German Savings Bank - Chicago, IL

Bank Information

Episode Type: Run Only
Bank Type: savings bank
Start Date: January 15, 1873
Location: Chicago, Illinois (41.850, -87.650)

Metadata

Model: gpt-5-mini
Short Digest: a535b4b8

Response Measures

Accommodated withdrawals

Description

Multiple January 1873 Chicago Tribune articles describe a multi-day run on the German Savings Bank triggered by injudicious newspaper articles and unfounded rumors. The bank paid depositors in full (subject to a $100 per-account immediate limit and 30-day notice for larger withdrawals) and the run ended without suspension or closure.

Events (1)

1. January 15, 1873 Run

Cause: Rumor Or Misinformation
Cause Details: Run stimulated by injudicious newspaper articles and false/unfounded rumors among recent German depositors.
Measures: Paid depositors in full while limiting immediate payment to $100 per account; depositors demanding more required 30 days' notice; offers of currency from friends were offered but not needed.
Newspaper Excerpt: The run on the German Savings Bank of this city has been stimulated by injudicious articles...
Source: newspapers

Newspaper Articles (6)

1. January 16, 1873 Chicago Daily Tribune Chicago, IL

Article from Chicago Daily Tribune, January 16, 1873

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THE GERMAN SAVINGS BANK. It was a current tonic of city news in banking and business circles, on Tuesday, that a run had commenced on the German Savings Bank, on North Canal street, but it belonged to a class of topics where outside discussion, and especially sensation news-mongoring, would do more harm than good, and THE TAIRUNE made DO reférence to the matter in its last issue. The pressure df depositors was not largo, and scarcely disturbed the ordinary business of the bank on Tuesday. But the startling headlines and Bonorous paragraphing of some of our neighbors in the morning papers of yesterday, had the precise effect that might have been frecast, for a multitudo of wholly disinterested parties went blocks out of their way, yeaterday, "to see whether there was a run on Greenebaum's bank to-day." and thus swelled tho oatside attendance, further considerably increased by the large number of unemployed, who were as willing to put in a few hours of lieavy standing-round in that vicinity as any other. And with these came an increased number of depositora to join in the run, and the street had all the appear-: ance of a crowd throughont business hours yesterday. There was no disturbance nor excitement, and the presence of police officers was only made necessary to keep the passage-way for the públic and those seeking to cuter the bank. The depositors of the bank are largoly Germans, among, whom there is no man more popular than Henry Greenebaum, in the very best sense of a much-abused phrase, since, in this case, the popularity of Mr. Greenebaum means strong and not easily shaken confidence in his rigid honesty and broad sagacity. to No man has done more than lie strengthen the material bands between his countrymen and the home-born element, in striking contrast to pitiful thimble-riggers who have sought to gain and employ like relations for mean political ends: In another column, our financial article gives the principal and essential facts in relation to the German Savings Bank, and its strength in an emergency to which it is exposed. The general and universal feeling among the officers of the bank, their frienda and associates, and throughout banking circles, yesterday, was one of implicit confidence in the ability of the institution to pass unecathed in the trial, a result that will be helped by the simple and easy common sensa of dispensing with injurious goseip. Few of the readers of THE TRIBUNE are to-day aware that a short time ago an Archer avenue savings bank came triumphantly and safely through a short sharp run, simply because gossip did not set her thousand tongues at work to increase the difficulty. There was at the time no publication of the run. and it is only referred to here to allow that the better policy was unwisely departed from in this instance, with effects as noted. Not one in an hundred of Mr. Greenedaum's depositors would be rendered otherwise than unhappy by the possession in hand of their money now in his charge. Like the Frenchman in the etory, If you ave the money, I no want 'im, but if you, no 'ave lim, I must 'ave 'im." The indications are that this confidence will be speedily re-established

