Chapter 462 Wall Street Civil War
To be fair, the accusations of the two were very correct. Among the financial institutions in New York, the Knickerbocker Trust and Investment Company was definitely a rising star. It was only established ten years ago, and in ten years it became one of the three largest trust companies in the United States. It developed rapidly, surpassing many of its predecessors. The company's history is a typical representative of the American dream.
However, for many Wall Street bankers, Knickerbocker Trust and Investment Company is also a complete upstart, and it does not belong to the elite group of Wall Street. Shorting the copper price is tacitly approved or even supported by many people. At this time, cutting off support for Knickerbocker Trust and Investment Company is to kill these two upstarts.
Under the manipulation of someone with ulterior motives, a run on the bank had already occurred in Morse's bank. The bank controlled by Heinze and Morse was the supporter behind the Knickerbocker Trust and Investment Company.
In the action of killing the nouveau riche on Wall Street, the New York Clearing House was the first to bear the brunt. As depositors swarmed in to run on the bank, it launched a cleanup of Heinze and Morse, and spared no effort to get to the bottom of the matter. The Clearing House ordered Augustus Heinze and Charles Morse to immediately withdraw from all financial institutions in New York City. This action came quickly and thoroughly. Morse resigned from his position as vice president and director of the National Bank of North America, as well as all his positions in the New Amsterdam Bank, Garfield National Bank, Fourteenth Street Bank, New York Products Exchange Bank, and two financial institutions in his hometown of Bath, Maine.
Hinds, who also resigned, was removed from all positions at at least eight banks and two trust companies. The committee also stressed that Morse and Hinds must repay the loans they had made to their respective banks, and further stipulated that any bank or banker involved in "chain banking" would be removed from the New York clearing house.
"Blair, this is just the beginning." Sheffield's voice came from the microphone and entered Blair's ears. "Can I understand that everything now is a civil war on Wall Street? Wall Street bankers are suppressing the newly emerging financial institutions?"
Blair calmed himself down and replied with a wry smile, "If I must say so, I can only say that my boss is right. It can be considered that they are targeting Heinze and Morse. According to the information I have collected, the situation of the bank controlled by the two is even worse than that of the Knickerbocker Trust and Investment Company. The New York Clearing Center has accurately found the target."
"So the situation of these two speculators is worse than that of the Knickerbocker Trust Investment Company, which they supported in financing? This is quite unexpected!" Sheffield whistled lightly and said, "It's just a matter of time. It will only take a few days."
After listening to his boss, Blair thought for a moment and said, "Boss, if we start the acquisition negotiations of Knickerbocker Trust and Investment Company now, we can make money by just reselling it."
"You still acknowledge the junk debts of the Knickerbocker Trust and Investment Company?" Sheffield asked with a chuckle. "Yes, given the current situation of the Knickerbocker Trust and Investment Company, if I acquire it, I may still make a profit even if I acknowledge those junk debts. Such a large trust company fell into my hands out of thin air, and I didn't pay anything. Even the money from the copper mine sold to the Knickerbocker Trust and Investment Company is enough to acquire it. It's like I'm using its money to save it, but what? Things are not over yet. I think there are better opportunities."
"As a large comprehensive enterprise, a banking system is a must, but the real industry of the United Company is truly important. Financial institutions can only serve as oscillators. The real industry is the bones, and financial institutions are the flesh and blood. Without bones, a pile of rotten meat alone cannot support it!" Sheffield's slow voice came from the phone, "Only when the Knickerbocker Trust Investment Company is squeezed out can we see how big this incident can be."
The current situation of Knickerbocker Trust Investment Company can be said to be doomed. Based on what Blair said, Sheffield concluded that the New York Clearing House was a tool to attack Heinze and Morse.
The New York Clearing House treated national banks and trust companies differently, providing assistance to the former while being passive and indifferent to the latter. For example, when the National Commercial Bank of New York was hit by a bank run and asked for help from the clearing house, the clearing house took timely action to check the bank's accounts and replace the management. Later, when the National Commercial Bank was unable to cope with the bank run, it was closed and the clearing house paid its depositors funds equal to the face value.
This protected the National Commercial Bank from bankruptcy under the run, and also effectively prevented the crisis from spreading among other banks, and the subsequent panic did not expand significantly. The New York Clearing House did not provide assistance to the trust companies that were also run by depositors.
