Monday, April 13, 2009

The Great Run of 1872

Charges of mismanagement were made by a morning paper on the 1st of January, 1872, and the following day another attack was made on the bank by the frightened depositors. This third run was the greatest ever experienced in the history of any bank. For ten weeks, a crowd of wild depositors besieged the bank, clamorous for their money.

The greatest excitement prevailed at the time. The claims were paid promptly as fast as the creditors presented their books, and thousands of dollars passed over the counters each day. During the first two days of the run $800,000 were withdrawn. People wondered where the money came from, as it was supposed the bank had not sufficient resources to hold out.

Week after week passed, and still there were no signs of abatement. Other banks came to its rescue and greatly assisted it. The Mutual Life Insurance Company took $1,000,000 of its securities and the Park Bank loaned large amounts. The struggle continued, but after ten weeks of steady payments the run ceased. Over $4,000,000 were paid to the depositors. When the end came the bank was in a very poor condition and its resources were nearly exhausted. It was so seriously crippled that when the panic came it was barely able to keep up, although its true financial condition was not generally known.

source: The New York Times September 30, 1875. This article in its entirety was transcribed verbatim.

To contact: or

No comments: