1413. Eastern Bank (Killingly, CT)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
March 15, 1853
Location
Killingly, Connecticut (41.831, -71.850)

Metadata

Model
gpt-5-mini
Short Digest
799cf5c41238447d

Response Measures

None

Description

Multiple articles (mid-March 1853) report the Eastern Bank of West Killingly suspended payment/closed after the failure of broker W. E. Chittenden who owned/controlled the bank. Reports describe an injunction closing its doors and that its assets were inadequate; no article describes a depositor run or later reopening, so this is classified as a suspension leading to closure.

Events (1)
1. March 15, 1853 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Immediate cause was the failure of W. E. Chittenden (a broker who owned/managed the bank) which left the bank insolvent or unable to meet obligations; assets were reported largely worthless and insufficient to redeem circulation. An injunction was issued closing the bank's doors shortly thereafter.
Newspaper Excerpt
It was announced...that the Woodbury Bank, of Woodbury, Conu., and Eastern Bank of West Killingly, Conn., had suspended payment
Source
newspapers

Newspaper Articles (8)
1. March 15, 1853 The Daily Dispatch Richmond, VA
Article from The Daily Dispatch, March 15, 1853

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BANK FAILURES. The New York Heraid has the following with regard to the recent failure of some New England Banks: It was announced quite early in the street this morning, that the Woodbury Bank, of Woodbury, Conu., and Eastern Bank of West Killingly, Conn., had suspended payment, and the Metropolitan Bank had refused to take their bills. It was reported that the Bank of North America, of Seymour, Conn., had suspended; but it was concluded to help it along, and remove, if possible, the difficulties under which it labors. The first two named banks faile I on account of too great an expansion, and when they applied for help it was found that their assets, (what few they had,) were worthless, and they were let down, without putting out a hand to save them. The circulation of the Woodbury Bank and the Eastern Bank amounts to about three hundred and eighty thousand dollare, and the probability is, that the bills are not worth ten cents on the dollar. These banks were established some time since, upon the New England system-the no security system-and there is no guaranty to the public that the bills will ever be redeemed. This is another evidence of the rottenness of that system. No one knows anything about the New England banks. They are sustained by a combination of the people and universal confidence among bill holders. The Suffolk Bank, of Boston, and the Metropolitan Bank of this city, have done more to give the issues of New England banks a wide circulation than any thing else, and they are the first to refuse them.

2. March 17, 1853 The Weekly Lancaster Gazette Lancaster, OH
Article from The Weekly Lancaster Gazette, March 17, 1853

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THE BANK FAILURES.-Three of the one horse Banks in Connecticut, of the progeny of the W all Street Brokers, have failed, viz: Eastern Bank, at West Killingly. Bank of North America, at Seymour. Woodbury Bank, at Woodbury. The cause of-the failure of these Banks we do not know, nor should the fact that Banks es ablished by speculating brokers to be used for their own accommodations fail, surprise any one or create a panic, indiscriminately discrediting the notes of the sound as well as of the unsound Banks. Such a panic injures community, and can only benefit brokers. Most of the Connecticut Bankers have capital, are conducted by experienced and capable men, and are safe. The failure of unsound banks increases the strength of the sound ones.-Cin. Gazette.

3. March 17, 1853 Litchfield Enquirer Litchfield, CT
Article from Litchfield Enquirer, March 17, 1853

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Bank Failures. The reported failure, on Friday, of the Woodbury Bank, and the Eastern Bank of West Killingly, was the cause of some commotion among those of our citizens who happened to be bill holders of those institutions. The failure of Mr. Wm. E. Chittenden of New York, was the immediate cause of the ir suspension. The capital of the Woodbury Bank was 100,000, and the circulation $180,000. The Eastern Bank circula. tion is estimated at $120,000-capital $100,000. The New York Journal of Commerce of Saturday, says in regard AYH to them They appear to have been designed mainly as Banks of circulation A portion of the capital was subscribed by parties in the neighborhood where they were located, under an impression, doubtless, that they were to be conducted on the same principle as the old, sound and ever relia ble Banks, which have given ever so good a character to the currency of Connecticut, In this, however, they were mistakea; and the loss will fall, in some cases, upon persons who are poorly able to support ita Officers, from some of the Hartford and New Haven Banks were here yesterdey, with a view to render assistance to the two suspended Banks, if it should be found expedient. But a partial exhibit of their affairs was not such, we understand, as to justify an attempt to resuscitate them." The Bank of North America, at Sey mour was also said to have suspended. but of the solvency of this institution no doubts need be entertained. A card in the New York papers announces that its notes will be redeemed at its counter or at the Ocean Bank, New York. It is also stated that the Woodbury Bank has thus far redeemed all bills present ed.

