said President Mitchell. "Depositors will lose the July semiannual interest dividends on all money withdrawn."
15.July 14, 1893The Providence NewsProvidence, RI
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Refused to Make an Accounting. CHICAGO, July 14.-The Illinois Trust and Savings bank, administrator of the estate of Walter M. Lovett, has made application for a receiver for the Smith Corrugating company. It is claimed that a large amount of money is due to the estate of Lovett, and that John Smith, proprietor of the Smith Corrugating company, who has the firm's books in his possession, refused to make any accounting.
16.November 28, 1894The StarReynoldsville, PA
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NO ASSETS IN SIGHT. The American Debenture Company of Chicago Has Assigned. When a corporation fails with liabilities of $2,000,000, and then turns over to the receiver one book and three second-hand desks, the prospect for the stock and bondholders cannot be considered very rosy, This is what happened in the case of the American Debenture Company, which was organized by Coffin & Stanton, of New York with offices in Chicago. It failed October 10, soon after the parent house succumbed in New York. At the request of Messrs. Trimmingham, Turner and Rlack, of New Jersey, Elias Summerfield was appointed receiver. The foreign holders of $1,000,000 or more of the debentures then stepped in and demanded that the Illinois Trust and Savings Bank be given the receivership. Mr. Summerfield was consequently relieved, and the bank was appointed. It is now six weeks since the Illinois Trust and Savings Bank took hold of the wreck of the Debenture Company. In that time the desks and the book have been all the assets the receiver could secure. The other books of the concern have disappeared, at least the receiver cannot find them. The one book turned over goes back only to last January and is very vague in important points. The Debenture Company was organized under the laws of West Virginia, one of which provides "that one corporation cannot hold the stock and bonds of another corporation." but this is just what the Debenture Company did. It took the stocks and bonds of every corporation and company it could prevall upon to give them up, and issued against them "guaranteed debentures" for investment, and they still have them. Besides the "debentures," the company floated, or had authority to float, common stock to the amount of $2,000,000. It was capitalized for that amount, and most of the stock is held in the East.
17.January 12, 1895The Topeka State JournalTopeka, KS
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CHAMPION SWINDLERS. New Move of Coffin & Stanton Who Figured in Topeka Waterworks Deal. NEW YORK, Jan. 12.-A new move regarding the American Debenture company, Coffin & Stanton's concern, is under way. When they broke up six months ago the Illinois Trust and Savings Bank of Chicago and W. K. Okley, ex-secretary of state of West Virginia, were appointed receivers. Today the news leaked out in Wall street that a quiet effort is being made to have the present receivership proceedings in West Virginia and Chicago dismissed and new ones begun. The object is to set aside the Illinois Savings Bank and Trust company, and W. H. Okley as receivers, and have two new receivers appointed. One of the men mentioned as one of the new receivers is said to be a relative of Coffin, of Coffiu & Stanton, and the other is said to be a relative of Stanton. This change, it was learned, will be made within a very few days if the creditors do not interfere. From the day on wnich the failure of Coffin & Stanton was announced the American Debenture company has been a veritable will-o'-the-wisp from a creditor's view point. Several times they have thought they had the property of the elusive company in their grasp, but each time they were mistaken. This American Debenture company, incorporated under the law of West Virginia, with its main office in Chicago and all its actual business in Europe and New York, has debenture bonds to the extent of nearly $2,000,000 in the hands of investors, and there is believed to be nothing back of the bonds but a conglomeration of worthless stock-stock of incorporations which are in the hands of receivers.
18.January 11, 1897The Topeka State JournalTopeka, KS
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# RECEIVER JOHN C. M'KEON.
immediate payment of the greater part of the bank's capital when the money is most likely invested in such a manner that it cannot be called in at once. To save a bank in this extremity there is a provision in the banking laws by which savings banks may decline to pay depositors in full on demand, but may require a notice of 60 days.
One of the most memorable runs in the history of Chicago was in 1893, when the Illinois Trust and Savings bank tried to bring its panic stricken depositors to their senses by a parade of strength. The depositors gathered by thousands and were formed into long lines running almost around the block. The bank attempted to meet all demands. The force of paying tellers was quadrupled, all rules regarding business hours were cast aside, and the money was shoved out as fast as a big corps of experts could count it. But these tactics did not have the required effect, and, although the bank was kept open nearly all night and until the last man in line had received his cash, more depositors came the next morning, and it was several days before confidence was restored.
A run on a savings bank was started not long ago in New York state by the mere fact that a man had dropped dead in front of the bank. A crowd collected, depositors became frightened, and the original cause of the disturbance was forgotten in the mad rush to withdraw money. The result was so serious that the bank was eventually obliged to close its doors.
While people who become so easily frightened are often called harebrained lunatics, there is really little to wonder at in their conduct. Knowing little of financial affairs, they jump at conclusions and do the very thing which will hurt their own interests.
Then there are the tragic features. Connected with the Chicago failure these have been more startling than usual. First came the suicide of Banker Wasmansdorff, whose firm was pulled down in the general smash. Then came the suicide of W. A. Hammond, the second vice president of the institution which he was charged with wrecking. These developments were almost as startling as the initial catastrophe.
And after the smoke has all cleared away comes the long and often tedious readjustment, when the bank examiner, with his corps of experts, spends weary hours over long columns of figures which have been juggled until they are jumbled into an almost inextricable tangle. This part of the work of the affairs of the Illinois National bank is in charge of John C. McKeon, who has been appointed receiver by Comptroller Eckels. He is one of the most expert accountants in the country and will probably be able to unravel the snarl in due time.
JOHN F. WILLOUGHBY.
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.
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Illinois Trust & Savings Bank · Episode ID 2001671122
