The news-democrat. (Providence, R.I.) 1906-1909, 1907-10-23
MAYER & CO., FAILED
BROKERS, owe $6,000,000

New York, Oct. 2s.-In the face of ex-
traordinary efforts 10 avert a blow at the
credit of the banks-the basis of busi-
ness-the financial district yesterday ex-
perienced one OF the most terrible or
deals in a generation.
The knickerbocker Trust company,
carrying deposits OF about $50. .0oo, ,0o0 emp
tied its vaults by paying out ss.0Oo.oo0 in
cash--every dollar that could be rushed
TO its relief-and then was forced TO sus-
pend with hundreds OF Its depositors
clamoring for their money
Mayer & Co. failed, owing $6,ooo,Ooo or
more
Many OF the principal securities. on top
OF a decline which wiped out many mil
lions OF dollars in value. fell an addition
al IS or $40 share on the exchange.
Call money rose to 20 per cent. and
bankers who formed a pool OF sfcooWo,
were the most popular OF all their class
They loaned the money at rates ranging
from so TO 90 per cent.
A frantic appeal for relief was sent TO
Secretary Cortelyou, which Immediately
brought a reply that he would do every
thing in his power to afford assistance.
The secretary at once directed that
$4,000 600 be deposited with the banks as
soon as the necessary collateral had been
furnished.
When the excitement was at its
height. hardly a trust company and
scarcely a bank escaped suspicion.
The following official statement was
issued by Levi p. Morton. president of
the Morton Trust company:
"The story I'm circulation that Mr.. Ryan
has resigned or intends 10 resign, as vice.
president of the Morton Trust company,
is pure invention. Mr.. Ryan has not re-
signed. and has no intention OF doing so.
The subject has never been discussed or
even suggested"
TO persistent rumors that the condition of
the Morton Trust company was under
investigation, and that Thomas II. Ryan
had resigned from the Wce-presidency of
1t vas known before the days business
began that the whole financial situation
rested upon a volcano that was more
than likely to break out in open eruption
at a moments notice. The acting state
superintendent of banks as soon as the
storm broke issued n statement that the
suspended bank was solvent. Prominent
bankers gave their word that there was
no true basis for alarm, and assurances
from Washington that Secretary Cortel-
YOU would not hesitate to act promptly
in any situation where legitimate business
was threatened were heralded abroad.
Nothing, however. could avert the cri-
sis The Knickerbocker Trust company,
the storm centre, paid out cash TO de-
positors at the rate OF $44.444 a minute for
three hours before It closed its doors. The
directors had. as they thought, fully pre-
pared for the run.
At $3.50 o'clock a few depositors with
drew their accounts. and an hour later
hundreds were In line to take out their
deposits at the main offices at Thirty
fourth street and Fifth avenue. and at
the Harlem, the Bronx and the down
town branches. The onslaught was ire
sistible and the coup, as planned, failed
to work
When the Knickerbocker closed It's
doors II probably did so not to reopen
them In the near future.
The crash I'm the stock market. which
carried security values to much lower
average figure than has been seen In
many years, was a natural sequel. Loan
able funds were tightly held. almost all
the banks and trust companies boarding
their funds to an extraordinary degree
The offer of 20 per cent for money for
Immediate use was no temptation to the
banks. for they could not tell the min
ute they might need all their funds