13608. Bank of America (New York, NY)

Bank Information

Episode Type
Run → Suspension → Reopening
Bank Type
state
Start Date
May 10, 1837
Location
New York, New York (40.714, -74.006)

Metadata

Model
gpt-5-mini
Short Digest
d52e4efe243ac840

Response Measures

None

Description

Newspaper articles describe the May 1837 suspension of specie payments by New York city banks (including Bank of America) following runs/large withdrawals, and later reports (Sept–Oct 1837) that the Bank of America was among banks resuming specie payments. Dates are taken from article dates and in-text references. OCR errors in some texts were corrected (e.g., 'Manbattan' -> Manhattan).

Events (3)
1. May 10, 1837 Run
Cause
Macro News
Cause Details
Part of the broader Panic of 1837 and widespread specie withdrawals across New York banks; large crowds and heavy withdrawals in Wall Street pressured banks including Bank of America.
Measures
Faced heavy withdrawals; initially refused to join suspension but were compelled to adopt suspension of specie payments along with other banks.
Newspaper Excerpt
The three banks declining to enter into the arrangement for a suspension last evening, were, the Bank of America... These, however, were necessarily obliged to adopt the same course this morning, since, however strong the whole rush would have been directed against them.
Source
newspapers
2. May 10, 1837 Suspension
Cause
Macro News
Cause Details
Collective suspension of specie payments by New York city banks in response to widespread specie drain and panic conditions during the Panic of 1837.
Newspaper Excerpt
At a meeting, last evening, of the officers of all the Banks in this city, except three, it was 'Resolved... to SUSPEND PAYMENTS IN SPECIE.' ... The three banks declining ... were the Bank of America, the Manhattan, and the National. These, however, were necessarily obliged to adopt the same course this morning.
Source
newspapers
3. September 22, 1837 Reopening
Newspaper Excerpt
From this day henceforth, the notes of the following banks in this city... will be received as equivalent to specie... Bank of America... (New York, Sept. 22, 1837). The Bank of America... pay their five dollar notes in specie: ... Bank of America (reported Oct. 12).
Source
newspapers

Newspaper Articles (11)
1. May 16, 1837 Rutland Herald Rutland, VT
Article from Rutland Herald, May 16, 1837

Click image to open full size in new tab

Article Text

From the Commercial Advertiser, May 10th. The three banks declining to enter into the arrangement for a suspension last evening, were, the Bank of America, the Manbattan, and the National. These, however, were necessarily obliged to adopt the same course this morning, since, however strong the whole rush would have been directed against them. Some of the banks were reduced to a very small quantity of specie last evening-one having less than twelve thousand dollars, and another only three thousand. A fortnight since, the aggregate of specie in the New York banks, was about three millions. Last evening it was reduced to a fraction below sixteen hundred thousand. There were, yesterday, some indications of a ri otous disposition-and in order to be prepared against scenes of popniar violence to day, the new mayor was apprised at a late hour last night of the resolution at which the banks have arrived. Preparations were immediately made for the preservation of the peace of the city. An adequate quaber of troops were promply ordered upon duty, and the mayor had this morning a good supply of ball cartridges in readiness at his office, for the troops on duty in the Park. Large crowds of people assembled this morning early in Wall street, and it has been filled the whole forenoon. There has, however, been not the least manifestation of a disorderly spirit. Indeed those from whom turbulence was naturally to be expected, have, for the most part, drawn their 8 pecie during the last four days. The people in the street to-day. are of the better classes-and, under the circumstances of the case, all are rejoicing at the resolution at which the banks have arrived. We are authorised to state, that the bills of the city banks will be received in pay ment of all taxes, assessments, and debts due to the city of N. York.

2. May 17, 1837 Vermont Telegraph Brandon, VT
Article from Vermont Telegraph, May 17, 1837

Click image to open full size in new tab

Article Text

GENERAL INTELLIGENCE. SUSTENSION OF SPECIE PAYMENTS. The events of the last few days, must have prepared the public for the toll wing notice, which appeared in all the morning papers : NOTICE TO THE PUBLIC IN RELATION TO THE BANKS.-At a meeting, last evening, of the officers of all the Banks in this city, except three, it was "Resolved, That, under existing circumstances, it is expedient and necessary to SUSPEND PAYMENTS IN SPECIE. In the mean time the notes of all the banks will be received at all the different banks as usual, in payment of debts and in deposite, and as the indebtedness of the community to the banks exceeds three times the amount of their liabilities to the public, it is hoped and expected that the notes of the different banks will pass current as usual, and that the state of the times will soon be such as to render the resumption of specie payments practicable." The three banks declining to enter into the arrangement for a suspension last evening, were the Bank of America, the Manhattan, and the National These, however, were necessarily obliged to adopt the same course this morning, since, however strong. the whole rush would have been directed against them. Some of the banks were reduced to a very small quantity of specie last evening-one having less than twelve thousand dollars, and another since, the only aggregate three thousand. of the specie A fortnight in New York banks, was about three millions. Last evening it was reduced to a fraction below sixteen hundred thousand. Large crowds of people assembled this morning early in Wall street, and it has been filled the whole forenoon. There has, however, been not the least manifestation of a disorderly spirit. Indeed those from whom turbulence was naturally to be expected, have, for the most part, drawn their specie during the last four days.The people in the street, to-day, are of the better class-and, under the circumstances of the case, all are rejoicing at the resolution at which the banks have arrived. It is supposed the legislature will pass an act to-day, authorizing all the banks to suspend; and by to-morrow night the act prohibiting small bills will also be repealed.- Y. Spec.

