J

CHAPTER XI

James H. Eckels

AMES H. ECKELS, the ninth Comptroller of the Currency, was appointed April 26, 1893, and served until December 31, 1897, a period of four years and eight months.

Mr. Eckels was born in Princeton, Ill., November 22, 1858, and was thirty-five years of age when appointed Comptroller, although in appearance he did not look to be more than twentyfive. Smooth face, light complexion, small of stature and delicate, he had the appearance of a youth. He attended the public schools of his native city and graduated at the High School at Princeton, Ill., in 1876. He attended law school at Albany, N. Y., and graduated in 1880. While in Albany he made the acquaintance of Grover Cleveland, who was then Governor of New York, and Daniel Lamont, who was then Governor Cleveland's secretary. This acquaintanceship laid the foundation for the prominence which Mr. Eckels attained in later years in the financial world.

In 1881 he commenced the practice of law at Ottawa, Ill., and continued in practice until his appointment as Comptroller of the Currency by President Cleveland in 1893. During the Presidential campaign of 1892, he took an active part in support of his friend, the Democratic nominee, and made a number of speeches, principally on the tariff question.

Previous to his appointment as Comptroller, Mr. Eckels was entirely without banking experience. He was an applicant for appointment as United States Attorney for the district in Illinois in which he resided, and no one was surprised more than he when President Cleveland nominated him for the position of Comptroller of the Currency. At first it was reported that the President had made a mistake in sending his nomination to the Senate for Comptroller instead of for the position of United States Attorney, but when President Cleveland's attention was called to the matter he declared that no mistake had been made. He expressed

great confidence in Mr. Eckels' ability, and desired to give him a better position than that of United States Attorney. Mr. Eckels happened to be at the Capitol at the time his nomination was received at the Senate, and stated to some of the newspaper correspondents, when they told him of the nomination, that that was the first information he had of the President's purpose. When asked what experience he had had in banking to qualify him for the place, he candidly replied that he had had none whatever, except as a borrower.

Up to this time it had been the invariable rule to appoint no one to the office of Comptroller of the Currency who had not had a banking experience, and there was considerable doubt at the time whether the Senate would break away from this practice and confirm the nomination. Ex-Comptroller Lacey happened to be in Washington when the nomination of Mr. Eckels was made, and knowing Mr. Eckels personally and having a high regard for his ability, was largely instrumental in overcoming the objections to his confirmation, and dispelling the impression that seemed to prevail that only a practical banker of long experience was qualified to satisfactorily fill the office of Comptroller. In a published newspaper interview at that time, Mr. Lacey expressed the opinion that the position was one that called for a man of good business judgment and discretion more than of banking experience or legal training, and while a banking experience would be very helpful it was not essential to a successful administration of the Bureau. The duties of the Comptroller of the Currency, he stated, were well defined by statute, and a successful administration of the office required only the exercise of good business judgment, discretion and conservatism.

Mr. Eckels always gratefully remembered the services rendered him by Mr. Lacey on this occasion, and while the nomination would no doubt ultimately have been confirmed by the Senate, he believed that his confirmation was very materially accelerated by Mr. Lacey's timely assistance, and the latter's judgment as to the qualifications necessary to insure a successful administration of the office was fully verified by Mr. Eckels' appointment.

Shortly following his appointment, Mr. Eckels was the recipient of a dinner given in his honor by some of his fellow-townsmen

of Ottawa, Ill. In a speech delivered on that occasion, he availed himself of the opportunity afforded him to reply to some of the criticisms that had been made of his selection as a practicing attorney, of limited experience, to preside over the affairs of a Bureau distinctively financial, and said:

No impairment of any system can be brought about by an honest and rigid enforcement of the laws which govern it, and those most strenuous in their criticisms must not complain if the National Bank Act as it stands on the statute book, be the rule and guide of the Comptroller.

The danger has always been the indifference of bank officials to keeping within the restrictions of law and not of the Comptroller's exceeding his authority.

He declared that it would be his purpose to strive always to see that the law was observed, that business and moral integrity should characterize those who were connected with the Comptroller's bureau, and that in no instance should the public interests be sacrificed to political expediency.

