Mechanics and Laborers' Bank

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: November 1, 1878*
Location: Jersey City, New Jersey (40.728, -74.078)

Metadata

Model: gpt-5-mini
Short Digest: d9c3c20b

Response Measures

None

Description

The bank failed/suspended on November 2, 1878 due to insolvency and alleged conspiracy to defraud depositors; directors were arrested and a receiver was later appointed (receiver declared dividend by July 1879). Contemporary articles describe failure and criminal charges rather than a depositor run on this specific bank (runs occurred at other local banks).

Events (2)

1. November 1, 1878* Receivership

Newspaper Excerpt: Washington B. Williams, who was appointed by Chancellor Runyon receiver of the defunct Mechanics and Laborers' Bank, of Jersey City, which suspended in November last, yesterday declared a dividend of ten per cent, payable to-morrow. (July 6, 1879 article referencing receiver.)
Source: newspapers

2. November 2, 1878 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank insolvency due to mismanagement and alleged conspiracy to defraud depositors; nearly $100,000 deficiency and false statements by officers.
Newspaper Excerpt: The Mechanics and Laborers' Bank ... failed on November 2, 1878, with a deficiency of nearly $100,000.
Source: newspapers

Newspaper Articles (4)

1. December 3, 1878 The New York Herald New York, NY

Article from The New York Herald, December 3, 1878

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Article Text

JERSEY CITY BANK TROUBLES. THE DIRECTORS OF THE MECHANICS AND LABORERS' BANK SURRENDER TO JUDGE MEEHAN-RUN ON THE PROVIDENT INSTITUTION FOR SAVINGS. Eleven of the directors of the Mechanics and Laborers' Bank, of Jersey City, who were charged by James J. Furey with conspiring to defraud the depositors, last evening surrendered themselves to Judge John Meehan and were admitted to bail in the sum of $500 each for their appearance at the present term of the County Court. With the exception of the ex-president, John Halliard, the directors became surety for one another. Mr. Halliard's bondsman was Mr. George L. Brooks. The directors who were bailed were Dr. T. C. O'Callaghan, now president; James W. Donelan, secretary; John Halliard, ex-president: Patrick Sheeran, Police Commissioner Matthew Monks, Henry Carroll, John Miller, James J. Reed, Patrick Meehan, Owen T W. McDonald and A. J. Dittmar. None of them expressed themselves in relation to the complaint while in court, except Messrs. McDonald and Sheeran. The former threatened to prosecute Mr. Furey, the complainant, if the law afforded him any opportunity to do so, and Mr. Sheeran was indignant that a complaint of such a serious nature should be entertained by any justice against citizens who were so well and favorably known throughout the county as they were. He threatened to put an end to all measures proposed for the relief of the depositors. The majority not the directors came into the court room with smiling faces and left the court room apparently in the same humor. The directors who failed to appear are Messrs. H. N. McKay, George P. Brock, Patrick Congdon, Jeremiah Sweeny, Robert Smyth, James Cartin and James Murphy. The charges against the directors will be presented before the Grand Jury which meets to-day to serve for the December term of Court. A feature of the affair is that two of the directors are members of the Grand Jury. The directors will visit the Chancellor to-day to learn his decision on their request to allow the bank to continue. Chancellor Runyon will also be waited upon by a committee of depositors representing those who desire the appointment of 2 receiver. ALARMED DEPOSITORS. The reports of the difficulties of the Mechanics and Laborers' Bank have given rise to doubts of the solvency of other banks in Jersey City, and yesterday quite a run of depositors began at the Provident Institution for Savings, corner of Washington and Plymouth streets. The institution has always been regarded an one of the safest, and the fears of those who presented their books yesterday, with a demand for their money, were greatly allayed when the amount was promptly handed out by the teller. Mr. E. W. Kingsland, County Collector, who is secretary and treasurer of the institution, when spoken to by a reporter at his residence, did not know how any rumor affecting the standing of the bank could have got abroad nnleez through the fact that Lincoln Lodge, I. O. O.F., on Saturday last drew their money from the bank and made the fact public.