2. January 16, 1873 Chicago Daily Tribune Chicago, IL

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MONEY AND COMMERCE. MONETARY. WEDNESDAY EVENING, Jan.15. The tendency of the local money market is still toward an easier condition. Products are moving more freely, exchange is becoming more plenty, and country bank balances with their correspondents here are increasing. The large amounts of money that have been sent into the country during the last month to pay for hogs and cattle are having the effect to make collections easier. and are clearing off indebic lnces rapidly. There is, however, a very large demand for ready money here yet. Currency has befor come comparatively scarce, and the demand it has helped to depress the price of New York exchange, though the main cause of the decline is the increase of bills drawn against shipmonts. The price between banks to-day was 50c per $1,000 discount. THE SAVINGS BANK RUN. The run on the German Savings Bank of this city has been stimulated by injudicious articles, published in two of our morning cotemporaries, and has assumed a more serious aspect. On Tuesday afterncon there was no time when there was over twenty or thirty persons in the line to the paying-teller's window, and it seemed not at all improbable that if the bank had offered to pay everybody in full, and the affair was not 0Xaggerated by the newspapers, the run might have subsided to-day. This was the experience of a Savings Bank on Archer avenue two. weeks ago: The bank was sound, it offered to pay everybody in full, and after paying out about $50,000 the run subsided, confidence was restored, and searcely anybody in the city but the depositors and the officers of the bank knew there had been a run. The German Savings Bank has adopted the plan of paying no depositor more than $100 on any one account. Depositors that demand more than €100 are required to give 30 days' notice. At the present rate of payment the bank is not disbursing over 825,000 or €30,000 per day. As far as the ability of the German Savings Bank to pay all its depositors is concerned, we have the following figures from Mr. Henry Greenebaum, the President of the bank

3. January 19, 1873 Chicago Daily Tribune Chicago, IL

Article from Chicago Daily Tribune, January 19, 1873

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A Card from Henry Greenebaum, Esq. The "run" on the German Savings Bank, which lasted for several days, is happily ended without disturbing any of the great business interests of our city, and I feel prompted to express my lasting gratitude to the legion of friends who tendered me, in case of need, the use of currency in various sums, from $5,000 to $150,000, in order to sustain the bank. The great rosources held at my command by Messrs. Greenebaum Bros. & Co. made it entirely unnecessary to accept any of the generous offers of my many friends here. I am much gratified in stating that the "run" was almost wholly confined to that portion of my German dopositorc who came to Chicago during the last year, operatives and laborers who lodged their small earnings in the German Savings Bank to the extent of 300 new accounts per month, without knowing anything either about myself or Chicago generally, and are therefore not to blame for having credited false and unfounded rumors about the solvency of the bank. Respectfully, HENRY GREENEBAUM.

4. September 22, 1873 Chicago Daily Tribune Chicago, IL

Article from Chicago Daily Tribune, September 22, 1873

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argued in time The same amounts of gold and currency that were in the country a fortnight Ago aro hold here to-day. The result has been A transfer of if no panio disturbing all only transfer, possession, business relations and that be created, affects only those immediately interested in the fortunes of one firm. But there was A GENERAL APPREHENSION that, owing to the excitement which some were endeavoring to increaso and extend and intensify, there be a run on the savings banks of the city tooutside of the officers and managers would day, and, and of interest these institutions, there was much anxiety expressed as to the result of such a movement. The of the savings banks, the and determining to managers possibilities, provide appreciating for their own safety and the security of their depositors, held a consultation yesterday, and resolved upon the adop& course as was both within the law and best as trustees of for tion the of such guardianship the treasures they hold. Their action is elsewhere reported. While it may not be denied that there was expressed yesterday & feeling of doubt in view of possible contingencies, it cannot be affirmed that there was anything approaching excitement or alarm. Men discussed THE FINANCIAL SITUATION quietly and deliberately, but not with the perfect confidence that mark predictions of ord! ary business. on the subject were in but conducted nor Conversations whispers, neither in boisterous moderate touce, as is the wont of the usual times, by couples, or in email knota. If appearances yesterday be any indication of results to-day, there will be no panic, and no rush on the banks, unless upon the savings institutions. All probability of such an attompted "run" is forestalled in the action of these institutions. A TRIBUNE reporter conversed with a number of the of the savings banks yesterday, and they the case: We receive and we pay heavy expenses mallmanagers pay thus interest, pithily put deposits. for the We agement of our institutions. To do this, of course, we cannot afford to let money lie idle in our vaults. We must invest it at remunerative rates. In doing BO, we endeavor to loan on the best terms compatible with for our depositors. This money must on a reasonable time, and in on domand. Our unperfect be immediately loaned security depositors cannot be must called derstand this. Our security is good, but we cannot pay at once all depositors out of our reserve funds." ACTION OF THE HAVINGS RANKS, The following is the result of the meeting of the officera of the avings banks yeaterday : SAVING DEPOSITE.-To allay all unnecessary excitement, and in the interest of the public and our depositors, and to prevent the possibility of any party obtaining an advantage over another, and to protect of the savings banks of the City of Chiby the officers whose names are hereto, will, from and after scribed cago, the rights represented all, this date, insist subupon requiring notice for the withdrawal of deposits, according to their respective rules. D. D. SPENCER, President State Savings Institution. JOHN C. HAINES, President of Fidelity Bank and Hafo Depository. SYDNEY MYERS, Cashier Merchants', Farmers' & Mechanica' Savings Bank, FRED. MEYER, Cashier Commercial Loan Company. F. C. TAYLOR, Vice-President Cook County Savings Bank. HENRY GREENEDAUX, President German Savings Bank. FRANCIS LACKNER, President German-American Savings Bank. 8. W. RAWHON, President Union Trust Company. CARL F. W. JUNGE, Treasurer Chicago Savings Institution and Trust Company. J. YOUNG SOAMMON, President Havings Department of the Marine Company of Calcago. H. A. WARE, Cashier City Savings Bank. W. II. PARK, Cashier of the Bank of Chicago, JAMES W. BCOVILLE, President of the Prairio State Loan and Trust Company. LAST EVENING it was reported that a tologram from President Grant, directed to & prominent financior of this city, bad been received in the afternoon, stating that the President would to-day order the immediate issue of the $14,000,000 reserve fund In order to afford relief. reported. from

