2193. Washington Loan & Trust Company (Washington, DC)

Bank Information

Episode Type
Run Only
Bank Type
trust company
Start Date
November 17, 1906
Location
Washington, District of Columbia (38.895, -77.036)

Metadata

Model
gpt-5-mini
Short Digest
4d824cbf

Response Measures

Accommodated withdrawals, Public signal of financial health, Books examined

Description

A rumor (woman clerk confused similarly named institution) triggered a depositor run on 17 Nov 1906. The bank met withdrawals, issued statements, and business returned to normal; there was no suspension or closure.

Events (1)
1. November 17, 1906 Run
Cause
Rumor Or Misinformation
Cause Details
Rumor began when a woman clerk in the Pension Office confused an inability to draw funds at a similarly named institution with the Washington Loan & Trust Company; the story was magnified and declared the trust insolvent.
Random Run
Yes
Random Run Snippet
Woman clerk confused similarly named institution; false rumor sparked run
Measures
Officers and examiners publicly reassured depositors; directors' signed statement posted; paying tellers paid withdrawals in cash; offers of assistance from correspondent banks.
Newspaper Excerpt
An idle rumor, innocently started and elaborated out of all proportion as it circulated, was responsible for the beginning of a run on the Washington Loan and Trust Company late yesterday
Source
newspapers

Newspaper Articles (12)
1. November 17, 1906 Evening Star Washington, DC
Article from Evening Star, November 17, 1906

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Article Text

in you have of According Washington the the of laws District as not Columbia, maintrust a company. its but tain last you 12, financial of you see will November in of than more $76,000 profits." undivid Reassuring to Statements. the same effect general by by B. H. were made Father Stafford, and Warner others. in seen office When Edson President the apdeeply affected obviously in the institution. he of confidence the and rumor the only reason "At our last was an that made declare of parent was lack repeated of for the the panicopistic a be the one trust this said company by this (and was morning 'but Mr. Edson), President the to increase in the increase $1,000,000 tion has before been profits." there distribution All Satisfied. Applicants at the the were When closed of at end the regular business bank do gaturday in 200 noon there about persons of All in were line. settled and any that made to could desired money do SO others full, on who Monday. Utmost Surprise Expressed. in all and fact Among among bankers. of any the who have classes knowledge of in this condition financial Institutions is the city, that utmost surprise expressed in the of run have nature anything in of the any case occurred Institution It was difficult deposits. an receivinghave appreciato of tion of realize anything the kind here for men the situation could a is It that what curious has the been most examiof the of the nation institu stitutions perhannancial by has city that the been conmade of the has been just comtroller currency pleted. of the This into banks affairs examination of was one most made in competent the men bank experts, treasury and the to were highly the creditable the as to well condition of the institudo The and ComTrust Management of the has being pany managed in the its and most manner, conservative as cash ammost upon reserves e looked an As of ple. the confidence Illustration is the in of which this stability it is of said that president one Institution, this banks leading of of the one large him notifying if of that department Loan and were Trust check presented be he would responsible morning of to stores the head in the the during day he they that said were personale would cashed to up that offer make good $100,000. and Senseless. T. P. Unnecessary of the curKane, acting controller a in an with Star rency, reporter interview the this made afternoon to as the the that announcement Washington and was Trust Loan Company "unnecesMr. not did sary Kane consenseless." to a formake sider said, sider it mal conceive Washi should the be suspected of Mr. possible state and it atement, necessary. that so as Loan strong he he of could and being an Trust institution in Company a weak said, Kane of the re fact" was never bank condition "As examiner a matter made one an month ago, in better in call for thing. ever ported institution "our The the Statement of In the a fact, few made days the statemeweshington last night answer ago condition shows to is our considered same Loan the and best Trust Com- and to pany. by "I the have allay done the all I uneasin I think could. that that by that seems Monday they and existed, to and will be ashamed asill last night me up many people the people have with their about I have today doubt bank. and. inquired called told voices them of that solid on the showing the bancider I have financial the trust institutions one in the today whole United the most States. Denial of Weakness that the an that inarose its "I understand from somewhat statement similar affairs. Some- name the conflicted and few talking was stitution thing preparing with to the wind name up Trust with Company that of about and of The but Washington on body Loan people that were company. few people to in a condition yesterday. they would amount depositors any idea I am surprised not better they could anything had are If they were busy rumor the started that fear. that kept informed as not in the to possibly its affairs. by have Mr. calls any Kane, as he to was the was condition great to today As stated answering bank, he and gave each Institution's unequivoca time there weakness. denial persons rellet of the when of the were A numthe stories of the inquiries department of engraving hard the by Many govern Government in bureau hit pretty here, and there fallusomething and ber in the of printing persons were of recently savings like bank small Danic was (Continued on Second Page.)

