15482. Banks of the city of New York (New York, NY)

Bank Information

Episode Type
Run → Suspension → Reopening
Bank Type
state
Start Date
May 10, 1837
Location
New York, New York (40.714, -74.006)

Metadata

Model
gpt-5-mini
Short Digest
eea0ac4c

Response Measures

Full suspension

Other: Collective action by all New York city banks to suspend specie and accept each other's notes.

Description

Articles describe a heavy specie drain (runs) in early May 1837 leading the banks of New York to suspend specie payments (suspension announced for Wednesday May 10, 1837). The banks later resumed specie payments (reported resumed on April 23, 1838). This is a collective episode involving many city banks (Manhattan, Merchants', American, etc.), so bank_type is set to unknown. Dates taken from articles (Wednesday 10th inst. in May 1837; resumption reported as April 23, 1838).

Events (3)
1. May 10, 1837 Run
Cause
Macro News
Cause Details
Large withdrawals (specie drain) amid the broader 1837 financial crisis/panic leading depositors to withdraw specie from New York banks.
Measures
Banks agreed to stop specie payments and receive bank notes of city banks in payment; suspension of specie payments followed.
Newspaper Excerpt
the drain of specie by bill holders and depositors exceeded six hundred thousand dollars on Monday, and seven hundred thousand on Tuesday.
Source
newspapers
2. May 10, 1837 Suspension
Cause
Macro News
Cause Details
Collective precautionary suspension of specie payments in response to heavy specie outflows and the wider financial crisis of 1837.
Newspaper Excerpt
The Banks of the city of New York, on Wednesday 10th inst. by common consent, stopped payments in specie
Source
newspapers
3. April 23, 1838 Reopening
Newspaper Excerpt
all the Banks of the city of New York commenced specie payments, that day, in the broadest extent, bills, deposits, and all; 'and more than that, they pay out their own notes only.' The Banks of the city of New York resumed specie payments on the 23d ult.
Source
newspapers

Newspaper Articles (6)
1. May 18, 1837 Herald of the Times Newport, RI
Article from Herald of the Times, May 18, 1837

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Article Text

THE CRISIS.-The Banks of the city of New York, OM Wednesday 10th inst. by common consent, stopped payments in specie, and each agreed to receive in payment of debts, and on deposite, the notes of all the Banks of the city. This measure was resolved on by the officers of all the banks except three, on Tuesday evening, viz: the Manhattan, the Merchants' and the American. These three on the following morning united with the rest in the measure, and accordingly there was no payment of specie from any of the Banks on Wednesday. It is stated that the drain of specie by bill holders and depositors exceeded six hundred thousand dollars on Monday, and seven hundred thousand on Tuesday. [From the N. Y. American of Tuesday. Public Meeting at the Merchants' Exchange. -The following call was this morning circulated: PUBLIC MEETING. A public meeting of Merchants and Traders, and others is requested at the Merchants' Exchange, THIS DAY, at 121 o'clock, to consider and adopt such measures as may be deemed necessary and expedient under the suspension of specie payments by the banks. In consequence thereof, an overflowing meeting assembled at the hour named, when, on motion, the following officers were appointed: President-James Boorman. Secretaries-John A. Stevens, Richard M. Blatchfor, Wm. H. Aspinwall. James G. King then presented himself to the meeting, and read the call, which he enforced by a brief and pertinent address. a Mr. K. then moved the following resolue tions, which were seconded by Nathaniel Prime: Resolved, That under existing circumstances, it is expedient and necessary to suspend payments in specie.

