the ascent of money a financial history of the world

Within a few weeks’ time, the bank’s doors were shut for good on June 29, 1874, leaving 61,131 depositors without access to nearly $3 million dollars in deposits.

Despite the other Trustees’ attempts to convince Congress otherwise, Congress sided with Douglass, and on June 20, 1874, Congress amended the Charter to authorize the Trustees to end operations. He then relayed this information to Congress, underscoring the bank’s insolvency, and declaring that he could no longer ask his people to deposit their money in it.

As soon as Douglass realized that the bank was headed towards certain failure, he imposed drastic spending cuts to limit depositors’ losses. Douglass did not ask to be nominated and the Bank Board knew that Douglass had no experience in banking, but they felt that his reputation and popularity would restore confidence to fleeing depositors….Douglas lent the bank $10,000 of his own money to cover the bank’s illiquid assets….Douglass quickly discovered that the bank was full of dead men’s bones, rottenness and corruption. In a last ditch effort to save the bank, the Trustees appointed Frederick Douglas as Bank President in March of 1874. The panic would not have affected the bank if it had been a savings bank, but by 1866, the business of the bank had become…reckless speculation, over-capitalization, stock manipulation, intrigue and bribery, and downright plundering…. The bank experienced several runs at the height of the panic. “The scheme began to unravel following the Panic of 1873 when railroad investments failed.

The ascent of money a financial history of the world