October 22 Tuesday – Isabel Lyon’s journal: Oh, it’s too dreadful. Every penny the King has, fifty one thousand dollars, is in the Knickerbocker Trust Co. and it has suspended payment. It has gone crashing into a terrible state. I was in town and read of the panic in the Times, and Ashcroft and I went to the bank, at 30th st and Fifth Avenue to see crowds of people there, with bank books in their quivering hands. And then I came back to Tuxedo to find the King in bed and so cheerful and beautiful and brave, and trying not to show his anxiety. He had telephoned in to me to withdraw the money, but by the time I could do anything it was too late. At the time I didn’t know it was too late, but Ashcroft telephoned the news out to me this afternoon. This evening the King went down to the Town Hall to talk to the Villagers. The great swells of the park didn’t know it, but if they had and had tried to enter they wouldn’t have been admitted. The King talked about memory and morals and told the stolen watermelon story and the old ram story and General Miles, and the dog story and found the murdered man on the floor. He was so gay and delighted those people so much that you wouldn’t ever have thought that the Knickerbocker had suspended payments [MTP TS 117].
Shelden writes of the bank run on Knickerbocker Trust, and on Sam’s actions when learningof it: …he promptly telephoned Isabel Lyon, who happened to be at 21 Fifth Avenue preparing the house for his return the next week. He gave her instructions to withdraw all his money immediately.
She hurried to the trust company as fast as she could and was stunned by the sight that greeted her outside. The streets were jammed with cabs, private automobiles, and “finely appointed carriages” belonging to Park Avenue widows and other wealthy depositors living nearby. With “bank books in their quivering hands”—as Lyon later put it—the crowd stood on the wide sidewalk and stared blankly at the Knickerbocker’s locked doors. Lyon had arrived too late. Police reserves, called in at the last minute, were standing at the entrance and were trying to hold back some of the depositors who were demanding to be let in. Everyone was told the company had run out of cash and would be closed indefinitely [MTMW 149-50]. Note: the cause of the bank’s problems were millions of dollars worth of bad loans made by the President, Charles T. Barney, to foster a stock scheme. Barney later committed suicide. For a full account of the Bank failure and what led up to it, see source. Ultimately, Sam’s funds were restored; plus, his seemingly placid reaction to the crisis can be explained in large part by his guarantee of $25,000 annual income from Harpers.
Charles E. Warren for Lincoln National Bank wrote to advise Sam that “The two checks aggregating $50,000 deposited by you this day on the Knickerbocker Trust Company are not paid, the company having suspended payment. We shall make further attempt to secure payment…” [MTP].