Exchange Bank - Mount Sterling, KY

Bank Information

Episode Type: Run Only
Bank Type: state
Start Date: July 28, 1893
Location: Mount Sterling, Kentucky (38.056, -83.943)

Metadata

Model: gpt-5-mini
Short Digest: d46f2091

Response Measures

Accommodated withdrawals, Books examined

Other: Marshall/police held crowds; directors 'fortifying' bank with funds

Description

Multiple articles (published 1893-08-01) describe a heavy run on Mt. Sterling banks after the New Farmers Bank failed to open; the Exchange Bank met demands, paid out checks, and remained open and solvent. Cause appears to be runs triggered by the failure/suspension of the New Farmers Bank (local banks contagion). Date of the run is taken as the prior Friday (Black Friday) referenced in the Aug 1 articles = 1893-07-28.

Events (1)

1. July 28, 1893 Run

Cause: Local Banks
Cause Details: Run on Exchange Bank was triggered by the New Farmers Bank failing to open and suspension of other local banks, provoking depositors to withdraw funds from remaining banks.
Measures: Cashiers and directors 'fortified'; paid out checks promptly; marshal/police held crowd; received large deposits from business men to restore confidence.
Newspaper Excerpt: At the Exchange Bank the Marshal and his assistants held the crowd at bay whilst every check was paid in full.
Source: newspapers

Newspaper Articles (4)

1. August 1, 1893 The Mt. Sterling Advocate Mount Sterling, KY

Article from The Mt. Sterling Advocate, August 1, 1893

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Article Text

In the afternoon the seene contrasted strangely with that of the morning. From 2 p. m. till evening there were very few on the streets; in fact, the town looked deserted. So dead was the calm after the stormy scenes of the morning that the contrast was almost painful. Any Sunday afternoon would have found as many people on the streets. Both the the Mt. Sterling National and the Exchange Banks are all right now and deeper rooted than ever in the confidence of the people. The Traders Deposit Bank is already at work to arrange for reopening, and it will be but a few days till it will be doing business as serenely as if a squall had never struck it. We have the proposition to make to any who are indebted to the ADVOCATE-let the sum be large or smallthat we will take a check on either the New Farmers or the Traders Deposit Banks in payment for the same and give a clear receipt. We are positive in our faith that both banks will pay every dollar, and that at no distant date. The banks at Indianapolis, Ind. have shared in the fate of others. People who knew nothing about banking methods wanted every dollar of their deposits, and of course went after it in a hurry, and got there just in time to see the blinds pulled down. Louisville banks, five in number closed their doors two weeks ago, and yet when the causes were made known, the depositors were not satisfied until they were taught a lesson on banking. The lesson was a public one, and every man here should have known better than to have make a run, because any bank which makes money for its creditors cannot stand a general run from its depositors. This is the cause of a suspension of one of the Kansas City banks. A lady presented a check for payment. She was unknown to the officers and they asked that she be identified, when she left the bank very much excited, saying they could not pay her check, causing great excitement and a run. Is there a man in this county who wonld rejoice over the suspension of any business interest We hope not. There are many reports going the rounds, and we would be slow to believe any man so mean as to delight to prey on a dead carcass. Some of the persons loudest against the banks in the runs made last week on them, did not have a dollar to their credit; some less than five dollars and others were overdrawn. Several gentlemen who had lost their equiblirium presented large checks for payment at the Mt.Sterling National Bank and received the state ment that the bank would not submit to a run. They saw their folly and tore up their checks. Five checks in the hands of such gentlemen aggregated $33,000. One lady wanted her money bad from the Exchange Bank, but when assured that it was safe, returned home perfectly satisfied, but when the excitement became general, she returned and drew her money and wanted a merchant to take'care of it. He informed her he would not be responsible for it, but would return it with his deposits to the same bank, which restored her confidence and she returned her money to the bank. Amidst the greatest excitement, business men who knew banking methods, pressed their way to the cashiers and left their deposits, They had read the bank statements. and

2. August 1, 1893 The Mt. Sterling Advocate Mount Sterling, KY

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Too much credit can not be given H. R. French and John G. Winn, cashiers of the Mt. Sterling National and Exchange Banks, for the manner in which they met the runs on their_banks. As soon as the New Farmers and Traders Deposit wers forced to close, they with their boards began fortifying, and to-day they have money with which to meet every demand.

