Fog bank

“ Reynolds asked, more interested in hearing the man's deliberate drawl than the meaning of the fog-bank.
"Wall, it seems to me that a fog-bank hasn't a ghost of a chance fer life when the sun hits it good an' hard." ”

“ I saw at sea a great fog bank
Between two ships that struck and sank;
A thousand screams the heavens smote;
And every scream tore through my throat. ”

“ Its southern extremity is in about forty-two degrees of latitude, and fifty degrees west longitude from Greenwich. The depth of water varies from twenty-five to fifty fathoms. The Bank is in the direct track of vessels bound to and from Europe, and many sad disasters have occurred to the fishermen, while lying at anchor in rough weather in a dense fog. In some instances they have been run down, crushed to fragments, by large ships under full sail, and every one of the crew has perished. ”

“ He said that this world was once a mere bank of fog, which is scientifically true, and he said that the Almighty thrust his finger into the bank of fog and then began slowly to move his finger around and gradually to increase the speed of his finger until at last he whirled that bank of fog into a solid ball of fire, and it went rolling through the universe, burning its way through other cosmic banks of fog, until it condensed the moisture without, and fell in floods of rain upon the heated surface and cooled the outward crust. ”

“ For months and months dark and heavy clouds were hanging over financial circles, threatening to burst at any moment. Depositors were in a fever of excitement, they held their deposit receipts in their hands ready to withdraw at the first alarm, their excitement stood on the balance, ready to burst forth or to be smoothed down into confidence by a judicious action of some responsible parties had it been forthcoming, but, alas, the Commercial Bank of Australia was allowed to suspend payment and the panic burst forth in every direction and no amount of work could cool the excited crowds. ”

“ Fogs are not only disagreeable, but very expensive, especially in fog-bound London, where they are often the cause of great loss to merchants. During the week preceding Christmas in a recent year it is estimated that as a result of foggy weather at least $50,000,000 was lost in that city, business being paralyzed for the time being. ”

“ In this connection, also, there is another important result to be gained: scientific research and practical inventive genius, advancing hand in hand for the benefit of mankind, have discovered not only the laws governing the formation of the dense banks of fog that have made the Grand Banks dreaded by navigators but also the means by which certain facts may be observed, telegraphed, charted, and studied a thousand miles away, and the occurrence of fog predicted with almost unfailing accuracy, even whilst the very elements themselves are only preparing for its formation. ”

“ Sometimes day comes in a fog, a dense, dripping, gray curtain, more impenetrable than the blackest night, for through it no flare will shine, and even the sound of the braying horn or tolling bell is so curiously distorted, that it is difficult to tell from what quarter it comes. No one who has not seen a fog on the Banks can quite imagine its dense opaqueness. When it settles down on a large fleet of fishermen, with hundreds of dories out, the peril and perplexity of the skippers are extreme. ”

“ There one at least could see the light of the binnacle, but last night I could not even distinguish the hand by which I guided myself along the barrack-wall. At sea a fog is a natural phenomenon. It is as familiar as the rainbow which follows a storm, it is as proper that a fog should spread upon the waters as that steam shall rise from a kettle. But a fog which springs from the paved streets, that rolls between solid house-fronts, that forces cabs to move at half speed, that drowns policemen and extinguishes the electric lights of the music-hall, that to me is incomprehensible. ”

“ All the depositors of any bank could demand payment the same day. But all banking, as well as all insurance, is based upon the expectation that these contingencies will not happen, and the average experience of life proves that they do not happen. A banker multiplies his debts to be paid on demand and keeps buying a sufficient amount of cash to insure the immediate payment of all claims which are likely to be demanded at one time. If a pressure comes upon him he must sell some of the securities he has bought, or borrow money on them. ”

“ They put a hundred pounds into the till, and they lend out four thousand pounds on the strength of the other nine hundred. If they lend more than that, or lend that without security, they go beyond legitimate banking. Now you know as much as I do. A banker’s money is out on bills payable in two months or four, it’s out on the security of shares and farms and shop-stock, it’s lent on securities that cannot be realized in five minutes. ”

“ The fire front was yet distant from these institutions, which were destined to fall a prey to the flames, and all that morning lines of dishevelled and half-frantic men stood before the banks on Montgomery and Sansome Streets, braving in their thirst for money the smoke and falling embers and beating in wild anxiety upon the doors. Their effort was vain; the doors remained closed; finally the police drove these people away, and the banks went on with the work of saving their valuables. ”

“ Then he noticed above all the great white columns of the Atlantic Trust and he realized that these were the first frightened outposts of the army of despair and panic which would come storming at the doors on the morrow. By the morning a dozen banks scattered over the city were besieged by frantic hordes of depositors, a dozen others hastily preparing against the impending tide of evil rumor and disaster.
With the opening of the Stock Exchange the havoc began, for with the threatened collapse of gigantic banking systems orders came pouring in from all over the country to sell at any price. ”

“ In such times depositors in banks, stricken with fear and sometimes pressed by need, draw out their deposits, in many cases to such an extent as to render it difficult or even impossible for the banks to contract their loans sufficiently to meet the demands thus made upon them. Under our present currency system no adequate method is provided for expanding the money volume as occasion demands, whereby the banks can continue their usual loans and discounts, and thus prevent a panic with all its evil consequences. ”

“ In banks, where those behind the scenes knew that not only their own stability and their own fortunes were at stake, but that if they failed there would be lamentation in a score of villages and loss in a hundred homes, endurance was strained to the breaking point. To show a cheerful face to customers, to chat over the counter with an easy air, to smile on a visitor who might be bringing in the bowstring, to listen unmoved to the murmur in the street that might presage bad news—these things made demands on nerve and patience which could not be met without distress. ”

