 | |
| Industry | Investment banking |
|---|---|
| Founded | 1884 |
| Defunct | 1912 |
| Fate | Acquired |
| Successor | Bank of New York |
| Headquarters | New York City, United States |
Key people | Frederick G. Eldridge John P. Townsend Charles T. Barney Charles H. Keep |
The Knickerbocker Trust was a bank based in New York City that was, at one time, among the largest banks in the United States. It was a central player in the Panic of 1907.
The bank was chartered in 1884 by Frederick G. Eldridge, a friend and classmate of financier J.P. Morgan. As a trust company, its main business was serving as trustee for individuals, corporations and estates. Eldridge was the founding president serving until his death in 1889. [1] Eldridge was succeeded by John P. Townsend, who served as president for five years until he resigned to become president of the Bowery Savings Bank. [2] After Townsend's resignation, Robert Maclay was unanimously chosen to be the new president, with Charles Tracy Barney as vice president. [3] When Maclay retired in 1897, Barney was elected president. [4]
In 1907, its funds were being used by then-president Charles T. Barney in a plan to drive up the cost of copper by cornering the market. This gamble came undone due to the dumping of millions of dollars in copper into the market to stop a hostile takeover in an unrelated organization. Barney requested a meeting with J.P. Morgan to discuss financial assistance for the bank, but was rejected. The board of Knickerbocker Trust asked Barney to resign after he admitted involvement in the F. Augustus Heinze and Charles W. Morse speculations. [5]
That afternoon, the National Bank of Commerce announced it would no longer clear checks for the Knickerbocker, triggering a run of depositors demanding their funds back that forced the Knickerbocker to suspend operations. [6] [7] George L. Rives, Henry C. Ide and Ernst Thalmann were named receivers. The failure of the Knickerbocker was the impetus for the Panic of 1907, [8] [9] and exacerbated an ongoing decline in the stock market that saw the Dow Jones Industrial Average lose 48% of its value from January 1906 to November 1907. The banking crisis is also seen as the final event that led Congress to form the Federal Reserve System in 1913. [10]
A. Foster Higgins of Greenwich, Connecticut, served as successor president of Knickerbocker (Barney shot himself on November 14, 1907). [11] Higgins was 77 years old and quite garrulous. [12] Foster made public statements, including one following the death of Barney, that greatly embarrassed the Rehabilitation Committee under F.G. Bourne and William A. Tucker that was trying to get the trust company on its feet again. [13] [14] Nevertheless, the company reopened some weeks after its forced closing and paid off all depositors in full with interest. [11]
In March 1908, Charles H. Keep became president of the Knickerbocker Trust. [15] He had previously served as Assistant Secretary of the Treasury from 1903 to 1907 under Secretary L. M. Shaw during President Theodore Roosevelt's administration followed by his appointment as New York State Superintendent of Banks. He served in that role for less than a year until he was appointed to the New York Public Service Commission, from which he resigned in 1908 to become president of the Knickerbocker. [16]
In February 1903, Knickerbocker Trust acquired the Washington Bank, afterwards opening a branch in the seven-story Smith Building at 148th Street and Third Avenue in the Bronx Financial District. [17] [18] In November 1912, the company bought its Bronx branch building, which was considered the Bronx's first skyscraper when it was built in 1900. [19]
In 1912, its assets were acquired by the Columbia Trust Company, forming the Columbia-Knickerbocker Trust Company. [20] One of the principal shareholders of the Columbia was Hetty Green and her son, Ned Green, was a director. At the time, Columbia had deposits of more than $21,000,000 and Knickerbocker had deposits of approximately $38,000,000. Columbia's president, Willard V. King, [lower-alpha 1] served as president of the new company and Knickerbocker's president, Charles H. Keep, [lower-alpha 2] became chairman of the board. [23] It was said that one of the deciding factors with the Columbia interests was Knickerbocker's hold on the uptown field. Columbia Trust had no branches and had outgrown its headquarters at 135 Broadway. [24]
In 1914, the name was changed back to Columbia Trust Company before it was acquired by merger by the Irving Bank of New York (which had been founded in New York in 1851) in February 1923. [25] After the merger, it was called the Irving Bank-Columbia Trust Company. In September 1926, the company was renamed Irving Bank and Trust Company before it acquired the American Exchange-Pacific Bank after which it was renamed the American Exchange Irving Trust Company. [26] In 1929, the name was changed again to the Irving Trust Company. [27]
On October 7, 1988, the Irving Trust board signed an agreement to merge with Bank of New York ending a yearlong battle as Bank of New York engineered a hostile takeover. At the time of the merger the combined banks became the United States' 12th largest bank with asset of $42 billion. [28] During that year Irving had been trying to participate in a friendly merger with Banca Commerciale Italiana. [29]
The New York City bank was housed in a Roman-style temple designed by McKim, Mead, and White and erected between 1902 and 1904 (illustrated) at the northwest corner of 34th Street and Fifth Avenue. [30] Stanford White's design allowed for the possibility of adding nine stories of offices upon the structure. [31] It had branch offices at 60 Broadway, in Harlem and The Bronx. [11]
The Stanford White building was enlarged by ten stories in 1921, and the façade completely redesigned in 1958, with its signature pilasters covered over; it still remains, its original form unrecognizable. [32]
The Panic of 1907, also known as the 1907 Bankers' Panic or Knickerbocker Crisis, was a financial crisis that took place in the United States over a three-week period starting in mid-October, when the New York Stock Exchange suddenly fell almost 50% from its peak the previous year. The panic occurred during a time of economic recession, and there were numerous runs affecting banks and trust companies. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered bankruptcy. The primary causes of the run included a retraction of market liquidity by a number of New York City banks and a loss of confidence among depositors, exacerbated by unregulated side bets at bucket shops.
