Jekyll Island and the Ghost of Knickerbocker Trust - Epilogue

June 21, 2019

Sketch of Waldorf Astoria in 1904


If you are a person who stays for the end of the film reel to find out what happened to the characters, read on. Today, we follow up on the ultimate resolution of some of the major players in Rob Hajduch's special series.
Rob Hajduch, Principal Credit Analyst

F. Augustus Heinze saw his luck in the courts hold up after he was charged with 16 counts of financial malfeasance for his part in the Panic of 1907. Acquitted on all charges in 1909, he returned to Butte to a hero's welcome from the local miners; however, he was not the same man who had left for New York. Ruined financially, his marriage failed and his relationships with his brothers irreparably shattered, he was described by contemporaries as distraught in appearance. Heinze was never one to be mistaken for a teetotaler and the years of heavy imbibing caught up to him in 1914, when he died from complications of cirrhosis of the liver. He was 44 years old.

Heinze's associate Charles Morse was not as fortunate before the bench. Indicted for conspiracy and bank fraud, he was found guilty of misappropriation of funds and making false accounting entries. He was sentenced to 15 years in the Federal Penitentiary in Atlanta commencing in January 1910. Morse initiated a campaign to have his sentence reversed almost immediately upon being incarcerated and his influential associates lobbied the Taft administration relentlessly for a pardon. Morse's lawyers increasingly focused upon his failing health and Taft relented to commuting his sentence after a team of Army doctors determined he was suffering symptoms of Bright's Disease. Released from prison in January 1912, Morse made a miraculous recovery and it was later discovered that he had been swallowing soap flakes to simulate symptoms of kidney failure. He returned to his native Bath, Maine where he attempted to rebuild his fortune in the shipbuilding industry, which led to an indictment for war profiteering following World War I - he managed to prevail in that case. He suffered a stroke in 1926 that left him inarticulate and confused. This time his symptoms were real and the local probate court found him mentally incompetent. He lingered on until January 1933, when the Knickerbocker ghost finally tapped him on the shoulder. He died of pneumonia at the age of 77, leaving an estate valued at $9,000.

Two members of the First Name Club served prominent roles in the Federal Reserve's formative years. Paul Warburg was appointed to the first Federal Reserve Board in 1914 where he served as a member until 1916. He was then appointed Vice Chairman in August 1916, serving in that role until August 1918. He remained active in both public service and private enterprise until his death in 1932. The last member to join the First Name Club, Benjamin Strong Jr., became the first president of the Federal Reserve Bank of New York in October 1914, a position he held until his death in 1928.

The Jekyll Island Club managed to survive the economic ravages of the Great Depression despite losing half of its gilt-edged member list. The federal government ordered it evacuated during World War II because of the German submarine threat off the Atlantic coast. Purchased by the state in 1948, it is currently open to the public within the Georgia state park system and anyone so inclined is welcome to spend a night or two in one of its mansion-sized cottages.

The Knickerbocker Trust Company's corpse was briefly reanimated shortly after its demise to allow its receiver to liquidate assets and pay off depositors, who were ultimately paid in full. What was left of its carcass was acquired by the Columbia Trust Company which, in turn, was acquired by the Irving Trust Corporation in 1923, which was itself acquired by the Bank of New York in 1989. The Knickerbocker Trust headquarters building still stands, although one must look hard to recognize it today. Ten stories were stacked on top of its original three in 1921 and in 1958 it was the victim of the sort of architectural travesty common in the mid- to late 20th century. The vestiges of the original building's majestic Corinthian columns were removed, the ground floor space was modernized and the exterior walls were clad in sheer panels of limestone. Difficult to recognize, it is nevertheless easy to find. The curious desiring to gaze upon its beige blandness need only make their way to the Empire State Building, which was built on the lot formerly occupied by the old Waldorf-Astoria before the hotel moved uptown to its current location. The Knickerbocker headquarters building stands opposite the Empire State Building on the northwest corner of 34th Street and Fifth Avenue. To the positive, its street level space at least continues to see brisk retail traffic, as it has been occupied by a pharmacy chain for several years.        

That's a wrap.


Board of Governors of the Federal Reserve System, Federal Reserve History, Paul M. Warburg

David Fettig, Federal Reserve Bank of Minneapolis, F. Augustus Heinze of Montana and the Panic of 1907, August 1989

Federal Reserve Bank of New York, Federal Reserve History, Benjamin Strong Jr.

Irving Bank and Trust Company certificate, product description,

Jekyll Island Club Resort, Club History, Jekyll Island Club Resort website

John R. Cross, Bowdoin Daily Sun, Whispering Pines: Opening Act: Charles W. Morse-Ice King, Prince of Financiers, and Steamship Magnate, June 2015

John R. Cross, Bowdoin Daily Sun, Whispering Pines: Charlie Morse's Second Act and Denouement, July 2015

New York Architecture, Knickerbocker Trust Co. Building,