Banks of New York and other States

Bank Information

Episode Type: Suspension → Reopening
Bank Type: state
Start Date: February 27, 1862
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: 05ec98fd

Response Measures

None

Description

Article (Feb 27, 1862) discusses that the Banks of New York and other states had suspended at an earlier date but subsequently resumed issuing their own notes after federal legal-tender notes were adopted. No specific single-bank run is described; this is a general suspension followed by resumption.

Events (2)

1. February 27, 1862 Other

Newspaper Excerpt: The moment that the law of Congress made Government notes a legal tender, the Banks began to receive the Government notes freely and to hold them, and resumed : the issue of their own notes: A demand for Government stocks also sprung up as a basis on which to issue new notes. The currency is therefore now in a rapid process of inflation.
Source: newspapers

2. * Suspension

Cause Details: General suspensions by banks (context: reluctance under state laws and currency contraction); later resumed issuance after federal legal-tender notes became acceptable
Newspaper Excerpt: The suspension of the Banks of New York and other States has hisherto been attended by a contraction of this currency
Source: newspapers

Newspaper Articles (1)

1. February 28, 1862 The Sun New York, NY

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Article Text

FINANCIAL. NEW YORK, Thursday, Feb. 27. The Stock market underwent a brisk reaction this morning, as many of those who had bought wished to sell. The consequence was a general de cline, largest in those stocks which had risen the most. After the board the rates were a little more steady, but in some cases a further decline was manifest. The Government stocks rose in some degive from an out-of-town demand for banks, and also because the interest is to be paid in specie. If specie riees in price it will give advantage to the holders, but not in face of $500,000,000 to come upon the market T e rate of gold fell today to 21/4 per cent to 21. and this decline will carry with it a fall in exchange for the packet of Saturday, the market for which has not yet opened. THE The exchanges at the Bank Clearing House today $22,139,322 and the balances $1 106,389. Money is in active demand, an17 per cent on call R freely obtained. There is, therefore, less desire to place money with the Government Treasury at 5 per cent. I The Boston Bank returns give the specie at $8,341,588 a decline of $69,302 during the week. The per cent. dollar bonds of the state of Alaba. . ma, due Nov. last, will be paid principal and interest at the Pacenix Bank, , The Merchants Bank, of Trenton, N.J., is under protest. The notes are not taken. I The Wamsutta Mills, New Bedford, have declared ) a dividend of $22 per share. ) The exports from the port of Boston for the past ) week were $437,563. The new loan bills have attracted much attention ) and are producing singular changes in the currency. The suspension of the Banks of New York and other States has hisherto been attended by a con) traction of this currency, because the Banks were not well convinced of the safety of their position in ) relation to the State laws against suspension. The New York city Banks were on their guard and paid their notes in specie as they were presented. This reduced the amount of their notes outstanding from 8 to 5 millions, or $1,000,000, and currency became scarce, The moment that the law of Congress made Government notes a legal tender, the Banks began to receive the Government notes freely and to hold them, and resumed : the issue of their own notes: A demand for Government stocks also sprung up as a basis on which I to issue new notes. The currency is therefore now in a rapid process of inflation. The $59,000,000 of . demand notes, issued under the law of July, 1861, : , are now a legal tender and available for duties. : They have therefore become, all at once, by a stroke of a feather, great favorites with the banks. Those institutions would before not take them on deposit, and some sold them at a discount of 1-5 per cent. They now give a small premium for them, and pay out their own notes in preference. The old demand notes as they are collected by the Government will be cancelled as they come in, and the new notes as soon as they are ready, will be paid out instead. Thus under the rule to allow 5 per cent. on deposits of demand notes to the treasury, H. me 4a5 millions have been taken. The owners , when they draw them will get new notes not receivable for duties. The amount of notes taken ) . f r duties in the past four weeks, was as follows I To Feb 1 $672,652 To Feb. 15 $482,410 " " 29 . 1,026,600 965,885 " 494,619 26 )