Rumors that the bank was overloaded with tobacco notes and plantation paper (widespread panic over tobacco paper).
Measures
Other Lexington banks furnished currency and deposited funds; tellers paid out cash rapidly to meet withdrawals, which halted the run.
Newspaper Excerpt
A run on the Bank of Commerce... was started today when report became current that the bank was overloaded with tobacco notes and other plantation paper.
Source
newspapers
Newspaper Articles (10)
1.January 6, 1921The Guthrie Daily LeaderGuthrie, OK
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Wild Report Starts Bank Run Lexington, Ky., Jan. 6.-A run on the Bank of Commerce, Capital $300,000. was started today when re port became current that the bank was overloaded with tobacco notes and other plantation paper. The depositor were being paid by perspiring tellers as fast as they reached the several windows. Oth. er banking houses are aiding by furnishing currency.
2.January 6, 1921Richmond Daily RegisterRichmond, KY
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RUN ON LEXINGTON BANK ENDS QUICKLY Other Banks and Business Men Rally To Support of Bank of Commerce There (by Associated Press) Lexington, Ky., Jan. 6-Frightened by rumors that the Bank of Commerce of Lexington, with a capital of $300,000, as overloaded with tobacco notes and paper. depositors started a run on that institution today. A crowd of SCVeral hundred persons was in front of the bank at noon with the tellers paying out money as last they could count it.
3.January 6, 1921The Daily Star-MirrorMoscow, ID
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Run On Kentucky Bank. Lexington, Ky.-(By A. P.) -Alarmed by reports that the Bank of Commerce here, capitalized at $300,000, is overloaded with tobacco paper, depositors started a run on it today. Several hundred were in front of the bank at noon and tellers were paying out money as fast as possible.
4.January 6, 1921Imperial Valley PressEl Centro, CA
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START RUN ON LEXINGTON BANK LEXINGTON, Ky., Jan. 6. Alarmed at rumors that the Bank of Commerce, with a capital stock of $300,000 is overloaded with tobacco notes and paper, depositors started a run on the bank today. Several hundred were in front of the bank at noon, the tellers paying out money as fast as they could count.
5.January 6, 1921Americus Times-RecorderAmericus, GA
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RUN STARTS ON TOBACCO BANK. LEXINGTON, Ky. Jan. 6.-Frightened bv rumors that the Bank of Commerce, of Lexington, an institution with a capital of $300,000, was over-loaded with tobacco notes and paper, the depositors started a run on that institution today. At noon a crowd of several hundred persons was before the bank, and tellers were paying out money as fast as they could count it.
6.January 6, 1921The Rock Island Argus and Daily UnionRock Island, IL
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STARTBANK RUN IN LEXINGTON Frightened by Ramor of Financial Overlead of Tobacco Notes De positers Claim Cash. Lexington, Ky., Jan. 6.-Frightened by rumors that the Bank of Commerce of Lexington, an institution with a capital stock of $300,000, was overloaded with tobacco notes and paper, depositors started a run on that institution this morning. A crowd of several hundred persons was in front of the bank at noon and tellers were paying out money as fast as they could count it.
7.January 6, 1921Every Evening, Wilmington Daily CommercialWilmington, DE
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RUN ON "TOBACCO" BANK. Scared Depositors Hastily Withdrawing Money at Lexington, Ky. By Associated Press to Every Evening. Lexington, Ky., Jan. 6.-Frightened by rumors that the Bank of Commerce of Lexington, an institution with a capital stock of $500,000 was over loaded with tobacco notes and paper, depositors started a run on the institution this morning. A crowd of several hundred persons was in front of the bank at noon and tellers were paying out money as fast as they could count it.
8.January 7, 1921The Bridgeport Times and Evening FarmerBridgeport, CT
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Depositors started a run on the Bank of Commerce, of Lexington, Ky. an institution with a capitol stock of $300,000, when rumors were current that the institution had been overloaded with tobacco notes and paper.
9.January 7, 1921The Washington HeraldWashington, DC
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BANKS CO-OPERATE; HALT MONEY RUSH LEXINGTON Ky., Jan. 6.-A "run" started this morning on the Lexington Bank of Commerce was halted shortly after noon today through co-operation of other Lexington banks. The sudden withdrawal of funds is alleged to have been caused by the tense situation in the Burley tobacco belt of Kentucky. Several large tobacco dealers are officials and stockholders in the Bank of Commerce. When anxious depositors beseiged the building this morning. demanding their money, other Lexington banks were notified. Tellers in the Bank of Commerce piled up huge stacks of money and met demands for cash as rapidly as they were made. Meanwhile heavy depositors from other banks lined up at the receiving windows and poured money into the bank more rapidly than it could be counted out to the crowd. thus checking the rush.
10.January 7, 1921Daily Kennebec JournalAugusta, ME
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Run on Lexington Bank in. Wake Tobacco Wrangle Lexington, Ky., Jan. 6.-A four-hour run on the Lexington Bank of Commerce, together with the starting of a grant jury investigation of rumors that caused the run and news that Governor Morrow had under consideration a series of conferences to bring about the settlement of the tobacco situation, were the chief developments in the central Kentucky tobacco district today. County mass meetings of growers, who forced closing of most tobacco markets in the state early this week when they refused to accept prices offered by buyers, have selected delegates to a general mass meeting to be held here tomorrow. The meeting is to decide whether or not tobacco shall be planted in 1921 and to attempt to devise means of marketing the 1320 crop at a satisfactory price. The Bank of Commerce, in its statement of December 31, 1920, showed resources of $3,397,450.97 and deposita of $2,496,695.16. Notes and bills discounted totalled $2,951,605.16.
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.