4. March 17, 1853 The Daily Union Washington, DC
Article from The Daily Union, March 17, 1853

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COMMERCIAL From our Commercial Correspondent. NEW YORK, March 15, 1853 The stringency of the money market, which was so com plained of last week among the stock speculators, is now far asparent, When the country is so full of capital, and so prosperous as now, a pressure soon works its own cure. The banks of New Pork city have for months been soliciting dealers to take their money for promises at low rates. They have induced many persons, by the facilities they have held out to them, to contract large obligations, and then suddenly discovered that they had loaned more than they possessed. Panic stricken, they turned suddenly round, demanding prompt payment for calls, loans, and matured paper, and rushed into the street to sell paper that was not matured The public paid up what was due, and private capital purchased the good paper that embarrassed cashiers offered. This process caused a rapid diminution in the line" of loans. Everybody paid; nobody failed-not even holders of faney stocks; the cashiers got over their panic, and begin to want those whom they have squeezed to borrow again of them. The manufacture of small notes for circulation has received some check in the failure of small batch owned by one W E. Chittenden, a broker. These were the Woodbury Bank of Connecticut, the Eastern Bank at West Killingly, and the Bank of East Tennessee. The owner of these banks stopped, and he sent word to the northern banks, that unless they aided him his banks must stop. A committee came down, and examined his assets. The circulation of the two first named was about $380,000, and he offered as security for assistance assets amounting to about $172,000. Of this, $10,000 was deemed good, besides about $20,000 of railroad bonds; consequently he stopped. These were not free banks," or secured notes, bus were irresponsible issues of paper, to circulate as money. This paper was put afloat in the western country through Chittenden and his agents for paying hard-working people on railroads, and industrious farmers for their produce. What was done with the pro ceeds of the notes put out does not appear, for there is noth+ ing to show for thein There are numerous other banks started in the eastern States for circulation at the West, and many banks which are good, and call themselves respectable, use indirect means to put out their paper the West This process of forcing paper monay into circulation is an evil which requires remedy, but which can be applied only by the entire withdrawal of all government countenance from paper money in any shape. These notes of Chittenden's never would have been palmed upon the western people, had not the State of Connecticut given them a stamp of legitimacy by granting them a charter. All the interests of society require that the independent treasury system of the federal government should be carried out and strictly enforced in all the States, requiring all State dues to be paid in specie, and refusing all countenance to paper issues. The spring business thus far has been in a high degree prosperous The current of exchanges has been in favor of the West and South during the winter, and that circumstance has enabled the dealers to make their appearance for the purchase of goods with ample means, and business continues remarkably brisk at firm rates for most goods Produce has, indeed, under the latest advices from abroad, been drooping for a few weeks, and among the dealers in is those articles, particularly cotton, flour, and pork, there less degree of buoyancy arising from the check given by the pause in speculation abroad The arrivals of gold will reach for March nearly five and a half millions, with an ex port of one million A. large portion of this will go into the interior in remittance for produce and railroad investments, as well as to those who have earned it in California. Its presence West and South can have no other result, however, than to vivify trade, and cause it ultimately to great profit. A specie curis the most profitable to the rency at the are eastern interest The products of the new States their means of baying what they most want. These are chiefly