5825. Fletcher & Churchman (Indianapolis, IN)

Bank Information

Episode Type
Run Only
Bank Type
state
Start Date
February 1, 1886
Location
Indianapolis, Indiana (39.768, -86.158)

Metadata

Model
gpt-5-mini
Short Digest
0be9dc1c

Response Measures

Accommodated withdrawals, Public signal of financial health

Description

Small-depositor run triggered by the failure of nearby Ritzinger Brothers and attendant rumors. The bank did not suspend: heavy depositors and First National (W. H. English) provided support and funds flowed in; operations continued after the flurry.

Events (1)
1. February 1, 1886 Run
Cause
Local Banks
Cause Details
Run triggered by rumors and the failure of Ritzinger & Brothers; public believed Fletcher & Churchman were closely connected/responsible.
Measures
W. H. English (First National) indorsed certificates so depositors could cash them at his bank; heavy depositors brought cash into the bank (about $200,000 from the East via express); bank had available cash and backing to meet demands.
Newspaper Excerpt
The run this morning on Fletcher & Churchman's bank was caused by the popular belief that there were close relations between it and the embarrassed firm.
Source
newspapers

Newspaper Articles (3)
1. February 2, 1886 New-York Tribune New York, NY
Article from New-York Tribune, February 2, 1886

Click image to open full size in new tab

Article Text

FAILURE OF A PRIVATE BANK. POOR PEOPLE LOSE THEIR EARNINGS. A DISASTER IN INDIANAPOLIS THAT WAS EXPECTED BY FINANCIERSOTHER ASSIGNMENTS. INDIANAPOLIS, Feb. 1 (Special).-Well-informed financiers have expected for some time the failure which took place to-day of Ritzinger Brothers' bank. It has been known in banking circles that the firm was heavily burdened with depreciated real estate, which was unloaded on it in the panic of 1873, in addition to which it has since suffered several large losses from unfortunate loans. The founder of the bank, J. B. Ritzinger, died six years ago, after he had taken the present proprietors into partnership and on his deathbed he advised his wife to withdraw from the concern her capital, amounting to $200,000. She did this and it had the effect to seriously cripple the bank. It has been generally understood that the capital of the firm was $50,000, but Rand & McNally's Bankers' Almanac for 1886 reports it at $10,000. The deposit account averaged about $500,000. When the bank closed on Saturday night it had about $v3,000 in cash on hand, of which $7,500 was in silver. A steady run of three weeks, started by the failure of a whiskey firm which the bank had been upholding, had reduced it to this state. The depositors were of the poorer class, many of them being German gardeners, butchers and laborers, and it was little more than a savings institution operated as a private bank. The run this morning on Fletcher & Churchman's bank was caused by the popular belief that there were close relations between it and the embarrassed firm. When a run was made on Ritzinger's several years ago, Stoughton A. Fletcher, the father-in-law of Frank Ritzinger, sent money into their back door by the basketful and carried them safely through their trouble. It has since been supposed that Fletcher & Churchman are responsible for the Ritzingers. During the run on them this morning, W. H. English went into the throng of depositors and offered to indorse the certificates of all who wanted their money, telling them that they could get it at his bank, the First National. This allayed uneasiness. The bank now has available cash to the amount of $1,100,000 to meeta possible demand of $1,200,000. The mos accurate information that can be obtained indicates that the liabilities of the Ritzingers will amount to about $450,000, and their assets, consisting largely of real estate, are valued at $300,000. The notes due the bank amount to about $109,000, and the overdrafts to $15,000. The Nassau Bank, of New-York, holds notes indorsed by Ritzinger & Brothers on collateral security for an indebtedness of the Ritzingers to the amount of $30,000. The papers of assignment were made out after midnight last night. The assignee 18 George B. Yandes. SELLING SECURITIES OF A SAVINGS BANK. New-HAVEN, Conn., Feb. 1 (Special).-The remaining securities of the Townsend Savings Bank, face value $489,466 were sold at auction to-day and brought $434 40; $33,062 75 of Selma, Rome and Dalton Railroad stock sold for $5; one judgment against J. M. Ryder for over $200,000 sold for $200.

