Streetscapes | Fifth Avenue and 34th Street By CHRISTOPHER GRAY Published: March 5, 2009

The headquarters of the Knickerbocker Trust Company, by McKim, Mead, and White (photographed in 1905; the facade is now entirely transformed).

From left: The Knickerbocker Trust Company in 1904; in 1952, after its 1921 enlargement; and as it looks today.

THE continuing banking debacle presents some parallels with the sad case of Charles Tracy Barney, who in the Panic of 1907 lost control of the Knickerbocker Trust Company, which shut down to his disgrace. And just as Mr. Barney’s tragedy was playing out, the seeds were sown for the mutilation of his superb 1903 bank at Fifth Avenue and 34th Street, designed by Stanford White.
 
Mr. Barney was well connected in social and business circles when he became president of Knickerbocker Trust in 1897. In the next 10 years the bank’s deposits grew to $61 million from $10 million, and in 1901 Barney retained McKim, Mead & White to design a 14-story bank and office building at the northwest corner of 34th Street and Fifth Avenue, as important a location as is 57th and Fifth today.

For reasons unknown, Mr. Barney scaled the project back to three stories — but oh, what stories! Stanford White created one of the most spectacular banks in New York, a sumptuous Corinthian-columned temple of Vermont marble on the outside and Norway marble inside the high banking room.

Just before it was completed in 1903, the city brought suit to scale back Mr. Barney’s temple, noting that its columns, cornices and steps extended out onto the public sidewalks by as much as 15 feet. Such encroachments had long been commonplace and even, at least on Fifth Avenue, expressly permitted. But pressure was building to widen Fifth for the increasing glut of vehicles.

The Department of Buildings had approved the project every step of the way, but litigation persisted for years amid sympathy for the bank and its willingness to build a civic ornament. In November 1906, The Real Estate Record and Guide predicted that surely “special arrangements” for “really beautiful buildings” could be made.

The Knickerbocker Trust Company’s banking room in 1904.

The year 1907 saw an unsettled, declining stock market, a budget crisis in New York City, continued economic fallout from the San Francisco earthquake the year before, and other financial problems. In October, several banks connected with Charles W. Morse and F. Augustus Heinze failed.

Both men were held in low regard by many in the financial community. Indeed, Mr. Morse was convicted for bank fraud in 1910 in an unrelated case and, according to “The Panic of 1907” by Robert F. Bruner and Sean D. Carr (Wiley, 2007), while in prison met Charles Ponzi, who developed the infamous pyramid scheme.

When it became known that Mr. Morse and Mr. Heinze were associated in some projects with Mr. Barney, he was obliged to resign from the bank he had helped create on Monday, Oct. 21.

But in that nervous climate, rubbing shoulders with such men was enough to precipitate a run on the Knickerbocker. On Tuesday, Oct. 22, so many depositors showed up that the police were called in to keep order.

The Knickerbocker Trust and The Waldorf-Astoria Hotel, charcoal and pastel on brown paper by Joseph Pennell, ca. 1904–1908.

Lines wound around each other in giant spirals in the great marble banking room before snaking out the door. Men and women stood in separate lines — women usually conducted their business in a separate office. The bank had substantial assets, but most were not liquid, and it could pay out only $8 million. The Knickerbocker Trust Company closed that day at 12:35 p.m., shutting out hundreds of unsatisfied depositors.

In December, The American Review of Reviews said that the problem had largely been caused by the “unreasoning alarm of women depositors” and that the bank’s failure created “a veritable panic on a continental scale.”

The financier J. P. Morgan stepped in and organized the financial community to save most of the other faltering institutions, often by a hairbreadth. But he had come late into the Knickerbocker crisis, and considered it too weak to save.

The Panic of 1907 dissipated before the year was up, although some institutions never got back on track. It all came too late for Mr. Barney, who on Nov. 14, at the age of 56, shot himself. He lived for four hours.

The bank’s builder, Charles Tracy Barney, around 1905. He shot himself after the bank failed in the Panic of 1907.

Two days after the suicide, The American Architect commented coldly that the low-rise Knickerbocker bank, “so much in fashion just now, is really nothing so much as an advertisement,” and that “when disaster comes, a well-rented skyscraper is a more valuable asset.”

In March 1908, Knickerbocker Trust reopened, and The New York Tribune reported that all depositors received their money in full. That October, The New York Times said that almost every other bank had paid off fully, the recovery essentially complete, along with the stock market. For instance, U.S. Steel had been trading early in 1907 at 50 3/8, and fell to 21 7/8 after the crash. But a year later, it was back to 47 1/2.

The original Knickerbocker Trust building survived until 1921, according to an account in The Times. The little bank then sprouted a 10-floor enlargement, also designed by McKim, Mead & White. The vertical addition sheared off the columns and other projecting ornaments, but left the pilasters along with much of the bank’s original character, including the banking hall. In 1958 the lower floors, occupied by the Bowery Savings Bank, were completely modernized, becoming sheer walls of limestone.

The Panic of 1907 remains as a famous cautionary tale, but nothing remains of Charles Barney’s magnificent white marble vision.

Streetscapes | Fifth Avenue and 34th Street By CHRISTOPHER GRAY Published: March 5, 2009

The site today.

On the site previously- Exterior view of the Manhattan Club, completed in 1869, at the corner of 34th Street and Fifth Avenue, New York, New York, late 1800s. Built for Irish merchant and businessman Alexander Taylor Stewart (and originally called Stewart’s Mansion), it became the Manhattan Club following his death in 1876.