14959. City Bank (Buffalo, NY)

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: May 6, 1837
Location: Buffalo, New York (42.886, -78.878)

Metadata

Model: gpt-5-mini
Short Digest: 82e4ad05

Response Measures

None

Description

Articles report that in early May 1837 the New York Bank Commissioners obtained injunctions restraining operations of three Buffalo banks including the City Bank of Buffalo for alleged charter violations; banks' doors were closed and later receivers are noted winding up affairs. This is a suspension by government action leading to permanent closure/receivership rather than a depositor run.

Events (1)

1. May 6, 1837 Suspension

Cause: Government Action
Cause Details: Bank Commissioners obtained injunctions restraining operations of the City Bank of Buffalo for alleged violations of its charter; temporary injunctions stopped operations (except receiving payments) with cause to be shown to the Chancellor; later receivers are listed winding up affairs.
Newspaper Excerpt: Three banks of Buffalo, all safety fund banks, are under injunction, and their doors closed.
Source: newspapers

Newspaper Articles (5)

1. May 18, 1837 Staunton Spectator, and General Advertiser Staunton, VA

Article from Staunton Spectator, and General Advertiser, May 18, 1837

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The Bank Commissioners of the State of New York have obtained an injunction to stop the operations of three of the Banks of Buffalo-the Commercial Bank of Buffalo, the City Bank of Buffalo, and the Bank of Buffalo-on the ground that each of these institutions has violated its charter. The fact is thus announced in a slip from the Albany Argus : From the Aibany Argus, Extra, May 5-4, P.M. We understand that the operations of all the banks at Buffalo will by this time have been suspended by injunction, issued at the instance of the Bank Commissioners, on the ground of alleged violations of charter by each of them. It is deeply to be regretted that any thing should occur to render proceedings against any of the banks necessary at this time, when there are so many other circumstances calculated to agitate the public mind.--Mr. Stebbins, one of the Commissioners, who has lately visited these banks, is now in the city, and we understand from him, that neither of the institutions is proceeded against on the ground of insolvency, and that he has no apprehension that the public, or the safety fund, can in any event sustain any loss by them. On inquiry, we learn that the course of proceedings by the court in such cases, is in the first instance, to issue a temporary injunction, restraining the operations of the bank, except receiving payments, until a short day appointed for the bank to show cause way a permanent injunction should not issue, and that in this instance, cause is to be shown before the Chancellor on the 4th Monday ol the present month. We indulge the hope that these banks will be able to show sufficient cause to prevent further proceedings against them, and in the mean time hope that no sacrifices will be submitted to by the holders of bills, which we have no doubt are abundantly safe and that the other banking institutions of this state will continue to enjoy, as we have no doubt they deserve, the public confidence. The New York American says that a bill was introduced into the New York Senate on Friday, providing for the immediate payment out of the Bank Fund, of the bills of any bank whose operations were suspended by the Bank Commissioners, This bill was framed with reference to the Buffalo banks, and will doubtless become a law. So that there is n.o cause for alarm OF sacrifice among the holders of these bills.

