The Years Were Good: The Autobiography of Louis B. Seltzer
THE MORNING of April 26, 1933, started out as a dull news day. Not much was happening. The telephone on my desk rang and I recognized the voice of a friend, who asked, "What about the Cleveland Trust Company?"
Since the Cleveland Trust Company was not figuring in any news situation, I countered, "What about the Cleveland Trust?"
That was the first intimation I had that there was a run on the bank. It was then eight-thirty o'clock. The bank had not opened. Yet many people had gathered in front of its branches and around its main office in the very heart of downtown Cleveland -- at what is regarded as one of the world's busiest corners, East Ninth and Euclid Avenue.
Nothing throws a shudder into a community like a run on a bank. And, generally, nothing presents a newspaper with a more serious problem. But the specific problem presented by the run on the Cleveland Trust Company in 1933 was unlike any other I have experienced.
From some mysterious source a rumor started about the Cleveland Trust Company. It was then, as it is now, Cleveland's largest bank. It was as sound that day as it is right now, and it is regarded as one of the soundest banks in America. Yet like a prairie fire the rumor went around Cleveland, and depositors began gathering shortly after daybreak.
All during the morning the crowds multiplied, and the bank, and all its branches, paid out money. It was thought that prompt and unquestioning payment of depositors in full would bring the run to a stop. It didn't. The run continued, and it grew worse as the day went forward. By noon its proportions became so serious that emergency measures were thought to be imperative.
At this point our problem as a newspaper became acute. With our afternoon edition approaching, we were faced with the question of whether to say anything about the run or not, and, if we decided to do so, what point of view we should take, how much we should say, and what display we should give it.
It was our decision that a situation like this could not possibly be ignored. We had to take note of it in our paper, and the best course seemed to be simply to publish a strictly factual story, telling how the mys-
terious rumor had brought about the run in the first place and describing its gradual growth and the action taken by the bank's executives to reassure its depositors. This represented the combined judgment of our paper's key people.
In the midst of this conference I received a telephone call from Harris Creech, President of the Cleveland Trust Company. I had talked with him earlier in the day, assuring him that our staff as a group or I as an individual would be available if we could be helpful at any stage of the emergency. Harris Creech's call was in response to this offer. He asked me to come to his office, and it took me only a few minutes to get there.
Because I felt that my appearance at the bank might be misinterpreted, in this highly emotional and tense atmosphere, I went through a side door, and thus, in a labyrinthian fashion, ultimately arrived at Harris Creech's office on the fourth floor.
The president and the bank's other officers were anxiously gathered in a large directors' room. Every device they could think of had been employed to halt the unaccountable run on the bank, but it continued.
Harris Creech was a cautious man. The very qualities which made him so thoroughly dependable as a banker unsuited him for the measures now needed to stop this dangerous state of affairs. He outlined in detail, and in sequence, the day's efforts to bring order and calm into the atmosphere of potential catastrophe. The staff had offered many suggestions, but for one reason or another they had been set aside.
It was a tough spot. The bank's statement showed it
to be in excellent condition, and it was fully capable of paying out the money the depositors asked for -- yet it was in imminent danger. It seemed to me that only a drastic measure would work.
Finally an idea occurred to me. It was an idea centered around Harris Creech himself, and it would work only if he agreed to it. I knew his temperament, but there are times when a man will, in an emergency, set aside all timidity and rise to the realities of a serious occasion.
I asked for a typewriter. This in itself would probably have astounded the bank officers under normal circumstances, but they showed me into an adjoining office, where I sat down at some stenographer's desk.
Two things, I believed, were essential at this moment. The first was a statement from the Governor of the Federal Reserve Bank, located in Cleveland. I called E. R. Fancher, who held this office, and told him where I was and what was in my mind. He in turn called Washington and talked with W. H. Woodin, Secretary of the Treasury. In a short time Mr. Fancher called me back, reporting that he had the green light to go ahead.
While I waited on the telephone, he wrote out in longhand a statement which he then dictated to me. I took it down on the typewriter. It said:
After finishing Mr. Fancher's statement, I wrote out another brief statement. This one said:
I then took the statement in to Mr. Creech, wondering how he would take my suggestion, as I explained, "What this situation needs, Mr. Creech, is a direct word from you as head of this bank. I would like to suggest, therefore, that you in person go to the lobby downstairs, climb up on a counter if necessary, and read this statement yourself to the people who are there."
Harris Creech and his associates were obviously startled. They looked at each other, and talked back and forth for a bit, then Mr. Creech finally said, "We'll try it."