3. May 23, 1837 Vermont Watchman and State Journal Montpelier, VT
Article from Vermont Watchman and State Journal, May 23, 1837

Click image to open full size in new tab

Article Text

NEW YORK, May, 15. Almost all of the French Indemnity money, if not all, has been paid off by the Banks of America in their own notes. The banks received the indemnity in gold, which is worth 20 per cent, advance above their own bills. This is one way of shaving honest sufferers. Claimants who have been kept more than twenty years out of their just demands, and who have lost all the interest and half the principal, are now compelled to receive the pittance in Bank of American bills, which are depreciated twenty per cent below the gold which honestly belong to them, and for which they have paid, but which is now refused! This refusal creates much conversation in the city. A claimant to day demanded his pay in gold, and the President refusing, said, "the Bank is broken"! 'The Bank of America broken! What, that Bank which volunteered its service to get the deposits, pledging the responsibility of its directors, and promising Mr Kendall, that it would transact the public business as well or better than the United States Bank, and afterwards agreeing to keep in pay Reuben M. Whitney, as a spy over the Treasury, to see what was going on in Washington. Surely such a confession was unexpected to the public after the haughty bearing of that institution, and its proud promises to take the place of the United States Bank, and better the best currency in the World! Since the suspension of specie payments, the failures have suspended also, but on Saturday, one of some magnitude, a French importing house was announced, which had some connection with Nicolet who killed himself in N. Orleans. The Buffalo people of all parties are indignant on account of the course the Regency have persued with the banks there. They believe there has been unfair play. The cities on many sides are preparing to issue small bills. The greatest inconvenience already begins to be felt for the want of small change. Hundreds are issuing their small notes in this city, and "the better currency" will soon be a city full of rags. The Express Mail brings us news of importance. There is every indication that the banks in the southern part of the Mississippi Valley are about to suspend specie payments. Every where, as the news from New York flies around, the Pet banks under the eyes of "the government" except, suspend specie payments. Alexandria has followed the general example. The Baltimore Patriot givee us important instructions to the government officers of that city. The same orders, without doubt, have been transmittel to the government officers in New York, and when they are announced here they must make a great sensation. -N. Y. Express.