2. May 20, 1837 Richmond Palladium Richmond, IN

Article from Richmond Palladium, May 20, 1837

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ve atrocities as the following, which th we copy from the Louisville Journal, and the es increasing frequency of brutal outrage, fills y the mind with shame, regret and distressing r apprehensions of future evil. on We have derived from a respectable travoleller the particulars of one of the most attroat cious and horrible occurrences that ever disis graced the annals of human life, civilized or of savage. A feeble bodied man, whose name Id we did not learn, settled a few years ago on nthe Mississippi, a short distance below Ranct dolph, on the Tennessee side. He succeeded to in amassing property to the value of about e $14,000, and, like most of the settlers, made fa business of selling wood to the boats.r This sold at $2.50 a cord, while the neighet bors asked S3. One of them came to remonstrate against his underselling, and had a fight with his brother-in-law, Clark, in which he was beaten. He then went and obtained legal process against Clark, and returned with a deputy sheriff, attended by a posse of desperate villians. When they arrived at Clark's house he was seated among his children, and they instantly fired on him, wounding two children, and putting two or three balls through his body. Clark ran, was overtaken and knocked down in the midst of his cries for mercy, one of the villains fired a pistol in his mouth, killing him instantly. They then required the settler to sell his property to them and leave the country. He, fearing that they would otherwise take his life, sold them his valuable property for $300, land departed with his family.--The sherif was one of the purchasers. CURIOUS TRIAL.--The Southern Correspondent of the New York Evening Star writes a strange circumstance, which is the source of some excitement, is about to undergo investigation in Jones county, Georgia. It appears that some eight years ago, a lad of that county, about 13 years of age, left his home; his father died and left a large property, and he not being heard from, the estate was divided, and his share, some thirty thousand dollars, was divided among those left. Within a few months, he has appeared and laid claim to his property; his mother denies him, and says he is an impostor, as- the real person died some time ago in New Orleans, and she paid his funeral expenses. He is to be tried as an impostor. Opinion is equally divided in regard to his identity: some avow he is the man, and others as decidedly con tend he is no: He has the same marks as the individual-a scar on one supposed of his fingers amputa- of his legs and a joint of one ted. He relates numerous circumstances su connected with his leaving and early youth, b and there are many he cannot remember.n Balt. Chron. pe In BANK FAILURE.--The New York Dry ⑉ Dock Bank stopped business on the 3th inst. A run had been made upon the Bank on Satpr H urday previous, and about $100.000 in specie drawn from its vaults by depositors and pe billholders. The Dry Dock was a Deposite th Bank and had $130,000 of Government mon w ev in possession, which of course the said of Government must lose. No loss will be susup tained by those who hold the notes of this in solvent institution, as the Wall street banks have agreed to redeem them. So the 'experment' progresses. Much excitement prevailed in New York. th Runs and rumors of runs upon several of the ch Banks are mentioned in the papers, but noan hing serious was anticipated. ste The condition of things in New York grows vorse and worse. Three hundred failures cld ave occurred since the Josephs led the way Pro n "the road to ruin". All is dismay in the tio great commercial metropolis.-Dayton Jour. pra mo BATTLE BETWEEN A WEASEL AND SWALLOWS.-M err seasel was observed by some persons in the neighorhood of Garven, in Scotland, to attack some Jac ests of bank swallows hollowed in the sand. A number of the bravest swallows, placed themselves of h battle array pounced upon him, seized him by rev he tai!, raised his hind feet from the ground, and Mr ith great dexterity tumbled him down the declivy, at the top of which the nests were ranged in pul ow. The invader renewed the attack several for mes, but was asofien repulsed in the same manner pea s at firs:, and, being at length worn out by fatigue, ele ielded up the palm of victory to his vanquishers. cha THE FROSTS.-The late severe frosts are said to of ve done great injury to the peach orchards of pat Jew Jersev. To such an extent is the peach ultivated in that State that the Trenton Gazette stimates the damage at 'many hundred thousand ollars.' ca The names of the Buffilo Binks whose doors citi ve closed, are the Commercial Bank of Buffulo, his e City Bank of buffulo, and the Bunk of Buffa con A bill was introduced into the Senate yesterday oridine for the immediate mament out of alm stat

