Clearinghouse access and bank runs: comparing New York and Chicago during the Panic of 1907

Jon Moen () and Ellis Tallman

No 95-9, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: During the Panic of 1907, New York City trust companies were not members of the New York Clearinghouse whereas trust companies in Chicago were members of the Chicago Clearinghouse. We argue that the apparent isolation of New York City trust companies from the pool of bank reserves controlled by the New York Clearinghouse led to the large-scale depositor runs on the New York City trusts. In contrast, Chicago trust companies had direct access to the Chicago Clearinghouse and their pool of reserves and did not suffer large-scale depositor withdrawals. Statistical evidence on a cross-section of intermediaries in both New York and Chicago supports this contention.

Keywords: Bank failures; Banks and banking - History; Clearinghouses (Banking); Chicago (Ill.); New York (N.Y.) (search for similar items in EconPapers)
Date: 1995
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Published in Journal of Economic History, March 2000

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