2. February 2, 1886 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, February 2, 1886

Click image to open full size in new tab

Article Text

THE BROKEN BANK. Its Condition, as Shown by the Assignment Papers-The Run on Other Banks. The immediate effect of the Ritzinger failure yesterday can be measured within the limits of a flurry. No decided panicky feeling was manifested, although a class of small depositors expressed an anxiety as to their holdings. Yet this had no visible result except in a run on Fletcher & Churchman's bank. If there was a tendency to lengthen the lines of claimants for money from other concerns it did not receive any force. The interest of the day centered solely around the Ritzingers and Fletcher & Churchman, and as far as other banks were concerned their business displayed no more than ordinary features. Fleteher & Churchman came into the center of attraction probably on account of the rumors that prevailed during the past week. Then there seemed to be more of a panicky feature than yesterday, due, probably, to the difficulty in verifying either favorably or otherwise the various statements. The Ritzingers' condition was principally referred to in these rumors, but they were never retailed by anyone as conjectured news without the offset, "I hear, too, Fletcher & Churchman are weak." Hence it was natural to expect the latter to be involved at this time, as far as public anxiety went, more than any other concern. Yet those who have the inside of financial information, or are in & position to gather it from direct sources, displayed no uneasi ness. This had a great deal to do in allaying any fear of great disaster. Of course the small depositors, who are remarkably timid about their small savings, took alarm and hurried as early as they could to Ritzingers' and Fletcher & Churchman's Before banking hours a crowd of considerable size had gathered in front of each place, the one being but a few doors distant from the other. There was no outburst of excited apprehension. At the Ritzinger bank the crowd looked upon the closed doors and the announce ment thereon, reading, "This bank has closed its doors and made an assignment to George B. Yandes, trustee, for the benefit of all its creditors, Feb. 1, 1886." Passing through the groups of men and. women, some expressions of anger were caught, but these stopped short of violent feeling. Somebody told somebody else that decisive methods of revenge should be thken, box all the belonged to rumors characteristic of crowds of any kind. A number of police kept the Washington-street walks passable and the crowd nursed its thoughts, gossip and suggestions without endangering the conservative feeling that prevailed among those not directly interested. By the noon hour only three or four loungers could be seen in front of the bank. In the meantime the scene at Fletcher & Churchman's was more animated. When the doors were ready for opening, quite a line of de positors stood ready to pass in, and within an hour this gathering too was greatly diminished. At no time did the line exceed a hundred and fifty, in-doors and out, and when noon came the latter portion had dwindied down to not more than thirty or thirty-five. It was a steady run of small depositors, and judging from the appearances of the people, their individual deposits would run anywhere from $50 to $500. While this went on, the heavier creditors of the bank appeared tranguil, and expressed confidence as to the safety of their deposits. Then, as noon approached, busi ness men hurried to the bank with their packages of money and left them there. Thus, while the small creditors were maintaining their steady demand for an output of cash, the heavier depositors stepped in to increase the bank's resources. It is hard to say to what extent the latter class gave their support to the bankers, but it was nevertheless large. A prominent lawyer, one whose business tends largely in the settle ment of financial interests, was visited by a former client. He had in the bank that was receiving the steady demands of thesmall creditors some $8,000 or $9,000. "What shall I dof" he anxiously inquired. "Don't be disturbed. Let your money stay in the bank. It is safe," was the attorney's advice. "I was asked by a claimant this morning," said another lawyer, "to advise him as to what he should do. He had $5,000 with Fletcher & Churchman, and I told him to rest easy. My own balance is there, and I have no fears of losing it. He left sattsfied." It was incidents like these that had a great deal to do in holding the public away from an expression of intense anxiety. A party of three mer, intelligent, but who evidently carried their cash in their pocketbook and had none to spare, were passing the crowd at the bank. One said, "1 wish I had $20,000 with that concern. It would stay." "I don't want that much," replied another. "If I had one half, this crowd might have its money. I would wait for mine." While the line of creditors was at its largest, Wm. H. English, of the First National Bank. stood by and offered to indorse any of Fletcher & Churchman's certificates of deposit that would be given him. Several accepted the offer. He promptly carried outhispromise, saying, as he held the paper on the side of the house while he wrote his name across its back, "Take this across the street to my bank and get your money." Fletcher & Churchman had been dealing with "scare" deposits for a week or more. They knew what to expect. and were fully prepared to meet the demand. From Mr. Churchman no figures as to the amount paid out or in could be had during the afternoon, but the latter amount was as large as $200,000, and is known to have gone into the bank from the East. This was through an express company. Outside of this there was no flurry. Other banks held their own, and came up to the clearing-house with the day's settlement without a ripple to report. "The clearances," said the secretary of that institution, "have been very Targe -more than the average-while the balances were less than usual. was surprised at the banks

