Chapter 459: Bank Run

"If people generally expect the market to collapse, then the collapse will not happen. The sense of self-protection will permeate the market, making the stock market more rational." Such an article appeared in the "Chronicle of Business and Finance" that day.

If the slave owners saw this, they would definitely say that the chicken soup for the soul of Wall Street was not that good, not as good as the level of the circle of friends. On this day, the United Company officially announced that the acquisition plan of its subsidiary United Mining and Knickerbocker Trust Investment Company had collapsed, and the news immediately spread to the New York Stock Exchange at an extremely fast speed.

Many people who were well-informed knew that the Knickerbocker Trust and the men behind it, Heinze and Morse, had failed in their attempt to short copper stocks. In an instant, these people sold their United Copper shares. Many people knew that once more people knew about it, no one would take over.

In the stock exchange, countless stockholders who heard the news swarmed in and saw the stock of United Copper Mine falling at a speed visible to the naked eye. In the two-hour selling frenzy, the stock of United Copper Mine dropped from the high of $60 to $10 in just a short time, falling to one-sixth of the previous day's price. The stock of United Copper Mine fell along with all metal stocks.

Two hours later, the shares of United Copper Mine had actually entered bankruptcy liquidation. Even though it was still on the stock market, Blair kept an eye on the stock market and immediately called Edith Rockefeller's villa, "The Knickerbocker Trust and Investment Company is in big trouble."

"The strong prey on the weak, the fittest survive, the theory of evolution makes so much sense." Sheffield said without a trace of pity. In the eyes of a slave owner like him, all people are equal, except that black people are more likely to be seen as punching bags. But don't think that white people have any privileges. When it's time to strike, they will not hesitate.

"The New York Daily News can have a certain panic effect. It's not Pulitzer's New York Times, don't make a mistake." The New York Daily News is the newspaper that Sheffield acquired from Hearst. Now Sheffield asked Blair to make some efforts on this newspaper.

"I understand." Blair's voice was filled with excitement. There were so many methods that could be used.

After the call ended, Edith Rockefeller sighed softly, "I wonder how many people will jump off the building because they can't stand the blow."

"The strong prey on the weak, and the fittest survive. Their tragedy can serve as an embellishment to our success." Sheffield taunted calmly, "Jumping off a building because he couldn't handle the blow shows that he has mental problems and is not a qualified person. He should just die. But out of kindness, I can buy a park in New York for our benefit. How about calling it Hyde Cemetery? As for other things, don't expect to get too much from me."

Tragedies are happening every moment in this world, which has nothing to do with Sheffield. It's just that this crisis has a little bit to do with himself, and it's still passive. If it weren't for the Knickerbocker Trust Investment Company coming to him, he would just be a spectator waiting to buy at the bottom.

The mistakes were all the fault of the Knickerbocker Trust and Investment Company and the two big speculators, Heinze and Morse. Sheffield himself was also a victim. The Union Bank was a disadvantaged group for so long. Who did the slave owners complain to? If the citizens were not greedy and did not deposit their money in the Union Bank, how could they be affected this time?

"Social Darwinism seems to be very popular among you Dixies." When Edith Rockefeller saw Sheffield's expression, she knew that this man had no sympathy and he shouldn't have any.

Because the stock price of United Copper plummeted, it went bankrupt in two hours, and the New York stock market was shaken. The stock market, which had been stagnant like dead water, finally boiled. Heinze and Morse controlled many small banks, stock brokerages and trust companies in New York, and used them to provide financial support for the copper stock short-selling activity, causing the above-mentioned institutions to be badly hurt after the short-selling speculation failed.

The main problem this time is not the stock market. Of course, the stock market will also be hit hard, but compared with the problems in the banking industry, the stock market is really a small problem.

Heinze and Morse also realized the seriousness of the situation at the first time. Why could the negotiations not go on? This issue is of course important, but compared with the stock market crash and the evaporation of all funds financed to United Copper Mine, it is already a small problem.

The many banks and trust companies controlled by the two men are in a very dangerous state. If the first one falls, a domino effect will immediately occur, causing depositors to panic and driving all the banks where they deposit money into bankruptcy.

"These two upstarts really think they can control everything." At Standard Oil's headquarters in New York, Rockefeller Jr. said with disdain, "Let these two bastards pay back, otherwise our slave owners may act quickly!"