3. August 1, 1893 The Mt. Sterling Advocate Mount Sterling, KY

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Prompt Action and Cool Management Won the Day and Both Outride the Storm Unhurt. The Excitement Entirely Subsided and Confidence Seemingly Completely Restored. The Traders Deposit Already well on the Way to Reopen, and Steps Being Taken to Reopen the New Farmers Also, If the scenes of Thursday were On Tuesday morning the New Farstartling those of Fridaymorning were mers Bank failed to open its doors for widely alarming. We have heard and business. The news quickly spread read of runs on a bank, but never wit over the city and created no little exnessed one in its wild reality till Fricitement. The steady drain on the day last-truly "Black Friday" in Mt. Sterling's history. ready money of the bank by deposAs soon as the two remaining banks, itors was more than it could stand and the Mt. Sterling National and the Exfinally it had to succumb to the presschange Bank of Kentucky, opened, a ure of circumstances and suspend pay rush was made for the doors of the ment. For the last four months there institutions and the scene simply beggars description. Men lost their reahas been a shrinking of the deposits, son in a mad rush for the counters. and since it seemed impossible to realAt the Exchange Bank the Marshal ize on its paper. There was nothing and his assistants held the crowd at else left to be done but to close its bay whilst every check was paid in doors. The liabilities of the bank full. In the meantime Ex-Chief Jusreach $300,000, and it has in available tice Peters, the President, of the bank, appealed to the men in the crowd to assets over $600,000. exercise a little reason and common There can be no question but that sense. Others aided the venerable old every depositor will be paid in full, man in his brave efforts to still the and there is good ground for the belief tumult. For a time nothing availed that the stockholders will lose little or but as the crowd came out with their money the police saw that they moved nothing. This bank has been the speoff, and as the throng saw the money cial favorite for the deposit of the being paid SO promptly the words of fund of widows, guardians and esthe Judge began to have their effect tates, and has always enjoyed the conon the mob. In the meantime some fidence of the community. It was a of our business men had edged their way into the crowd with money to heavy blow to the more helpless pormake deposits ostentatiously displayed, tion of the community when it was and this, too, tended to call the party forced to the wall. The scenes were to their sober senses. After a couple pitiable when women looked the situof hours the crowd began to show ation in the face and felt their strong signs of disintegration, and in a short while thereafter the doors of the bank rock of business defense was taken were deserted. from them. Whilst this scene was being enacted The closing of the doors of the New a similar scene with variations was Farmers Bank was the signal for a beheld at the Mt. Sterling National run on the other banks. The drain Bank, only a block away. When the on all of them was heavy, but the doors were opened and the rush came Traders Deposit seemed to be the spethe Cashier and several directors, who were with him, retired for a moment's cial point of attack. All day long the tellers stood at the counters and paid consultation. Quickly Judge French, the Cashier, reappeared, his face white out the money in a steady stream till the hour for closing. Not one sign ef with firm set determination. He sprang weakening was seen in the face of upon the counter and announced that if one of those who were clamoring for any official of the bank; but after their money for the simple purpose of closing hours the directory thought it better to suspend payment than to withdrawing it presented his check to face the certainty of the continnation the teller for payment, he would close of the run of the day. No bank, howthe bank and that not one would get a cent till the bank examiner passed ever strong, could stand such a drain on its available cash. Therefore the upon the condition of the bank. He announced that the bank was able officials reluctantly decided to give up the unequal fight and make an assignand ready to pay any and all deposiment. The deed of trust was made tors who wanted their money for leat 5 :40 o'clock to James M. Bigstaff. gitimate business; but it would not submit to a run. This sobered the Thus in one day M. Sterling saw two of her staunch business enterprises maddened crowd, and ex-Chief Justice driven to the wall. The condition of Holt seconded Judge French's efforts in a timely talk. In the meantime, the bank is in every respect good. It money was being paid out as rapidly has $390,000 of good paper and liabilities to the amount of only $150,000as could be done and deposits were made by some of the cool-headed busiThere is no reason in the world why ness men as fast as could do so. this bank should not be on its feet By 11 o'clock the lobbies of both banks again in a very short time.

4. August 1, 1893 The Mt. Sterling Advocate Mount Sterling, KY

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ing on its business credit, together with a combination of unfortunateand unforseen circumstances over which the managment could have no control. For instance: when a bank in a neighboring city suspended a few weeks since, some heavy depositors of the New Farmers Bank, living not far from our sister city, withdrew their deposits and when this same bank opened again, other depositors, living in the same neighborhood also withdrew their deposits to loan to the suspended bank. Thus, the New Farmers Bank, from no fault on its part, lost thousands of dollars of deposits because of the failure of another bank, and because of of its reopening-no bank could stand such strains let it be ever SO sound. The run on the other banks after the New Farmers had closed its doors was senseless. The Traders Deposit caught it heaviest on Thursday as it happened. It was totally unlooked for, the President having gone that very morning to look after his farming interests in Bath county, one director going out of the State on a trip and others to their business calls in one direction and another, all knowing that the bank was sound, and never dreaming of trouble; and when the storm burst with such suddenness and fury it was as complete a surprise to the officers as to the busiuess men of the city. The attacks on the Exchange and the Mt. Sterling National on Friday morning were more savage than had been on the Traders, but fortunately these bauks had been able take thought for the situation and be prepared for the mob (for it was little else) when it did come. THE MT. STERLING BANKS ARE ALL RIGHT. The Mt. Sterling National and the Exchange are as solid as a rock. The Traders Deposit, which closed with more money on hand than the law demands, and more than it often had in its vaults during the conduct of its legitimate business, will be open in a few days. It will be open, too, with much more money than it closed with. Several of its friends, we are informed, offered large deposits while its doors were closed for business, determined to show to the business world their faith in its integrity. It shall be our aim to induce some of our better informed bankers from time to time, to write popular articles on the conduct of banks that our people may become better informed as their mode of doing business. We shall ask the Cashier of each bank in Mt. Sterling for such an article, and will take pleasure in giving it to our readers.