“ The tesselated pave of your safe deposit companies and banks will look like the floor of an ocean steamship pier on the arrival of a big liner, only instead of being snowed under by a mass of shirts, trousers, Paris-made revelations in chiffons, silks, and brocades, necklaces, tiaras, pearl ropes, snipped aigrettes, and snowy drifts of indescribable, but in these free days no longer unmentionable, lingerie, it will be piled high with steel bonds, New Haven deferred dividends, sinking fund debenture certificates, government five eighths per cent. ”

“ With the volume of bank credit moving in the reserve cities four times as fast as the volume of cash, and throughout the country ten times as fast as the volume of cash, it is plain that the machinery of credit is extremely sensitive to variations in the amount of cash held by the banks. For this reason, an institution like the United States Treasury, alternately accumulating and disbursing many millions of cash, is likely to create widespread disturbance in the money market. ”

“ You hold among the securities of your two banks just the margin of Coal and Ore which I need for complete safety. Turn your proxies over to me tonight and tomorrow will pass quietly. I will support every market depression caused by Malone's illness. There will be no panic. Fail to do that and ten minutes after the gong sounds on the floor, I shall be ripping the entrails out of the Street! Full-page advertisements in every paper in town will feed the general uneasiness into an orgy of terror. Frightened mobs will clamor about the doors of your banks. ”

“ It is undoubtedly impossible to exercise a strict supervision over the financial institutions; any such measure would soon appear vexatious and would be, moreover, contrary to our spirit of liberty and independence. But we can quite justly ask whether these concerns are fully sheltered against disasters; whether nothing can happen to them of a nature to shake their credit; and in such a contingency what should be the attitude of the Bank of France. ”

“ It is not nearly so much a run on the banks by the depositors, as it is a run by the bankers on each other, just to accumulate cash. Everything comes to a dead stop, just as it did in 1907, and it always will under present conditions. Now, it seems to be perfectly plain that if the banks could convert their book credits into note credits, they could immediately meet the demand for cash, and so avert these commercial catastrophes, which set us back years. You know we are just now beginning to realize that we are getting over the panic of 1907. ”

“ Fallows at the beginning of the oil boom was echoed by many before the summer was over. The coldest thing in the world is an exhausted enthusiasm, and when weeks slipped into months, and notes fell due, and the bank became cautious about lending money, a spirit of distrust got abroad, and a financial frost settled upon the community.
Notwithstanding these conditions, “The Opp Eagle” persistently screamed prosperity. ”

“ And such banks would meet an incipient panic freely and generously; they would advance out of their reserve boldly and largely, for each individual bank would fear suspicion, and know that at such periods it must "show strength," if at such times it wishes to be thought to have strength. Such a system reduces to a minimum the risk that is caused by the deposit. If the national money can safely be deposited in banks in any way, this is the way to make it safe. ”

“ James McMillen, president of the First National and Johnstown Savings Banks, said:
“The loss sustained by the First National Bank will be merely nominal. It did a general commercial business and very little investing in the way of mortgages. When the flood came the cash on hand and all our valuable securities and papers were locked in the safe and were in no way affected by the water. The damage to the building itself will be comparatively small. Our capital was one hundred thousand dollars, while our surplus was upwards of forty thousand dollars. ”

“ Death ensued to some from the shock, misery was the lot of others, and frantic confusion once more marked the alleys and the neighbourhood of Capel Court. Consternation reigned paramount, and almost every third man was a defaulter. All foreign securities were without a price; the bankers refused to advance money; the brokers’ checks were first doubted, and then rejected; nothing but bank-notes would be taken; and, with a desperation which will never be forgotten, the jobbers closed their books, refused to transact any business, and waited the result in almost abject despair. ”

“ Accordingly the whole policy of the Bank, for the last six months, has been exclusively protective and conservative, calculated to mitigate suffering and yet avert danger." [24]
The facts above narrated in regard to the attempted curtailments, etc., also account for the heats and chills of the money market, which the anti-Bank men interpreted either as attempts of the Bank to make its power felt and dreaded, or to curry favor. No such explanations are called for. We have already seen ample evidence that such recurrent heats and chills were incident to the "credit system." ”

“ When the panic storm broke banks struggled to call in loans and line their vaults with cash. Business was crippled; industry was squeezed dry of its lifeblood. Last year when Germany was threatened with both war and panic, trouble was averted by the German "Money Trust," which loaned more than $200,000,000. It takes no expert knowledge of finance or banking to perceive that a few great, strong banks, or many smaller ones (provided they are welded closely together) can meet a storm more calmly than scattered, unconnected institutions. ”

“ The words were caught up by those outside, and ran through the crowd like wildfire, gaining strength as they ran, until by the time they reached the outer circle it was affirmed that the bank could pay no more that day.
Those who have witnessed a run on a bank know how the excitement grows until people, ordinarily cool and sane, grow wild and mad, and howl sometimes like beasts at the prospect of losing their money. And so it was now at the White Bank, where the excitement was intense, especially among the small depositors—the women, whose little was all in the bank. ”

“ With Bank Stock falling ten points in as many days, what will happen to the immense mass of speculative securities held by the public, and on much of which calls are due? It will be down this week; next week the banks will have to throw it out to save their margins, and customers to pay their calls. It will fall, and fall. The week after, perhaps, panic! A rush to draw deposits, or a rush to cash notes, or, probably, both.”
“Then you think—you must think”—Arthur’s voice was not quite under his control—“that there is danger?” ”