Within a little more than a month after Mr. Eckels assumed charge of the Currency Bureau the country was plunged into one of the most violent and memorable financial panics in its history. National, State and private banks failed in quick succession, and the business of the entire country became paralyzed. During the six months immediately following Mr. Eckels' induction into office, one hundred and fifty-eight national banks suspended and closed their doors, sixty-five of which were found to be insolvent and were placed in the hands of receivers, eighty-six resumed business and seven were placed in the hands of bank examiners in expectation of their resumption. The weakest banks were the first to succumb. Many failures were due to speculation, and some to dishonesty. In some communities depositors were seized with panic, making it impossible for the banks to meet their demands, and numerous suspensions occurred where no stigma attached to the management, and the banks were in a solvent condition.
During this trying ordeal, such as no Comptroller of the Currency ever was called upon before to undergo, Mr. Eckels, inexperienced as he was, even in the detail workings of the Bureau, discharged the onerous duties of the office with rare skill and good judgment, and not only quickly disarmed the opposition invoked by his appointment, but inspired the confidence of the entire banking and business interests of the country and contributed very materially toward allaying the excitement superinduced by the panic and the restoration of confidence.
Perhaps no one connected with the Treasury Department at that time shared with Mr. Eckels the strain of the trying ordeal of this panic more than the writer, who was then the Comptroller's secretary, or had equal opportunity for knowing how skilfully, manfully and energetically he met and handled the situation. For weeks there was no rest, night or day. Every hour of the day and late into the night telegram after telegram was received announcing additional suspensions of banks or new complications which had to be promptly met. As many as thirty suspensions occurred in a single day, and for a time it looked as if every national bank in the system would succumb. Telegrams from bank examiners and bankers came in such quick succession that the entire time of the Comptroller and the writer was occupied in translating cipher messages and in sending replies or instructions. Messages came so thick and fast that it was impossible to file them away in any order for reference, and the expedient was resorted to of filing each day's messages on a spindle marked with the date of their receipt, until there was a spindle for every day in the week, and a row for each week, with telegrams six inches deep on each file.
Among the stream of messenger boys who poured into the office all day long was one who had a defective or blind eye, whom Mr. Eckels called "The bird of evil omen." Every message he delivered announced another suspension, so that whenever this boy entered the Comptroller's room Mr. Eckels would remark, "Here comes another bust."
The greatest difficulty, however, that Mr. Eckels encountered during this trying occasion was in quickly finding reliable and competent men to place in charge of the suspended associations, either as examiner or receiver. All of the examiners in the sections where suspensions were most numerous were already in charge of failed banks, and some of them were in charge of several, with an assistant assigned to each to manage its affairs under their supervision, and every available man who had had any previous experience as a receiver or examiner was pressed into service and given an appointment.
When a national bank closes its doors it is necessary to place a representative of the Comptroller in charge of its affairs as promptly as possible, in order to collect and protect maturing paper and the interests of all the creditors alike, so that no creditor will secure preference over another by withdrawal of his deposit.
Considering the haste with which the Comptroller was compelled to act in making his selections, and his lack of knowledge of the antecedents of many of the men appointed to take charge of banks, it is remarkable that so few mistakes were made and that such good judgment was displayed by those who were appointed receivers in the management of the affairs of their trusts and the good results attained, many of whom never having had any experience in the liquidation of an insolvent bank.