4. July 4, 1837 Morning Herald New York, NY
Article from Morning Herald, July 4, 1837

Click image to open full size in new tab

Article Text

of Van Buren in relation to the currency. Now, these measures are the only strong points of his administration. Van Buren's weakest point is the Safety Fund bubbl of this state. Oppose the Safety Fund bubble-blow up the Suspension law-cut up Marcy & Co-defeat the Regency in this state, and with that defeat, the whole of Van Buren's strength is gone. What state would support him, if he is defeated in New York? None. The locofocos ar conducting a more effectual opposition to Van Buren than the whigs. They support his legal measures issuing from Washington, but oppose his Safety Fund bubble policy coming from Albany. Get a state legislature opposed to the Safety Fund bubble, and Van Buren is down forever in New York. Whigs be wise. The battle is to be fought in New York. THE REV. DAVID HALE, the pliant and amiable organ of George Griswold and the Bank of America, is very much annoyed at the intimation given out that Mr. Biddle intends to resume specie payments, and reconstruct the exchanges before Congress meet. Hale, like George Griswold, is covered with speculations of all kinds, and nothing would interfere more with his plans of making money than the return to a specie standard of value. Mr. Griswold is a very amiable tempered man,-excessively charitable-uncomfortably pious, and has numerous other valuable qualities about him too tedious to mention, but he wants the intellectual capacity to be a great financier in Wall street. He is hardly fit to walk in the shoes of the late Charles Wilkes or Lynde Catlin, although he often attempts to imitate their great capacity for money matters and finance. In a few days we shall publish a full and accurate analytical history of the connection and influence which George Griswold, Robert White, George Newbold, Albert Gallatin, and other leading financiers, have had with the money market during the last five or six years. We shall be able to trace, we think, the original causes of the suspension of specie payments, and of the great revulsion. We shall try at least. MORE SHIN-PLASTEAS. We understand that several of the loafers of the Five Points are preparing to issue their small notes, payable on demand, in goods or safety fund bills. The only cause of the delay is the celebration of the fourth, and the difficulty of keeping sober during these merry times. About Saturday the loafers will have recovered from the fumes of gin-slings, and be then able to put their signatures thus [ ] to this valuable new currency which is intended to beon a par with the Safety Fund notes. Application will not be made to the Bank Commissioners, Messrs. DAVIS & Co. to let the Five Points banks come in under the suspension law. These miserable loafers say-"we doesn't like for to hearn of the idé of suspension-it makes our necks for to tickle-give us another horn." ### PROGRESS OF THE FINE ARTS. Really Endicott is going to take us by storm. Yesterday morning, the commencement of one of the loveliest days since the opening of summer, we were sitting calmly at our desk, enjoying the hour to the extent of our imagination, when the portraits of all the presidents and Miss Clifton, and the full length of Miss Nelson were put into our hands. GEORGE WASHINGTON, the father of his country, -the man that could repress his ambition so far as to set us a bright example of republicanism in retiring to his farm when the country could illy spare him, is the first of the series. JOHN ADAMS, the philosopher and the statesman, - comes next. His character is not understood by the present generation. THOMAS JEFFERSON, the great leader and founder of the ultra democratic party in these United States, the eleré of the French school of morals and metaphysics, and a thoroughgoing politician, holds the next rank. JAMES MADISON, the clear reasoner, the just expounder of our system of constitutional liberty, and the defender of "free trade and sailors' rights," occupies the next niche. JAMES MONROE, the last of the heroes of the revolution, the amalgamator of the two great parties, and the neglected of his countrymen after he had served his term, is the fifth in the series. JOHN QUINCY ADAMS, a scion from an old and tried stock, but an ambitious statesman, fond of public life, and a wordy reasoner, is the sixth on the list. ANDREW JACKSON, the hard money ruler, the cunning politician, and an unwavering despot, without the knowledge necessary to make him a great statesman, is the next in the series. MARTIN VAN BUREN-the present incumbent, is the last. His character is so well known that a description is unnecessary. In execution, these lithographs are all deserving of commendation. So far as correctness of features goes, the likenesses are as good as may be. These prints are valuable in many points of view. Bought up by the country people, the rising generation will have the chance of gazing on the features of our great men, and thus is cherished the feeling of patriotism and love of our institutions. Every attempt of this sort tends to increase a love for the fine arts. Great praise is due Mr. Endicott. Then comes that charming piece of flesh and blood, Miss Clifton. What features-what expression of countenance. I will not dwell on them longer. This is my second portrait for the Dramatic Gallery-Augusta being my first. Gambardella is the painter of this likeness. He should be encouraged, wherever he may be. On a ball-I suppose the veritable globe itself-stands mounted Miss Nelson. Tip-toe she displays her proportioned limbs, with scarce a covering such as mother Eve, in her modesty, sought for when she was so silly as to betray the trust reposed in her by

5. August 1, 1837 Morning Herald New York, NY
Article from Morning Herald, August 1, 1837

Click image to open full size in new tab

Article Text

MONEY R K ET. Monday, July 31, P. M. Specie continues to arrive. The amount brought in on Friday and Saturday was 50,000 Five Frane pieces from Havre, $15,000 from St. Barts, 254 oz. of gold dust, $2118 in gold, and $62,978 from the Coast of Africa. The Havre importation is destined for the purchase of cottons. Since the breaking up of the bill system, men are obliged to resort to the old plan ofbuying the produce of other countries. The cotton spinners must have the raw material, and if goods are not taken in exchange, metals will come. Besides the exportation of coin for the purchase of cotton is a money making operation, as we long since showed. By the next arrival we expect to hear of heavy remit tances for investment in the southern staple. Stocks) have gone down today. U. States closed at 117. The transactions of last week being closed, dealers are ofish today. There is no permanent cause that can throw upsecurities.Speculators are cautious under present prospects. The Utica, arrived this morning,brings Havre dates two days later-up to the 22d June. The commercial troubles are extending over all Europe, from Stockholm to Constantinople.Fifty thousand francs came by the Utica, destined for the South. Our southern brethren will have a fine chance to get off their surplus as the summer advances. Buyers will be abundant. Six O'Clock, P. M. The remarkable developement of the policy of our banks, and the position of the banking system, made by the Albany Argus, has been the great topic of conversation today in all the monied circles. These discussions have been confined principally to the city banks-sometimes diverging to the country. Among traders and great speculators, great diversity of opinions exists-among the mass of the community none. The speculators, and all those covered with engagements at old prices, are beginning to be extre mely noisy against the conduct of most of the city banks that are preparing for an early and honorable resumption of specie payments. On the other hand, those banks that appear to be launching into fresh speculations. by additional issues of irredeemable paper, are very creditably spoken of. The Phenix and the Commercial, being the weakest in point of real merit, so far as the community is concerned, are the pattern banks among the speculators, and overtraders. The State Bank, the Mechanics, the North River, the Merchants, the Fulton, and a few others, are considered as pursuing a less ruinous policy, and less calculated to satisfy the moral sentiments of the public. The National, the Union, the Bank of America-the Manhatt an being silent-and a few other banks indicate by their policy a regard to the state of public opinion, and the determination towards an early resumption of specie payments. The National and Union banks are particularly deserving of credit. To the firmness and good old school notions of the present President of the Union is that institution indebted for its position and its reputation. During the mania of speculation, a couple of large brokers, now bankrupts, attempted to get the Union as the Dry Dock was gutted. Mr. Howard set his face against playing kites, having never touched such amusements since be left school in 1795 or thereabouts. For this unwonted exhibition of moral firmness, the speculators, by intrigue, had him removed from the presidency of the bank, and had another appointed in his place. Mr. Howard, however, did not give up the safety of the vessel, though removed from the command. He went to work among the crew. He reasoned with the directors-pointed out the purpose of the speculators-and saved the institution from the very fate that everwhelmed the Dry Dock Bank. Of several of the other banks we possess full and complete secret financial histories-which we shall give in due time. The suspension of specie payments, which has thrown all business into confusion, was mainly produced by the corruption and mismanagement of the banks themselves. Having now data on which to act, let public opinion correct these errors. Last evening two of the Wall street printsasserted that it is impossible to resume specie payments, unless sustained by a national institution," and such a measure "will end in aggravated disappointment and distress." This is the language of speculators, and the miserable agents of speculators. If the banks of New York are sound and well managed-if they unite with the moral feeling of the age, and return to specie payments, they require the aid or support of no national institution. Justice, integrity, science, skill are as capable of supporting asingle bank as of a thousand-twenty banksas of one large one. Two-thirds, or at least one-half of the city banks can resume tomorrow. Whatisto prevent then Their profits are sufficient to pay the difference between paper and specie. But in addition to this reasoning, their general position is favorable to such a resumption, as will appear by glancing ever the following important analysis of their loans on the 1st January, as compared with their loans on the 1st July. LIANE AND DISCOUNTS

