The day the Dow fell 777 points, David Latham, a 45-year-old Alabama cattle farmer and electrician, was busy doing errands. Driving his Chevy pickup into Montgomery, he dropped by the hardware store, then stopped into the bank, where he withdrew $8,000 from his CD account, all in 20s. Back home, he slipped the four inch-thick bundles into a Ziploc bag, popped them into a waterproof PVC tube and set out for a remote location on his 300-acre property, where he dug a deep hole with a post digger. And then he buried his money.
Is there an American alive who hasn’t considered burying his savings—or at least stashing it in the mattress—as this financial crisis has deepened? Latham assumes the Federal Deposit Insurance Corp. will step in if his bank collapses, but he figures it might take a few weeks to get his money. Now, he says, “I can get my hands on cold, hard cash anytime I want.” But beyond that, there’s the nagging fear that the world isn’t as secure as we’d like to believe. Latham says the $8,000 is an insurance policy against, well, who knows? “I’m hedging my bets,” he says.
America’s uneasy relationship with banks has deep roots. Between the financial panic of 1837 and the Great Depression, the nation endured six widespread bank failures in which millions lost their savings. The bank runs typically started in rural areas before spreading to the cities, accounting for the lingering distrust country folks have for banks to this day. “In some ways, it really was wiser to put your money in the ground,” says Dartmouth history professor Ronald Edsforth. Given this history and the current panic, he adds, “It’s not unusual that it would resurface.”
Mitch Cohen, a family physician in the remote logging town of Elma, Wash., says his patients who grew up during the Depression have always kept savings in coffee cans buried under the porch. But in recent months, when hometown stalwart Washington Mutual went south, the younger generation caught on. Residents have taken to making treasure maps (“walk 20 paces, turn left at the tree”), which they share with a trusted friend or family member. Cohen finds it hard to argue with the impulse. He, too, snatched his cash out of WaMu before it went under. “But I moved it to a credit union,” he says. “I avoided the backyard.”
It’s not just rural folk who get the urge. Kristy Young, an accounts manager with a Texas-based credit union, recently confronted a customer who wanted to transfer $150,000 from the bank to his backyard. She pleaded with him for an hour, using arguments ranging from the technical (soundness ratings) to the practical (“If a dog digs it up, that money is gone!”). The man relented, but Young is more worried about the customers who withdrew their money silently. “I don’t put it past people to keep money in their own personal safes,” she says. Indeed, according to Doug Brush, head of business development for SentrySafe, the nation’s largest safemaker, the company’s retailers report sales of home safes increasing 20 to 40 percent in recent weeks.
Of course, there’s opportunity in every crisis. Earl Snyder, a Sarasota, Fla., home builder who first buried cash after the S&L crisis and currently tends a subterranean stash of gold coins, recently launched a Web site and eBay listing to sell an invention he calls the Midnight Gardener: a 12-by-4-inch capped, watertight PVC pipe. As his listing notes, the device is “designed by a licensed septic installer” (“That’s me!” Snyder hoots) and perfect for burying “over $4,000 in gold, silver and paper money.” Within two weeks of the launch, Snyder sold several, and he expects more sales as the crisis wears on. “Maybe instead of Chia Pets,” he says, “people will buy a Midnight Gardener for Christmas.”