Thus did Mr. Eckels in brief outline his policy and express his conception of his duties and responsibilities, and who can say that a practical banker would have discharged the duties of the position with more credit to himself, the administration which he represented, and the interests of the public at large during the exceptional period of Mr. Eckels' incumbency, than this unknown lawyer from Ottawa.

Considering his utter lack of experience in banking at the time he assumed charge of the Currency Bureau, and the extraordinary conditions which immediately followed his induction into office, his administration of the Bureau and the soundness of his views as expressed in his annual reports to Congress and in his public addresses and writings will compare favorably with those of any of the experienced and practical bankers who preceded or followed him. It was recognition of his natural ability that led Secretary Lyman J. Gage to remark that "there was not much to Eckels," referring to his stature, "but what little there was was three-quarters brains."

Mr. Eckels resigned the office of Comptroller on December 31, 1897, near the end of his five-year term, to accept the presidency of the Commercial National Bank of Chicago, which position he retained until the date of his death. He died suddenly in Chicago, of heart disease, in April, 1907.

Panic of 1893

Within a little more than a month after Mr. Eckels assumed charge of the Currency Bureau the country was plunged into one of the most violent and memorable financial panics in its history. National, State and private banks failed in quick succession, and the business of the entire country became paralyzed. During the six months immediately following Mr. Eckels' induction into office, one hundred and fifty-eight national banks suspended and closed their doors, sixty-five of which were found to be insolvent and were placed in the hands of receivers, eighty-six resumed business and seven were placed in the hands of bank examiners in expectation of their resumption. The weakest banks were the first to succumb. Many failures were due to speculation, and some to dishonesty. In some communities depositors were seized with panic, making it impossible for the banks to meet their demands, and numerous suspensions occurred where no stigma attached to the management, and the banks were in a solvent condition.

During this trying ordeal, such as no Comptroller of the Currency ever was called upon before to undergo, Mr. Eckels, inexperienced as he was, even in the detail workings of the Bureau, discharged the onerous duties of the office with rare skill and good judgment, and not only quickly disarmed the opposition invoked by his appointment, but inspired the confidence of the entire banking and business interests of the country and contributed very materially toward allaying the excitement superinduced by the panic and the restoration of confidence.

Perhaps no one connected with the Treasury Department at that time shared with Mr. Eckels the strain of the trying ordeal of this panic more than the writer, who was then the Comptroller's secretary, or had equal opportunity for knowing how skilfully, manfully and energetically he met and handled the situation. For

weeks there was no rest, night or day. Every hour of the day and late into the night telegram after telegram was received announcing additional suspensions of banks or new complications which had to be promptly met. As many as thirty suspensions occurred in a single day, and for a time it looked as if every national bank in the system would succumb. Telegrams from bank examiners and bankers came in such quick succession that the entire time of the Comptroller and the writer was occupied in translating cipher messages and in sending replies or instructions. Messages came so thick and fast that it was impossible to file them away in any order for reference, and the expedient was resorted to of filing each day's messages on a spindle marked with the date of their receipt, until there was a spindle for every day in the week, and a row for each week, with telegrams six inches deep on each file.

Among the stream of messenger boys who poured into the office all day long was one who had a defective or blind eye, whom Mr. Eckels called "The bird of evil omen." Every message he delivered announced another suspension, so that whenever this boy entered the Comptroller's room Mr. Eckels would remark, "Here comes another bust."

The greatest difficulty, however, that Mr. Eckels encountered during this trying occasion was in quickly finding reliable and competent men to place in charge of the suspended associations, either as examiner or receiver. All of the examiners in the sections where suspensions were most numerous were already in charge of failed banks, and some of them were in charge of several, with an assistant assigned to each to manage its affairs under their supervision, and every available man who had had any previous experience as a receiver or examiner was pressed into service and given an appointment.

When a national bank closes its doors it is necessary to place a representative of the Comptroller in charge of its affairs as promptly as possible, in order to collect and protect maturing paper and the interests of all the creditors alike, so that no creditor will secure preference over another by withdrawal of his deposit.

Considering the haste with which the Comptroller was compelled to act in making his selections, and his lack of knowledge