6. August 2, 1837 Morning Herald New York, NY
Article from Morning Herald, August 2, 1837

Click image to open full size in new tab

Article Text

GOVERNMENT DEPOSITES. Decr. Incr. Jan. 1. July 1. 2,071,053 932,964 Bank of America, -2,064,017 1,055,418 Mechaniss, 944,582 2,000,000 Phenix. 183,795 183,795 439,824 140,056 579,880 Merchants, 5:9,000 Union, 130,634 709,634 30,624 National, 150,624 120,000 264,502 115,498 380,000 Merchants' Exchange, 264,911 Leather Manufac. 185,089 450,000 211,000 134,000 Lafayette, 345,000 194,399 133,101 327,500 Seventh Ward, 158,013 41,987 200,000 Tradesman's, 4,238,120 214,419 7,176,031 3,152,330 214,419 3,152,330 Dim. Depos. $4,023,701 $4,023,701 This exhibit furnishes many themes for reflection. They will readily occur to the intelligent mind. We see the folly of making state institutions depositories of the government funds. It supplied them with additional capital to speculate upon, anthus disturbed the original intent of their charters. On the 1st of January last, upwards of seven millions were at the disposal of eleven corporations. Did the framers of their charters ever anticipate such an accession to their capital? What was the effect? Theystimulated, to an unnatural extent, by loaning these funds to detters who had already gone beyond their depth. Up to the 1st of March, these seven millions were no doubtturned twice or thrice with immense profits. And whence were these profits derived? From the pockets of the consumers, the greater part of whom are the middling and poorer classes. The undue extension given to trade, speculation, &c. by the use of seven millions of government funds, brought with it the 4th of March, 1837. We should like very much to see a statement of the affairs of these banks OR that day. It would be a rare and curious exhibit. We will venture one opinion without fear of contradiction, that the public deposites on that day were overnine millions. Let that pass, however. During an unexampled panie, we find these very banks curtailing in all directions, and ruining their deluded victims. They have decreased the deposit fund since the first of the year $4,023,701. It is supposed that the amount of the public revenue locked up in the deposite banks is now about 25 millions. New York owes one ninth of that amount, What is tobinder these eleven Banks from resuming specie payments and liquidating this debt? Nothing but the miserable desire of amassing profits at the expence of their bill-holders and other creditors. We, however, care not for the Treasury."In can afford to pay the whole 29 millions as a bonus for a retur to honesty and straight paths. But there need be no loss. Let t government protect its baaks and throw its whole weight into the some of resumption. The thing-ean be easily effected. But will Mr. Van Buren compel his way ward agents to come back to the good old doctrine of paying what they owe? We again call public attention to the fact that eleven deposite banks of New York coly owe the government $3,152,330! Let this be remembered. Let it be proclaimed throughout the country. If these do not pay this sum voluntarily, they ought to be made to do it even at the expense of their charters. Let something be done retrieve our honorfrom the disgrace of suspension. Stocks today are stiff. United States went ap to 118. Delaware'& Hudson aproved 11, Phenix 4, American Life & Trust 1, Mokawk Rail Road 1. New Orleans Gas Co. remained firm. Speeie was heavy at the Board and in the street. Three o the packets have smiled and carried out a large amount. The other,the London packet, will be detained untile o'clock P.M. this day, to receive . hatever comes along. She towever will netcarry out but a rifling amount more than was engaged for her yesterday. Stx'o'clock, P. M. At the second board today very little was done in stocks There was also great inactivity in therbullion offices. It is calculated that the four paekets which went to sea today will carry.out $1,200,000. in specie, in part payment of the foreign debt. The quantity of produce is meagre. Inc the Ontario alone, for London, we learn that $100,000 of specie passed through the Custom House. Few entries were made for the other vecsels, but it is known, unofficially, that $500,000, if not more, have been shipped to Liverpool and Havre. For several days past the activity in the bullion market has been immense. The following are the exports of specie inthe.several vessels named $500,000 By the Ontario to London, (official,) as 425,000 Orpheus to Liverpool, (unofficial,) do 44 Shakspeare todo. 89,000 " do. Baltimore to Havre, 170,000

