15477. Banks of the City of New York (New York, NY)

Bank Information

Episode Type
Suspension → Reopening
Bank Type
state
Start Date
October 14, 1857
Location
New York, New York (40.714, -74.006)

Metadata

Model
gpt-5-mini
Short Digest
c735cbe8

Response Measures

None

Description

Article 1 (1857-10-15) reports that banks were obliged to suspend specie payments (suspension around Oct 14, 1857) but were solvent; courts vacated receiver orders and banks would go on. Article 2 (1858-09-01) states the banks of New York resumed specie payments on the 13th of the month. Context ties these events to the 1857 suspension and later resumption (commonly resumed Dec 13, 1857); I set reopening date to 1857-12-13 but date in Article 2 is somewhat ambiguous in year/month — note this uncertainty. No explicit depositor run is described, so classified as suspension with reopening.

Events (2)
1. October 14, 1857 Suspension
Cause
Macro News
Cause Details
General monetary crisis/panic (1857 financial crisis) led banks to suspend specie payments despite being solvent; courts vacated receiver orders and banks intended to continue operations.
Newspaper Excerpt
the banks yesterday had found themselves obliged to suspend specie payments
Source
newspapers
2. December 13, 1857 Reopening
Newspaper Excerpt
the banks of the city of New York resumed specie payments on the 13th of the month . . . .
Source
newspapers

Newspaper Articles (2)
1. October 15, 1857 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, October 15, 1857

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Article Text

F. M. French, Maitland, Phelps & Co., Wm. Nelson & Son, Barclay & Livingston, Foster, Elliott & Co., Grinnell, Minturn & Co., Howland & Aspinwall, Tucker, Cooper & Co., Charles H. Russell, Augustus Schell, J. H. Brower & Co. At 3½ o'clock the number of merchants present could not have been less than 1,000. Edwin D. Morgan read the call of the meeting and nominated James Brown as President. The nomination was acceded to. James Lee and Robert C. Goodhue were appointed Secretaries. Peletiah Perit, President of the Chamber of Commerce, offered the following resolutions for adoption: Resolved As the sense of this eeting, that the exigencies of public affairs require an immediate extra session of the Legialature in order that such measures of relief may be granted as in their wisdom may be deemed just and expedient for the public good, and to enable the banks to continue their aid to the manufacturing and commercial industry of the State, to give employ. ment to the labor of the city and to renew specio pay ment at an early day. Resolved, With the view to liquidate the indebtedness of the interior, and to basten the shipment of produce to the seaboard, that it is the duty of the New York merchants and of the banks to afford every facility in their power without delay. Resolved, That in the judgment of the New York merchants assembled. looking at those great elements of wealth. the varied and large crops of the United States. the existing monetary de mangement may with certainty be speedily corrected, and be followed by a restoration of confidence to the ordinary machinery and credit of business; so that while the severity of the crisis will be long remembere d, so too will the speedy arrival of prosperity. be a Committee to present these Resolved, That resolutions to the Governor of the State, at Albany, and to solicit his immediate action thereon. Mr. Perit advocated the adoption of the resolutions. He said he would not attempt to speak at length upon them, as it would be impossible for him to be heard by but a small portion of the assemblage, and he did not know it was necessary that he should speak at length, as he was positive that the