The several national banks in one city were legally quite separate.

It was only by voluntary agreement that in some of the larger cities they came together into clearing-house associations.
They made possible some measure of cooeperation which, small as it was, proved at times of stress to be of much service within a limited sphere for the local communities.

But even with the aid of these organizations the banks were unable in times of emergency to avoid the suspension of cash payments.
There was no provision whatever for the concentration of bank revenues so that each bank would be supported by the strength of the other banks, if a movement began to withdraw deposits in unusual amounts.
Each bank then was compelled for self-protection to call for any sums it had deposited with other banks,[5] and to keep for its own use all the reserves it might have in excess of its own immediate needs.

This threw a great strain upon the banks in the reserve cities, which in normal times had become the depositories of a good part of the reserves of the banks in other places.

Thus developed a spirit of panic, like the fright of theater-goers crowding toward the door at the cry of fire.
The maintenance of the government's independent treasury contributed to the difficulties by causing the irregular withdrawal of money from circulation and thus depleting bank reserves in periods of excessive government revenues and by returning these funds into circulation only in periods of deficient revenues.