The panic of 1907 leads to depositor insurance

Posted by Dave Tabler | February 13, 2015

In early 1907 consumer goods prices were high and continuing to increase, a situation set in motion by too easy credit. Most glaringly, the money center banks of New York City owed their depositors more money than the whole country possessed, real money and ‘credit money’ combined. The system couldn’t sustain itself that way any longer. A stock market “panic” hit that threatened to topple the New York investment banks and reverberate through the economy, triggering a depression.

The ‘Panic of 1907’ caused nationwide bank failures, timber prices collapsed, mine operations ceased, railroads stopped running, a rash of bankruptcies occurred, and a dramatic loss of confidence and a nasty economic downturn sank in for the next year. Although not as severe as many in the past, the Panic made clear the need for national legislation to protect bank depositors.

The First National Bank, of White County, TN was one of the few banks in that state which was able to keep open through the Panic. The Tennessee Bankers Association (TBA) took notice of that fact. They sought to craft a proposal to the state’s legislature that would emulate many of that company’s best practices.

First National Bank, Jackson, TNCustomers inside of the First National Bank in Jackson, TN, 1900.

The TBA’s lobbying activities were in fact responsible for the state’s 1908 legislature passing banking bills of very minor importance. The TBA made every effort to prevent what it considered undesirable legislation until it could present a bill satisfactory to banks as well as offering sufficient protection to depositors.

At each succeeding annual association convention many bankers increasingly felt that depositor protection legislation was inevitable. However, the legislative committee of the association found it very difficult to prepare a bill that met the approval of all the bankers in the state.

In 1911 the association convention resolved: “supervision is desirable and examination made by and under the authority of the State of Tennessee would strengthen confidence in state banks and prevent failures.”

When the convention of 1912 was held the legislative committee was able to present a bill which had almost unanimous support of the association members, and this bill was presented to the legislature of 1913.

On February 13, 1913, five years after the Panic of 1907, the legislature finally passed the Banking Act of 1913, which greatly strengthened the state’s ability to oversee bank operations. It stated: [Section 1] “There is hereby created a Banking Department of the State of Tennessee, charged with the execution of all laws relating to corporations, firms and individuals doing or carrying on a banking business in the State of Tennessee. The chief officer of the Banking Department shall be known as the Superintendent of Banks, and he shall be appointed by the Governor upon the recommendations of the Tennessee Bankers Association, and his term of office shall be four years or until his successor is appointed in the manner aforesaid.”

The act required that every state bank within Tennessee should be examined by the superintendent or his examiners at least twice each year, or more often if he deemed it necessary.

The act established minimum capital requirements for banks: at least $7,500 in towns of less than 1,500 inhabitants on up to $50,000 in cities over 100,000 in population. It prohibited any bank from reducing cash on hand and due from banks or bankers below ten percent of demand deposits.

Loans could not be made to officers or employees except on approval of the directors or finance committee. Loans to one person or interest could not exceed fifteen percent of the capital, surplus and profits, except on approval of approval of a majority of the executive or finance committee.

Loans on or the purchase of the company’s own stock was prohibited, unless to prevent loss on previously contracted debts, in which case the stock had to be disposed of within six months.

On the national level, Congress was determined to create a central bank that provided a vigilant monetary policy, price stability, a more elastic currency and more careful supervision over the nation’s banks, and so the panic of 1907 led directly to the development of the Federal Reserve Act.

Sources: The Development of Banking in Tennessee, by Warren P. Gray, Capricorn House Publishers, 2007 (orig. publ. 1948)
Trust Companies, by Clay Herrick, Bankers Publishing Company, 1915
The Panic of 1907, by Robert F. Bruner, Sean D. Carr, John Wiley & Sons, Inc, 2007

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  • Sheryl says:

    I just discovered this blog and really enjoyed reading a few of the posts. I’m impressed by how well-researched the stories are. When I have a little more time, I plan to come back and explore the site some more.

