Knickerbocker Trust Company
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The Knickerbocker Trust was, at one time, one of the largest banks in the United States. Its funds however were being used by its then president Charles T. Barney in a plan to drive up the cost of copper and corner the market. This gamble came undone due to the dumping of millions in copper on the market to stop a hostile takeover in an unrelated organization.
This was then public and on the 21 October the National Bank of Commerce announced that it would stop accepting cheques for the Knickerbocker Trust Company triggering a run of depositors demanding their funds back.
According to author John Steele Gordon, "Depositors lined up in front of the bank's headquarters on the future site of the Empire State Building to demand their funds. The bank closed the next day after an auditor found that its funds were depleted beyond hope. The bank's president, Charles Barney, shot himself several weeks later, prompting some of the bank's outstanding depositors to commit suicide as well."
The panic in the market can be seen as the main driver for the creation of what was to become the Federal Reserve System. And more importantly is seen as the final straw that broke the back of the stock exchange and triggered depression in the market until the fall of 1908.
The Knickerbocker Trust assets were acquired by Columbia Trust Company and eventually became Irving Trust Corporation.
[edit] Sources
- John Steele Gordon, "The Great Game".