7. August 10, 1837 Morning Herald New York, NY
Article from Morning Herald, August 10, 1837

Click image to open full size in new tab

Article Text

DIORC very DOCK From whatever source the Bank of America may have derived its $600,000 of specie is of no consequence to the public. The first duty of every bank is to its bill holders. This institution ought to resume immediately. It has more than specie enough in its vaults to redeem its paper, and it ought not to class itself voluntarily among those banks which were forced to suspend by bad management, &c. We have nothing to do with the engagements of this or any other bank. As coiners of money, and so authorized by the supreme power of the state, we have to do with them. The Bank of America then, can resume if she pleases. In relation to the other banks in the list, their ability to redeem their promises is plainly marked out in our classification. The bill-holder will look surprised to find that every one of them is unable to pay coin for their notes on demand. But he must recollect that the profits of each of these banks far exceed their circulation. They have then a fund to which they can resort if they wish to relieve the community of the heavy tax it is now paying to support them. There are other curious facts connected with the business of some of these banks. The North River Bank, for instance, has new in jeopardy more than one-third of its capital. It has been engaged in the West India trade. The nature of its assets is well known. The Commercial is in a worse condition. She has almost one-half of her capital tied up in the Mississippi trade. Her portfolio presents a fine array of figures, but their realization will be an impossibility. The Phenix and State Banks are swamped in exchange to fully one-fourth of their capital. The securities they hold are little better than their own notes. When they come to touch the "siller" for them, they wille be egregiously disappointed. The Mechanics' Bank may reckon its losses at $400,000 in the kiting system, besides having the death of its cashier to answer for. When the whole batch of the city banks come to be weighed in the scales of justice and right, the classification we have given will be totally changed. It has been urged that the amounts under the head of circulation in the bank statement are not really in the hands of the people forming a currency. Why did not the banks then deduct the notes of each other in their possession, and give us the actual circulation as the Boston banks do? If they cheose to mystify their statements, let them abide by the consequence. We have two other curious and interesting tables Supposing for a moment that the government is a preferred creditor, and that the bill holder must be thrust aside, see how the twelve deposite banks stand affected. of United Stated Manico - Servicio in

