Charles T. Barney - Panic of 1907

Panic of 1907

In 1907, the Knickerbocker entered into a deal organized by speculators F. Augustus Heinze and Charles W. Morse to corner the market of the United Copper Company. On Tuesday, October 15, 1907 their plan failed spectacularly when the share price of United Copper collapsed. Heinze's brokerage firm failed on October 17, and he was forced to resign as president of the Mercantile National Bank. On October 19 Morse was forced out of the banks with which he had been associated. Realizing that the Knickerbocker was involved in the failed cornering, depositors began to remove their deposits from the bank.

On October 21, Monday of the week after the bid collapsed, the board of the Knickerbocker Trust Company asked Barney to resign after he admitted involvement in the Morse speculations. That afternoon, the National Bank of Commerce announced it would no longer clear checks for the Knickerbocker. The next day, a massive bank run forced the Knickerbocker to suspend operations. George L. Rives, Henry C. Ide and Ernst Thalmann were named receivers. The failure of the Knickerbocker was the keystone of the Panic of 1907.

Barney's successor as president of Knickerbocker, A. Foster Higgins of Greenwich, Connecticut, was an unfortunate choice. He was 77 years old and quite garrulous. Foster made public statements, including one following the death of Barney, that greatly embarrassed the Rehabilitation Committee under F.G. Bourne and William A. Tucker that was trying to get the trust company on its feet again.