The Moneychangers

by Arthur Hailey

  “I’m equally uneasy,” Alex Vandervoort agreed. “It’s why we’ll continue to watch closely to see what effect it has.”

  Alex had called a midday strategy meeting. Among those summoned were heads of departments responsible for branch bank administration, since everyone was aware that any lack of public confidence in FMA would be felt in branches first. Earlier, Tom Straughan had reported that branch withdrawals late yesterday and this morning were higher than usual, and deposits lower, though it was too early yet to be sure of a definable trend. Reassuringly, there had been no sign of panic among the bank’s customers, though managers of all eighty-four FMA branches had instructions to report promptly if any were observed. A bank survives on its reputation and the trust of others—fragile plants which adversity and bad publicity can wither.

  One purpose of today’s meeting had been to ensure that actions to be taken in event of a sudden crisis were understood, and communications functioning. Apparently they were.

  “That’s all for now,” Alex told the group. “We’ll meet tomorrow at the same time.”

  They never did.

  At 10:15 next morning, Friday, the manager of the First Mercantile American branch at Tylersville, twenty miles upstate, telephoned Headquarters and his call was put through immediately to Alex Vandervoort.

  When the manager—Fergus W. Gatwick—identified himself, Alex asked crisply, “What’s the problem?”

  “A run, sir. This place is jammed with people—more than a hundred of our regular customers, lined up with passbooks and checkbooks, and more are coming in. They’re withdrawing everything, cleaning out their accounts, demanding every last dollar.” The manager’s voice was that of an alarmed man trying to stay calm.

  Alex went cold. A run on a bank was a nightmare any banker dreaded; it was also—in the last few days—what Alex and others in top management had feared most. Such a run implied public panic, crowd psychology, a total loss of faith. Even worse, once news of a run on a single branch got out, it could sweep through others in the FMA system like a flash fire, impossible to put out, becoming a catastrophe. No banking institution—not even the biggest and most sound—ever had enough liquidity to repay the majority of its depositors at once, if all demanded cash. Therefore, if the run persisted, cash reserves would be exhausted and FMA obliged to close its doors, perhaps permanently.

  It had happened before to other banks. Given a combination of mismanagement, bad timing, and bad luck, it could happen anywhere.

  The first essential, Alex knew, was to assure those who wanted their money out that they would receive it. The second was to localize the outbreak.

  His instructions to the Tylersville manager were terse. “Fergus, you and all your staff are to act as if there is nothing out of the ordinary. Pay out without question whatever people ask for and have in their accounts. And don’t walk around looking worried. Be cheerful.”

  “It won’t be easy, sir. I’ll try.”

  “Do better than try. At this moment our entire bank is on your shoulders.”

  “Yes, sir.”

  “We’ll get help out to you as quickly as we can. What’s your cash position?”

  “We’ve about a hundred and fifty thousand dollars in the vault,” the manager said. “I figure, at the rate we’re going, we can last an hour, not much more.”

  “There’ll be cash coming,” Alex assured him. “Meanwhile get the money you have out of the vault and stack it up on desks and tables where everyone can see it. Then walk among your customers. Talk to them. Assure them our bank is in excellent shape, despite what they’ve been reading, and tell them everyone will get their money.”

  Alex hung up. On another phone he immediately called Straughan.

  “Tom,” Alex said, “the balloon’s gone up at Tylersville. The branch there needs help and cash—fast. Put Emergency Plan One in motion.”

  16

  The municipality of Tylersville, like many a human being, was engaged in “finding itself.” It was a neo-suburb—a mixture of bustling market town and farmland now partially engulfed by the encroaching city, but with enough of its origins remaining to resist, for a while, ex-urban conformity.

  Its populace was a hybrid assortment of the old and new—conservative, deep-rooted farming and local business families, and freshly resident commuters, many of the latter disgusted with decaying moral values of the city they had left, and seeking to absorb—for themselves and growing families—something of peaceful, rustic mores before these disappeared. The result was an unlikely alliance of real and would-be ruralists, mistrusting big business and city-style maneuverings, including those of banks.