8. August 15, 1837 Morning Herald New York, NY
Article from Morning Herald, August 15, 1837

Click image to open full size in new tab

Article Text

MONEY MARKET. Monday, Aug. 14, 6 P. M. The confusion increases in the money market-in the exchasges-and in every operation of commerce Every thing is again tending downwards. The fall which took place in stocks, during the first Board, was continued at the second sitting, and in the street, during the whole day. There is a general impression new that the disparity be. tween specie and paper money will gradually, if not rapidly, increase. This impression has gathered force and strength, fron: the revelation of the policy of the general government.It is generally calculated that this policy will diminish the value of all stocks 20 or 30 per cent further before December. By the 1st of October, the amount of suspended bonds, that will become due by the merchants, will have increased to five millions of dollars. The new policy of the government will have such an effect upon trade and currency as to destroy at least two-thirds of that amount if not more. In the mean time the situation of the banks-and particularly of the Safety Fund banks-becomes more and more critical.Yesterday the Manhattan Company was in the market, as purchaser of specie, to a considerable amount. The bank is preparing, if its courage does not fail it, to publish a general notice of resumption of specie payments before the meeting of Congress. The resumption will take place on their circula. ion only. To provide for the deposites, Mr. White, the cashier, under the advice of the directors, and possibly two members of the cabinet-the Hon. Amos Kendall, (premier de cuisine,) and the Hon. B. F. Butler-has entered into negociations with the depositors that they shall not make any drafts for specie, or give checks on the bank that may be used as such. It is calculated also that the Bank of America will be able to resume on the same principles, and at the sam time. This bank is perfectly able to do so. The Phenix Bank has been purchasing small silver change in considerable quantities, which movement is believed io have originated in the sarie purpose, and intended for the same result. The intention of the banks, by resuming, is, to show the government that an entire separation from incorporations is not called for by the present crisis in their pffairs. If these and other banks should resume, on such qualified principles, they may be able to form a nucleus on which to erect public confidence, and entirely to prevent the necessity of resorting to the Gouge system" in managing the finances of government. If there be any portion of the banks of this city, capable of resuming specie payments, at any sacrifice, even by expending all their profits, it is their duty and their policy to step forward at once, and assume that dignified stand. The United States Bank, notwithstanding all the hopes formed of its president, and his general character for high talent, has proved inadequate to meet the emergency. We are persuaded-and have been so from the commencement-that the banks of this city, in May last. were urged into the suicidal measure of suspension by their worst enemies, or their ignorant friends. We will explain. The panic which caused the run in May, 1837, was not greater t'san that which brought on the crisis in July 1825. Similar causes in 1824, and '25, caused a similar state of the currency to that we have experienced in 1856, and '37. In 1823 and '24, the Bank of England had expanded the currency. This caused a general expansion of the foreign and domestic trade. The exchanges turned against England-the bank found in eighteen months a diminution of the specie from £12,000,000 to £2,000,000. A curtailment ensued in England-and it reacted on this country. Cotton fell-the exchanges run against New York-specie began to be partially exported. This caused a run on our banks. What was the consequence ? Instead of acting under a panic, and in a body, as the banks did in 1837, they conducted their business, each on its own hook. The panic always causes people to run only particular banks. About a dozen banks throughout the country were broke to pieces. This satisfied the masses who were operated upon by pasic. The good banks stood it. The panic subsided in a few days or weeks. The export of specie ceased after sending out only $500,000-and the bank credit was substituted for our foreign debt till 1828, when we exported $3,000,000 of specie without creating a single flurry in the market. When the panic began in May last, our banks ught to have followed a similar policy. Each one ought to havestood it out. A half dozen of the weak banks might, and ought to, have been shut upand closed forever-but the very fact of closing a dozen or two would have stayed the clamor, and in a few days the whole panic would have ceased entirely. Instead of such a bold and decided step, all the banks throughout the country, in a moment of terror, suspended in a body, thus throwing themselves out of the pale of moral sentiment-of st justice-and of unchangeable equity. The only remedy to restore confidence now is to resume as fast as possible such as can and will. If the good banks do not, the avowed policy of the government will destroy them entirely. Yesterday throughout the day, several leading financiers were in consultation with the Hon. B.F. Butler, who leaves town tomorrow morning. The great inquiry was whether it was actually the intention of the government to séparate from the banking system altogether ?" Mr. Butler replied in substance-" It is. The policy of the government is fixed. The State banking system is a broken reed. There is no reason to believe that individuals may not be found safer depositories of the public funds than the banks." These opinions were known in Wall street at an early hour, and it is prebable that they contributed to depress stocks, and add another pang to the des. pondency in the money market.

9. September 22, 1837 Morning Herald New York, NY
Article from Morning Herald, September 22, 1837

Click image to open full size in new tab

Article Text

MORNING HERALD. FRIDAY, SEPTEMBER 22, 1837. The Beginning-Resumption of Specie Payments-Separation of the Sheep from the Goats. To THE PUBLIC.-I hereby give notice that from this day henceforth, the notes of the following banks in this city (with the reasons annexed to them) will be received as equivalent to specie, and also silver will be given for them in change for advertisements, subscriptions and other payments made at this office. NAMES OF THE BANKS. REASONS FOR RECEIVING THEIR NOTES Specie. Circulation. Bank of America, 656,596 440,769 82,564 65,713 Leather Manufacturers' Bank, Seventh Ward Bank 76,390 77,592 Tradesmen's Bank, 28,932 32,993 Thus do I show Mr. Van Buren and his chef de euisine, Amos Kendall, the right path to popularity. Will they not fellow ? JAMES GORDON BENNETT. New York, Sept. 22, 1837. In making this announcement to the publie, it may be expected that I should assign further reasons for taking such a step. I will do so. It becomes the duty of every good citizen and upright man, to aid, in seasons of calamity, the general effort made towards an improvement and restoration in trade and commerce. On many occasions I have honestly and fearlessly laid bare to the public view, what I deemed to be a wide departure from the scienificeprinciplesof: and currency, in the conduct of our banks. I pursued this course through every species of threats-in the midst of inducements to the contrary,-and in opposition to all sinister attempts upon what I believed to be the duty of an intelligent and fearless editor towards an honest, cheated, butenlightened public. When the banks expanded their eirculation last year, in the midst of an inflation of prices, I denounced their policy, their ignorance, their cupidity, and predicted the consequences we have all seen. When the thick-headed and stupid bank commissioners, who seemed to me always like three asses all in a row, were certifying rottenn and giving character to bankruptey, I told the public not to believe these charlatans, and they did not believe them. Thus far thus well. But after the severe revalsion which we have seen, the last throes being yet felt, the banks have at last come to their senses-they have looked into the principles of their peculiar business, and many of them have wisely retraced their steps, and come back, like the prodigal son, to the paths of honesty and correctness. Let us do them justice. We know the fact-personally and beyond the reach of cavil-that the measure of suspension was forced, and urged, and threatened upon them, by speculators in lots, lands, and other articles of cupidity, aided and assisted by corrupt and unprincipled peliticians of this and another city, for the purpose of making the government and the people succumb to the authority of certain bankers and their confederates. It is our deliberate opinion that this self-inflicted calamity was produced by the intrigues of Nicholas Biddle, Esq., of Philadelphia, aided and assisted by his corrupt instruments in this city, the Courier & Enquirer, the Star, with others, in order to destroy the commercial character of New York-extort a new charter from Congress, and make the insolent institution in Philadelphia, the centre of the money market of this Union, instead of New York. Had we aided or assisted in approving such a policy as Mr. James G. King, of the house of Prime & Co., and other Wall street financiers, did, on the day after the suspension, in a public meeting in the Exchange, we should have considered ourself recreant to national honor, to moral principle, to commercial integrity, to correct financial science, and to the interests of New York and the whole country. Instead of pursuing that atrocious policy, only capable of being adopted by ignorance, and hailed by reckless presumption, we insisted upon the banks gradually but rapidly recovering their former strength, and putting themselves in a position to resume specie payments at an early day. On this question a great difference of opinion has existed-but fortunately for correct financial science, nearly one half of our institutions have adopted the right policy, and rejected e advice, and despised the threats of the intriguers and agitators with equal contempt. The banks which we named in the foregoing notice, are at this moment in a condition to resume specie payments. They have duly published monthly statements since May last, and on their statements we, so far as our individual operations extend, have came to the resolution to receive these bills equivalent to specie, and to give that confidence to their paper which their proper management deserves. We find, also, that the following banks, by the policy they pursue, will probably be ready on the 1st of October, to be placed on the same list

