Letter Re: The Five Minute Bank Run

Dear Mr. Rawles:
I wanted to tell you a personal experience I just had at the bank that scares me to death. If you think a bank can last a few days during a bank run, then you will be very surprised by my story.

I wanted to withdraw $10,000 from a JP Morgan Chase Bank branch in a local Houston [, Texas] suburb. Chase is the second largest bank in the US and Houston is the fourth largest city in the US. I went in and said: “Can I please have my money?” The teller disappeared for 10 minutes and then came back, and told me to my surprise that “We don’t carry that much cash on hand”. I was shocked. I said: “Are you kidding me?” She went on to explain that, even though this was a payday weekend at the end of the month (which means they have more cash on hand than usual), if I took that amount from them, they would be completely out of cash in a few hours. They suggested that I travel seven miles to a larger local Chase branch and ask them.

So, I drove over to the larger Chase branch. When I got there, they had only one teller working (now think about the implications of one teller working during a bank run with hundreds of people in line). After waiting in line for 10 minutes, I walked up to the teller and asked her for the amount. She then told me that she would have to go into the vault to see if they had enough money there! Now this is getting scary because I was starting to think that I might not get my cash – and this isn’t even a bank run! She came back with the cash and gave it to me, but then told me that I need to call ahead next time for that amount. Hmmm… $10,000 just isn’t that great an amount and now I need to call ahead?

I wanted to tell you this story because the implications are very scary: the second largest bank in the USA in the fourth largest metropolitan area only has enough cash on hand to allow one depositor to empty his/her account. A bank run in the USA would only last five minutes because only a handful of people will be able to get their money out [in cash].

Needless to say, I am getting all my money out, ASAP. – W.D.in Texas