The Bank Asks Newport to Keep Its Nerve
Stockholders of the First State Bank of Newport pledged to cover depositors' losses and asked for time to collect loans as the Panic of 1907 tightened its grip on the country.
The stockholders of the First State Bank of Newport are signing up a guarantee securing the depositors from loss of any portion of their money on deposit, with the understanding that the depositors give the bank a reasonable time in which to collect its loans and continue the banking business in the usual manner.
The large depositors will be asked to sign an agreement to give the bank an opportunity to make its collections and continue business. This last suggestion came from one of the largest depositors and will be carried out.
In times like these collections are slow, and to foreclose mortgages, sue on notes and distress borrowers who have ample means to pay their debts when they can market their products is not considered a wise plan by the directors of the bank if it is to continue in business.
The stockholders of the bank are doing what they can to relieve the financial stringency which affects this section as well as all other parts of the country. The community should do its share toward relieving the strain under which the banks are at present doing business. The request of the stockholders is reasonable, and its customers and the community in general should do their part toward bringing about a satisfactory readjustment of business conditions to the profit and well being of all.
“The request of the stockholders is reasonable, and its customers and the community in general should do their part toward bringing about a satisfactory readjustment of business conditions to the profit and well being of all.”
The Panic of 1907 was a bank-run crisis before federal deposit insurance, and local stockholders were improvising the kind of backstop the FDIC now provides. Newport's bank story shows how quickly confidence—the thing depositors actually hold—can become the town's most fragile currency.
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