The rapid development of trust companies had its effect. The cash reserves held by these companies were small; their investments were not always conservative and the depositors were often suspicious. This free expansion of business with little or no reference to cash reserve or capital gave rise to another cause for the panic, which was not a matter of money. It was a matter of what was in men's minds. There was a period of "muckraking" in which leaders financial and political were severely critcised. Whether or not this criticism was justified by the exposition of the frauds of the insurance companies and the questionable dealings of some other corporations need not be discussed. The criticism created an attitude of mind throughout the nation, and the first weakening of a bank brought on the deluge. [Illustration] The panic of 1907. Uptown branch of the Knickerbocker Trust Company, 125th Street. To the ordinary observer the panic of 1907 will date from October 22, when the Knickerbocker Trust Company of New York closed its doors. Earlier in the month the Mercantile National Bank had gotten into difficulties and had appealed to the clearing-house committee for aid, which was given. Soon it was noted that the Knickerbocker Trust Company was in a precarious condition, and the directors, following the example of the other bank, appealed to the same committee. The investigation of the committee showed the company insolvent and aid was refused. When the facts became known, a run on the bank began and it was compelled to close its doors. The lack of confidence in other financial institutions was soon shown by similar runs. No bank could stand the strain unaided. Now the Federal Government stepped in and Secretary of the Treasury Cortelyou came in person to New York and deposited $40,000,000 of the surplus from the United States Treasury to be used for the aid of beleaguered institutions. For more than a week the crowds of depositors sought their money. The lines were not broken at night until the police hit upon the plan of giving to each individual a ticket denoting his place in the line. The Trust Company of America alone paid $34,000,000 across its counters and still crowds thronged the streets. At length the enormous reserve of the Treasury was exhausted and it became necessary to delay and deliberately to make slow payments. Through loans made by other banks the Trust Company of America and the Lincoln Trust Company, which had endured the hardest sieges, were saved and now the panic entered its second stage. [Illustration: Hundreds of people waiting in line.] The panic of 1907. Run on the Colonial Trust Company. Line of depositors in Ann Street waiting their turn.