Sunday, June 22, 2014

Bankers and Train Wrecks

Photo of Board Members after the PNC/National City merger announcement in 2008
Jubilant board members of PNC Bank after receiving TARP funds.

Traveling 50 miles per hour, the engineer of a empty equipment train fell asleep. Idling on the same tracks was a circus train. Upon impact, the forty sleeper cars, constructed mostly wood and lit by kerosene lamps, derailed and caught fire. The ninety-four dead were charred beyond recognition.

While there were no animals injured in the wreck, the Hagenbeck-Wallace circus was famous for its animal acts, led by trainer Carl Hagenbeck. A pioneer of rewards-based training, Hagenbeck "was convinced that far more could be achieved by gentleness and sympathy than was ever accomplished by tyrannical cruelty," he wrote in his autobiography.

It was also known for its banking. In March 1904 Ben Wallace opened his own bank, the Wabash Valley Bank and Trust, after Peru National refused to process the circus' proceeds (barrels of nickels shipped in containers labelled "nails").  For eighty years, Wabash Valley operated on the corner of Main and Broadway in Peru, Indiana, with the third floor a workshop for making circus costumes.

After the train tragedy, Wallace and Hagenbeck sold the circus to Jeremiah Mugivan and Bert Bowers who renamed it the American Circus Company, then the American Circus Corporation. In 1929, John Ringling bought the ACC, and formed the largest circus in the world at the time, the Ringling Brothers Barnum & Bailey.

So, too, the Wabash Valley Bank and Trust eventually became the First of America Bank, then the National City Bank. In 2008, after the financial train wreck, the former circus bank was purchased by PNC Bank, a controversial merger at the time, PNC used TARP funds to finance the merger, just weeks after National City was denied those funds.

Describing how the $700 billion bailout was distributed to the banks, former director of the Office of Thrift Supervision Tim Ryan admitted it was “a four-ring circus.”
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Flannery O'Connor

You shall know the truth and the truth shall make you odd.