3. April 15, 1933 The Buffalo News Buffalo, NY

Article from The Buffalo News, April 15, 1933

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HOW BUFFALO CONQUERED HARD TIMES By MONTGOMERY CURTIS TEADILY prices went down, down, down. Failure, bankruptcy and disaster were the order of the day. Banks failed everywhere. As speculation had probably reached its climax in Buffalo so there the universal reaction was more strongly felt. Fortunes disappeared almost in night. Mortgages were foreclosed on every hand Does that sound like a concentrated version of Buffalo's post-1929 commercial record? For those citizens who take perverted pride in bragging about the current distress as the "world's worst depression" it will be rude shock to learn that the paragraph above is a summary of Buffalo business in 1837. Three times, 1837, 1857 and 1871, Buffalo bent double under the burden of economic collapse. She remained in that painful position for several years each time. Then the city straightened up to advance surely into new and prosperous eras. Those souls who writhe in the certainty of utter doom should look to the records. Depressions do have a mysterious way of disappearing, impossible as may seem to And the period which began late in 1929 belongs in the same pigeonhole with 1837, 1857 and 1871. The city suffered its share of the national doldrums in 1893 and again in 1907 but the comparative brevity of those disturbed periods forbids comparison with their predecessors. That history has pleasant habit of repeating itself is proven by study of H. Perry Smith's "History of Buffalo and Erie County," Mr. Smith, who wrote the quoted paragraph above, faithfully recorded Buffalo's descent, survival and rise in three major depressions. In scholarly fashion he revelled in 1837. Here are some more paragraphs from the record to compare with 1929. "In the disastrous financial revulsion and panic which swept the country in 1835-1836, Buffalo suffered as severely as most places similar in size and character. The inhabitants had raised themselves and their city to high financial and speculative altitude. and the fall was proportionately destructive the city recovered from the horrors of the cholera epidemic of 1832. and from the destructive fire, only to plunge into the abyss of financial ruin. "THE year 1836 dawned with prospects of brilliant promise, with dazzling visions of easilyacquired wealth it closed under a cloud of almost universal bankruptcy "Fortunes disappeared more rapidly than they had been acquired; mortgages were foreclosed on all sides and land that had been eagerly bought at $30 or $40 per foot would scarcely bring as much per acre. Land is known in the city which sold early in 1835 at $2 foot-about $500 an acre. It was sold and resold in parcels during the excitement. until 12 months after it sold at the rate of $10,000 an acre. In 1865 the same land was worth $18 foot." For those who might dismiss that panie as victimizing speculators only, Mr. Smith extends his remarks: "Even in the country towns the reaction produced great distress and some who had deemed themselves rich suffered for the necessaries of life. "In the course of 1837. matters probably got about as bad as they could be, so that after that they did not grow any worse; but was several years before there was any sensible recovery from the 'Hard Times' as that era was universally called. Unquestionably the designation was a correct one: for never has the country, and especially this part of it, known so disastrous financial crisis." Such is what Mr. Smith called "the great wreck of 1837.' Then he wrote paragraph unintentionally but nonetheless specifically directed at the mourners who now weep at the bier of prosperity in the gloomy City a Bulwark in Periods of Financial Stress - Hardest Hit by Panic That Began in 1837 and Lasted Nine Years— Rallied From Depression of 1871 in Two Years and in 1893 and 1907 Suffered But Little. belief that it will never return Here it is: "The county (Erie) recovered very slowly from the terrible financial crisis and it was not until near 1845 that it could be considered to have fully regained healthy condition by which time moderate prosperity was the rule throughout its borders as distinguished from the feverish fortune-making of ten years before." That was a depression which lasted nine years. Conditions of 1931-1932 will have to persist until 1938 to beat that record. Americans who take pride in extremes and think they are enjoying the "worst depression" had better look further into history. There are more gems for them to consider. culled from the local histories of Senator Wayland Hill and J. N. Larned. MAY 6, 1837, Buffalo was shocked by the closing of its banks. They were the Bank of Buffalo, City Bank and Commercial Bank of Buffalo. The state banking chancellor issued injunctions against them. This shock was felt even in New York city where Phillip Hone, former mayor, made this entry in his diary for May 8, 1837: "Three banks of Buffalo. all safety fund banks, are under injunction. and their doors closed. The Legislature immediately passed an act directing the bank commissioners to assume the payment of their notes, which will consequently be received and paid at the Manhattan bank. This will probably sweep away the famous safety fund. The bubble will burst, and the public creditors of rotten banks will look in vain hereafter to that delusive hope for protection against loss. Where will it all end?