In 1910 Shanghai, a speculative boom in rubber shares collapsed and placed severe pressure on Chinese banks that had financed the market. Depositors doubted whether institutions could pay and rushed to withdraw cash. In a bank run, an orderly line is not necessarily reassuring: the visible existence of the line may attract the next frightened customer.
Banks do not keep every deposit as cash in a vault. Under ordinary conditions that allows credit to support economic activity, but simultaneous withdrawals can exhaust even a solvent institution’s ready money. Each successful withdrawal at the front can increase anxiety at the back.