Banks of the city of New York

Bank Information

Episode Type: Run → Suspension → Reopening
Bank Type: state
Start Date: October 13, 1857
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: caa9f27a

Response Measures

Full suspension

Description

Multiple articles state that after a serious run for specie the New York city banks suspended payments on the night of Oct 13/14, 1857, and then resolved to resume specie payments on the night of Dec 11, 1857. The run appears driven by a broad financial panic (failures, suspensions in Philadelphia and Baltimore, and general contraction), so I classify the immediate cause as macro_news/systemic panic. Bank grouping is collective (all city banks); exact charter types vary, so bank_type set to unknown.

Events (4)

1. October 13, 1857 Suspension

Cause: Macro News
Cause Details: Following the heavy run and widespread financial revulsion (failures, stoppage of remittances, suspensions elsewhere), the banks collectively suspended specie payments.
Newspaper Excerpt: At a meeting of the bank officers at the Clearing House, on the evening of the 13th of October, it resolved to suspend specie payments
Source: newspapers

2. October 14, 1857 Run

Cause: Macro News
Cause Details: A broad financial panic with failures of large private houses and suspensions in Philadelphia and Baltimore triggered heavy specie withdrawals from New York banks.
Measures: Bank officers met at the Clearing House; subsequently resolved to suspend specie payments (see suspension event).
Newspaper Excerpt: after a serious run upon them for specie from their depositors, the banks of the city of New York suspended specie payments.
Source: newspapers

3. December 11, 1857 Other

Newspaper Excerpt: The banks of the city of New York have resumed specie payments. ... they resolved to resume specie payments in full at once. On the night of October 13 the banks resolved to suspend, and on the night of December 11 they resolved to resume.
Source: newspapers

4. December 11, 1857 Reopening

Newspaper Excerpt: The Banks of the city of New York have unanimously resolved to resume specie payments for all their liabilities, the resumption to commence to day.
Source: newspapers

Newspaper Articles (5)

1. December 12, 1857 The New York Herald New York, NY

Article from The New York Herald, December 12, 1857

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Article Text

The News. The steamship Europa, due at this port from Liverpool, had not been telegraphed up to 1 o'clock this morning, at which hour the weather was perfectly clear. The banks of the city of New York have resumed specie payments. At a meeting of bank managers last evening, at the Clearing House, it was resolved to resume specie payments in full at once. and all claims upon them are now paid in coin. On the night of October 13 the banks resolved to suspend, and on the night of December 11 they resolved to resume. The suspension has therefore continued fifty days. The banks at Albany and most others throughout the State, and those of Boston and most of the New England States, will without doubt resume at once. The movement will gradually extend, and we expect to see, with perhaps a few exceptions, before many weeks elapse, all the banks of the United States ranked again as specie paying institutions. We have a fortnight's later news from Mexico. The dates are from the City of Mexico to the 4th instant, and from Vera Cruz to the 7th. The government troops had defeated the revolutionists at Puebla and other points, and affairs generally had assumed a more encouraging aspect. The position of the hostile factions in Yucatan exhibited no change. Comonfort and the Supreme Court were formally installed in office on the 1st inst. A decree had been issued regulating the Tehuantepec isthmus by the Louislana company. A rumor prevailed in Washington last evening that Gov. Walker had precipitately fled to Kansas, with the view of provoking his removal by the President. Our correspondent states that beyond all doubt Gov. Walker will be relieved of his official burthens before the lapse of a fortnight, unless he should anticipate such a contingency by tendering his resignation. We publish this morning an official despatch from Col. Johnston, commanding the army of Utah, which has just been received by the War Department. As heretofore stated, the troops are to winter at Henry's Fork. on Green river, until spring, when the entire force will advance on Salt Lake City by the most direct route. Col. Johnston is of opinion that, from the nature of the country, a protracted guerrilla war with the Mormons is inevitable, unless a large force is sent against them. The force at present employed is entirely inadequate to meet the requirements of the contemplated campaign. It appears that Gen. Scott does not favor the design of ordering troops from the Pacific to Utah, but will send all the reinforcements and supplies from this side. The motion for an injunction to restrain the grant made by the Common Council to the Catholic Orphan Asylum attracted a great deal of interest yesterday in the Supreme Court. Judge Davies denied the motion. The report of the proceedings will be found under the appropriate head. We publish in another column an interesting statement made by Dr. Wynne before the Special Committee of the Board of Councilmen appointed to consider the propriety of establishing a foundling hospital in this city. The doctor evinced considerable research on the subject in giving the history of foundling hospitals from the eighth century to the present time, and presenting numerous statistics in regard to them, illegitimate offspring and still births. He did not express any opinion as to the establishment of a foundling hospital here; but his statement tends to show that it would be advantageous to establish one. The Metropolitan Police Commissioners met yesterday, but transacted no business of great importance. A communication was received from Thad deus Hyatt, Esq., offering free of charge the use of the building No. 120 West Broadway for the accommodation of lodgers during the winter. Mayor Wood was not present. The Board went into secret session at 3 P.M. The trial of James Shepherd, charged with arson in the first degree, was continued in the Court of General Sessions yesterday. A number of witnesses were examined for the prosecution, whose evidence, although entirely circumstantial, points strongly against the accused. In the afternoon counsel for the prisoner opened the case for the defence. and after the examination of one witness the Court adjourned its further hearing till this morning. In the case of Donnelly, convicted of the murder of Moses at the Sea View House last summer, the New Jersey Court of Appeals have affirmed the judg. ment of the Supreme Court. An application is to be made to the Court of Pardons for a commutation of punishment; and, if that fails, the culprit will suffer the extreme sentence of the law on the 8th proximo. The United States steamer Powhatan sailed from Norfolk yesterday for Madeira and China, with exPresident Pierce and family as passengers to the first named port. The brig Georgia, Capt. Carlisle, from Philadelphia, with a cargo of coal, ran ashore at 6 o'clock yesterday morning on the bar of Jones' Inlet, oppoBite Freeport, N. J. If the weather becomes stormy she will prove a total loss. Her captain and crew were saved. The Board of Aldermen met last evening and