-In ruin revolution, perhaps civil war." Buffalo's banking problems became even more stringent and still they did not end in ruin, revolution or civil war. Mr. Larned writes that "the directory of 1841 names but two in its list of banks, the Bank of Buffalo and the Commercial bank (they resumed when the injunctions were lifted). In 1842 it reports the whole list of 1840 under the sinister caption "Suspended Banks' with the names of the receivers who are winding up their affairs." Now in 1933 there are many feeling the pinch who look back at the pre-1929 heyday and bemoan the present stringency. For those who reminesce and groan here is gem taken from The Buffalo Commercial Advertiser of Feb. 6, 1836. Blissfully unaware of the gathering storm, an editorial writer for that newspaper, protesting the difficulties of obtaining bank charters in Albany, wrote: our banking capital should be trebled. There not another town in the United States which does so great amount of business with so limited banking facilities. We reason to know that the banks here do all in their power to accommodate their customers, but their means are but as drop in bucket to the wants of the community. Their discount line is extended as far as is with safety; yet the notes of our best and safest men are frequently declined. from absolute necessity of the case. This state of things is unpleasant to the officers of the existing banks, as well as to the public, and however careful the banks may be possible for them to escape the charge of favoritism. Shortly after 1840 the city got its feet on bottom, liquidated the debris left by the pre 1836 speculation and started the slow drive forward. In 1842 the Buffalo-Attica railroad was completed. In 1844 six banks were chartered. The flow of grain from the west increased rapidly and the city became established as the nation's most important grain forwarding port. How did Buffalo get into the depression of 1837? She was thrown in with the rest of the country by the collapse of inflated paper money and President Jackson's specie circular ordering that payment for all public lands be made in specie when nobody had enough specie of sufficient value But Buffalo's collapse was aggravated by the failure of Benjamin Rathbun, the city's combination of Samuel Insull and Ivar Kreuger Rathbun was speculative builder who operated on credit. His schemes were in the millions. He employed 3000 people. Two assistants forged notes for large sums. Payment was demanded. He didn't have the money. His business was built on confidence, not cash. When he collapsed the whole city went with him into the chaos of 1837. did Buffalo get out of the depression of 1837? The answer is not clear. She worked her way out in common with the rest of the country. Futile remedies were tried. "panic meeting" was held May 1837, but Mr. Smith records laconically that it was "addressed by Millard Fillmore and others and resolutions were adopted but it does not appear that any special good resulted. But if the methods by which the city recovered are not clear the fact remains that she did revive slowly and surely. The citizens suffered patiently and sawed wood. Here is Mr. Smith's account of what happened: 'Following the tardy recovery from the financial crash (there) was inaugurated an era of prosperity for the city of Buffalo the of the growing West poured its profitable business into the city giving it wide reputation for prospective growth and thus attracting to its acwhich insured that growth. The surrounding country had reached a position of tolerable independence; the farming community had in most cases wholly or in large part paid for their lands; plank roads extended from Buffalo and its ready market. directly to the doors of the farms and over them were drawn the products which were turned into money in the city As Buffalo survived 1837 to forge ahead so the city survived 1857. Once again the pall of financial collapse descended. So severe was the crash that Mr. Smith records "our oldest banker" saying seemed as the whole town was not worth dollar.' Bank doors closed rapidly The Reciprocity bank suspended payment Aug. 29, 1857. Hollister's bank followed Aug. 31. Oliver Lee & Co.'s bank followed few days later. The Pratt bank ssupended Sept. 12. Reviewing this period Mr. Smith writes. referring to the prosperity of the early 1850's, this very tide of prosperity brought its own destruction: business of all kinds gradually became excessively overdone; railroads and other great undertakings were recklessly projected in all parts of the country: the banks in many states inflated the currency beyond necessity or prudence, and another crash The climax was reached in the fall of 1857 and was precipitated by the suspension of specie payments in New York. money market had become more and more stringent. if the New York banks had postponed their suspension little longer, the failures in Buffalo would have been more than they were. As was, two or three banks suspended and prices of real estate sank to mere tithe of what they had been. For three years only the depression of 1857 continued. Mr. Smith re-