Harris Creech was a thin, quiet, almost shy man, earnest and sincere in both appearance and personality. To do what I had proposed was perhaps the last thing he would ever have dreamed of doing. But he did it.
In a lobby filled with depositors, pushed and crowded by a line of people outside waiting to get into the bank, Harris Creech gingerly climbed up on a counter. He asked for silence and got it instantly.
In clear, ringing words, surprising even to his closest friends, he read the brief statement, and then the statement issued by Governor Fancher of the Federal Reserve Bank.
The crowd listened. Mr. Creech climbed down from the counter. This was the fateful moment. The crowd could go either way.
Harris Creech was prepared to stay in the lobby with his depositors as long as they wished him to. He was surrounded by people asking questions, and stoutly he answered them.
Presently, a few of the depositors put their bank books in their pockets and walked out. Others followed them. Within a short time the crowd thinned out, and a feeling of stability replaced the feeling of tension. Even before Harris Creech turned to go back upstairs to his office he knew, and everyone knew, that the bank run had been stopped.
It was a long chance, and it had succeeded simply because it deserved to succeed. A sincere man speaking in the lobby of his own bank, whose condition was among the best in the nation, was believed because he spoke the truth.
No one ever knew how the rumor started which prompted the run. The Government sent in Secret Service operatives who searched out every shred of evidence. Already, even on that fateful day, they were mingled among the depositors who lined up before the branch banks and the main office downtown, but they couldn't piece together anything at all. It was all hearsay; one person credited somebody else with hearing
the rumor from another, and yet another. The background, of course, was the national "bank holiday" which had forced the closing of banks throughout the country, combined with the fact that several banks in Cleveland had failed to reopen. The only reasonable conclusion seemed to be that a malicious rumor had been thrown as a spark into the minds of an inherently apprehensive banking public.
That is one of the days I shall never forget, out of all the days of my newspaper career in Cleveland, because its potential for harm to Cleveland was great. The idea that came to my mind in Harris Creech's office that midafternoon was not particularly original, but it was, as it turned out, an effective one -- made so by the character and reputation of a great bank and the sincerity of its president.
Among the precious papers I have preserved are two handwritten notes -- one from Harris Creech and the other from E. R. Fancher. Neither is a fine example of penmanship, but these two almost illegible notes stir memories of one of the dramatic days of a lifetime.
This story of the run on Cleveland's biggest bank makes painfully familiar reading, perhaps, to those who lived through the tumultuous decade of the thirties. The stock market collapse of 1929 occurred only a year after I was made Editor of The Press (for the coincidence of which I disclaim any personal responsibility) plummeting the country from its high economic plateau of "prosperity forever" to the worst despair the nation had experienced in modern times. It brought along
with it an apparently unending chain of social and political experimentation which caused sharper cleavage with a relatively conservative past than at any other time in the nation's history.
The newspapers of America, ours of course not excepted, had to display editorial flexibility and improvisation not theretofore equaled. From the standpoint of practical operation, business fell off, circulations subsided, and costs required serious retrenchments.
The primary test of any newspaper organization is its ability to adapt itself, not only to sudden emergency in a given hour or day, but even to unexpected change in the fundamental pattern of life. The shift from prosperity to depression, and, in the next decade, from peace to war, are extreme examples, but they dramatically illustrate the problems of change. Both required extensive readjustments of purpose, techniques, and emphasis. Both necessitated an almost immediate flow of new ideas, of enterprise, of ingenuity, especially in a business which is so highly competitive as is that of daily newspapering. During the depression, The Press editorial operation distinguished itself in a way which brought pride to my heart.
Early in my experience as an editor I contrived a simple formula by which to judge the underlying vitality of our organization. It was this: If the people upon whom I depended outthought me, created more ideas than I was capable of developing, and were abler and more resourceful than I, then I felt reasonably sure The Press was in sound organizational condition. Other-
wise, I became restive and uncomfortable about the paper's health. By the grace of good men and women, and the further good fortune of having them, the latter moments have been relatively few during the approximate thirty years that I have had the editing responsibility of our paper.
There has always been in our office a free and easy exchange of opinion, constructive criticism, and ideas, and that's the way we like it. Not infrequently is the Editor overruled in none-too-gentle terms by others on the paper, and this is as it should be. There is no purpose in having able men and women on a newspaper only to have their effectiveness neutralized, as too often is the case, by an editor who insists, by some singular appropriation of divine omniscience, that he alone has the answers.
The Cleveland Press is not the reflection of a single individual. It is the reflection of many men and women -- and it will be that way so long, at least, as I am responsible for it.
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