Boston Fed On The Panic Of 1907 ( Or Is That 2008?)
Spot the 10 differences (if any) between this text and the one historians (hopefully not Fed bankers) will write about our time period in 2109.
Some interesting comparisons, demonstrating that even as one hundred years pass, nothing really changes (except for the Fed Chairman's printing press, which luckily, did not exist in 1907). Then and now:
- New York Clearing House Committee - FDIC
- New York City’s clergy - CNBC
- Knickerbocker Trust Company - Lehman Brothers
- New York bankers - New York bankers
- J.P. Morgan - J.P. Morgan (of course)
- Cold - Swine Flu [TBD?]
MONDAY OCTOBER 14: The stock of United Copper Company soars past $62 a share.
WEDNESDAY OCTOBER 16: United Copper closes at $15 a share after bank owner/speculator F.A. Heinze fails in his attempt to corner the company’s shares.
THURSDAY OCTOBER 17: Shortly after midnight, Heinze resigns as president of Mercantile National Bank. Later that morning, prompted by the fear that Heinze’s stock market losses might affect the bank, Mercantile National’s depositors scramble to withdraw their money.
During the day, Heinze’s Butte (Montana) Savings Bank fails as does the brokerage firm of Otto Heinze & Co., which is owned by the brother of F.A. Heinze.
That night, the New York Clearing House Committee declares that Mercantile National is "perfectly solvent and able to meet all its indebtedness." The Committee’s acting chairman also announces that
the Clearing House will stand by the bank in the event of a run by depositors.
FRIDAY OCTOBER 18: Nine banks form an emergency pool of funds to aid Mercantile National. But depositors at Knickerbocker Trust Company begin to withdraw their money. They are concerned because
Knickerbocker’s president, Charles T. Barney, is an associate of F.A. Heinze.
SATURDAY OCTOBER 19: Charles W. Morse, a banker and speculator who was involved with Heinze in the disastrous copper corner, announces he will resign official positions at nine banks and trust companies.
MONDAY OCTOBER 21: Charles T. Barney resigns as president of Knickerbocker Trust Company. Depositors withdraw $8 million in less than four hours before Knickerbocker suspends operations.
TUESDAY OCTOBER 22: J.P. Morgan refuses to aid Knickerbocker Trust, wtiich does not reopen for business. A headline in the Neap York Times announces that Morgan will organize support for Trust Company of America, which is deemed to be in much better condition than Knickerbocker.
WEDNESDAY OCTOBER 23: Treasury Secretary George Cortelyou travels to New York to meet with Morgan and other financiers.
THURSDAY OCTOBER 24: At 1 a.m., Cortelyou announces that the U.S. Treasury will deposit $25 million in several New York City banks. Later in the day, oil tycoon John D. Rockefeller commits $10 million
of his own money to stabilizing the financial situation.
FRIDAY OCTOBER25: Under heavy pressure, firm J.P.Morgan, New York bankers contribute to a $25 million rescue pool for cash-strapped stockbrokers, who have been unable to borrow and are facing ruin.
SATURDAY OCTOBER 26: The crisis takes its toll on J.P. Morgan. Under the headline "J.P. Morgan Has a Cold," the New York Times reports, "J. Pierpont Morgan has a slight Cold resulting from exposure to the night air. In the last week Mr. Morgan has attended many night conferences dealing with the banking situation. In doing so he was obliged on several occasions to ride about in his cab late at night, and in some instances in the early morning. The result was that he contracted a cold which gave him some trouble yesterday. When he left his office late yesterday afternoon he wore a handkerchief about his neck."
SUNDAY OCTOBER 27: At the behest of J.P. Morgan, New York City’s clergy preach sermons urging "Calmness and Confidence."
WEDNESDAY OCTOBER 30: In response to a plea from New York’s Mayor, a Morgan-led syndicate bails out the city by agreeing to place $30 million worth of its revenue bonds with investors. The night before, Morgan had pressured trust company presidents into putting up funds to support the still ailing Trust Company of America and Lincoln Trust-Company. Morgan and his associates also devise a plan to save the brokerage firm of Moore & Schley from failure.