2. December 4, 1878 The New York Herald New York, NY

Article from The New York Herald, December 4, 1878

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Article Text

THE RUN ON THE PROVIDENT INSTITUTION FOR SAVINGS IN JERSEY CITY-ANOTHER COMPLAINT AGAINST THE MECHANICS AND LABORERS' BANK. The excitement attending the arrest of the directors of the Mechanics and Laborers' Bank, of Jersey City, has been such as to seriously alarm the bank depositors in that city, and the result is that large numbers of the poorer depositors are making demands on all the banks in the city for their money. The run on the Provident Institution for Savings, corner of Plymouth and Washington streets, which was begun on Monday, continued yesterday, and was even larger than on the previous day. The bank has been in operation for thirty-five years, and through its economical and close management was always rated to be the safest in the State. When the rumor of a run on the institution was first heard it was laughed at as ridiculous; yet a crowd be gan to gather about its doors, and yesterday, long before the doors were opened, the stoop and street in front of the building were thronged with depositors, the majority of them being women. When the doors were opened the throng rushed in and presented their books for payment. Several directors sat in the back room smoking, and all the money that could be paid out in a day was placed on the desks in front of the clerks. County Collector E. W. Kingsland, the secretary and treasurer of the institution, walked about behind the desks watching the clerks as they rapidly made up the different accounts and paid out the full amount to each depositor. Many of the depositors, as they saw the clerks paying out without a word, began to grow confident and left without drawing their money. On Saturday last $33,000 were drawn and on Monday about $40,000; yesterday the amount drawn reached over $50,000. Many depositors were anxious to have their books made up with interest to January 1, but this the directors refused to do. Interest was computed up to July 1 only. Thus by the run the bank saves five months' interest on the amount drawn. Secretary of State Henry C. Kelsey, having heard of the run, visited the bank yesterday, and assured the depositors that they were needlessly alarmed. He said that Bank Examiner Van Camp, who recently made an examination of the affairs of the institution, reported that the management was excellent, the bonds and securities of the safest and that over $1,000,000 could be realized within twenty-four hours on the bonds and government securities. He considered the bank able to pay every dollar. and have a handsome surplus left. The profits of the institution at present averaged nearly $60,000 annually, while the surplus amounted to nearly $200,000. The report of the bank to the State department in January last shows the assets at that time to have been $4,820,679 and liabilities $4,652,075. THE MECHANICS AND LABORERS' BANK. No decision has yet been rendered by Chancellor Runyon on the application of the directors of the Mechanics and Laborers' Bank to be allowed to continue business and the request of several depositors for the appointment of a receiver. Secretary of State Kelsey said yesterday that the bank, since its organization, had never filed any report with the State of its condition, and it was only through an accident that he became aware that such a bank was in operation. Bank Examiner Van Camp was sent at once to make an examination of their books and on reporting its embarrassed condition to Mr. Kelsey the latter began proceedings for the appointment of a receiver. One would have been appointed 'ere this but for the application of the directors and their statement that if they were allowed to continue they would in a short time be able to meet their entire liabilities. It was because of this proposition that the Chancellor has held the matter in abeyance. Yesterday another complaint was made against the directors of the institution by James Chester, of Hoboken, who in his affidavit alleges that Secretary Donelan resorted to false pretences and falsehood to get him to deposit his money in the bank, knowing at the time that the bank was insolvent. Although the directors were arrested and gave bail before Judge Meehan for alleged conspiracy on Monday they will, it is thought, be rearrested to-day on Chester's complaint.