4. April 15, 1933 The Buffalo News Buffalo, NY

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Pessimists of the Past OIR JOSIAH STAMP in an after-dinner speech in London recently. produced some specimens of past pessimism. He had been discussing world economy as calling for the utmost courage and enterprise at the World Economic conference. "In looking the facts seriously in the face, however, we need also to have historical perspective,' he declared. "William Pitt said: "There is scarcely anything around us but ruin and despair.' 'Wilberforce at one period said: dare not marry. the future is so dark and unsettled.' "Lord Grey in 1819 'believed everything was tending to a convulsion. "Disraeli in 1849 said: 'In industry. commerce and agriculture there no hope. "Lord Shaftesbury in 1848 said: "Nothing can save the British empire from ship"Similar comments were made exactly 100 years ago." City a Bulwark in Periods of Financial Stress - Hardest Hit by Panic That Began in 1837 and Lasted Nine YearsRallied From Depression of 1871 in Two Years and in 1893 and 1907 Suffered But Little. belief that it will never return. Here is: "The county (Erie) recovered very slowly from the terrible financial crisis and it was not until near 1845 that it could be considered to have fully regained healthy condition by which time moderate prosperity was the rule throughout its borders as distinguished from the feverish fortune-making of ten years before. That was a depression which lasted nine years. Conditions of 1931-1932 will have to persist until 1938 to beat that record. Americans who take pride in extremes and think they are enjoying the "worst depression" had better look further into history. There are more gems for them to consider. culled from the local histories of Senator Wayland Hill and J. N. Larned. MAY 6, 1837, Buffalo was shocked by the closing of its banks. They were the Bank of Buffalo, City Bank and Commercial Bank of Buffalo. The state banking chancellor issued injunctions against them. This shock was felt even in New York city where Phillip Hone, former mayor, made this entry in his diary for May 8, 1837 "Three banks of Buffalo, all safety fund bank are under injunction, and their doors closed. The Legislature immediately passed an act directing the bank commissioners to assume the payment of their notes. which will consequently be received and paid at the Manhattan bank. This will probably sweep away the famous safety fund The bubble will burst, and the public creditors of rotten banks will look in vain hereafter to that delusive hope for protection against loss. Where will it all end?-In ruin revolution perhaps civil war." Buffalo's banking problems became even more stringent and still they did not end in ruin, revolution or civil war. Mr. Larned writes that "the directory of 1841 names but two in its list of banks, the Bank of Buffalo and the Commercial bank (they resumed when the injunctions were lifted). In 1842 it reports the whole list of 1840 under the sinister caption Suspended Banks' with the names of the rereivers who are winding up their affairs." Now in 1933 there are many feeling the pinch who look back at the pre-1929 heyday and bemoan the present stringency. For those who reminesce and groan here is gem taken from The Buffalo Commercial Advertiser of Feb. 1836. Blissfully unaware the gathering storm, an editorial writer for that newspaper, protesting the difficulties of obtaining bank charters in Albany, wrote: our banking capital should be trebled There not another town in the United States which does so great amount of business with 80 limited banking facilities We reason to know that the banks here do all in their power to accommodate their customers. hut their means are but as drop in bucket wants of the community Their discount line is extended as far as consistent with safety; yet the notes of our best and safest men are frequently declined from absolute necessity of the case This state of things is unpleasant to the officers of the existing banks. as well as to the public and careful the banks may be possible for them to escape the charge of favoritism. Shortly after 1840 the city got its feet rock bottom. liquidated the debris left by the pre-1836 speculation and started the slow drive forward. In 1842 the Buffalo- Attica railroad was completed. In 1844 six banks were chartered. The flow of grain from the west increased rapidly and the city became established as the nation's most important grain forwarding port. How did Buffalo get into the depression of 1837? She was thrown in with the rest of the country by the collapse of inflated paper money and President Jackson's specie circular ordering that payment for all public lands made specie when nobody had enough specie of sufficient But Buffalo's collapse was aggra. vated by the failure of Benjamin Rathbun, the city's combination of Samuel Insull and Ivar Kreuger. Rathbun was speculative builder who operated on credit His schemes were in the millions He employed 3000 people Two assistants forged notes for large sums Payment was demanded He didn't have the money. His business was built on confidence. not cash. When he collapsed the whole city went with him into the chaos of 1837. OW did Buffalo get out of the depression 1837? The answer not She worked her way out in common with the rest of the country Futile remedies were tried. "panic meeting' was held May 1837. but Mr. Smith records laconically that it was "addressed by Millard Fillmore and others and resolutions were adopted but does not appear that any special good resulted. But if the methods by which the city recovered are not clear fact remains that she did revive slowly and surely. The citizens suffered patiently and sawed wood. Here is Mr. Smith's account of what happened Following the tardy recovery from the financial crash (there) was inaugurated an era of prosperity for the city of Buffalo the commerce of the growing West poured its profitable business into the city giving it wide reputation for prospective growth and thus to its population acwhich insured that growth. The surrounding country had reached position of tolerable independence: the farming community had in most cases wholly or in large part paid for their lands plank roads extended from Buffalo and its ready market, directly to the doors of the farms and over them were drawn the products which were turned into money in the city As Buffalo survived 1837 to forge ahead so the city survived 1857. Once again the pall of financial collapse descended So severe was the crash that Mr. Smith records "our oldest banker' saying Itseemed as the whole town was not worth dollar. Bank doors closed rapidly The Reciprocity bank suspended payment Aug 29, 1857. Hollister's bank followed Aug. 31. Oliver Lee & Co.'s bank followed few days later The Pratt bank ssupended Sept. 12. Reviewing this period Mr. Smith writes, referring to the prosperity of the early 1850's, this very tide of prosperity brought its own destruction: business of kinds gradually became excessively overdone: railroads and other great undertak ings were recklessly in all parts of the country the banks in many states inflated the currency beyond necessity prudence, and another crash followed. The climax was reached in the fall of 1857 and was precipitated by the suspension of specie payments in New money market had become more and more stringent if the New York banks had postponed their little longer, the failures in Buffalo would have been more numerous than they were. As was. two or three banks suspended and prices of real estate sank mere tithe of what they had been. For three years only the depression of 1857 continued. Mr. Smith re-

