856 THE PRINCIPLES OF PERSONAL INTEGRITY
cover the demand. Smaller banks that didn't have enough cash in their
vaults had to turn away customers.
As word spread to the general public it created a "run /I on the banks
as depositors lined up to demand they be given the money they had on
deposit. Banks called in loans to meet the demand for cash. When the
borrowers couldn't pay, the banks foreclosed on the businesses, homes,
or whatever else had been put up as collateral.
America was caught in a downward spiral that was reversed only
when the major Wall Street bankers and financial executives, who were
themselves in danger of losing their businesses, stepped in to shore up
troubled banks. In addition to arranging foreign loans, they themselves
bought stocks as a show of faith in the market.
It was in large part because of the bank panic of 1907 that legislation
was enacted in 1913 to create the Federal Reserve System.Third Turning PointIt required the 1907 panic, and the defeat that it brought me, to
divert and redirect my efforts from the lumber business to the study
of law. Nothing on earth, except defeat, could have brought about
this result. Thus, the third turning point of my life began in what
most people would call failure, which reminds me to state again
that every defeat teaches a needed lesson to those who are ready and
willing to be taught.
When I entered law school it was with the firm belief that I would
emerge doubly prepared to catch up with the end of the rainbow and
claim my pot of gold, for I still had no other concept of success except
that of money and power.
I attended law school at night and worked as an automobile
salesman during the day. My sales experience in the lumber business
was turned to good advantage. I prospered rapidly, doing so well-
still performing more service and better service than that for which I