2. November 17, 1906 Evening Star Washington, DC
Article from Evening Star, November 17, 1906

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Beginning of Run on Washington Loan and Trust Company. MANY DEPOSITORS WITHDRAW MONEY Acting Controller Says Alarm is Unnecessary and Senseless. Statement by T. P. Kane, Acting Controller of the Currency: "The uneasiness as to the Washington Loan and Trust Company is unnecessary and senseless. Our examiner made an examination of the institution about one month ago, and reported that the concern was never in better condition. The statement of the bank a few days ago shows the same thing. In fact, the statement is considered the best ever made by the Washington Loan and Trust Company. By Monday the people will be ashamed that they ever doubted the company. I consider this trust company one of the most solid financial institutions in the United States." Father Stafford: "All my church money is on deposit with the Washington Loan and Trust Company, and it will stay there." By he Directors of the Washington Loanand Trust Company: "The institution was never in such sound and safe condition as at the present time. We assure all concerned that their money and property intrusted to our care are perfectly safe."

3. November 17, 1906 Evening Star Washington, DC
Article from Evening Star, November 17, 1906

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An idle rumor, innocently started and elaborated out of all proportion as it circulated, was responsible for the beginning of a run on the Washington Loan and Trust Company late yesterday, which continued through all the banking hours today, in hundreds of depositors drawing their money out of the institution. Never was the Washington Loan and Trust Company in a better financial condition, so the controller of the treasury and his assistants and the officers and the board of directors of the trust company united in declaring but, like a flock of lambs following the bell wether, the depositing public could see nothing but canards in the reassuring statements, and each one insisted upon receiving every penny he, or she, had in the institution. The rumor started in the pension office yesterday when a woman clerk related some difficulty she had experienced in securing her money from another institution. That institution happened to have the word "Washington" in its title, and as she related the incident it appeared that the "Washington Loan Company" or the "Washington Trust Company" had refused to honor her check From this small beginning the story grew, and with each repetition more "details" were added until it was openly declared that the Washington Loan and Trust Company was on the verge of insolvency. The rush of frightened depositors to that institution thus had its beginning yesterday, and today the trust company at the corner of 9th and F streets northwest was besieged by a panie-stricken mob and a run of no mean proportions followed. Addressed the Throng. At intervals during the morning the depositors who crowded the rooms of the company and those who united in the crush outside impatiently awaiting their turn at the windows of the paying tellers were addressed by Mr. Owen T. Reeves, an assistant to Wm. B. Ridgely, controller of the treasury; by Rev. Father D. J. Stafford and by B. H. Warner and John Joy Edson and other officials of the bank, all stating that the Institution was perfectly solvent; that It was stronger than at any previous time in its history, and that every penny of money on deposit within the vaults was safe. But the verbal assurances had no power equal to the satisfaction each would feel in holding his or her little all in actual greenbacks, and the run continued up to the very moment that the doors were closed at the end of the banking day, at 12 o'clock noon. Beside the statements concerning the solvency of the Washington Loan and Trust Company which were made by the controller by his assistant, Owen T. Reeves, who made a personal examination of the company's affairs only a few days ago, and by Father Stafford, who declared that all his church money was on deposit with the trust company that it would stay there, a number of messages offering any assistance in their power were received by President