3. July 6, 1879 The New York Herald New York, NY

Article from The New York Herald, July 6, 1879

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SUBURBAN NOTES. Brooklyn's city treasury contains at present $1,310,207 13. The Brooklyn tower of the East River Bridge was completed yesterday. John P. Walters, of Mount Vernon, a harness maker, went to get a pail of water from a well on Friday. His body was subsequently found in the water, head downward. Three boys, residing with their parents in Orange, N. J., visited Newark yesterday, and, hiring a boat, went in bathing. One of them, Clifford Thompson, was drowned. The body was still undiscovered late last night. A brakeman named Gross, while attempting to get off a train on the Pennsylvania Railroad coming into Jersey City, yesterday afternoon, fell upon the rail and two cars of the train passed over his body, instantly killing him. A steam motor on the Third avenue line of cars, Brooklyn, collided with a street car which was off the track on Friday night last, and slightly injured several people who were returning from a picnic. The motor was badly damaged. Washington B. Williams, who was appointed by Chancellor Runyon receiver of the defunet Mechanics and Laborers' Bank, of Jersey City, which suspended in November last, yesterday declared a dividend of ten per cent, payable to-morrow. Judge Pratt, of the Kings County Supreme Court, yesterday annulled the marriage between Henry Cratt and Elizabeth Craft, of East New York, on the ground that at the time the marriage was constructed the defendant was of unsound mind. a The officials of Richmond county were notified by telegrams from Albany yesterday that Governor Robinson had appointed Dr. J. J. Van Rensselaer, of Stapleton, as Coroner, in place of James Dempsey, recently convicted of perjury and sentenced to State Prison. The hat manufactory owned by John Taichnor and situated on Broad street, Stapleton, S. I., caught fire early yesterday morning. The flamer spread to an adjoining building, owned by Mary Wilson and OCcupied by J. Matthews. The loss is estimated at between $5,000 and $6,000. Supposed cause, fireworks. Herman Peter and Benjamin Schwam, neighbors, of Seventeenth street, Newark, quarrelled about some trifle on Thursday night. Peter knocked Schwam down and beat him. While Schwain lay on his back he whipped out a gardener's knife and nearly severed Peter's nose from his face. Peter's condition is considered dangerous. Schwam has been arrested and held for trial.

4. December 3, 1881 New-York Tribune New York, NY

Article from New-York Tribune, December 3, 1881

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Article Text

BANK OFFICERS PUNISHED. There was an unusually large attendance at the Court House in Jersey City vesterday morning, drawn there by the announcement, made two weeks ago, that the officers of the broken Mechanics and Laborers' Bank would be sentenced. The defendants, John Halliard, president; James W. Donelan, cashier, and Thomas C. O'Callaghan, ex-Assemblyman, Patrick Sheeran, ex-Alderman Jeremiah Sweeny and Adam J. Dittmar. arrived at the Court House early, but did not show themselves at first. At 11 o'clock Judge Garretson and his associates took their seats on the bench and the defendants were called. Ex-Attorney-General Gilchrist made an appeal in behalf of Halliard. He was followed by ex-Senator Gilbett, who pleaded for Sweeny and the other directors; he intimating that the chief responsibility for the bank's failure rested with Halliard. Gilbert Col 1118 made an earnest appeal for all the defendantsexcept Halliard, and then the judges retired for consultation. In about an hour they returned, and Judge Garretson pronounced the sentence of the Court. He said that no case had been tried while he had had a place on the bench which had given the Court more trouble. The defendants were convicted of mismanagement of a bank, and of conspiracy to defraud its depositors. The Court did not feel disposed 10 question the verdict. The trial was fair and impartial; the finding of the jury was in accordance with the testimony, and it met with the approval of the Court. The evidence showed a difference in the degree of crime on the part of the defendants, which would exert an influence on the judgment of the Court. John Halliard was the president of the bank, and had the absolute control that officials of the same standing have in similar institutions. The bank was carried on until ruined by Halliard, and the Court could not shut its eyes to his responsibility. When Donelan was made secretary, he called the attention of the directors to the deficiency in the bank's funds, and Halliard was called on to explain. He made a statement, but in the opinion of the Court that statement was false. It was then resolved to keep the insolvency of the bank a secret, and to continue business, although Halliard know at the time that the bank could not be revived. Donelan and O'Callaghan knew of this agreement to continue business, and induced people to put money in the bank and prevented others from drawing their money out. Sheeran and Sweeny knew of the agreement. and exerted themselves to strengthen the institution. The Judge then sentenced Hailiard to State Prison for eighteen months, fined Doneian and O'Callaghan $500 each and costs, and sentence was suspended in the cases of the other directors on payment of costs. The general opinion in Jersey City is that the sentences are very light. The Mechanics and Laborers' Bank was organized in 1869, and failed on November 2, 1878, with a deficiency of nearly $100,000. The ositors were all poor people, many of whom had been in uced to put their savings in the bank because the officers church were all Catholics and prominent in circies. The failure caused great distress, and 80 much indignation was aroused among the depositors that at one time it was feared that the officers would be lynched. The defendants were indicted for conspiracy to defraud and convicted. Before being sentenced they appealed to the Supreme Court, which after a year's consideration decided not to interfere with the case. Halliard was taken into custody immediately after sentence was pronounced, and removed to the County Jail. The others have not paid their fines yet.