5. April 15, 1933 The Buffalo News Buffalo, NY

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HOW BUFFALO CONQUERED HARD TIMES By MONTGOMERY CURTIS TEADILY prices went down. down, down. Failure, bankruptcy and disaster were the order of the day. Banks failed everywhere. As speculation had probably reached its climax in Buffalo so there the universal reaction was more strongly felt. Fortunes disappeared almost in a night. Mortgages were foreclosed on every hand Does that sound like a concentrated version of Buffalo's post-1929 commercial record? For those citizens who take perverted pride in bragging about the current distress as the "world's worst depression" it will be rude shock to learn that the paragraph above is summary of Buffalo business in 1837. Three times, 1837, 1857 and 1871, Buffalo bent double under the burden of economic collapse. She remained in that painful position for several years each time. Then the city straightened up to advance surely into new and prosperous eras Those souls who writhe in the certainty of utter doom should look to the records. Depressions do have mysterious way of disappearing impossible as it may seem to some And the period which began late in 1929 belongs in the same pigeonhole with 1837, 1857 and 1871. The city suffered its share of the national doldrums in 1893 and again in 1907 but the comparative brevity of those disturbed periods forbids comparison with their predecessors. That history has pleasant habit of repeating itself is proven by a study of H. Perry Smith's "History of Buffalo and Erie County, Mr. Smith, who wrote the quoted paragraph above. faithfully recorded Buffalo's descent, survival and rise in three major depressions In scholarly fashion he revelled in 1837. Here are some more paragraphs from the record to compare with 1929. "In the disastrous financial revulsion and panic which swept the country in 1835-1836, Buffalo suffered as severely as most places similar in size and character. The inhabitants had raised themselves and their city to high financial and speculative altitude. and the fall was proportionately destructive the city recovered from the horrors of the cholera epidemic of 1832. and from the destructive fire only to plunge into the abyes of financial ruin. "THE year 1836 dawned with prospects of brilliant promise. with dazzling visions of easilyacquired wealth it closed under cloud of almost universal bank"Fortunes disappeared more rapidly than they had been acquired: mortgages were foreclosed on all sides and land that had been eagerly bought at $30 or $40 per foot would scarcely bring as much per acre. Land is known in the city which sold early in 1835 at $2 foot-about $500 an acre. It was sold and resold in parcels during the excitement. until 12 months after it sold at the rate of $10,000 an acre. In 1865 the same land was worth $18 foot." For those who might dismiss that panic as victimizing speculators only, Mr. Smith extends his remarks: "Even in the country towns the reaction produced great distress and some who had deemed themselves rich suffered for the necessaries of life. "In the course of 1837. matters probably got about as bad as they could be, so that after that they did not grow any worse: but was several years before there was any sensible recovery from the Hard Times' as that era was universally called. Unquestionably the designation was a correct one: for never has the country, and especially this part of it, known so disastrous financial Such is what Mr. Smith called "the great wreck of 1837." Then ne wrote paragraph unintentionally but nonetheless specifically directed at the mourners who now weep at the bier of prosperity in the gloomy City a Bulwark in Periods of Financial Stress - Hardest Hit by Panic That Began in 1837 and Lasted Nine Years— Rallied From Depression of 1871 in Two Years and in 1893 and 1907 Suffered But Little. belief that it will never return. Here "The county (Erie) recovered very slowly from the terrible financial crisis and it was not until near 1845 that it could be considered to have fully regained healthy condition by which time moderate prosperity was the rule throughout its borders as distinguished from the feverish fortune-making of ten years before That was a depression which lasted nine years. Conditions of 1931-1932 will have to persist until 1938 to beat that record Americans who take pride in extremes and think they are enjoying the "worst depression" had better look further into history. There are more gems for them to consider, culled from the local histories of Senator Wayland Hill and J. N. Larned MAY 6, 1837, Buffalo was shocked by the closing of its banks. They were the Bank of Buffalo, City Bank and Commercial Bank of Buffalo. The state banking chancellor issued injunctions against them. This shock was felt even in New York city where Phillip Hone. former mayor, made this entry in his diary for May 8. 1837 "Three banks of Buffalo, all safety fund banks are under injunction, and their doors closed. The Legislature immediately passed an act directing the bank commissioners to assume the payment of their notes, which will consequently be received and paid at the Manhattan bank. This will probably sweep away the famous safety fund The bubble will burst, and the public creditors of rotten banks will look in vain hereafter to that delusive hope for protection against loss. Where will it all end?