Banks in New York City - New York, NY

Bank Information

Episode Type: Suspension → Reopening
Bank Type: state
Start Date: January 1, 1862*
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: c6d71c03

Response Measures

None

Description

Article (Jan 4, 1862) reports a unanimous conference of New York banks resolving to suspend specie payments (temporary suspension of coin payments) to preserve reserves after heavy advances to the government and specie outflows. No run is mentioned and the suspension is described as a relief measure, implying a temporary suspension rather than permanent closure.

Events (1)

1. January 1, 1862* Suspension

Cause: Macro News
Cause Details: Large drain on banks' specie reserves due to heavy advances to the government and specie outflows to Europe; banks suspended specie payments to preserve reserves and avert money pressure.
Newspaper Excerpt: they resolved upon an immediate suspension of specie payment. The step was followed on Monday by the banks of New York and Philadelphis
Source: newspapers

Newspaper Articles (1)

1. January 4, 1862 The Ottawa Free Trader Ottawa, IL

Article from The Ottawa Free Trader, January 4, 1862

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Article Text

Suspension of Specie Payment. At a conference of the Banks in New York City on Saturday evening of last week, by a unanimous vote, they resolved upon an immediate suspension of specie payment. The step was followed on Monday by the banks of New York and Philadelphis, and by this time is doubtless followed by all the banks in the country. The government, also, has fallen into the same track, and issued orders to stop the payment of coin at the custom houses on "demand" treasury notes. The immediate cause of the movement on the part of the New York Banks was the large drain upon their specie reserve by reason of the late heavy advances to the government. From a balance of some $42,000,000 of specie in the New York Banks six months ago, they had run down, on Saturday to $23,000,000. Their loss, week before last, was $6,000,000, and last week $7,000,000. At this rate, a few weeks more would have drained them to the last dollar. Where this specie has gone to is not so palpable. There have a few millions within a month gone to Europe, and the circumstance, (being the reverse of the tide for a year or more,) doubtless alarmed the more timid, and heavy drafts were made upon the banks for purposes of hoarding. Coin thus disposed of can benefit nobody and might as well be buried. As a matter, therefore, not only of self-preservation to themselves, but to the community in averting a frightful money pressure, no other course seemed open but a general suspension of specie payment. The effect of the suspension in this, as in like previous cases generally, has been that of immediate relief to the money market. Stocks showed an advance at once of 2 to 5 per cent., and hundreds of merchants on the eve of breaking, were enabled to save themselves by a seasonable bank accommodation. Money, in the nature of things, must now become plentier, and a general advance in prices and very perceptible revival of business necessarily follow. The payment of coin by the government ceasing with that by the banks, we may reasonably expect that hereafter a large portion, if not indeed the main circulation of the country will be government treasury notes. No one has questioned the credit of the Government thus far. and treasury notes have circulated freely as coin. A cessation of their redemption, however, may make a difference, and the government may be reduced to the humiliation of seeing her promises to pay rated below those of comparatively unknown and irresponsible corporations. Sooner than have this occur, we have no doubt Congress will adopt the extreme measure, never hitherto resorted to, but we apprehend perfectly within its power, of making treasury notes : legal tender as in England. during the Napoleonic wars, made the notes of the Bank of England.