  Unique, too, in the case of the Tylersville bank run, was one gossipy mail carrier. All day Thursday, while delivering letters and packages, he had also handed out the rumor, “Did you hear about First Mercantile American Bank going bust? They say anyone who has money in there and doesn’t get it out by tomorrow is going to lose everything.”

  Only a few who heard the mailman believed him implicitly. But the story spread, then was fueled by news reports, including those of evening television. Overnight, among farm folk, trades people and the new migrants, anxiety grew so that by Friday morning the consensus was: Why take a chance? Let’s get our money now.

  A small town has its own jungle telegraph. Word of people’s decisions circulated rapidly and, by midmorning, more and more of the populace was heading for the FMA branch bank.

  So, out of small threads, are large tapestries woven.

  At FMA Headquarters Tower, some who had scarcely heard of Tylersville were hearing of it now. They would hear more as the chain of events in Vandervoort’s Emergency Plan One went forward quickly.

  On instructions from Tom Straughan, the bank’s computer was consulted first. A programmer tapped the question on a keyboard: What are the totals of savings and demand deposits at Tylersville Branch? The answer was instantaneous—and up to the minute since the branch was on-line to the computer.

  SAVINGS ACCOUNTS ……… $26,170,627.54

  DEMAND DEPOSITS ……… $15,042,767.18

  TOTAL ………………………… $41,213,394.72

  The computer was then instructed: Deduct from this total an allowance for dormant accounts and municipal deposits. (It was a safe assumption that neither of these would be disturbed, even in a run.)

  The computer responded:

  DORMANT & MUNICIPAL …… $21,430,964.61

  BALANCE ……………………… $19,782,430.11

  Twenty million dollars more or less which depositors in the Tylersville area could, and might, demand.

  A subordinate of Straughan’s had already alerted Central Cash Vault, a subterranean fortress below the FMA Tower. Now the vault supervisor was informed, “Twenty million dollars to Tylersville Branch-rush!”

  The amount was still more than might be needed, but an objective—decided on during advance planning by Alex Vandervoort’s group—was to make a show of strength like running up a flag. Or, as Alex expressed it, “When you fight a fire, make sure you have more water than you need.”

  Within the past forty-eight hours—anticipating exactly what was happening now—the normal money supply in Central Cash Vault had been augmented by special drawings from the Federal Reserve. The Fed had been informed of, and had approved, the FMA emergency plans.

  A Midas fortune in currency and coin, already counted and in labeled sacks, was loaded onto armored trucks while an array of armed guards patrolled the loading ramp. There would be six armored trucks in all, several recalled by radio from other duties, and each would travel separately with police escort—a precaution because of the unusual amount of cash involved. However, only three trucks would have money in them. The others would be empty—dummies—an extra safeguard against holdup.

  Within twenty minutes of the branch manager’s call, the first armored truck was ready to leave Headquarters and, soon after, was threading downtown traffic on its way to Tylersville.

&
nbsp; Even before that, other bank personnel were en route by private car and limousine.

  Edwina D’Orsey was in the lead. She would be in charge of the support operation now under way.

  Edwina left her desk at the main downtown branch at once, pausing only to inform her senior assistant manager and to collect three staff members who would accompany her—a loan officer, Cliff Castleman, and two tellers. One of the tellers was Juanita Núñez.

  At the same time, small contingents of staff from two other city branches were being instructed to go directly to Tylersville where they would report to Edwina. Part of over-all strategy was not to deplete any branch seriously of staff in case another run should begin elsewhere. In that event, other emergency plans were ready, though there was a limit to how many could be managed at once. Not more than two or three.

  The quartet headed by Edwina moved at a brisk pace through the tunnel connecting the downtown branch with FMA Headquarters. From the lobby of the parent building they took an elevator down to the bank’s garage where a pool car had been assigned and was waiting. Cliff Castleman drove.