5. August 5, 1875 Chicago Daily Tribune Chicago, IL

Article from Chicago Daily Tribune, August 5, 1875

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and its branch, is impressed with the belief that there is no sounder or more ably-conducted savings bank in Chicago. # THE GERMAN SAVINGS BANK. This institution commenced business just five years ago-on the 1st day of August, 1870-under a special charter of the Legislature of the State, passed in 1869. The provisions of its charter differ from those of other savings banks in the city doing business with a guaranteed capital in the following essential points: First-Stockholders are liable to double the amount of their stock. Second-The capital stock of the bank, as well as one-third of the deposits, must be kept either in Government bonds, bonds of the State of Illinois, Cook County bonds, or Chicago Municipal bonds, or cash. Third-The Bank must file with the Auditor of the State a detailed statement annually of its condition. Fourth-The Bank is subject to an examination by the Auditor of State at any time. Fifth-The deposit line of the Bank is limited to ten times the amount of its capital and surplus. During the first business-day of the Bank fifty accounts were opened by depositors. Since then, the customers of the bank have steadily increased, so that the enormous amount of from 15,000 to 16,000 accounts have been opened during the first year of its existence. On the 1st of January, 1871, the bank having been doing business for five months the deposits had already aggregated the handsome amount of $230,000. On the 9th day of October, 1871,-the day of the great fire,-the deposits had reached the sum of $662,000. After the fire, the rebuilding of Chicago gave so much remunerative employment to the mechanics and workingmen, who selected the German Savings Bank as the depository of their savings, that the deposits ran up steadily up to January, 1873, when the deposits had reached the large sum of over $1,500,000. The bank then held, besides a large amount in cash, $600,000 in available bonds and about $1,000,000 in first mortgages on Chicago real estate, a large proportion of which was loaned to its customers on the North Side to enable them to rebuild their homes and places of business. In January, 1873, after the failure of the Scandinavian National Bank, an uneasiness spread among the new comers to Chicago, who had probably their all deposited in the savings banks of the city. During this time the German Savings Bank had a run which lasted five days, and paid every dollar called for on demand. Not one of the old settlers of Chicago who were acquainted with the Manager of the bank presented himself at the counter to draw any money during those days. The general depression in manufacturing and mercantile circles since 1873 has forced many depositors in this bank to fall back upon their reserve in bank, so that the deposits have since then been considerably reduced. The present amount of deposits is $900,000, of which $505,000 is held in cash and available bonds, and $100,000 invested in first mortgages upon Chicago real estate. The bank has also $200,000 paid up capital, and $30,000 surplus capital. The bank is managed by the following-named gentlemen as directors: Henry Greenebaum, of Henry Greenebaum & Co., bankers. Thomas Hoyne, of Hoyne, Horton & Hoyne, attorneys. Charles Wirth, of Bock & Wirth, tobacco manufacturers. Peter Schuttler, of Peter Schuttler Wagon Manufactory. Frederick Letz, capitalist. Joseph Liebenstein, of J. Liebenstein & Co., wholesale merchants. B. G. Caulfield, of Moore & Caulfield, attorneys. Simon Florsheim, of Gimbel, Landauer & Florsheim, wholesale merchants. Henry N. Hart, of Hart Brothers, wholesale merchants. John Herting, capitalist. Elias Greenebaum, of Henry Greenebaum & Co., bankers. A. Wise, Cashier of the Bank. James T. Hoyne, Teller of the Bank. The German Savings Bank does exclusively a savings business, is not engaged in any commercial banking whatever, draws no bills of exchange either domestic or foreign, and loans its funds only against absolute security. The bank does not covet a large business, the rule of the Directors being to do a safe business, and manage the savings of its depositors beyond any possible contingency of loss, and is not as liberal as many others in the allowance of interest. The bank computes interest twice a year up to the 1st of January and July on moneys then in bank, provided that the same have been on deposit for three months previous. The bank also requires thirty days' notice for the withdrawal of deposits, panic or no panic; they have but one rule the year around, rain or sunshine. During the panic of 1873 notices for the withdrawal of upwards of $500,000 were served on the bank, and, at the end of the thirty days, the money was paid promptly and cheerfully. The other banks generally took sixty days' notice, so that, as a matter of historical fact, the German Savings Bank stood the brunt of the battle, and by its promptness in making payments to depositors at the end of thirty days, the general feeling of distrust among savings depositors was allayed, and many notices already given were canceled by the depositors. The original object of the incorporators of the German Savings Bank, as the name implies, was to create a safe depository for German workingmen. This principle has thus far been lived up to to such an extent that the bank has not yet advertised its business in the English press of the city. It is true, nevertheless, that among the depositors of the bank all nationalities of both sexes are represented. The German Savings Bank may be said to be the child of Mr. Henry Greenebaum, President, and the Hon. Thomas Hoyne, Vice President, both of whom take the deepest personal interest in its soundness and prosperity, and they are warmly backed by Mr. Elias Greenebaum, Peter Schuttler, Charles Wirth, John Horting, Frederick Letz, and the other members of the Board of Directors. The personal responsibility of the gentlemen connected with the bank is very large. Their character and standing are second to none in the city, and it is therefore beyond any doubt that they will realize their object in maintaining a safe depository for the savings of the people. Among the London cabmen are to be found a former Governor of the Bank of England, an ex-M. P., a late Fellow of a Cambridge College, and a clergyman who was one of the respondents in a remarkable clerical divorce case.-Boston Journal.

