Lewis Johnson & Co. - Washington, DC

Bank Information

Episode Type: Run Only
Bank Type: state
Start Date: December 4, 1891
Location: Washington, District of Columbia (38.895, -77.036)

Metadata

Model: gpt-5-mini
Short Digest: 65e994d2

Response Measures

Accommodated withdrawals

Description

Article describes pension-payment confusion that produced heavy cashing at several firms. Lewis Johnson & Co. paid pension checks upon presentation (about $2,500 by noon). A crowd and rumor of a run formed at Woods & Co.; no suspension or closure of Lewis Johnson & Co. is reported.

Events (1)

1. December 4, 1891 Run

Cause: Rumor Or Misinformation
Cause Details: Confusion from change in pension-check drawing location and distribution of an agent's circular led to crowds and rumor of a run; pensioners sought payment at private firms including Lewis Johnson & Co.
Measures: Paid pension checks on presentation; other firms later stopped promiscuous paying to protect regular business.
Newspaper Excerpt: By that time fully 400 checks, aggregating about $20,000, had been cashed... Up to noon about $2,500 had been thus paid.
Source: newspapers

Newspaper Articles (1)

1. December 4, 1891 Evening Star Washington, DC

Article from Evening Star, December 4, 1891

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Article Text

PENSION OF AGENT WILLSON'S NEW ARRANGEMENT WHAT BANK OFFICIALS BAY-TREASURER NEBEKER VIEW OF THE AFFAIR. The patience of Paying Teller W. H. Gibson, in the cash room of the treasury, was sorely tried today. He was obliged to undergo the painful ordeal of refusing to cash several hundred checks drawn by the pension agent in this city on the assistant treasurer of the United States at New York. In view of the fact that the paying tellers of the banks of the city were, with very few exceptions, also fusing to cash these checks except upon personal identifications, the result upon the pensioners who drew their checks today was rather demoralizing. Today is the beginning of the quarter of the year as far as the pension agent in this city is concerned. Today he begins to pay out the money entrusted to him for the 10,000 and more pensioners on his rolls. and in the ordinary course of business he pays about $150,000 from o'clock to the close of business. Heretofore the agent, Mr. S.L. Willson, had a fund on deposit at the United States treasury from which to draw every three months for this purpose, and his checks have always been drawn on the treasurer of the United States and were consequently cashed without hesitation by thetellers in Uncle Sam' bank on 15th street. A CHANGE SUGGESTED But soon after the last payment, in September, the agent consulted with Secretary Foster and urged that the deposit in the treasury be transferred to the subtreasury in New York for certain reasons One of these was that at the end of the first rush each quarter there was a large surplus left both here and in New York where there was also deposit for the payment of the 4,700 mail checks that are sent out from this office. It was deemed desirable to husband this sur plus by consolidating the deposits and the subtreasury was chosen as the more convenient place for the placing of the fund. Orders were issued November 11, signed by Gen. Spaulding as acting secretary giving Agent Willson authority to change his deposits. Before doing this. however, the agent had taken what he thought was an adequate measure to insure the easy cashing of the pensioners' checks in this city, which amount to about $300,000. He sent one of his confidential clerks to the banks of the city with a form of the new check to be used this quarter, asking "the banks if they would cash these checks upon presentation if they bore the indorsement of the agent. This check was drawn on the assistant treasurer in New York, bore on the back the usual stamp of the clerk at the agency, the regular indorsement by supposititious pensioner and the initials of the agent, "S. L. W. The clerk, according to Mr. Willson's statement to STAR reporter this morning, returned with the word that he had seen all of the banks, and that majority of them, giving the names of thirteen that will be mentioned later, had agreed to the proposition and would pas pensioners bearing such checks without personal identification. THE CIRCULAR TO PENSIONERS. Mr. Willson thereupon had printed several thousand circulars for distribution to the pensioners for their information on the days of payment. This document read as follows: Hereafter all pension checks will be drawn on the assistant treasurer of the United States at New York city, and checks for regular quarterly payments, with the usual identification by the pension agent, will be cashed by the following named banks in this city, instead of the treasurer of the United States. as heretofore: National Metropolitan Bank, National Capital Bank, Central National Bank, Traders National Bank, West End National Bank, Ohio National Bank, Citizens National Bank, Second National Bank, Lewis Johnson & Co. Bank, Woods & Co. Bank, Bank of the Republic, Riggs & Co. 8 Bank SIDNEY L. WILSON, United States Pension Agent. Accordingly a boy clad in a light blue suit stood in front of the agency all day today and handed out copy of this circular to each person leaving the building. Very many of the people who took the paper were unable to read it. and they had to secure the services of interpreters. A good many rather funny scenes were enacted around the corner of 4th and F streets, in the vicinity of the agency. THEY ARE REFUSED PAYMENT. As a rule the first thing the pensioners did was to go to the nearest bank, the Second National, on 7th street. Other banks in the neighborhood were also visited, but, to the consternation of the check holders, the paying tellers uniformly demanded personal identification before paying. This was out of the question in all but few cases, and thus the number of checks cashed was very small. From bank to bank the pensioners trudged, shoving in their checks and getting them back again, growing more confused at each declination to pay, and it was not long before there was very general movement up town. toward the treasury. DECLINED AT THE TREASURY. Inasmuch as the checks were drawn on the New York subtreasury Paying Teller Gibson in the cash room had to decline to fork over the funds, and the down town scenes of wrath surprise, expostulation and fear were repeated within the marble walls of the treasurer's counting house. Whenever a pensioner was refused payment he invariably produced his copy of the agent's circular as an inducement to the tellers to pay. In the banks the reply was that the circular had been issued without the knowledge of the bank, and that no money would be paid on such check as drawn unless depositor or some other person known to the teller should identify the person presenting the check. WHERE THEY WERE CASHED. Word was received at the treasury during the morning that Woods & Co. on F street were paying the checks without restriction, and thither the pensioners were sent by the teller and by others in the building. The result was startling. In few minute after 9 o'clock the pavement in front of this establishment was crowded and for two hours and half the clerks inside were kept busy paying. The regular customers of the firm, encountering the crowd, were startled, and the rumor spread that there was run on the bank. At 11:30 it was found to be absolutely necessary to stop the promiscuous paying of these checks, as it interfered sadly with the current business of the house and the windows were shut in the face of half hundred eager people. By that time fully 400 checks, aggregating about $20,000, had been cashed. There had been personal understanding between Agent Willson and the firm of Lewis Johnson & Co., and this bank paid pension checks all day upon mere presentation Up to noon about $2. 500 had been thus paid. A few checks that bore defective indorsements were returned. THE CAUSE OF THE DIFFICULTY. STAR reporters made a hurried investigation into the cause of the misunderstanding and the conclusion is that there had been rather