  As they were getting in, Nolan Wainwright sprinted past, heading for his own parked Mustang. The security chief had been informed of the Tylersville operation and, with twenty million dollars cash involved, intended to oversee its protection personally. Not far behind him would be a station wagon with a half-dozen armed security guards. Local and state police at Tylersville had been alerted.

  Both Alex Vandervoort and Tom Straughan remained where they were, in FMA Headquarters Tower. Straughan’s office near the Money Trading Center had become a command post. On the 36th floor, Alex’s concern was to keep close tab on the remainder of the branch system, and to know instantly if fresh trouble erupted.

  Alex had kept Patterton informed and now the bank president waited tensely with Alex, each mulling the unspoken questions: Could they contain the run in Tylersville? Would First Mercantile American make it through the business day without a rash of runs elsewhere?

  Fergus W. Gatwick, the Tylersville branch manager, had expected that his few remaining years until retirement would pass unhurriedly and uneventfully. He was sixtyish, a chubby apple of a man, pink-cheeked, blue-eyed, gray-haired, an affable Rotarian. In his youth he had known ambition but shed it long ago, deciding wisely that his role in life was supportive; he was a follower who would never blaze a trail. Managing a small branch bank ideally suited his ability and limitations.

  He had been happy at Tylersville, where only one crisis had marred his tenure until now. A few years ago a woman with an imagined grudge against the bank rented a safe deposit box. She placed in the box an object wrapped in newspaper, then departed for Europe leaving no address. Within days, a putrid odor filtered through the bank. At first, drains were suspect and examined, to no effect, while all the time the stench grew greater. Customers complained, staff were nauseated. Eventually suspicion centered on the safe deposit boxes where the awful smell seemed strongest. Then the crucial question arose—which box?

  It was Fergus W. Gatwick who, at duty’s call, sniffed his way around them all, at length settling on one where the malodor was overpowering. After that, it took four days of legal proceedings before a court order was obtained permitting the bank to drill the box open. Inside were the remains of a large, once-fresh sea bass. Sometimes, even now in memory, Gatwick still sniffed traces of that ghastly time.

  But today’s exigency, he knew, was far more serious than a fish in a box. He checked his watch. An hour and ten minutes since he had telephoned Headquarters. Though four tellers had been paying out money steadily, the number of people crowding the bank was even greater, with newcomers pouring in, and still no help had come.

  “Mr. Gatwick!” A woman teller beckoned him.

  “Yes?” He left the railed management area where he normally worked and walked over to her. Across a counter from them both, at the head of a waiting line, was a poultry farmer, a regular bank customer whom Gatwick knew well. The manager said cheerfully, “Good morning, Steve.”

  He received a cool nod in return while silently the teller showed him checks drawn on two accounts. The poultryman had presented them. They totaled $23,000.

  “Those are good,” Gatwick said. Taking the checks, he initialed both.

  In a low voice, though audible across the counter, the teller said, “We haven’t enough money left to pay that much.”

  He should have known, of course. The drain on cash since opening had been continuous with many large withdrawals. But the remark was unfortunate. Now there were angry rumblings among those in line, the teller’s statement being repeated and passed back. “You hear that! They say they don’t have any money.”

  “By Christ!” The poultry farmer leaned wrathfully forward, a clenched fist pounding. “You just better pay those checks, Gatwick, or I’ll be over there and tear this goddam bank apart.”

  “There’s no need for any of that, Steve. Not threats or shouting either.” Fergus W. Gatwick raised his own voice, striving to be heard above the suddenly ugly scene. “Ladies and gentlemen, we are experiencing a temporary cash shortage because of exceptional demands, but I assure you a great deal more money is on the way and will be here soon.”

  The last words were drowned by wrathful shouts of protest. “How come a bank runs out of money?” … “Get it now!” … “Forget the bullshit! Where’s the cash?” … “We’ll camp here till this bank pays what it owes.”

  Gatwick held up his arms. “Once again I assure you …”

  “I’m not interested in your sleazy assurances.” The speaker was a smartly dressed woman whom Gatwick recognized as a newish resident. She insisted, “I want my money out now.”