manufactured goods sil pplied from the East, specie for currency, and railroads and other means of communication. The goods purchased are generally consumed, and the want is renewed. It, however, instead of using paper for circulation, they invest several millions in the precious metals for a currency, necessarily, to that extent, are the purchases of goods curtailed and, moreover, after the cumulation of considerable specie, if admission is found bank notes, the specie will be driven out for the purchase of goods, and the eastern basiness enhanced while the specie lasts. The increase of specie South and West has been one cause of the bank difficulties on the seaboard during the past few weeks. The abundance of capital here continues, however, very great, and for desirable objects there is no lack of means. As an instance, there has been taken to-day one million dollars of the 10 per cent bonds of the great West ern railroad of Illinois by Messis Ketchum, Rogers, & Bement, of this city. It is understood that the whole was taken for themselves and clients, embracing the most influential mercantile firms in New York. This was during an alleged season of "tightness in the money market"that is to say, when stockjobbers, shinplaster banks, and financiers cannot borrow without security. At such a quack moment, however, a few of the merchants of New York subscribed million to a meritorious enterprise, as mat ter of course The great Western railroad of Illinois is one of he most important in the whole country, inasmuch as that it is the Illinois link in that directroute from New York towards the Pacific which is in process of construction to the Missouri river. The road was originally part of the great system of internal improvements adopted by Illinois in 1837. It was projected to run from Quincy, on the Mississippi across the Illinois river, due east through Jacksonville, which contains the great public charitable institution of the State through Springfield the State capital, intersecting the Central railroad at Decatur, and proceeding to the Indiana line in the direction of Lafayette This line was about 180 miles, and was called the "Northern Cross road." More importance was attached to it than to al most any other State work Accordingly it was the only one put in operation by the State. After an expenditure of about $1,000,000 upon the whole line, the route from the Illinoisriver to Springfield- miles into operation in 1540 In 1845 company was organized called the "Sangarnon and Morgan," and the State sold to this company that part of the Northern Cross-road from the Illinois river170 miles -10 the Indiana line, with all its property, depots, stations, incomplete work, rights, and privileges. This hascontinued profitable in operation, and has attracted its route a considerable population. In the mean time the great system of railroads in Ohio connecting with New York and Philadelphia has been developed and continued by successive routes through Indiana to the lilinois line. On the west the road from opposite Quincy has been commenced. to cross Missouri on its way to the Pacific. The road from Indianapolis to Terre Haute is about being ex tended to the Illinois line, and the Sangamon & Morgan road have determined to relay their track and to complete their extension, to connect east and west when the great lines coming from Toledo, from Wooster and from Columbus would connect across Illinois with the Mississippi The expense of this extension would be very much modi fied by the remains of the old State work, the grading and masonry of which remains very good. The expense of $ 1,000,000 would put the whole in working order from Decalar, the junction with the Central and with the Terre Haute roads, 10 the Illinois, where steamboat connexion with St. Louis is already formed. To secure the loan, whole road, with its depots, stations, rights, and franchise, was mortgaged in trust to the Farmers' Loan & Trust Com pany, of New York, for the payment of the bonds in 15 years, These bonds. as we have said, were promptly taken, and the work is being rapily pashed to completion. The iron has been purchased, and portion has already arrived at New Orleans, and the " ties" are on the line. the The proceeds of the bonds (one millions dollars) are to