10. October 12, 1837 Morning Herald New York, NY
Article from Morning Herald, October 12, 1837

Click image to open full size in new tab

Article Text

$10,000,000 The next question is the rate of premium these notes will bring in the market. The recent refusal of the banks, here and elsewhere, to refuse entering into a negociation, except at a discount, was a ridiculous piece of fanfaronade. Treasury notes, bearing 6 per cent interest, issued by the government, is now the most valuable paper money in the country, or the world. The credit of the I ited States government is equal, if not better, than that of England. Its paper bearing 6 per cent interest will bring a higher premium on London Change than any other, even the bonds of the U.S. Bank, or any government or banking security. There will be no difficulty in negociating these notes, notwithstanding the opposition. A few days ago, a proposition was made to Secretary Woodbury from Philadelphia for $500,000, without interest, at 95 per cent, payable in specie. The Secretary, by the law, has the right to issue at 6 per cent interest or less, and it is yet unsettled at the Department, in what form and at what interest to issue them. This being the case, there will be, th refore, a great competition among capitalists to catch these notes. Now it happens that the aggregate deposites, belonging to capitalists, lying idle in the banks of the commercial cities is fully equal to $30, 000,000. In this city alone, these private deposites equal $15,000,000. The refusal of the banks to negociate for the issue of these notes, will leave the field open to all the private capitalists. These capitalists will immediately withdraw their funds from the banks and invest them in the Treasury notes. The effect of this operation will be to cripple the banks, and curtail their ability to the extent of the whole issue. But the capitalists and the solvent merchants will not feel the effect of this bank curtailment at all. It will principally falt on the speculators, on the banks, and on those who build up their business on accommedation paper. The capitalists will first draw out their deposites-make an investment in the notes-and then when the merchants come into the market, resell them at an advance. According to the relative values of bank paper, specie and Treasury drafts, it is probable that the government will receive for these notes 102, varying to 105-perhaps more, as they will be received in payments to the government, and bear interest at 6 per cent. As soon as the whole amount is absorbed by the deposites held by the capitalists, it is probable these notes will come in'o the market again at an advance, and thus become a highly valuable remittance from the South to the North, and from the North to England. In this shape they will come into competition with the large amounts of southern bank certificates of deposit, now circulating as an exchange currency from the South to the North. The efficiency of these notes as a commercial currency will soon give them a value beyond the paper of any bank, or even of the U.S. Bank. It is probable, therefore, that the capitalists will made a very handsome profit OR the first process of circulation-and that the merchants will make them very useful in the second process. The general results of the issues will be to drive all irredeemable bank paper from the higher ranks efcirculation. It is the greatest blow to the rotten banking system which has yet been made. The capitalists and the solent merchants, throughout the country, will alone receive the benefits of these issues. By the withdrawal of the private deposites, to be invested in these notes, we should not be surprised to see several banks compelled to shut their doors altogether. At any rate the apprehension has already compelled the banks to begin to pay speeie. We learn that the following banks now pay their five dollar notes in specie:Pheuix Bank, Manhattan Bank, Tradesmen Bank, Bank of America, National Bank, Lafayette Bank, The extension of the bond system is also very beneficial to the merchants, to the extent of $5,000,000. The stock market is looking up. Sales at the Stock Exchange.