resolutions would meet with the full acquiescence of the merchants. To day the merchants found themselves in a position new and novel. The banks yesterday had found themselves obliged to suspend specie payments, though on the previous day it was known that they were perfectly solvent. The merchants had anqualified confidence in the entire solvency of the banks; there could be no doubt that their assets were abundant to meet all their liabilities; and, if this were true, he regarded it as the duty of merchants to sustain the banks by every means in their power, and this duty he considered imperative. Mr. Perit thought that their first duty was to represent to the Governor of the State the necessity that existed for an immediate call for an extra session of the Legis lature, to remove the penalties now imposed upon the banks for & suspension of specie payments, in order that the regular current of business might be restored to its legitimate channel. That step was provided for by the resolutions. Further, he suggested that it was the duty of merchants to give all their influence and all their aid to sustain the banks in the presenexigercy, and also to use all forbearance in their dealt ings with one another, and to give every indulgence possible in the present pressure. Moses H. Grinnell seconded the resolutions, which were put to vote and unanimously adopted. Theodore Dehon moved that the committee provided for by the resolutions be appointed by the President. The motion was carried, and the President named the following gentlemen as such committee: Moses H. Taylor, John C. Green, Royal Phelps, Moses H. Grinnell, Schuyler Livingston, Charles H Russell, Charles H. Marshall Abraham Hewitt, On motion the President and Secretaries of the meeting were added to the committee. Mores H. Grinnell then offered the following resolution: Resolved, That we, as merchant, and citizens, have entire confidence in the ability of the banks of the City of New York to meet all their engagements dollar for dollar. Mr. Grinnell said he should not offer any extended remarks. The resolutions which had been adopted with such unanimity expressed his sentiments, and he did not doubt that the Governor would respond to the call contained in them. But in accordance with what he deemed to be their duty to the banks, he had offered this resolution of confidence in their soundness, and he hoped it would be adopted, notwithstanding the fact that they bad been compelled to suspend pecie payment the previous day. But if they had done so, the banks had as tangible property to meet their liabilities as any merchant in the room, and that they intended to pay their debts as the merchants intended to pay theirs. (Applause). The resolution was seconded, and afterwards unanimously adopted. The meeting then adjourned. A consultation between the members of the Committee was at once held, and at 5 o'clock they left, on the Hudson River Railroad, for Albany. THE COURTS-SUSPENDED BANKS TO GO ON. The universal suspension of specie payment has already made some change in the circumstances and prospects of the banks. On Tuesday orders were made at the Special Term of the Supreme Court that the Marine and Citizens' Banks should show cause why receivers should not be appointed. Yesterday these orders were vacated, the suits and all proceedings withdrawn, and the banks will go on as usual. The Judges say that in like manner they will vacate all orders which have been granted appointing receivers, excepting, of course, such banks as have gone into liquidation. Of such there is only one-the Mechanics' Banking Association. The result will be that all the banks will be placed on an equal footing, and all will on. go enting ininnetions and appointing re-