2. December 28, 1837 The Madisonian Washington, DC
Article from The Madisonian, December 28, 1837

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Article Text

# INDIANA. ## Extract of Gov. Noble's Message. The disordered conditition of the monied affairs of the country so sensibly felt in the east during last spring, induced the banks of the city of New York, in May last, to resort as a measure of precaution, to a temporary suspension of specie payments. That step was followed by a general and almost simul-taneous suspension throughout the Union. The intelligence arrived at the seat of Government during the session of the State board. After giving that anxious deliberation due to the magnitude of the interests involved, they determined to recommend an immediate suspension to the branches. The latter were in a safe and prosperous condition, as shown by the exhibit of their resources and liabilities made at the time. They had, however, in their possession more than a million of dollars in notes and credits of the suspending banks. Under these circumstances a continued redemption of their paper amidst the universal suspension of neighboring banks, would have led, unavoidably, to an almost entire abstraction of the specie basis of our circulating medium. The fatal tendency of the latter would have been seen, not merely in crippling and prostrating the bank, but in the severe and lasting injuries thereby resulting to the State. The members State board, would therefore have been faithless to their trust if they had neglected to adopt measures designed to prevent the capital which the State had furnished for the benefit of her citizens from being withdrawn to to supply the vaults of foreign banks, the doors of which were closed against every similar demand we might make upon them. The establishment of the State Bank of Indiana was rather a matter of necessity than choice, and that necessity grew out of the discontinuance of the National Bank. The late Chief Magistrate having determined to refuse to that institution a renewal of her charter, zealously recommended the State bank as possessed of the ability to furnish a more sound and uniform carrency. The local banks instantaneously multiplied, and with the withdrawal of the paper of the Bank of the United States, it was evident that the notes of the local banks would supply its place. We were therefore under the obligation to furnish our citizens with a substitute to place them on an equal footing with those of other States, and to avoid the necessity of supplying our deficient circulation by the paper of banks of which we could know but little. With these facts and views before them; with the general consent of all parties, and the marked approbation of the people, the State bank with its branches was established by the Legislature. In order more effectually to identify it with the public interest and welfare, the State became the owner of half the stock, reserved to herself ample supervisory powers over it, and retained the right of selecting some of the more important of its officers. To pay her half of the stock, and to furnish individuals with a part of the means of paying their subscription in specie, the State borrowed in all the sum of $1,390,000, at five per cent., payable in from twenty to thirty years. She receives on this sum an average interest of nine per cent., leaving a clear annual profit of $55,600, which is again loaned out at nine per cent., on the principle of compound interest. Long before the expiration of her charter, there will remain in the hands of the Commissioners of the Sinking Fund, after the extinction of the yearly interest on the bank loan, a sum sufficient to pay off the entire principal, leaving the whole of the stock of the State as our profits. In accordance with a provision of the charter, this is to be used as a fund for the support of free schools. Our bank is therefore emphatically a State institution, closely identified with the interests of the State and her citizens, and as long as she continues to discharge her legitimate duties with the fidelity and success so honorably characteristic of her past history, she will retain the undivided support and merited confidence of the people. The necessity of sustaining the sound banking institutions of the States is apparent and generally admitted. The suspension of specie payments worked a forfeiture of the charters of the banks in several of the States. The Legislature on being convened to advise with regard to the subject have uniformly adopted protective enactments. In many states, as in our own, the Legislature have not deemed it proper to annex the penalty of forfeiture to a suspension of payment. Our banks are made liable for twelve per cent. when they fail to redeem their notes, and may be withdrawn and wound up at the discretion of the State board. The wisdom of not exacting a forfeiture is now fully attested. It has enabled our banks quietly and efficiently to discharge their accustomed duties, and aid in warding of from our trading agricultural and manufactoring interests, the threatened disasters of the crisis. If the State had reserved to herself the authority to resume the charter on such a contingency, and had with a rigid and inflexible regard to her rights exerted it, the step would have sapped the foundations of our credit, and inflicted a blow on our interests which would have required years of uninterrupted prosperity to repair. On viewing the amount of interest the State possesses in the stock of the bank, the nature of the objects its establishment was designed to subserve, the beneficial influence it has exerted on every branch of enterprise, and the immense gain that will ultimately accrue to the people, you will find in the range of your duties, no subject more worthy of your attention. The safety of the bank is found in the prudent management of her ample means, and secured by the personal responsibility of her