-In ruin revolution, perhaps civil war." Buffalo's banking problems became even more stringent and still they did not end in ruin. revolution or civil war. Mr Larned writes that "the directory of 1841 names but two in its list of banks, the Bank of Buffalo and the Commercial bank (they resumed when the injunctions were lifted). In 1842 it reports the whole list of 1840 under the sinister caption Suspended Banks' with the names of the receivers who are winding up their affairs." Now in 1933 there are many feeling the pinch who look back at the pre-1929 heyday and bemoan the present stringency. For those who reminesce and groan here is gem taken from The Buffalo Commercial Advertiser of Feb. 1836. Blissfully unaware of the gathering storm, an editorial writer for that newspaper, protesting the difficulties of obtaining bank charters in Albany, wrote: our banking capital should be trebled There is not another town in the United States which does so great an amount of business with so limited banking facilities We have reason to know that the banks here do all in their power to their customers, but their means are but as drop bucket to the wants of the community Their discount line extended as far as consistent with safety; yet the notes of our best and safest men are frequently declined, from absolute necessity of the case. This state of things is unpleasant to the officers of the existing banks. as well as to the public, and careful the banks may be it scarcely possible for them to escape the charge of favoritism. Shortly after 1840 the city got its feet on rock bottom, liquidated the debris left by the pre-1836 speculation and started the slow forward. In 1842 the Buffalo Attica railroad was completed In 1844 six banks were chartered. The flow of grain from the west increased rapidly and the city became established as the nation's most important grain forwarding port. How did Buffalo get into the depression of 1837? She was thrown in with the rest of the country by the collapse of inflated paper money and President Jackson's specie cular ordering that payment for all public lands made species nobody had enough specie of sufficient value. But Buffalo's collapse was aggravated by the failure of Benjamin Rathbun, the city's combination of Samuel Insull and Ivar Kreuger Rathbun was speculative builder who operated on credit His schemes were in the millions. He employed 3000 people Two assistants forged notes for large sums Payment was demanded He didn't have the money His business was built on confidence, not cash. When he lapsed the whole city went with him into the chaos of 1837. OW did Buffalo get out of the of 1837? The answer is not clear. She worked her way out in common with the rest the country Futile remedies were tried. "panic meeting' was held May 1837. but Mr Smith records laconically that it was "addressed by Millard Fillmore and others and resolutions adopted but does not appear that any special good resulted. But if the methods by which the city recovered are not clear the fact remains that she did revive slowly and surely The citizens suffered patiently and sawed wood. Here is Mr. Smith's account of what happened Following the tardy recovery from the financial crash (there) was inaugurated an era of prosperity for the city of Buffalo the of the growing West poured its profitable business into the city giving it wide reputation for growth and thus attracting to its population accessions which insured that growth The surrounding country had reached position of tolerable independence: the farming community had in most cases wholly or in large part paid for their lands plank roads extended from Buffalo and its ready market. directly the doors of the farms and over them were drawn the products which were turned into money in the city As Buffalo survived 1837 to forge ahead the city survived 1857. Once again the pall of financial collapse descended. So severe was the crash that Mr. Smith records "our oldest banker saying seemed as the whole town was not worth a dollar Bank doors closed rapidly The Reciprocity bank suspended payment Aug 29, 1857 Hollister's bank followed Aug. 31. Oliver Lee & Co.'s bank followed few days later The Pratt bank ssupended Sept. 12 Reviewing this period Mr. Smith writes, referring to the prosperity of the early 1850's this very tide of prosperity brought its own desbusiness of all kinds gradually overdone: railroads and other great undertak ings were recklessly projected in all parts of the country the banks in many states inflated the currency beyond necessity prudence, and another crash followed The climax was reached in the fall of 1857 and was precipitated by the suspension of specie payments in New York "HE money market had become more and more stringent if the New York banks had postponed their suspension little longer, the failures in Buffalo would have been more than they were. As was. two or three banks suspended and prices of real estate sank. to mere tithe of what they had been. For three years only the depression of 1857 continued Mr. Smith re-