2. September 1, 1858 New Orleans Daily Crescent New Orleans, LA
Article from New Orleans Daily Crescent, September 1, 1858

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Article Text

must forever be a source of pride, gratification and exultation to every good citizen and resident of Louisiana. The exchange market closed on the last of the month at 1¾ @2 per cent. discount for sight drafts on New York City bank checks at 1@1¼ per cent. discount; two to five days sight, at from 2½ to 2¾ per cent. discount; 30 days sight 3½ discount; sterling bills advanced to 102, 103 and 104½; best of A1 soll at 105, and francs firm at 5.70@5.50. Giving the position of the banks on the last Saturday, (28th of November,) we give below the comparative condition for the years as follows: | | Nov., 1856. | Nov., 1853. | Nov., 1854. | |--------------|-------------|-------------|-------------| | Secie | 6,475,758 | 8,598,836 | 6.737.247 | | Circulation | 8,152,137 | 5.890,633 | 5,935,259 | | Deposits | 12,870,962 | 13,451,629 | 11.888.532 | | Short loans | 20,275,751 | 14,967,220 | 15,903,709 | | Exchange | 5 364,061 | 4,469,060 | 3,410,067 | | Due distant banks | 957.527 | 1,132 851 | 950,356 | | Total loans | 24,075,874 | 19.201,799 | 19,815,698 | The commencement of the month of December was followed by intelligence from Europe of the most gloomy nature. Fail- ures and suspensions in every commercial place appeared to be the order of the day. Steamer succeeding steamer brought a decline in our great staple, which went far towards destroying the hope entertained that an immediate amelioration in affairs was at hand. From every place of note in the north of Europe we received the most disastrous intelligence; nor was the aspect of affairs any more favorable in the south of Europe. As the month advanced, the accounts regarding the English cotton market were of the most cheerless import. Prices kept receding. Middling Orleans cotton, which was worth in Liver- pool on the 9th of October 9¾d., fell to 5¾ on the 5th of De- cember--equal to a fall of seven cents in the short space of eight weeks. Of course, the action of the Bank of England did not assist the cotton market of the great Southwest. Although symptoms of improvement in general were mani- fest during the early part of this month, yet the falling off in the receipts of cotton was severely felt by many of our factor- age houses, compelling two of the heaviest class to suspend payments. During this month the banks expanded in their discounts, and though money became plentier and deposits in bank in- creasing, it was difficult to realize on paper at better rates than 2@3 per cent. per month for short dates, and 1@1¼ for long -dated acceptances. Exchange gradually improved, though from heavy losses on early shipments of cotton there were dif- ficulties in general negotiations, particularly in document bills and in some grades of clear bills. Nevertheless, business began to assume its usual characteristics of the season. For the week ending the 19th of December, there were sold 65,000 bales cot- ton, directly in the face of depressing accounts from Europe. Other branches of trade commenced to revive about this time, and as the holidays approached a lively time was anticipated. Specie arrived freely, which found its way into the vaults of the banks, and for the week ending the 19th, the specie reserve of the banks showed an increase for the week of eleven hun- dred and one thousand dollars, and the line of deposits an in- crease of one million of dollars. About this time the General Government was found to be deficit, the Treasury being nearly depleted, and Congress was called on for authority to issue Treasury notes. A great fall- ing off in importations from foreign countries had commenced, and likely to continue for a length of time. The issue of Treas- ury notes was granted. The Secretary of the Treasury, how- ever, not anticipating or foreseeing the results of the panic, and with a disposition to alleviate the pressure, governed by the best of motives, and withal a desire to assist the commer- cial and financial interests of the country during the eventful crisis, redeemed and purchased some millions of Government debt. This course was highly censured by some distinguished financiers; nevertheless, the relief which followed was highly appreciated, and if the fiscal department of the Government is always conducted with the same degree of liberality, there will be no cause for complaint. Congress granted the Treasury De- partment all it required, and the notes aided greatly the gen- eral currency of the nation; and though no direct benefit re- sulted to New Orleans, still the action in New York, with which we happened to be closely blended, tended to the good of all, and the disposition evinced by Mr. Cobb to assist our com- munity, which he did through the United States Mint, was fully appreciated, and we presume, will be remembered. Exchange continued to be freely supplied, and at the close of the month, say 29th and 30th, rated as follows: Bank checks on New York, ½ per cent, discount; five days sight, 1⅛ dis- count; ten days sight, 1¼ discount; sixty days sight, 3@3½ to 3¾ and 4 per cent. discount; thirty days sight, 2½@2¾ dis- count. The banks purchased document sterling bills at 107@ 103, private parties paying 104. Open bills sold from 104@ 105½ to 106, and for remittance 106½@107: francs closing at 5.70@5.50 to 5.45. The cotton market 9¼@9½c. for Middlings, and 9¾@1c. for Good Middlings. We received favorable accounts from the West of a general improvement in business and a restoration to confidence in all circles. The banks of the city of New York resumed specie