3. March 8, 1838 The Madisonian Washington, DC
Article from The Madisonian, March 8, 1838

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Article Text

JACOB WORCESTER, Secretary. Ata meeting of the Banks of the city of New York, held on the 28th February, 1838, the commi tee on "the resumption of specie payments" submitted the following report, in part, viz: In contemplation of the resumption of specie payments, by the banks of the city of New York, on, or before the tenth of May next, and under the uncertain contingency of a simultaneous or early resumption by the banks of some of the other great commercial cities, it is incumbent on those of New York to adont all the measures within the limits of their resources, which may enable them not only to resume, but also to maintain the specie payments. Much has already been done in that respect, the result, as well of causes not under the control of the banks, as of positive action on their part. 1. It appears by the annual returns of the Bank Commissioners, that, exclusively of the Dry Dock Bank, which is not included in the return of this vear, the gross amount of all the liabili ies of the city banks payable on demand, deducing therefrom the notes and checks of other banks held by them and the balances due to them by other b nks, amounted on the 1st of January, 1836, to $26,918,105; on the 1st January, 1837, to $26,485,287; and on the 1st January, 1838, to $12,920,604-making a diminution in the li bilities of more than twelve millions and a half during the year 1837. 2. The detailed statement for the 1st January, 1838, rendered by he several city banks to their standing commi tee, shows a balance to their credit of more than four millions due to them by the banks out of the State, and of more than two millions in account with all the banks out of the city. Ample means, as also appears by those statemen's, have been provided by the country banks of the State, for the redemption of their notes, which circulate in the citv. On a view of the whole subject, we may confidently say, that the relatives rength of the banks is, and at the time of the resumption, will be, greater than it was during the last two years, and prob..bly at any former time. The f ll in the rate of foreign exchanges, now considerably below par in our city paper, renders it absolutely certain, that no exportation of specie can take place, and more than probable that a conside-rable influx may be expected. This fact, now in-disputable, must have an effect on public opinion, and ought to remove the apprehensions of those who may have believed our efforts for an early resumption premature. Secure, as all the banks in the United States are, against foreign demands, we are justified in expecting their co-operation. If this is obtained, we do not perceive any cbstacle to an early, easy, and safe resumption of specie pay-ments. A continued suspension, on the part of some of the other great commercial cities, can alone render the resumption on our part difficult, and may prevent a free application of the legi imate resources of New York. Yet, such is the favor ble relative state of the balances between this and the other parts of the Union, that, for the present, at least, but little need be apprehended from the ffect of natural causes. Of deliberate acts of hostility, as there could be no motive for such, there should be no apprehension on our part. We trust that, supported by the community of this.city and by the State, the binks will be able to surmount all obstacles, and, on or before the tenth of May, to resume and maintain specie pay-ments. The preparatory measures on their part appear to be, first, a reduction of their liabilities out of the State, and drawing in their foreign funds; second, an equalization of the balances due from and to each other, and a mutual return of their notes, which may enable all to resume on an equal footing and with equal safety; third, a sufficient increase of their specie. On these points the committee will submit a separate report. ALBERT GALLATIN, PETER STAGG, GEO. NEWBOLD, CORN'S. HEYER, JOHN I. PALMER, C. W. LAWRENCE, F. W. EDMONDS, Whereupon, the report was unanimously adopted by the meeting. On motion, Resolved, That the same be published. BFNJ. M. BROWN, Chairman. WM. M. FERMILYE, Secretary.

4. May 3, 1838 Virginia Free Press Charles Town, WV
Article from Virginia Free Press, May 3, 1838

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Article Text

RESUMPTION-New-York was the first to suspend specie payments, and she is the first to resume. The Journal of Commerce, of the 23d ult., states that all the Banks of the city of New York commenced specie payments, that day, in the broadest estent, bills, deposits, and all; "and more than that, they pay out their own notes only." The Banks in Boston have resumed speele payments on their notes is circulation below five dollars: and, the resumption, it is thought, will-soon become entire with them.

5. May 9, 1838 Martinsburg Gazette Martinsburg, WV
Article from Martinsburg Gazette, May 9, 1838

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Article Text

RESUMPTION.-New York was the first to suspend specie payments, and she is the first to resume. The Jour. nal of Commerce, of the 23d ult., states that all the Banks of the city of New York commenced specie payments, that day, in the broadest extent, bills, deposits, and all; "and more than that, they pay out their own notes only." The Banks in Boston have resumed specie payments on their notes in circulation below five dollars ; and, the resumption, it is thought, will soon become entire with them.

6. May 12, 1838 Columbus Democrat Columbus, MS
Article from Columbus Democrat, May 12, 1838

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COLUMBUS, MISS. SATURDAY, MAY 12, 1838. Resumption of Specie Payments. -The Banks of the city of New York resumed specie payments on the 23d ult. The Journal of Commerce, of April 24th, thus remarks on this important movement of the banks-a movement as honorable to themselves as it must be advantageous to the community. LAND Ho! -Yesterday was a proud day for New York. It witnessed the restoration of specie payments in less than twelve months from the time of suspension, and after one of the most fatal mercantile revulsions which ever happened. Such a recovery from such a wreck, the world never before saw. It is attributable, under the blessing of Heaven, to the energy, the sound intelligent good sense, and moral integrity of our citizens. The banks have resumed in the fullest sense of the term. They have also returned to the use of their own notes, which they now pay out as formerly. The hearts of our citizens were filled with joy at this, as well they might be. The following resolution was adopted by the bank convention held some days previous to the resuption. "Resolved, That it be recommended to all banks of the several States to resume specie payments on the first Monday of January next, without precluding an earlier resumption on the part of such banks as may find it necessary or deem it proper."