5. March 18, 1853 The New York Herald New York, NY
Article from The New York Herald, March 18, 1853

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FINANCIAL AND COMMERCIAL. MONEY MARKET. THURSDAY, March 17-6 P.M. There were large sales of Nicaragua, Cumberland, and Erie, this morning, at prices a fraction below those current at the close yesterday. Most of the operations were on time, showing no let up in the tightness of the money market. At the first board New Jersey Zinc declined & per cent; Nicaragua, &; Harlem, I; Reading Railroad, 1; Hudson River Railroad, 1. Florence and Keyport advanced & per cent; Buffalo and Rochester Railroad, 1; St. Lawrence Mining Company, 1. At the second board, there were more evidences of weakness, and but very little business was transacted. Nicaragua fell off & per cent; Erie Railroad, 1; Hudson River Railroad, 1. There was a very active demand for money throughout the day, and the pressure is likely to be more severe than ever. A large failure in Baltimore was reported this morning, which caused a great deal of excitement in certain circles. Many are apprehensive that more will follow. During the past week the mercantile classes have been more embarrassed than for many years before, and a contraction has commenced that will ultimately place things upon a healthier basis. The ordeal through which they must pass may prove fatal to many; but it is better that such a purging should be made now than the disease become more deeply seated, when the treatment would be more serious, and the result less favorable. The receipts at the office of the Assistant Treasurer of this port to-day amounted to $228,265; payments, $119,749 89-balance, $6,819,369 23. Capitalists must bear in mind that Simeon Draper wil: sell at auction to-morrow-Friday, March 19-at the Merchants' Exchange, at twelve o'clock, eighty thousand dollars of the bonds of the Wellsville Coal and Land Company. These bonds bear interest at the rate of seven per cent per annum, with coupons attached, payable January and July, in this city, principal payable in 1862. This company owns a valuable tract of bituminous coal land at Wellsville, on the Ohio river. There are two wide extended beds on the company's property, both of good quality, but of varied excellence. The veins are of a convenient working thickness, and all crop out at the hill side, draining themselves, and affording every advantage that could be wished for in convenience for working and for running the coal down to the railroad depots and to the steamboat wharves, which are nowhere more than half 2 mile distant from the pit mouth. The superficial vein, of four and a half to six feet thick, is acknowledged to be the best coal available for the market of Cleveland and the lakes. It is got out in bright. bituminous, hard lumps, very free from iron and sulphur, and its quality makes it sought after with avidity by the Ohio steamers. The company can deliver their coal at Cleveland for less than two dollars per ton. The prices it commands there range from three dollars to four dollars; and there is as ample a margin for profit on what they furnish at the pit mouth for steamboat, manufacturing and domestic consumption. To enable them to open out the coal veins more thoroughly, to lay down their tracks from the wharves and railroad depots tofthe mines, andt o work more extensively this Cleveland coal traffic, and, also, to improve the wharves and landing, the Wellsville Company now come into the market for a loan. The Norwich Courier states that Judge Wait, of the Superior Court, has issued an injunction against the Eastern Bank at West Killingly, thus closing its doors for the present. As before mentioned, the circulation of this bank is $110,000, in addition to which it has other liabilities which will raise th whole amount of its debts to $133,600. Its asse according to the paper above quoted, are $40,00 ad, bonds or stock of the Rock Island (III.) Re notes $10,000 in specie, and $15,000 receivable 00. discounted to customers-riaking in all rilroad for The earnings of the Michigan Centra' February were as annexed :MICHIGAN CENTRAL RAIL Ret's. Total Passengers. Freight. b25 $40,045.92 1853 $15,087 89 $20,933 03 21,143 22 1852 10,061 61 14,081 6' $4,025 $15,902 73 Increase. $5,026 28 $6,867 Garter of the fiscal year Earnings for the February 28th, as compared of the company, endin