"Got it, boss!" the manager who was waiting for orders behind him said immediately and hurried out of the office.

Rockefeller Jr. had to remind the two speculators that the real giants would not tolerate these two upstarts.

Newspapers questioned the financial situation of United Copper, banks began to urge Heinz to repay the loan, and thousands of United Copper shares began to be sold on the market, causing chaos on the streets.

The news that the Knickerbocker Trust and Investment Company was the behind-the-scenes leader of the United Copper Mine had already spread in a small circle, but the news was truly confirmed by the New York Daily News the next day, which revealed the behind-the-scenes boss of the United Copper Mine.

It is not enough to use only economic means, which naturally means to use other means. Generally speaking, there are only a few, and the most common one is public opinion. Generally speaking, ordinary people are always easy to deceive, because firstly, their education level is limited, and they are confused; secondly, economic activities are becoming more and more complicated, and the tunes here are simply incomprehensible to non-professionals. So as long as you find a good angle to enter, grasp a problem that everyone cares about, and then think deeply in a very literary way, you can often fool a large group of people. Sometimes, even spreading rumors is a very common means.

What's more, this is not a rumor at all. What the New York Daily News said is the truth. The owner of this newspaper wants to burst the bubble himself. As an excellent employee and a person who wants to build an image of standing with the citizens, what is there that the New York Daily News dare not do?

Depositors who had been successfully incited to panic lined up in front of the Knickerbocker Trust and Investment Company. When investors and depositors learned that many banks and trust companies were involved in the speculation and suffered heavy losses, they all ran to withdraw their deposits. The Knickerbocker Trust Company, the third largest trust company in New York at the time, was the first to be hit by the depositor run.

It had only been two days since the stock of United Copper Mine plummeted. Mike, standing by the window, was at a loss as he watched the long queue. No one knew the situation of his company better than him. This meant that depositors' withdrawals were rapidly exceeding the bank's reserves. Knickerbocker Trust Company had only $1.7 million in cash left, equivalent to 15% of the total deposits, far below the level of one-quarter required by banking regulations and the New York Clearing House.

Another day passed, and the long procession continued. On the third day...

Even more worrying was that in the past three days, the total balance of Commerce National Bank's clearinghouse loans had reached $2.4 million, or one-fifth of its total deposits. It was estimated that at this rate, the bank's deposits would be exhausted in less than ten days. Other banks associated with Commerce National Bank showed even worse reserve conditions, with reserves equal to only 5 percent of total deposits.

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Heinze, Morse and Mike borrowed cash at an interest rate of 150%, but still could not withstand the huge queue of depositors. For this reason, Heinze had to take the initiative to say that there was no problem with the cash flow of Knickerbocker Trust Company. However, at this time, no one believed the banker anymore.

The bank run spread like a virus throughout New York, and terrified citizens lined up in front of various trust companies all night to withdraw their deposits. The bank asked the trust company to repay the loan immediately, and the trust company, which was being urged to pay back from both sides, had to borrow money from the stock market. In three days, the Knickerbocker Trust Company was no longer the only company involved.

There are depositors coming to withdraw money in front of all the trust companies. This scene is everywhere in front of all the trust companies in New York, which will only cause greater panic. Bank stocks have already fallen to the bottom, but compared with the current run on banks, stocks are no longer important. No matter how good the numbers look, they are just numbers after all, and what depositors need now is cash.

Sheffield, a veteran rumormonger, could only learn about the situation in New York through the phone, and he wanted to see it with his own eyes. The Chicago Daily Times once again proved that the slave owners invested in the media and even killed Hearst, even though the other party was also a Democrat. This was very correct, and Albert once again took the lead.

In a neutral and objective tone, it reported in detail the bank run in New York and the dire cash situation of more banks and trust companies. Chicago was very calm on the first day, but early on the second morning, like the citizens of the New York metropolitan area, countless depositors walked out of their homes and took their deposit certificates to withdraw money. Chicago followed New York and was also hit by a bank run.

The banker's words are not worth a cent. Today's citizens just want to get their money back, but they don't know that their actions will only make the bank go bankrupt faster. At the door of the Chicago Union Bank, local bank employees are very puzzled. Is it because their bank is not shameless enough and therefore does not fit in with other banks?

I just got home at eight o'clock this evening, and I've only written two chapters.

(End of this chapter)