Knickerbocker or Knickerbockers may also refer to:
Bankers Trust was a historic American banking organization. The bank merged with Alex. Brown & Sons in 1997 before being acquired by Deutsche Bank in 1999. Deutsche Bank sold the Trust and Custody division of Bankers Trust to State Street Corporation in 2003.
1 Wall Street is a mostly residential skyscraper in the Financial District of Lower Manhattan, New York City, on the eastern side of Broadway between Wall Street and Exchange Place. 1 Wall Street, designed in the Art Deco style, is 654 feet (199 m) tall and consists of two sections. The original 50-story building was designed by Ralph Thomas Walker of the firm Voorhees, Gmelin and Walker and constructed between 1929 and 1931, while a 36-story annex to the south was designed by successor firm Voorhees, Walker Smith Smith & Haines and built between 1963 and 1965.
Irving Trust was an American commercial bank headquartered in New York City that operated between 1851 and 1988 when it was acquired by Bank of New York. From 1965, the bank was the principal subsidiary of the Irving Bank Corporation.
Manufacturers Hanover Corporation was the bank holding company formed as parent of Manufacturers Hanover Trust Company, a large New York bank formed by a merger in 1961. After 1969, Manufacturers Hanover Trust became a subsidiary of Manufacturers Hanover Corporation. Charles J. Stewart was the company's first president and chairman.
The Brooklyn Trust Company was a bank in New York City. Chartered in 1866, the Brooklyn Trust Company originally offered trust management and estate management services but also functioned as a commercial bank. The Brooklyn Trust Company acquired over a dozen smaller banks throughout its existence, merging with the Manufacturers Trust Company in 1950.
The Bank of United States, founded by Joseph S. Marcus in 1913 at 77 Delancey Street in New York City, was a New York City bank that failed in 1931. The bank run on its Bronx branch is said to have started the collapse of banking during the Great Depression.
Robert Maclay (1834–1898) was an American merchant, business executive, and civic activist. He engaged in real estate and banking in New York City and was appointed to various posts having to do with urban development.
James Lee Wells was an American businessman and politician. He became known as Father of The Bronx, a title which was officially conferred on him by the Bronx Board of Trade in May 1921.
Charles Tracy Barney was an American banker who was the president of the Knickerbocker Trust Company, the collapse of which shortly before Barney's death sparked the Panic of 1907.
Henry Melville Whitney was an American industrialist, the founder of the West End Street Railway Company of Boston, Massachusetts, and later the Dominion Coal Company Ltd. and the Dominion Iron and Steel Company Ltd. of Sydney, Nova Scotia. He was also president of the Metropolitan Steamship Company, long an important transportation link between Boston and New York City.
Joseph Rockwell Swan was an American investment banker, football player and coach. He played college football for Yale University from 1899 to 1901 and was the head coach of the 1902 team. Swan later had a long and successful career in the investment banking business, serving as the president or senior partner of three major securities firms: Guaranty Company (1928–1934), Edward Smith & Co. (1934–1937), and Smith Barney & Co. (1937–1944). He was also affiliated with the New York Botanical Garden as its president (1937–1949) and chairman of the board (1949–1858).
The Chatham Phenix National Bank and Trust Company was a bank in New York City connected with the Chatham Phenix Corporation. Its predecessor Chatham and Phenix National Bank was formed in 1911 when Chatham National Bank paid $1,880,000 to absorb the asset of the Phenix National Bank. The bank grew significantly as it absorbed smaller banking institutions, such as Mutual Alliance Trust Company and Century Bank in 1915, at which point Chatham and Phenix National Bank became the "first national bank to operate branches in the same city with the main bank."
The Trust Company of America was a large company in New York City. Founded on May 23, 1899 in Albany, New York, its founding president was Ashbel P. Fitch and it was initially located in the Singer Building in Manhattan's Financial District. In 1907 the company absorbed the Colonial Trust Company, a commercial bank. During the Panic of 1907 it was the target of a bank run starting on October 23, 1907, which it survived with the backing of J. Pierpont Morgan and an infusion of gold from the Bank of England and other European sources. The company ultimately represented a consolidation of the North American Trust Company, the former Trust Company of America, the City Trust Company and the Colonial Trust Company. The Trust Company of America was absorbed by the Equitable Trust Company in the spring of 1912.
Alexander Stewart Webb Jr. was an American banker and philanthropist who was prominent in New York society during the Gilded Age.
The Astor Trust Company was a historic American banking organization. The firm merged with Bankers Trust in 1917.
Charles Hallam Keep was an American banker who served as Assistant Secretary of the Treasury from 1903 to 1907 where he was chairman of the Keep Commission and later served as president of the Knickerbocker Trust.
The Farmers' Loan and Trust Company was a national bank headquartered in New York City that later became Citibank.
The National Bank of Commerce in New York was a national bank headquartered in New York City that merged into the Guaranty Trust Company of New York.