6. March 18, 1853 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, March 18, 1853

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Total $4,709,516 $9,709,023 $7,563,834 $3,507,881 A small loan for the City of Buffalo, $60,000 of sixes, was taken here a few days ago, and are now held at 105. The money is to be expended in public buildings. We remind our readers of Mr. Draper's sale of Wellsville Coal and Land Company Bonds to-morrow. The Bonds amount to $80,000, ten years to run, bearing 7 per cent. interest, and secured on lands and coal mines at Wellsville, on the Ohio River. The City of Newark invites sealed proposals for a loan of $50,000, in Coupon Bonds, bearing six per cent. interest, and redeemable in the year 1880. Bids will be received until the 1st day of April, 1853. The Norwich Courier states that Judge Wait, of the Superior Court, hasissued an injunction against the Eastern Bank at West Killingly, thus closing its doors for the present. As before mentioned, the circulation of this Bank is $110,000 in addition to which it has other liabilities which will raise the whole amount of its debts to $133,600. Its assets, according to the paper above quoted, are $40,000 in bonds or stock of the Rock Island (III.) Railroad $10,000 in specie, and $15,000 receivable, on notes discounted to customersmaking, in all, $65,000. A large provision house is telegraphed as having failed in Baltimore. The receipts of the Philadelphia and Columbia Road for the quarter ending 28th February 1852, were $117,638 31 Ditto1853 170,591 0 Increase $52,952 24 A Richmond, Va., letter says, in regard to the Bank basis extension bill before our Legis) ture The Treasurer informs me that, in the event of its passage, eight millions of dollars worth of our bonds will at once be purchased by a New-York broker, at a higher premium than they have yet reached." It is proposed to increase the tax in Virginia to twenty cents on the hundred dollars, being two cents more than the tax now in force. The estimated receipts into the treasury from all sources, for the year ending September 30, 1853, is $1,517,583 49, and the estimated expenditures for the same period, $1,436,733 84, leaving a balance in the tressury, including small surplus from last year, of $118,478 47. This estimate is made upon the tax of eighteen cents: if the rate is increased to twenty cents, the receipts will be much larger. A company has been organized with a capital of six millions of dollars, to construct a Railroad from a point on the Mississippi near Davenport, in the the State of Iowa, to a point on the Missouri near Council Bluffs, The line will be run in & nearly straight west direction across the southern part of Iowa. The Directors of this new company are John B. Jervis, Joseph E. Sheffield, Henry Marnum, John M. Wilson, Norman B. Judd, Ebenezer Cook. John P. Cook, James Grant and Hiram Pierce. The Galena Adcertiser states that a preliminary survey of the Air Line Railroad from that City to Chicago, by the way of Savannah, Oregon, Sycamore and St. Charles, was commenced lately. It is thought that the requisite amount of stock in this road will be immediately taken, and the road be completed within eighteen months from the time when the contracts are taken We annex some extracts of letters received by the last Lake Superior mails to Jan. 15 Cliff Mine-It is clearly proven that this mine has increased in width and richness, from the surface to the depth of 680 feet. There is more Mass Copper at the bottom than has been found at any point above. South Cliff. 1,500 feet south, on the same vein, shows one mass of fine Copper of from 50to 80 tuns, and others of less size vein, is well defined and of very fair promise. This is & very interesting feature, from the fact that it clearly proves those mines to be productive entirely aoroes the amygdaloidal rocks, which is at some points about two miles in width. Copper Falls Mines continue to show Mass Copper as the ground is opened Several masses are met with in different parts of the mine: the largest is about 49 feet in length, but as yet we know nothing of its extent J. Hill vein will average about 212 feet in width for some 1,200 feet in length, and is well filled with mass bbl and stamp Copper. The Copper Falls vein will average about 20 inches The largest mass of Copper exposed is this vein is about 12 tuns: many small masses are met with, and the entire vein is well filled with bbl and stamp work North-Western Mine continues to improve: the rein is about 24 feet in width, produces masses of Copper from 12,000 to downward, with rich bbl. and stamp Copper. The 20 fathom level shows & decided improvement. Dana Mine has improved very much the past winter: in the 20 fathom level the vein is about 90 inches in width, well filled with small mass bbl. and stamp Copper. Native Copper and North-Wes continue about the same. Mainto Mines, for the work done, shows very favors ble results. This mine is so situated upon the southern escarpment of the trapean range, that it can be opened by driving in levels and worked to the depth of about 250 feet in the mustalliferous rocks. The sdit level has

7. March 19, 1853 Weekly National Intelligencer Washington, DC
Article from Weekly National Intelligencer, March 19, 1853