3. February 3, 1886 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, February 3, 1886

Click image to open full size in new tab

Article Text

THE SUSPENSION OF MONDAY The Excitement Growing Out of the Ritzinger Failure Fully Abated. No Unusual Demand Made Yesterday on any of the other Banks-The Outlook for the Unfortunate Depositors, There was nothing in banking circles yesterday to suggest anything of the scare the day before among Fletcher & Churchman's small depositors. It was plain that the Ritzinger failure had spent its fever, leaving the effects to be felt by the creditors of that institution. It is hardly worth while to say that confidence has been restored, for within the limits where fright would certainly cause dangerous runs, it was not disturbed. On the first of the month railway companies are among the class whose settlements amount to sums sufficient to strengthen a favorable view of the money situation. Yesterday this particular business was transacted without a riffle of insecurity, and deposits from mercantile and commercial houses came into banks with nothing to indicate that there had been the least anxiety. The situation confirmed all that had been written and said about the spurt of the day before. "I am," said a prominent banker, "rather particular about being quoted. The flurry is over. I never saw anything of the kind succumb 80 rapidly. One cannot tell that there has been a scare, for business to-day does not show a particle of uneasiness. We have had the full average of deposits for this time of year, and the payments have been only those expected in the usual course of business on the first days of a month." Another banker remarked: "Public confidence where injury would follow has not been affected. I judge of Monday's scratching at Fletcher & Churchman's, by what we had to deal with on that dav. Of course our business was not in the circle of intense interest, but, nevertheless, we enjoyed a little brush from small depositors. About ,700 waspaid out by us on deposit certificates that did not average more than $200 each. This little fright checked itself early in the day. Since then not a new feature has presented itself." These expressions give the feeling of yesterday. It is thought by some who have a right to say so that the withdrawal of the small deposits will help the spring real estate market. This money, kept concealed for any length of time, will become restless. Out-of-the-way corners, covered up cash boxes and old stockings are, after a time, looked upon as less secure than houses and lands. "You will find," said a financial gentleman, "that, in a few weeks, part of this money will reach the people again. You see there is no evil without a benefit. A great deal of it, too, will come back to the banks as deposits." The Ritzinger affair revealed no details that will serve to estimate more accurately the condition in dollars and cents. A gentleman, who has been for a year or two intimately converssant with the Ritzingers' investments, attributed the failure to whisky. "I know that when the whisky in bond threatened a glut in the market a few years ago," he went on to say, "the Ritzingers covered a large amount of it at cost of production. The bond extension came and they held it, expecting to pay the tax at a rise in the market. For example, assuming the cost of production at thirty cents per gallon, or, say in round numbers $12.00 per barrel, the amount of the investment is comparatively small, and, on a rise would, with payment of tax, turn a good profit. The Ritzingers had it figured in this way. I do not know exactly what they carried of '79 and '80 whiskies. Some of it was tax due in '82 and the rest in '83, of course. Assuming that they had about 5,000 barrels, it is easy to be seen where their failure comes in. You remember the scare about a whisky glut a few years ago. The Ritzingers held on to their origiinal investment of $60,000, but when bond expired and tax had to be paid, $118,000 confronted them. Here was an investment of $178,000 from which they could not recover, because they did -not have the money to pay the tax. They were compelled to drop the whisky altogether. for it was impossible for them to raise the $118,000. The original $60,000 went to pot, and since they have been laboring against this as a big element in their losses. The failure had to come. While on this topic it proper to say something about the Bunte transaction. His bill of sale conveying a little over $10,000 worth of whisky and liquors to partly secure an advance of $22,500 is a favorable showing compared with the debts due them from Bunte. Altogether the amount was $67,000, but I know that $45,000 in notes, belonging to this transaction, was cancelled in order to lessen the strain on the assets on the face of the inventory. There are other liquor speculations in their business which were equally ruinous." George B. Yandes, assignee of the Ritzingers, filed his bond yesterday. It is in the sum of $800,000, and has for sureties Simon Yandes, J. H. Baldwin, Volney T. Malott, and Wm. Mansur. The assignee could tell no more than he did the day before about the assets and liabilities. Said he, "It will be a week or ten days, perhaps longer, before I can reach even a basis upon which to make an estimate. My present concern has been with a lot of notes sent for collection. These I want to save from protest. With the books behind and the necessity of having these brought up to date of the assignment, you can see why I can give nothing definite as to the amount of liabilities. The only idea I have as to their sum is from a rough guess made by the Ritzingers. Again, I have only an inventory of the assets, and the first thing to be done with these is to verify the items and then to have them appraised by men acquainted with such values. This, after all, will only bring us to an approximate estimate." "There are rumors as to the Ritzingers being away from town?" "They are in the city, but not at home. I think any one of us, in the same condition, would seek a place where rest could be assured. I heard today that Frank Ritzinger is threatened with the