Jonita Mullins
On a chilly day in February 1926, a crowd was gathering on the streets of downtown Muskogee. A rumor had begun to circulate that the Commercial National Bank was about to fail. The recent failure of a bank in Stigler and depressed cotton prices had added fuel to the speculation.
When Commercial Bank officials opened their doors for business on that chilly Wednesday morning, they were met by customers waiting to get in. Fearful of losing their savings, small depositors had come to withdraw their funds from the bank. Within minutes, the line of customers stretched across the lobby and this increased the speculation among townsfolk that something was amiss.
Trying to portray an air of calm, bank officials went about business as usual in the hopes that this would reassure customers. It did not. The lines to the three teller windows kept growing as the day progressed. What was meant to look like calm businesslike behavior began to look like indifference or even ignorance. The mood of the crowd of customers changed from worry to anger.
Throughout the day, word of the bank run spread throughout Muskogee. The lines of customers grew longer, now stretching outside the bank at Third Street and Broadway and around the block. Spectators milled about and talked in hushed, worried tones. Small business owners watched out their windows downtown, caught in the drama taking place outside.
These business owners knew that a run on one bank could trigger runs on every bank in town. There was no Federal Deposit Insurance at that time. If other banks closed this would certainly bring complete ruin to the local economy. Though many Muskogee business owners had accounts at Commercial, they all realized they must not give into the frenzy and withdraw their own funds. They would have to sit tight and hope that the crisis passed.
Members of the Retail Merchants Association and the Chamber of Commerce rallied around the bank, expressing support of the institution. Other banks offered their support as well. Funds from First National Bank, located then at the corner of Second Street and Broadway, were quietly removed from its vault and transferred to the vault of Commercial National Bank. Business owners were urged to make deposits to Commercial as a show of confidence.
But by 1:30 that afternoon, the crowds were so thick in the bank lobby no one could get inside to make a deposit. At that time, Commercial National Bank president, D.N. Fink, stepped out of his office and mounted a marble railing in the lobby to speak to the people. He reassured them that the bank was solvent, but could not remain so if everyone withdrew their deposits.
He went outside and spoke to the crowd on the street from the hood of an automobile, almost begging them to step back from the precipice over which the entire local economy might be swept. Nearly in tears, the words of the banker had an effect. The listening crowd applauded when he finished his impassioned speech.
The bank closed its doors at the normal time, barely still in business. More Muskogee leaders rallied to the bank’s support. Local labor unions met and voted to keep their accounts at Commercial. That evening business leaders spoke during intermission at the Broadway, Yale and Palace movie theaters, urging people to stay calm and avoid pulling the bank under. The Federal Reserve rushed $500,000 cash funds to the bank by train overnight, and this was reported in the Phoenix the next morning. An editorial in the paper expressed confidence in the bank.
With the support of the business community and even its competitors, the bank survived the scare. Commercial National Bank was reorganized a few months later. With new officers, it went on to become Muskogee’s largest bank for a time.
Reach Jonita Mullins at jonita@netscape.com.
