Clearinghouse Access and Bank Runs: Comparing New York and Chicago During the Panic of 1907

The Journal of Economic History, Vol. 60, No. 1, pp. 145-163, 2000

WP 95-9

Posted: 2 Jul 1998 Last revised: 6 Aug 2014

See all articles by Jon R. Moen

Jon R. Moen

University of Mississippi - Department of Economics

Ellis W. Tallman

Federal Reserve Bank of Cleveland

Date Written: March 1, 1996

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.

JEL Classification: N21, G21

Suggested Citation

Moen, Jon R. and Tallman, Ellis W., Clearinghouse Access and Bank Runs: Comparing New York and Chicago During the Panic of 1907 (March 1, 1996). The Journal of Economic History, Vol. 60, No. 1, pp. 145-163, 2000, WP 95-9, Available at SSRN: https://ssrn.com/abstract=7326

Jon R. Moen (Contact Author)

University of Mississippi - Department of Economics ( email )

371 Holman Hall
University, MS 38677
United States

Ellis W. Tallman

Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

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