11. October 17, 1837 Morning Herald New York, NY
Article from Morning Herald, October 17, 1837

Click image to open full size in new tab

Article Text

e e e e not e e MONE Y M A R K E T. Monday, Oct. 16, 6 P. M. The news of the defeat of the Sub-Treasury scheme of finance, has created a great sensation in Wall street. It is considered a great and overwhelming victory by omeparty-apiece of humbug by the other. For our own part, we cannot see that its defeat amounts, practically, to a pin's value to either party. Since the suspension of specie payments by the banks en the 10th of May last, the Sub-Treasury system has been in operation. Who have been the depositories of the beggarly funds of the government since that period? The present officers of the customs, postmasters, and disbursing agents. A sort of an irregular or loafer Sub-Treasury scheme has been the law of the land for the period of time we have specified. By the existing laws, the President has almost the entire control of the revenue, and is empowered to withhold it from the banks till they resume cash payments. By the same law, the government is forbid to receive any money in payment of public dues, ,exceptspecie, or the notes of specie paying banks. The Sub Treasury scheme was merely the distinctand separate recognition of the practice which has beeni existence for six months, and which, until the banks resume specie payments, will be continued unconditionally. The noise made about the victory obtained in the House, sinks therefore to the merest twaddle that ever a set of loafers at the Five Points could rejoice about. If the opposition had defeated the Treasury Note Bill-defeated the fourth Instalment Postponement Bill-and after these defeats. if they had brought forward their OWN measures of relief, and carried them too, then indeed they might have claimed a victory, worth talking about. But in the face of losing every practical, tangible, distinct point of any importance mooted by the administration, to talk of triumph and victory, is to indicate boyish weakness, unworthy the name of common sense. In the midst of this state of feeling, stocks rather took a start, arising, however,more from the complexion of affairs,generally, than from the distinct action of Congress. Yet there is more political than commercial activity in the street. For six or seven years,from the time the late President began his "tinkering the currency," the commercial affairs of thiscountry have been in a constant agitation. We have lived through a panic of six years. Any other country, but the patient and long suffering Yankees, would have generated and carried through an organic revolution long since. At this moment, the elements of panic and political agitation are commencing a new conflict with the elements of prosperity and returning confidence. All the bankrupts, spendthrifts, speculators, visionaries, shinplasterers, are combining together to prevent the measures of Congress from producing that salutary effect which they might do by giving them a fair and candid trial. Several of the banks, struck by "the compunctious visitings of conscience," have shown a disposition to return to hepaths of honesty and specie payments. In this city and Albany, six banks now redeem their five dollar notes, and two all their issues. The following is the list, with their condition, at the last returns on the 1st of September:SPECIE PAYING BANKS IN NEW YORK. Loans. Cir. Specie Depes. Bank of America. 440,769 4,108,750 656 596 1,489,321 737,852 28,932 Tradesmens' bank, 32,993 331,582 851,860 98,735 Lafayette bank, 42,818 126,296 Phoenix bank, 226,889 149,927 2,163,545 768,464 736,905 76,390 Seventh Ward bank, 77,592. 244,435 Manhattan bank, Jan. 1, 5,451,890 568,417 601,427 1,546,344 SPECIE PAYING BANKS IN ALBANY. 986,241 435,747 70,373 Farmers' & Mechanics, 148,280 Canal bank 601,700 59,550 3,085 81,819 Two or three of these banks, the Tradesmens of N.York, and the Canal in Albany, pay all their issues of $5 and upwards.These and other banks, united with the action of the government, and the harmonious feeling of the solvent portion of the community, might be able to begin a movement calculated to lead to general confidence in our solvent banking system, and the ultimate recovery of all our former prosperity. In addition, we have the pleasure of stating the following as the condition of the UNITED STATES BANK for the month of September :New notes in circul'n. Old Circulation. Specie. $6,175,861 $601,40S. $3,016,230 It will be recollected that the old circulation of the bank is not redeemable on demand, the new circulation is so. This being the case, the United States bank may be considered as baving resumed specie payments, and we learn that this institution will accordingly pay in specie from this week forward. For further particulars we refer to our valuable correspondent's letter in another column. One of the most effectual instruments of the movement, might be the new issue of Treasury notes, but from what we hear, we fear that Secretary Woodbury will not take the advice of sound practical men, preferring the opinion of his ignorant kitchen advisers at Washington. The object of the government in these issues is o-fold. First to pay the public creditor what is due him, and secondly, to furnish a currency that will pass as such at par for a year. For this purpose it is said that the Treasury will first issue abent $1,600,000 at 2 per cent interest, and if it should be found that they fall below par, then to raise the interest on future issues. An issue at 2 per cent interest, will inevitably depress them to 95 or 96 at least. The objection that these notes are not redeemable in Lowdon, fall to the ground, not only for the reason that we gave yesterday in connection with the cotton trade, but for another and a stronger reason connected with emigration. If a large amount of these notes reach Europe, they will be bought up by emigram: coming to the United States. Receivable s they will be for all debts due the government. they will form bet. ter mode for emigrants of transferring values from Europe to America, than specie, bank of England notes, or commercial bills of exchange. Again, of their receivability at the custom house, a point which has been disputed. No orders have yet been received there, directing the public officers to take them in pay of duties before the day of redemption. At this mement there are $7,000,000 value in foreign goods in the public stores, waiting the action of the new compromising bill. As soon the department determine what course to pursue on the treasury notes, a decided action wil: take place in commercial affairs. At present we are loafers. Sales a the Stock Exchance