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Lots of people thought I was an idiot

Posted by Dave Tabler | February 12, 2015

“I never spoke a word until I was nine years old. I only clucked and motioned for what I wanted. Lots of people thought I was an idiot because I could not talk. I may have looked like one, for I was a little old country boy that never cut my hair in those days only about twice a year, and I wore a big checked cotton shirt and old jeans pants made by my mother and old yarn socks, and 70-cent stogie shoes with brass toes. This was my winter suit and my summer suit was only a big yellow factory shirt and no hat or shoes.

“At the age of ten I was taken by my mother and uncle, Gid Hogg, to Whitesburg, Ky., the county seat of Letcher County, a distance of about eighteen miles. We rode an old mare named “Kate,” without any saddle, and when I was taken off I could not walk I was so stiff, and that made everybody think I was an idiot sure enough.

Corporal Fess Whitaker“So when Judge H. C. Lilley opened court on Monday, February 12, they taken me before the judge. The judge ordered old Black Shade Combs, then the sheriff, to summon twelve jurors and two doctors. One doctor thought I had been born an idiot, and Dr. S. S. Swaingo, of Jackson, held out that I was all right of mind, and so the case was put off until 10 a. m. Tuesday.

“Then Dr. Swaingo got old Dr. McCray and gave me a thorough examination. The doctors found by examining my neck, where the small tits in one’s neck are, that the tit in my neck had grown together. After the doctors cut the tit loose in my neck I began to talk and to have a good joke. The doctors took me to a one-horse barber shop and had my hair cut and fixed me up and presented me on Tuesday morning to Judge Lilley, and he was surprised beyond reason that I was Fess.”

History of Corporal Fess Whitaker
Louisville, Ky, The Standard Printing Co., 1918.

Whitaker’s claim to fame is his run for U.S. Congress in 1926, in which he was narrowly defeated. Fess Whitaker (1880-1927) began his career as a politician in 1917, when he was elected county jailer in Letcher County, KY. He likely held this office until 1921, when he decided to run for county judge. The New York Times reported that sometime around 1921 Whitaker participated in a street fight, a disturbance of the peace that led to his incarceration in the very jail he supervised and earned him the nickname “The Jailed Jailer.” While imprisoned, Whitaker continued his campaign and was eventually elected. In 1922, Whitaker was again jailed, this time for possessing and transporting whisky for illegal sale. Nevertheless, he was re-elected Letcher County jailer in 1925. He died in a car crash in 1927.


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Fasnacht in Helvetia WV

Posted by Dave Tabler | February 11, 2015

Lent will be here next Wednesday, and that means that many residents of Helvetia, WV will be foregoing hosenblatt meat pastries deep-fried in lard for awhile. This Saturday folks there will have ample opportunity to consume that delicacy, along with donuts and rosettes, at the annual Fasnacht celebration. The Swiss settlers of Helvetia combined the Catholic celebration of Lent with the Protestant Winterfest of Zurich, when Old Man Winter is burned in effigy to hasten the advent of spring, to produce this annual February revel.

Fasnacht is the most famous city and canton in Switzerland’s Basel Stadt. And Helvetia is the Latin name for Switzerland. In West Virginia’s Helvetia, homes are decorated with scary figures to frighten Old Man Winter away. These after all are the Rauhnächte (rough nights), the nights between winter and spring, when evil ghosts are supposed to go around.

Musicians in Helvetia WVThis photo of musicians in Helvetia is undated; prior to the construction of the Star Band Hall in 1910 Fasnacht celebrations took place in homes, with the musicians off to one side of the parlor as in this photo.

Helvetians decorate the community hall in colorful ribbons and Swiss lampions (paper lanterns with candles), and hang a gruesome Old Man Winter by the neck in the middle of the dance floor. And they create elaborate masks.

At dark on the Saturday night before Ash Wednesday, the villagers and guests don their masks and congregate at Star Band Hall. This plain rectangular frame structure, built in 1910, was for many years home of a quite famous brass concert and marching band.

