Knickerbocker Trust Company
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The Knickerbocker Trust was at one time one of the largest banks in the United States, and a central player in the Panic of 1907.
In 1907 its funds 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 became public and on the October 21 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 resulting Panic of 1907 exacerbated an ongoing decline in the stock market that saw the Dow Jones Industrial Average lose 48% of its value from January 1906-November 1907. The banking crisis is also seen as the final straw that led congress to form the Federal Reserve System in 1913.
The Knickerbocker Trust assets were acquired by Columbia Trust Company which eventually became Irving Trust Corporation, which was in turn acquired by the Bank of New York in 1988.
The Knickerbocker "Bank" is referenced in the movie "Auntie Mame" in Mame's brother's will.
[edit] Sources
- John Steele Gordon, "The Great Game".
