Into Action

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Into Action

Into Action

Soon the calls began to come through. From San Francisco, We have £55,000 on hand. Will need £75,000 by Monday morning and £50,000 a day threafter." Los Angeles needed £55,000. Kansas City, £35,000. Portland, £35,000. Chicago, the distribution centre for the Mid-west: "We have only £30,000 on hand. Will need £290,000 Monday and £250,000 daily thereafter."

Florida, teeming with vacationists, was in the worst straits of all. There was a line of people nearly a mile long outside the Miami office of American Express. They were paid as fast as the extra tellers could count the money.

Through Saturday and Sunday and most of that week the officers of American Express sat around that table ascertaining the needs of the different offices, meeting unexpected emergencies, and ordering shipments of money. Many of them slept in the office. Young Fred Page acted as their confidential messenger and catered for the crowd, ordering the food that was brought in to the big table and eaten in snatches while they talked and made memos and gave shipping orders.

How the money went out! Shipments were from £1,000,000 to £2,000,000 every day. By train and plane and private automobiles it went, but mostly in the cars of Railway Express. It was the final irony that American Express, which had made its first profits carrying money for other people until the practice was outmoded, should now, in this sudden breakdown of the beautiful, intricate financial machine, return to the primitive practice of shipping cash to meet its obligations.

The officials of American Express had calculated correctly when they reasoned that three or four days of paying out would restore confidence in their Travellers Cheques. In places it worked faster than that. One man came into the Los Angeles office with £2,000 worth of Cheques and belligerently demanded payment. As the cashier began to count out the money the customer's jaw dropped. "You mean you're really going to pay me?" he gasped.

"Certainly, sir," said the cashier.

"In that case," said the man, "I'll only need twenty bucks.

Within the four-day limit the public was convinced that American Express Travellers Cheques would be paid. The hoarders thought of their large sums of cash, which were an open invitation to robbery. They began to buy Travellers Cheques, which were safe both ways. Soon the flow of fresh money exceeded payments and the tension in the directors' room relaxed.

Meanwhile, American Express offices abroad had a different problem on their hands. There was absolutely no exchange market in dollars, and nobody could even guess what the quotations would be when it finally reopened. Yet these offices had to purchase foreign money if holders of Travellers Cheques were to be paid, as was their obligation, in the currency of the country where they were presented.

Boldly American Expressmen grasped the horns of the dilemma. They made schedules of the amount in dollars which they would pay for pounds and lire, francs and Hong Kong dollars and Japanese yen, and guaranteed that any difference between these and the actual rate of exchange when dollars could be quoted again would be paid. Backed by the name and credit of American Express, it worked.

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What next? Making it happen

Making it happen

As the date for the inauguration of the new President of the United States drew closer, the necessity for a Bank Holiday became more evident. News of closings in other states frightened New York depositors and brought on panic conditions. In this situation the officials of American Express were still determined that its Travellers Cheques would retain their record of never having been refused. There were two problems to be overcome. One was to obtain permission of the government to remain open after the banks had been closed, and the other was to accumulate the necessary cash.

Through a prominent New York banker the American Express Company stated its case to William H. Woodin, the incoming Secretary of the Treasury: "The American Express Company is not a bank. People who are travelling all over the country hold its Travellers Cheques. If they cannot get cash when they are far from their homes they will get panicky. If the American Express offices stay open... see: Making it happen

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