“The Helvetia Star Band will rank favorably with the best in the State,” declare the authors of ‘The Story of Helvetia Community,’ an undated article most likely from the early 1920s. “This band is frequently asked to play for occasions at various distant points over the State.

“There is band practice twice a week, Wednesdays and Saturdays, and in this way the players are always able to measure up to the expectations of those asking them to perform. Several of the members of the band served their country as buglers or musicians in the bands of the respective branches to which they belonged while in the army.” The Star Band was active for 65 years.

The assembled parade marchers light the lampions, then proceed up the road Mardi Gras style to the Community Hall where they parade around the dance floor as their masks are judged. They dance schotisches, waltzes, polkas, and squares until midnight, when the fiddler announces the hour to burn Old Man Winter. The prettiest maiden then mounts the shoulders of the tallest man and cuts down the ghoul. He is dragged out into the snow, roughed up and cursed, then thrown onto the bonfire amid shrieks and applause.

A group of Swiss immigrants from Brooklyn, NY calling themselves ‘the Gruetli Verein’ settled the tiny community of Helvetia in 1869. The members had agreed that they would all emigrate to another section of the country together when the time was right.

A member of the society named Isler surveyed large swaths of the eastern West Virginia mountains for a Washington-based firm, and reported back to the society on the richness of the country. A committee of six men was assembled, and left Brooklyn by rail on October 15, 1869. They arrived at Clarksburg and began the difficult work of traveling by foot over the mountains.

At one time there were three Swiss colonies in Randolph County: Helvetia, Adolph, and Alpina. In the early 1900s Dr. Hanz Gruber was Helvetia’s village doctor for about ten years. He was a nephew of Franz Gruber who wrote for his Austrian church choir the much loved carol “Silent Night, Holy Night.” Dr. Gruber’s house still stands.


Sources: ‘The Story of Helvetia Community,’ by Eugene Daetwyler, Annie Teuscher, and E. Metzner at
Helvetia, West Virginia : a study of pioneer development and community survival in the Appalachia, by Atje Partadiredja, Ann Arbor: University Microfilms International, 1978
One’s own hearth is like gold : a history of Helvetia, West Virginia, by David H Sutton, New York: Peter Lang, 1990
Many thanks to Elvira Niles of Lithia, FL for her input on this article.

appalachia appalachian+history Fasnacht Helvetia+WV history+of+appalachia Randolph+County+WV

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  • Country Life says:

    My family is from Pendleton, Randolph and Tucker County WV. I've been to Helvetia. One of my grandmothers was a Tschudi or now spelled Judy from Pendleton county who married a Henckel (Hinkle) in the last 1700's.

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The frog who freezes solid for the winter

Posted by Dave Tabler | February 10, 2015

On bitterly cold mornings, when dry snow squeaks under boots and mustaches freeze solid, a variety of hardy animals keep the spark of life.

An Appalachian frog holds one such amazing spark. The wood frog (rana sylvatica) overwinters under leaf litter in the forest floor—where it freezes solid. How can this be? By combining three adaptations, the wood frog endures its total-body freeze.

The first adaptation is supercooling. The molecules of a liquid, like H 2O, ricochet off each other in random fashion. Normally, as a liquid cools, its molecules slow their bouncing and become sluggish. At this point, the molecules of the liquid line up in a geometrical pattern, forming a crystal. Once that initial crystal forms, it serves as a seed for the alignment of more molecules, the crystal grows rapidly, and the liquid turns solid.

Stirring a liquid increases the odds that its molecules will randomly conform to the critical angles required to form that first crystal. If, however, a liquid cools slowly and without agitation, its molecules may not strike each other at just those specific angles. Perfectly still and cooled slowly, a liquid’s temperature can drop far below its freezing point without starting the crystallization process—the liquid supercools.

The second adaptation is making and circulating antifreeze, a chemical that lowers the freezing point of water. The wood frog’s antifreeze is glucose. Plus, glucose has other advantages: it is rapidly produced, easily transported, and fuels anaerobic metabolism.