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BROKEN BANKS.-It was announced in Wall street on Friday that the Woodbury Bank, of Woodbury, Connecticut, and the Eastern Bank, West Killingly, Connecticut, had failed and for a few hours there was in consequence quite a panic among holders of New England bank notes. Some of the brokers refused to purchase the notes of any of the Eastern banks; and the American Exchange Bank, we are informed, received them only upon the guarantee of depositors. As soon as the true state of the case becomes known, the excitement will doubtless disappear. The two banks in question had never enjoyed the full confidence of the other Connecticut banks. They were partly owned and chiefly managed by a Wall street broker, or operator, who, having failed the day previous, was of course unable to disentangle his affairs from those of his proteges; and the banks, if not previously rotten, suffered from their connexion with him. A rumor was in circulation prejudicial to the Bank of North America, at Seymour, (formerly Humphreysville,) Connecticut; but we are assured by a gentleman from that vicinity, whose means of information are very good, that the report is without any just foundation. It is possible that the fate of the Woodbury and "Eastern" banks may be shared by one or more of the other small banks of Connecticut; but in regard to most of the banks in that State there need be no apprehension whatever. We doubt if in any State in the Union banking has on the whole been conducted more prudently or safely. [Journal of Commerce.

8. March 30, 1853 The Miners' Express Dubuque, IA
Article from The Miners' Express, March 30, 1853

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NEW YORK MONEY MARKET. y There seems to be quite a panic among the p money dealers in New York, owing to the faily are of some few banks in the East. The daily , journals of that City team with doleful forebo ) dings of approaching financial difficultiés. But these journals are not always to be relied upon. The United States Economist, which is good authority upon this subject, lias the following in its issue of the 12th, in relation to monetory affairs in New York City : 1 The Stock market during the week has quite broken down for fancies, under a combination of events, of which the leading one was the stringency in the money market, caused by the fright of the banks at the phantom which they had themselves conjured up. We have from time to time pointed to the immense discount lines of the banks as an inevitable source of pressure at no distant day. The moment that the banks stop lending more than they receive, there is no longer ease in the market. The mo ment they begin to curtail, there is pressure, and the intensity of the pressure is proportioned to the degree of curtailment. The position of the Hanover Bank turned what was meant to be a gentle pressure into a violent one, and stocks were thrown upon the market without resource, while speculative holders struggled desperately to sustain themselves. The avails of private capital came to their aid, and it was wonderful how few stopped. Towards the close, the market was more firm, with some disposition to buy in again. The stock of the Hanover Bank has fallen 10 per cent., or from f02 on Saturday, to 92 yesterday. With the leading merchants money has not been scarce; on the other hand, it has plenty. The bills receivable have come is promptly in all cases, and the remittance against open credits from all sections of the country have been better than ever known. Nevertheless, some descriptions of good paper have ranged 7a10 per cent, and some borrowers have gone as high as 18a20 per cent, premium. The needy borrow ers are stock operators mostly, and the banks have been so anxious to get rid of the paper that they were before competing with each other to get, as to be sellers to private capitalists. The amount of payments is, however, immense, and the current of money setting in from the country will soon produce a plethora The failure of two banks was announced to. day; the Woodbury Bank and the Eastern Bank of West Killingly-both purporting to be situated in Connecticut, but really owned and operated by one Wall street broker. Mr W. E Chittenden. This person has various business connections in the Western country, where the bills were sent for circulation : but they were redeemed in Wall street at a discount. The joint circulation of the two was about $380,000, and the assets were small comparatively The two banks have been kept up for some time by the most desperate kiteing; as an instance of which some $20,000 of the Woodbury bills have been hawked about Wall street, for a loan, at extravagant rates, most of the brokers refusing to lend on them on any terms. The slight pressure in the money market for the past week, has finally crushed them. The Banks of Connecticut, generally, than which institutions none in the country are more deserving of the high confidence of the public, have never countenanced these little rag shops, and the only drawback involved in the good for tune of their stoppage, is that innocent holders may suffer. When we observe the great prosperity of the country at large, the absence of all speculation, with the exception of sonte local speculation in fancy and real estate; the large production of every variety of commodity, and the facility of interchange, and the entire soundness of general business, the uproar created by a few banks and conceited stock speculators, becomes ridiculous. Suppose the banks have loaned more money than they really had, they loaned it to those who are able to pay, and when the paper matures it will all be paid. If, meantime, the lenders are pinched for their own necessities, why, it is a capital lesson for them. It is the just reward of that speed which overreaches it self. The merchants of New York were never so rich as now, and millions of dollars could now be raised for any feasible object.