4. November 17, 1906 The Washington Times Washington, DC
Article from The Washington Times, November 17, 1906

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A statement alleged to have been made yesterday by a woman employe of the Pension Office that she could not draw her money from a Washington loan company, grew, and was magnified until this morning it resulted in a run being made on the Washington Loan and Trust Company. Shortly after doors were open this morning an unusual number of customers filed into the bank office, and began to draw out their deposits. Realizing the harmful effect of the rumors, John Joy Edson, president of the Washington Loan and Trust Company, called a conference of the directors, and went over the situation with them. A statement, signed by the directors, was then issued and posted in full view of the crowd. The statement had a tendency to reassure the depositors. Owen T. Reeevs, jr., national bank examiner, who several weeks ago made a thorough examination of the company's books, mounted a chair and in a short sepech told the depositors that there was no occasion to be alarmed. "This bank is as solid and sound now," said Mr. Reeves, "as it has ever been. Its assets are greater at this moment than at any other time since the organization of the company," The crowd applauded and some turned and left the building. Others, however, remained and presented checks for their balances. A gratifying incident in connection with the run was pointed out by Mr. Edson. At the paying teller's window there was a string of people that extended into the street, and at the receiving teller's window on the opposite

5. November 17, 1906 Alexandria Gazette Alexandria, VA
Article from Alexandria Gazette, November 17, 1906

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From Washington. (Correspondence of the Alexandria Gazette.] Washington, Nov. 17. A run on the Washington Loan and Trust Company created considerable excitement this morning. A bank examiner, B. H. Warner and Father Stafford talked to the excited depositors from a table, telling them that the bank is one of tae salest institutions in the country and there was no danger. Father Stafford said all the church money was there and he was not worrying. The run was caused by the complaint of a woman who had money in an institution with a name some what similar to the Washington Loan & Trust Company and was unable to get it at once. An examination ordered by the Comptroller of the Currency showed the bank to be perfectly solvent. The "insufficient funds" referred to her own RCcount. The Newfoundland government, in pursuance of its determination to contest the legality of the modusvivendi entered into between the United States and the British government which conflicts into its own fishing law and restructions regarding the fishing by American in Newfoundland waters, has taken steps to put the matter to a test. The State Department has been informed that two colonial fishermen, Baits and Crane, have been arrested tried and convicted of having. in violation of the bait act, put herring on board the American vessel, Ralph Hall, and of having shipped aboard that vessel outside the three mile limit. They were fined $500 each with the alternative of serving three months in prison Bond was given for the men by counsel and an appeal will be taken to the Supreme Court. At the State Department this morning it was announced that this attitude of Mr. Alexandria was taken under instrnerious from the department itself. In a formal statement issued this afternoon Secretary Shaw, of the Treasary Department, announces that he is in entire sympathy with the general plan for elastic currency adopted by a special committee of the American Bankers' Association in this city. He says "he will be pleased beyond measure if Congress will adopt every detail of the plan." He says if Congress determines to add an elastic feature to the currency system, there should be no doubt of favorable results in a short time. Capt. Carl Reichman, 17th Infantry, will probably be called upon by the Secretary of War to explain the statement made by him in It letter to a New York friend published this morning that he has been debarred from the United States army general staff because of his German birth. He insinuat's also, much to the surprise of his brother officers at the War Department that he has been in dis. favor because he is not an "Anglomaniae" and a "Japanesemaniac." The reference made by Capt. Reichman in his letter to the close relations between the United States an Japan are considered serious by officials of the War Department. It is declared that there is ab. solutely no foundation in his statement that be has been kept out of the general staff because he was born a German and once served in the German army.

