Mechanics & Traders Bank

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: *
Location: Brooklyn, New York (40.660, -73.951)

Metadata

Model: gpt-5-mini
Short Digest: fc01146d

Response Measures

None

Description

Article (New-York Tribune, 1877-04-25) discusses the receiver (William J. Best) of the Mechanics' and Traders' Bank and payments to depositors (65 cents on the dollar). It describes asset depreciation (real estate and Southern bonds) and the receiver's administration. No run or depositor panic is described; the bank has a receiver and partial payout, indicating suspension/closure with receivership.

Events (2)

1. * Receivership

Newspaper Excerpt: William J. Best, the receiver of the Mechanics' and Traders' Bank, was recalled. ... The assets of the bank when delivered to the witness embraced ... bonds of North Carolina ... South Carolina ... Alabama ... The available cash amounted to only a few thousand dollars.
Source: newspapers

2. * Suspension

Cause: Bank Specific Adverse Info
Cause Details: Severe depreciation of Brooklyn real estate (since 1872) and large holdings of Southern bonds which lost value, producing large deficiencies in assets and insolvency of the bank.
Newspaper Excerpt: William J. Best, the receiver of the Mechanics' and Traders' Bank, was recalled. ... The witness stated that he had already paid to the depositors of the Mechanics' and Traders' Bank 65 cents on a dollar.
Source: newspapers

Newspaper Articles (1)

1. April 25, 1877 New-York Tribune New York, NY

Article from New-York Tribune, April 25, 1877

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Article Text

John F. James, a dealer in real estate of No. 326 Scher- merhorn-st., Brooklyn, testified that he was well informed in regard to the real estate owned by the Mechanics' and Trader's Bank. If this property had been disposed of at the proper time the bank would have suffered little or no less. The depreciation of real estate in Brooklyn began in the Spring of 1872. This class of property had been failing in value ever since, and the depreciation would fully amount to 33 per cent. William J. Best, the receiver of the Mechanics' and Traders' Bank, was recalled. Mr. McKeon asked the wit- ness to point out the deficiency in the assets as reported and the actual condition of the same at the present time. Mr. Chapman objected to this on the ground that the committee was not trying Mr. Best. The point at issue, he added, was whether Mr. Ellis reported the condition of the bank soon enough or could be regarded as having neglected to do his duty in this case; whether or not Mr. Ellis exercised the best judgment according to the light that he received. Mr. McKeon contended that the amount of the loss to the depositors ought to determine the importance of the case. If a loss of only a few thousand dollars had fallen upon the depositors the Superintendent ought not to be regarded as nearly so culpable as though the loss had been as in this case, several hundred thousand dollars. The previous question was then read, and Mr. Keon's last question was submitted to the committee under Mr. Chapman's objection. That question was, "What was the deficiency in this bank?" After a short consultation the committee sustained the objection and excluded the question. The witness then continued, stating that he had already paid to the depositors of the Mechanics' and Traders' Bank 65 cents on a dollar. The witness had a consid- erable amount of the assets remaining on hand in the form of bonds and mortgages under the process of fore- closure. The amount of this property he could not state definitely, but believed that its value was between $50,000 and $60,000. The assets of the bank when de- livered to the witness embraced the four pieces of real estate spoken of in the schedule, bonds of North Carolina amounting to $113,600 (one of these bonds for $1,000 had been sold), bonds of South Carolina amounting to $141,000 ($14,000 of this class of bonds had been sold), bonds of Alabama amounting to $166,000, and the fur- niture, fixtures, safes, etc., in the bank. The available cash amounted to only a few thousand dollars. Mr. Chapman facetiously asked here, "When the receiver's fees and my friend McKeon's are paid will there be any cash left?" This inquiry raised a laugh, and seemed to put everybody in good humor. Daniel A. Moran submitted a list showing the relative prices of the stocks reckoned among the assets on July 1, 1874, and September and October, 1874. This list was introduced as evidence. The witness stated that the difference between the buying and the selling price of ordinary stocks was from 1 to 5 per cent. Brokers, he added, buy as cheaply as they can and sell at the highest prices they can get. Mr. McKeon then stated that he proposed to introduce the minutes of the bank, or rather such portions as related to its financial condition, from 1873 to the time of the appointment of the receiver. He said that the law gave to the Superintendent of Banks almost abso- lute power to examine books and papers, and if the minutes showed that the financial condition of the bank was doubtful, these would be evidence of negligence on his part. Mr. Chapman said that he did not consider this fair, for an important paper showing the true condi- tion of the bank might lie undisturbed in an open pigeon-