6. December 8, 1877 Chicago Daily Tribune Chicago, IL

Article from Chicago Daily Tribune, December 8, 1877

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examine Into its nonice whenever be saw at to do PO. For this service he was entitled to charge $1 per day and three cents per mile mileage. ORGANIZED. The charter lay dormant for fully 1 year after Its passage. when lienty Greenehium undertook to organize the bink. During the Furnmer of 1870 he anceeded In placing all the stock. and un Aug. 1. INTO. the bink WAS opened for business. with Heary Greenebaum Pre-t and Abraham Wise Cashier. It was located on the corner of Lasalle and Lake streets, diagonally opposite the Marine Bank Building. Having a well-known and responsible Directory. and life President heing on the tidal-wave of copularity and prosperity. the bank at-once became a favorite Bunnet our industrions and trugal German population. Nothing occurred to produce a jar in the management of the bank until the his fire.' a short time after which the Institution was re. opened for business in the Date Building. on Canal street, just north of Randciph Here its business moldly extended During the summer of 1872 the bank purchased the property on Fifth avenue. between Washington and Randoiph streets. having a frontage of eighty feet, on which it erected one of the most commodious and best arranged hankIng-offices ⑉ the city. In January. 18"3, a fan was started on the institution It only lasted a few days. The vagite were full of currency. and each depositor was paid off to full on presentation of his book. In the fall of the same year occurred the panic. from the effects of which the country has not yet fally recovered. In common with the other savings-banks. the German Savings Instated on n rigid adherence to the *die that thirty dare notice should be given The panic W45 gone through without any serious difficulty, and nothing occurred to mar the felicity of the institution, rave the gradual decline in the value of real estate. until the fall. fire of a targe savings-bank in St. Louis In July 1A-L The deposits on the 1st of that month amounted to $070,000. The St. Louis tidings had a depressing effect on Pavings. bank depositors generally. and a gradual fun commenced. Doring the months of July, August. and September the deposite can down A little over $250,000. Since then the run acquired increased speed, an In A little over ten weeks the deposits were reduced some $300,000, or at the rate of $0,000 per day. FOR THE PURPOSE or COMPARISON the following tables are given showing the condition of the bank Sept 20 and Dec. U. At the close of business on the first-prentioned date the balance sheet exhibited. ASSETS.