6. November 17, 1906 Evening Star Washington, DC
Article from Evening Star, November 17, 1906

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A Senseless Bank Run. A striking Illustration of the folly of "running" a bank is afforded by today's experience of the Washington Loan and Trust Company. "This institution is not only thoroughly sound. but it is distinguished in local financial circles for its exceptional conservatism of management. A bank less likely to subject-itself by its methods to public suspicion is difficult to find. Yet on the strength of a rumor, said to be based upon a confusion of names, that The Washington Loan and Trust Company was in straits, hundreds of depositors this morning presented themselves with demands for the repayment of their deposits. The fact that they were promptly paid and that they were assured that the bank was in sound condition, having just passed the close scrutiny of the controller of the currency. had no influence for a time in checking the tide. Conditions were never less suggestive of financial stringency in Washington. There was never less reason for public doubt as to the soundness of the local financial Institutions of good standing. Yet, without pausing to inquire into the reasonableness of the reports, and without thinking of the absurdity as well as the possible danger of starting a run upon an institution of such generally recognized conservatism and strength, these depositors poured pell mell into the bank with their pass books and Insisted upon withdrawing their deposits. It is to be hoped that this groundless, senseless run will teach its proper lesson to the people of Washington, who are safeguarded in their financial affairs as are few communities. Those who without the slightest reason circulated the reports that precipitated the run have cause to reflect upon the responsibility that attaches to gossip prejudicial to the soundness of financial institutions.

7. November 18, 1906 The Washington Times Washington, DC
Article from The Washington Times, November 18, 1906

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BANKS TO ADOPT PROTECTING RULE Refuse to Accept Deposits Withdrawn From Other Banks During Run. W. L. AND T. READY TO PAY All Obligations So Far Have Been Met and No Trouble Expected. Owt of the unreasonable and spasmodic run on the Washington Loan and Trust Company, which "began Friday afternoon as a result of a woman's mistake and culminated in the forenoon yesterday, there will come, it is said, a rule which will protect the banks more than is now the case. The suggestion was made in several quarters that it would be well to teach depositors a lesall the banks in reto from persons fusing son, by accept Washington deposits withdrawn during a run. As a matter of fact, several banks yesterday refused to grant individual requests that they should transfer accounts from the Washington Loan and Trust Company. Frederic C. Stevens, president of the Commercial National Bank, said last night: "We refused today to take an account which a person wanted transferred from Loan and Trust Comto us. While we are for the pany Washington looking it does all the new business possible, not seem right for the banks of this city to encourage people in a run on any one bank, and to accept these transfers of accounts would be an encouragement to them." It was seriously proposed last evening that the Washington banks should make an agreement which would result in such a condition of affairs that, if a person drew his money from a bank in the course of a run on the institution, he would have to carry it around on his person or lock it up in a safe in his own house. Such an agreement, it was discourage people in rush to get money of a there was no said, the bank needless would when utterly provocation out for it. Such an arrangement between the banks, it was pointed out, could be made by the officers of the banks getting together and making the necessary agreements. Able to Meet Obligations. Officers of the Washington Loan and Trust Company felt confident last night their institution will be able to that do meet all demands tomorrow. They not expect a continuance of the run, but they think they would be able to meet it if it materialized. Additional offers of assistance came last evening to President Edson, of the Washington Loan and Trust Company, from Washington and New York banks. These institutions assured Mr. Edson that they would be glad to have him call upon them for assistance in the unlikely event of his needing any assistance. Bankers expressed surprise that the run could have come out of such small thing as it did. Runs on banks are often hysterical, but they generally come from a more serious cause than the bare fact of a woman confounding the instiution with some other company in the statement that it could not meet its obligations. It was stated last night that most of the accounts withdrawn yesterday were comparatively small. A story was told of one young woman who seemed particularly anxious. It developed later that her account amounted to a total of $25. B. H. Warner, who was the founder of the Washington Loan and Trust Company, for some years its president, and a member of its executive committee since its commenced business, said: The run which started yesterday was absolutely without foundation. "This company's loans are all secured, are first-class in every respect, and can be turned into cash so as to liquidate within a month, if necessary. "Its business will go on as usual. Its officers and directors regret very much to have its progress interfered with.