Now let’s put these two ideas together. In the autumn, tucked in its leaf-litter hideout, a wood frog slowly cools to high subfreezing temperatures, like 28oF. Ice crystals start to form in the fluids pooling in the spaces between its cells. Within minutes of ice onset, wood frogs begin pumping glucose to body tissues. To move glucose from the liver, where it is made, requires efficient heart function.

In the first minute of freezing, heart rate nearly doubles to eight beats per minute, slows after one hour of freezing, and then stops at near-complete ice formation at 20 hours. Rapid cooling, in contrast, causes heart failure, which hampers the distribution of glucose throughout the body.

The wood frog is one of the few species of land-hibernating frogs and toads that tolerates ice in its fluids. The frog’s supercooled body water freezes quickly, in less than 30 seconds, after direct contact with external ice crystals. Frozen wood frogs show neither breathing nor heart movements and rely on anaerobic metabolism. Upon dissection, ice chunks can be seen in the abdomen and organs.

In addition to supercooling and distributing glucose, the wood frog’s organs dehydrate, which prevents ice-caused mechanical injury. The organs of slowly cooled frogs retained less water than in rapidly cooled frogs.

The water moves from organs to body spaces, where it then freezes.

Together, the three adaptations of supercooling, producing and transporting glucose, and drawing water from the organs permit wood frogs to survive winter as totally frozen, rock-hard bodies. In the spring, heart beat resumes within an hour after thawing and resurrection is complete in a few hours.


Adapted from Hollows, Peepers, and Highlanders: an Appalachian Mountain Ecology, 2nd ed.,” by George Constantz, West Virginia University Press, Morgantown WV, 1994

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When the Wind’s in the West, the Sap runs Best

Posted by Dave Tabler | February 9, 2015

When temperatures begin to rise in February and March, maple sap begins to flow from the roots of trees up the trunks to the branches and limbs. During the short period of spring when the daytime temperatures are above freezing, and the night temperatures are below freezing, the sap flows up and down the tree trunks daily.

Appalachia has a long history of sugar making. The Cherokees threw hot rocks into hollowed-out logs that were filled with sap. The early colonial settlers, too, quickly learned to make the sweet stuff: even though census enumerators were inconsistent in reporting maple sugar production, the 1790 output is reported for 26 Appalachian counties of southwest Virginia, West Virginia, eastern Kentucky, and eastern Tennessee. all maples produce the sweet sap that eventually may become syrup, it is only the sugar maple and black maple that are generally tapped. At least 75 percent of all commercial maple sugar comes from sugar maple trees because they are the species with the highest sugar content in their sap (about 2%).

Sugar bush workers drill small holes in the trunks, and insert taps to allow some of the sweet sap to come out. At first these taps consisted of carved, hollowed out pieces of wood, with a wooden bucket hanging from them to collect the sap. Later, metal taps and buckets were mass produced, as well as bucket covers to keep the sap cleaner.

In the 1930s the sap was hauled to the sugar house by human, horse, ox, and tractor power. Considering that a sugarbush usually contains hundreds of trees, this was an incredible amount of work. Large trees can fill upwards of 10-12 buckets each.

Some folks think the sap just comes out of the trees and is packaged as syrup for sale. Wrong! It takes 40 gallons of sap to make one gallon of maple syrup. Even more is required to make maple sugar. The water content of the sap has to be boiled off, leaving the syrup behind. You can’t just leave the sap around and boil it at your convenience either! The sooner you boil the sap, the better the quality of the syrup. If you wait too long, the sap will spoil and you’ll have to dump it.

The sap is transported to a holding tank where it accumulates until there’s enough to boil off—known as “sugaring off.”


Davenport, Anni L. and Lewis J. Staats. Maple Syrup Production for the Beginner. Cornell Cooperative Extension, 1998. Retrieved February 9, 2015 from

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