It seemed fine, but the National Bank, which was owned by Heinze and Morse, was not helped. The Knickerbocker Trust and Investment Company, which was supported by the two, was in a better situation. The New York Clearing House treated Heinze's financial power in a completely different way from other trust companies and banks.
You should know that banks are members of the New York Clearing House, but trust companies are not. But in Heinze's case, it's the other way around.
This is such an obvious double standard. As for this civil war on Wall Street, it's just a dog-eat-dog fight. Although the slave owners were exploited to a certain extent in the copper mine incident before, it's understandable that the adults don't remember the villains' mistakes and they just stand by and watch. Let's see if the two sides have any more cards to play. If not, how long can the fight last? It's not the time to step in yet.
And it was busy enough right under their noses. There was also a clearing center in Chicago. Chicago was a transportation hub and an important industrial city in the United States. The clearing center here was second only to New York. Slave owners had no face in Chicago. At least not in this matter.
All he could do now was to play with his two children, William and Catherine, and live an incompetent and useless life. He asked Edith Rockefeller to negotiate with the Chicago Clearing House, and he didn't want to work hard in the villa.
Edith Rockefeller's children certainly knew that Sheffield was their father, and they also wondered why their father could not live with their mother.
Sheffield almost said something like a catchphrase from a romance novel, "I have my reasons!" But after thinking about it, he decided not to, and just explained that he and Edith Rockefeller met too late, and they would know what was going on when they grew up.
Daughter Catherine was also there. If it was only his son William Rockefeller who asked this question, the slave owner would definitely not be polite and would definitely popularize the French mistress culture, which is profound and has a long history. The four wives in West Asia are so friendly to us men. A real man should be like this. It doesn't matter if the dregs of monogamy are not there. Men should be learning all their lives. There is nothing wrong with that.
It's not like we don't have the capital. For rich people like us, it's a blessing for common women to fall in love with them. The strong prey on the weak and only the fittest survive. This is very fair and in line with the law of evolution. We should do this.
"I'm back!" Edith Rockefeller shouted as she entered the villa. The two children rushed over. This scene made the slave owner want to recite a poem, but she couldn't think of it.
"What does the Chicago Clearing House want to do!" Sheffield took the coat that Edith Rockefeller took off and hung it on the hanger. This action was indeed in line with the identity of a gigolo.
"They want to close the clearing house!" Edith Rockefeller said with a sigh, "But I object. I think we can just use metal currency as before."
"But as far as I know, no bank is short of gold now, except me!" Sheffield shrugged. In the past, when economic crises occurred, major clearing centers had made use of paper money and metal currency, that is, gold, to delay bank runs, but it should be useless now.
Edith Rockefeller stepped in to prevent the closure of the clearing center, which was a huge risk. This woman knew that her man hoped that this crisis would be as big as possible and not just limited to the civil war on Wall Street.
This is a misunderstanding of Sheffield. It is not that the bigger the better, but the longer the better. The scale of this crisis in history was huge. Before the Knickerbocker Trust and Investment Company was squeezed out, things were indeed under control. In fact, the old bankers on Wall Street have a great aversion to trust companies.
It is believed that these trust companies have risen by exploiting policy loopholes. New York provides trust companies with much better benefits than banks. Vested interests are unwilling to take risks, so bankers did not pay much attention to trust companies when they first appeared. However, a group of new trust companies have emerged, which makes these old bankers feel uncomfortable.
The rise of these upstarts made the old bankers psychologically unbalanced, especially since the restrictions on trust companies and national banks were different. It was too late for the old bankers to intervene. Sheffield felt that the bankers used the New York Clearing House, which they still controlled, to begin to reap the trust companies.
It later evolved into a nationwide crisis. Was it because these bankers had calculated this long ago, or was it because, like most people, they did not expect the situation to get out of control? The financial industry in New York is so developed that even if many investors were kept in the dark at the beginning, they would eventually wake up.
On this day, Heinze used the last two million US dollars of reserves in his hands to inject into the Knickerbocker Trust and Investment Company in a desperate attempt. Facing the influx of depositors, this decision can be regarded as a very tragic one.
(End of this chapter)
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