8. November 19, 1906 The Washington Times Washington, DC
Article from The Washington Times, November 19, 1906

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RUN ON BANK SPENDS ITSELF The run on the Washington Loan and Trust Company has spent itself. For four hours today, a line of men and women, worried, insistent, and needlessly alarmed. wormed its way from the F street entrance of the bank's building past the cashier's window, where, without delay or confusion, they were paid their deposits as they asked for them. In this line, which, up to 1 o'clock, drew out only about $80,000, there were for the most part people who had in the bank only small accounts, most of them ranging from $25 to $500, and majority of them being closer to $25 than to $500. The run began promptly with the opening of the institution's doors at 9 o'clock At 1 o'clock this afternoon the line had gone, and only every now and then an individual dropped in to ask for his or her deposit. After 12:30 o clock the line of people depositing money in the bank was longer than the one withdrawing funds. The first depositor this morning was Father D. J. Stafford, who showed up early with his black bag, containing the Sunday collections and other funds. In speaking of the run, John Joy EdSOI. president of the bank, sale: "We would have kept these doors open until Saturday night, but what we would have paid every depositor who wanted to withdraw. But, you see, the run has spent itself, and the day is only half over. The whole affair has been gratifying-I mean in the issuance of the statement by the Comptroller of the Treasury saying this bank was solid. It was the first statement of the kind ever issued by the United States under similar circumstances, "I think the bank has been grandly vindicated." When the bank opened its doors this morning, had in the neighborhood of $1,500,000 In cash in Its vaults.

9. November 20, 1906 The Washington Times Washington, DC
Article from The Washington Times, November 20, 1906

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RAILWAY COMMON ON UP GRADE Excellent Prices Paid to Secure Washington Loan and Trust Stock. Features of Today's Market Most Active Stock. Wash. Railway common 450 shares Greatest Net Gain. Wash. Loan and Trust 2 points Total Dealings. Stocks 571 shares Bonds $1,000 Two features stood out prominently today in the business on the Washington Stock Exchange. First, because of the great public interest centered in the hysterical run on the Washington Loan and Trust Company it was expected that it might be reflected in the price of the stock. The first sale that has been made for nearly a month took place today and the price was several points in advance of the last quotation with the demand well distributed and strong bids for goodly amounts. While it is to be regretted that the incident occurred, the substantial position of the company has been never more strongly shown than in the willingness to pay high 'prices by investors for the little floating stock.

10. November 20, 1906 Evening Star Washington, DC
Article from Evening Star, November 20, 1906

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DEPOSITORS RETURN. Those Who Withdrew Again Place Funds With L. and T. Company. "It is all history now, though we will never cease wondering how it happened," said President John Joy Edson of the Washington Loan and Trust Company today, in speaking of the "run" upon that institution which began Friday and ended yesterday at noon. Business resumed its normal course in the bank yesterday and continued today, the only feature being a considerable rush on the part of the depositors who withdrew their money from the institution Friday, Saturday and yesterday morning to redeposit it. President Edson stated further that the company had gained a fairly definite idea as to the starting of the rumor which inspired the run, and no efforts will be spared to learn the exact form of the original trouble-making story. If it is proved to have been at all malicious the company proposes to institute whatever proceedings may be necessary to have punishment placed where it is deserved.