payments on the 13th of the month. The condition of the banks of New Orleans on the last Satur- day of this month of December was: LIABILITIES. Circulation $4,336,624 Deposits 11,679,048 Due distant banks 1.363.478 ASSETS. Specie 10,320.714 Ninety day paper 14,940,420 Exchange 3.951.212 Total loans, long and short 17.741,355 The increase in specie for the month was $2,283,000; the in- crease in deposits was $1,555,000; the reduction in loans and discounts for the month was $110,000. From this date all cur- tailment ceased, and so did the renewal of paper which had been in course for nearly three months. Following the old beaten track of formers years, the 4th of January was regarded with considerable fear and anxiety. It was supposed that the three months of October, November and December had absorbed the greater amount of the resources of our community, and the ability to pass the eventful 4th was questioned and commented on as the day approached. The large payments maturing on that day were promptly met, with only one exception, and that was one of our most extensive cotton factorage houses. The payments made into the several banks on that day, including paper under discount and paper received for collection, were $3,198,000 The amount paid in 4th January, 1857, was 4,045,000 Do do do do 1856 2,465,700 Do do do do 1855 2,450,000 Do do do do 1854 2,274,850 It was fully confirmed that there was very little made, or ac- commodation paper (unless cotton planters' drafts come under that head) in our banks. The schemes of financiering adopted in New York and other localities, and practiced to an enormous extent in England and the north of Europe, were bad indeed. It was thought that the system of open credits which has been long followed in this market had been abused. Though many letters of credit are granted by parties of sold wealth and capital, yet there were many given to which the highest credit to the makers and presumed wealth were attached. While our banks and community have not suffered through this fictitious system, other parts of the commercial world have. The first week in January witnessed general depression in trade, connected more or less with the revulsion. Cotton de- clined one cet per Ib., and Middlings receded to 8⅝@8¾c. The general money market gave signs of weakness, and the year opened without any real quotations for commercial paper. On the 11th of the month we received Liverpool accounts up to the 26th of December, which were of a favorable nature. A reaction in cotton had taken place. The Bank of England reduced its rates of interest to 8 per cent.; and the general im- pression ruled that the turning point in England had been reached. This was confirmed. On the 13th there were large transactions in cotton in our market. On that day we made the following remarks on our great staple: Cotton is moving briskly, and exchange will have to move briskly, even if lower rates have to be submitted to. The fall- ing off in the receipts of cotton will soon begin to be developed; but whether this falling off will seriously affect prices is another question. There is a great falling off in the consumption at all the manufactories throughout New England, but it will not in our view have any effect in depressing prices. We consider that prices have now receded to the lowest figure for this sea- son. It is quite immaterial what views the Bears take at this moment. They will buy all they can pay for, or negotiate ex change for. We did not hear of a solitary transaction in paper to-day. Capitalists and buyers will, before the season ends, be put to their wits to find means of employment, and if our banks, towards the close of the season, find as much satisfactory paper as they desire or can discount, we shall be mistaken. Capital ists can hold on. They cannot employ their money in other sec- tions of the country to greater advantage than in New Orleans. The above remarks, made in January last, are, we think, fully confirmed at this present time, the close of August, 1858. During this month (January) business in every department and every branch began to improve. Money became more plenty, and rates of interest commenced to recede. The banks continued to increase in strength and ability. The Legislature had assembled, and some fears were entertained that harsh measures might be adopted towards some of the banks. This fortunately did not prove to be the case. Wisdom, judicious and wise councils prevailed, and our admirable banking system in the main was not tampered with. On the 22d of this month a sale of city bonds to the amount of $80,000, issued to one of the railroads, was made at 66, and interest equivalent to 67½. Bank stocks began to improve, and money more plentifully supplied. Exchange improved all through this month. The following were the rates on the 16th of the month: Sight drafts on New York, ¼@½ discount; bank checks, par; five days sight drafts, ½@¾ discount; thirty days sight, 1@2 discount; sixty days sight A1. 2½@3 discount; sixty days other good to fair bi ls, 3¼@3½ to 3¾ discount; sterling, with documents, 103@104 to 105; sterling clear bills, 107@108½; francs, commercial bills, 5.55@5.42½; francs, bankers' drafts, 5 30. Business continued to improve through the month, and at the close there was nothing to show that a panic had pervaded our city. Money continued to increase in supply, facilities for the active employment of large sums were few and far between, and in general, borrowers with good securities could dictate their own terms. During the month there were some sales of real estate, confined, however, to medium class property. High priced brick stores and costly dwellings were not sold.