  “Damn right!” a man behind her echoed. ‘That goes for all of us.”

  Still others surged forward, voices raised, their faces revealing anger and alarm. Someone threw a cigarette package which hit Gatwick in the face. Suddenly, he realized, an ordinary group of citizens, many of whom he knew well, had become a hostile mob. It was the money, of course; money which did strange things to human beings, making them greedy, panicked, at times sub-human. There was genuine dread, too—the possibility, as some saw it, of losing everything they had, along with their security. Violence, which moments ago appeared unthinkable, now loomed close. For the first time in many years, Gatwick felt physical fear.

  “Please!” he pleaded. “Please listen!” His voice disappeared under growing tumult.

  Abruptly, unexpectedly, the clamor lessened. There seemed to be some activity in the street outside which those at the rear were craning to see. Then, with a bravura flourish, the bank’s outer doors flung open and a procession marched in.

  Edwina D’Orsey headed it. Following her were Cliff Castleman and the two young women tellers, one of them the petite figure of Juanita Núñez. Behind was a phalanx of security guards shouldering heavy canvas sacks, escorted by other protective guards with drawn revolvers. A half dozen more staff who had arrived from other branches filed in behind the guards. In the wake of them all—a vigilant, wary Lord Protector—was Nolan Wainwright.

  Edwina spoke clearly across the crowded, now near-silent bank. “Good morning, Mr. Gatwick. I’m sorry we all took so long, but traffic was heavy. I understand you may require twenty million dollars. About a third of it just arrived. The rest is on the way.”

  While Edwina was speaking, Cliff Castleman, Juanita, the guards and others continued through the railed management area to the rear of the counters. One of the newly arrived relief staff was an operations man who promptly took charge of incoming cash. Soon, plentiful supplies of crisp new bills were being recorded, then distributed to tellers.

  The crowd in the bank pressed around Edwina. Someone asked, “Is that true? Do you people have enough money to pay us all?”

  “Of course it’s true.” Edwina looked over heads around her and spoke to everyone. “I’m Mrs. D’Orsey, and I’m a vice-president of First Mercantile American Bank. Despite
any rumors you may have heard, our bank is sound, solvent, and has no problems which we cannot handle. We have ample cash reserves to repay any depositor—in Tylersville or anywhere else.”

  The smartly dressed woman who had spoken earlier said, “Maybe that’s true. Or maybe you’re just saying so, hoping we’ll believe it. Either way, I’m taking my money out today.”

  “That’s your privilege,” Edwina said.

  Fergus W. Gatwick, watching, was relieved at no longer being the focus of attention. He also sensed that the ugly mood of moments earlier had eased; there were even a few smiles among those waiting as increasing amounts of money continued to appear. But less obdurate mood or not, a purposefulness remained. As the process of paying but continued briskly, it was clear that the run on the bank had not been halted.

  While it continued, once more like Caesar’s legionaries, the bank guards and escort who had returned to their armored trucks outside, marched in again with still more loaded canvas sacks.

  No one who shared that day at Tylersville would ever forget the immense amount of money eventually displayed on public view. Even those who worked at FMA had never seen so much assembled at a single time before. On Edwina’s instructions and under Alex Vandervoort’s plan, most of the twenty million dollars brought to fight the bank run was out in the open where everyone could see it. In the area behind the tellers’ counter, every desk was cleared; from elsewhere in the bank more desks and tables were moved in. Onto them all, great stacks of currency and coin were heaped while the extra staff who had been brought in somehow kept track of running totals.

  As Nolan Wainwright expressed it later, the entire operation was “a bank robber’s dream, a security man’s nightmare.” Fortunately, if robbers learned of what was happening, they learned too late.

  Edwina, quietly competent and with courtesy to Fergus W. Gatwick, supervised everything.

  It was she who instructed Cliff Castleman to begin seeking loan business.

  Shortly before noon, with the bank remaining crowded and a lengthening line outside, Castleman carried a chair forward and stood up on it.