11. November 20, 1906 The Washington Herald Washington, DC
Article from The Washington Herald, November 20, 1906

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BANK RUN IS FINISHED. Many Washington Loan Depositors Bring Money Back. The run on the Washington Loan and Trust Company spent itself before 1 o'clock yesterday, and business settled down to normal conditions. By 2 o'clock the banking room was deserted, save by the late depositors, and the clerks at the paying teller's window were resting from their arduous duties of the last two days. All who wished to draw their accounts had been paid in full. When the bank opened at 9 o'clock there was a small crowd waiting. The line to the paying teller's window was continuous until a few minutes after noon, although at no time was there a rush like that of Saturday. At the same time another line almost as long was filing past the receiving teller's window, making deposits. Father D. J. Stafford was the first. He came down early with the Sunday collections of St. Patrick's Church. He was followed by others, and not a few were persons who had withdrawn their savings on Saturday. They brought them back in several instances in the same packages, that had not been broken. John Joy Edson, president of the company, was cheerful. "You see," he said, "the run is over and the confidence in the bank's ability to pay its obligations has been demonstrated in the most practical way. We should have continued to pay the depositors if the run had lasted a week. We were prepared to liquidate with the whole list." Mr. Edson said the run had been remarkable. One of the most striking things was the friendliness exhibited by financiers in Washington and elsewhere, who urged upon the officers of the bank substantial assistance. Mr. Edson explained that the local correspondent of the National City Bank of New York was one of the first to call upon him and offer aid in any amount up to $1,500,000. The bankers of Washington, he said, urged upon him the acceptance of large amounts. One man who had $600,000 in interest-bearing securities in the deposit vaults of the company tendered its use to the bank, offering to sell the bonds. Another friend offered $250,000. Mr. Edson said If it had accepted all the offers of aid he could have paid the depositors twice over. Mr. Edson showed figures taken from the books of the deposit department, indicating that for the nineteen days of the present month the deposits had been several thousand dollars in excess of those of the same period a year ago. He said the company had apparently lost nothing on account of the run. An analysis of the withdrawal of aecounts made yesterday shows that those who closed their accounts had, for the most part, small deposits. On the Washington Stock Exchange there was lively bidding for stock in the Washington Loan and Trust, but none was to be had. The demand forced it up a point.

12. December 20, 1906 The Washington Herald Washington, DC
Article from The Washington Herald, December 20, 1906

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Equity Court No. 2. JUSTICE GOULD. Wheelan vs. Wheelan; auditor's report confirmed and distribution ordered. Complainant's solicitors, Stuart McNamara and H. B. Moulton: defendant's solicitor, J. W. Jennings, Horn vs. Horn: rule to show cause, returnable Jannary 4. 1907. Complainant's solicitor, Albert Sillers: defendant's solicitor, W. P. Plamley. Kleps vs. Kleps: will established and trustee given power to sell; bond, $5,000. Complainant's solicitors, 8. V. Hayden and H. L. Frane. Scott vs. Jennings: receivers authorized and directed to sell personalty at public auction. Complainant's solicitors, John Ridout and George C. Gertman: defendant's solicitor, D. W. O'Donoghue. Reinburg VS. Reinburg ; amendment of former decree reducing alimony. Complainant's solicitor, W. Gwynn Gardiner; defendant's solicitors, Lester & Price. Mackey VS. Felt; salo confirmed and reference to auditor. Complainant's solicitor, Crandal Mackey; defendant's solicitor, Guy H. Johnson. Freeman vs. Freeman; sale confirmed and reference to auditor. Complainant's solicitor, John B. Larner Boswell vs. Boswell: divorce a vin. mat. granted. Complainant's solicitors, Campbell Carrington and S. D. Truitt; defendant's solicitors, Wolf & Rosenberg. Washington Loan and Trust Company VS. Dulany: appearance of absent defendant ordered. Complainant's solicitors, A. 8. Worthington, J. J. Darlington, John B. Larner, and W. G. Johnson. Title Guaranty and Surety Company vs. Shaw; demurrer sustained. with leave to amend. Complainant's solicitor, Philip Walker; defendant's solicitor, D. W. Baker. Snitzer VS. La Porte; rule as to receivers returnable January 4, 1907. Complainant's solicitor, Leon Tobriner. No assignment for to-day.