Interview with Mariner Eccles

Read the words below of Marriner Eccles who later chaired the federal reserve system under President Roosevelt.  He is looking back to his experience as a banker in Utah in 1931:

“…the banks of the First Security Corporation kept their doors open throughout the depression.  No depositor lost one penny”. The key challenge was to conserve capital by addressing public anxiety directly. 

Here is what Eccles told his employees before  his bank opened for business on Monday:

“If you want to keep this bank open. . . you must do your part. Go about your business as though nothing unusual was happening.  Smile, be pleasant, talk about the weather, show no signs of panic.. .Instead of the three windows we normally use, we are going to use all four of them today.  They must be manned at all times because if any teller or clerks window closes for even a short time, that will stir up more panic… We can’t break this run today.  The best we can do is slow it down.  People are going to come in here to close out their accounts.  You are going to pay them.  But you are going to pay them very slowly. Our object is to pay out a minimum today”(check all signatures, use small bills)

“The crowd in the bank was as taut as it was tense.” Stayed open past three—“to remain open so long as there were people who wanted to get their money.”

Fed Reserve bank in Salt Lake City brought in some reservee funds to prevent a run in Salt Lake City :

”The armored car that brought the funds to us in Ogden arrived on the scene as in the movies when the Union cavalry charges in to save all from the Indians. The guards  strode through the crush inside the bank, and all made way before them.”

Eccles to his depositors:

Standing atop a “black and gold marble counter, I raised my hand and called for attention:

‘Just a minute…I want to make an announcement. It appears we are having some difficulty  handling our depositors with the speed to which you are accustomed. Many of you have been in line for a considerable time. I notice a lot of pushing and shoving and irritation. I just wanted to tell you that instead of closing at the usual hour of three o’clock, we have decided to stay open just as long as there is anyone who desires to withdraw his deposit or make one.  Therefore, you people who have just come in can return later this afternoon or evening, if you wish.  There is no justification for the excitement or the apparently panicky attitude on the part of some depositors. As all have you have seen, we have just had brought up from Salt Lake City a large amount of currency that will take care of all requirements.  There is plenty more where that came from.’(This was true—but I didn’t say we could get it.)”

“And, if you don’t believe me . . .I have here Mr. Morgan Craft, one of the officers of the Federal Reserve Bank, who has just come up in an armored car.  Mr. Craft, say a few words to the folks”

Morgan Craft, Dep manager of the Fed in Salt Lake confirmed:

”I just want to verify what Mr. Eccles has told you…I want to assure you that we have brought up  a lot of currency and there is plenty more where that came from.”

“This, again, was perfectly true. But he didn’t say the currency belonged to us.”

“In a split instant the faces before me relaxed in relief.  The edge in all voices seemed to vanish. Some people stepped out of line and left the bank.”