THE RUN ON THE BIRKBECK BANK. -E VERY one remembers the
sensational chapter in the old-fashioned novel—" The Run on the Bank" —and how the novelist used all his art to depict the struggling and agonised crowd of half-crazy men and women, mad with a vague fear and suspicion that if they did not see and handle their money it would be lost. The chance of the hour has revived this once-favourite piece of sensationalism, and the readers of newspapers have been treated to as exciting a piece of realism as was ever pre- pared for them by the novelists. The Birkbeck Bank, though admittedly sound and prosperous, and ready and able to pay every penny of its liabilities, and then have over some £300,000 in hard cash, became the subject of a senseless panic, and for three days this week its doors were besieged by a crowd of half-mad and wholly miserable depositors. The Bank does an enormous and perfectly sound business among the elite of the artisan class and the poorer professionals, and hence the number of small depositors is very large indeed. Working men earning from £4 to £6 a week, clergymen of various denominations, widows and old maids with a little put by, and numberless small tradesmen, are the patrons of the Bank ; and among these essentially timid people the rumour of possible disaster fled like wildfire. The big depositors— of whom there are, of course, a good many—remained calm, being able to appreciate the meaning of a balance-sheet, and knowing that a million and a half of English Government Stocks, another million and a half of Colonial and Indian Securities, and other gilt-edged Stocks, amounting in all to five millions of securities that could be sold at a moment's notice, are as good as gold ; but this feeling does not seem to have affected the small depositors and the women and clergymen. They could not reason about securities. They only felt a mad passion to see if their money was all right, and to count it over. We believe that many of the men who waited for five hours or more in a mob as tightly packed as a football scrimmage, and who, when they got to the counter, declared that they were quite sure as to the soundness of the Bank, but wanted to feel satis- fied that their money was really there, were perfectly sincere. Their heads told them that the money was safe ; but they could not control that manifestation of the hoarding instinct which prompts men to count over their money, and test their paper calculations by the touch of the gold. This instinctive and passionate desire to see and feel that their money had not vanished once satisfied, the depositors became again reasonable beings, and man after man crossed with his notes and gold to the paying-in counter, and opened a new account with the money he had just received, remarking that he had only come up to see if the Bank had really got his money safe, and finding that it had, was perfectly willing to trust it with the cash again. The proceeding was not very logical, for if the depositor intended to put the money back if he found it there, why trouble the Bank ? Either the money was there or it was not. If it was not, then it was not worth while to ask for it. If it was, and if under those circumstances it was to be left where it was, it was also not worth while to ask for it. It would, however, be absurd to expect a small depositor during a run to be logical. As we have said, his sole idea is to get into con- tact with his money, to feel sure it is there, just as an anxious mother will get up in the night to assure herself by sight and touch that her child is really safe. No doubt this semi-animal sentiment about money—a dog, though, if intelligent, banks his bone without desiring to smell it every two minutes—will seem very absurd to persons whose property is all derived from inheritance, and who know nothing of the pains and pleasures of making and saving money. The money a man has made by painful effort and self-denial keeps some of his own blood about it, and when losing it is in question, reason and good sense are apt to disappear. The feeling—" I might have spent it once, and been happy ; I made myself miserable, and I am going to lose it" —works like madness in the brain. The thought is absolutely intolerable, and no effort seems too great to save the cash after all. Mr. Yere's £5,000, part of the money that came to him under his mother's marriage settlement, means so much comfort and happiness, no doubt ; but it has no history, and the pounds of which it is composed do not each represent a distinct, painful, and remembered effort. Hence Mr. Vere, though he may ultimately be made quite as miserable by his loss, takes it quietly, and is not, at the mere fear of loss, stung into an agony. The £1,000 of Mr. Bunter, the Congregationalist Minister, on the other hand, is part of his life, and attached to it by a thousand threads. He saved every penny of it himself, and, what is more, can remember the process. He and his wife deferred their marriage till the first £400 was got together, and deferred with it their happiness, for she had lost her looks and her temper, and he had grown hard and selfish in the ten years of waiting. When they think of this, and of the sordidness and misery that comes from never spending a penny except under compulsion, they feel perhaps that they have thrown away their lives, until they remember the money at the bank. That, at least, brings consolation. If the past had been happy, it would be gone now ; and, at any rate, they are safe from the supreme wretchedness of being without anything to fall back upon in old age and sickness. Given such a state of mind, and given the moral history of the £1,000, can we wonder that the thought of losing it makes men mad ?
The cause of the panic is not less curious than the panic itself. Apparently, it was purely sympathetic. No rumours appear to have been put in circulation as to the condition of the Birkbeek Bank, and the alarm was solely due to external causes. Two houses doing an analogous business failed, and this appears to have set the Birkbeck deposi- tors wondering whether it would not be prudent for them to look after their own deposits, and see whether or not they were intact. Accordingly, a certain number of them appear to have gone to the Bank on Saturday to draw their money, and, unfortunately enough, to have attracted the attention of the crowd and of the newspapers, who, though they have behaved exceedingly well, and done nothing to excite alarm, were almost bound to note the ex- citement. The result was that during Monday and the two next days there was a run on the Bank such as we have described, people blindly imitating each other in drawing out their money, though unable to give any reason for their action. Many of the incidents of the mad struggle at the Bank doors were exceedingly painful, the agitation of the women being specially great. As usual, they bore the hardships—and they were real hardships, for age and sex are not respected in a panic—without complaint and without more physical distress than the men. In the moment of success, however, they generally broke down, and once inside the doors, fainted or gave way to hysterical outbursts. Perhaps the most piteous cases were those in which a depositor would draw his or her deposit, only to be robbed of it by the pickpockets who swarmed in the crowd. One unfortunate man is said to have lost £700 in this way. Imagine his misery and chagrin ! The Bank stands firm, and yet he is ruined !
It is very difficult to see what can be done to check panics such as that which we have just witnessed. The proposal that a bank should be allowed to call in a Treasury official who should, on scrutinising its books, publicly cer- tify to its soundness, is a good one, except that it might sometimes be the ruin of a bank which, though not hope- lessly weak, was temporarily in an unsound condition. Pos- sibly its books would not show it to be absolutely solvent, though so nearly so as to make a little luck all that was needful to insure its pulling through. Under these circum- stances, to call in the Government official would be to pro- claim disaster ; while, on the other hand, not to call him in would be held to be a sign of weakness. Short of rigid State supervision, which is contrary to our system of business, there is, we fear, no royal road to the avoidance of panics. All that can be done is to try and get people who leave money at call to investigate the position of a bank before they trust it, and, if they are not satisfied, to go elsewhere. If, however, they are satisfied, they should treat the bank as a sort of partner in business, and give it all the support they can. Best of all, how- ever, would be a change in the habits of our small investors. If they would only, instead of lending money to the banks, acquire the habit of buying stock, like French investors, we should hear no more of runs on banks. No doubt the small stockholder is apt to get ruined in other ways, but, at any rate, he is not exposed to the particular form of agony experienced by the Birkbeck Bank depositors.
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