2. December 14, 1857 Evening Star Washington, DC

Article from Evening Star, December 14, 1857

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Article Text

# RESUMPTION OF SPECIE PAYMENTS The Banks of the city of New York have unanimously resolved to resume specie payments for all their liabilities, the resumption to commence to day. It is said that their condition was never so strong as at present. Having twenty-six millions of dollars in their vaults, they will sustain the resumption with ease. In the meeting which resolved on the resumption thirty-eight of the city banks were represented. Eight of the un-represented banks are now understood to be also ready to fall into line. It is now just two months since the suspension. The Banks of Albany have also resolved to resume specie payments to-day; also, the Banks in Boston. The Banks of New England and other States, will, no doubt, soon follow example. On the 31st of October the Banks in New Orleans had an actual coin basis of nearly four million dollars. They now have eight millions. They resumed several weeks ago.

3. December 14, 1857 The Daily Dispatch Richmond, VA

Article from The Daily Dispatch, December 14, 1857

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Resumption of Specie Payment in New York, The telegraph announced. on Saturday, that the Banks of the city of New York had that day fully resumed specio payments on all their liabilities.They determined, by resolution, to suspend on the night of October 13th, and they recolved to resume on the night of December 11th. It is supposed that the Banks of Albany and most others throughout the State of Now York will follow suit, "or." 88 a letter says, " wind up." Tt is conjectured that this resumptionin New York is that the Banks may be acting in conformity with law when the Legislature meets, which will be on the 1st of January. We suppose that the Boston Banks, and most of those of New England, will soon follow the example of the New York Banks. The Banks of this State have been most prudent15 shaping their policy for the purpose of being ready, ns soon possible, to resume specie payments: and we doubt not they will be prevared for that movement whenever the Banks of Philadelphia and Baltimore set the example. Letters say that the effect of the resumption in New York will be favorable. Money was abundant and the influx he avy, though the export had somewhat increased. The Fulton took out on Saturday about $750,000 for Europe.

4. January 1, 1858 The New York Herald New York, NY

Article from The New York Herald, January 1, 1858

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realized, and the payments were more promptly met than expected. The banks looked out for them- selves before the business community had become weakened by sacrifices to sustain their credit. The Sub-Treasury was rapidly depleted and the surplus revenue of the government experienced a rapid reduction. The suspension of specie payments on the part of the Philadelphia and Baltimore banks on the 26th of September, first impressed the public mind with the fact that a financial revulsion was about being realized, and a panic seized upon all classes. It was at first hoped that the bank suspensions would not extend beyond those cities. The managers of the New York and New England banks assured the public that they were able to maintain themselves as specie paying institu- tions. The hope of this sustained in a measure pub- lic confidence, and relief was looked for daily. Heavy failures among the mercantile and manufacturing classes continued, and the amount of liabilities in- volved was enormous. The money market never was before known to be so stringent. It was utterly im- possible to get money, upon any class of security. The supply ceased at once, while the demand never was more active. Most fabulous rates of interest were offered. The month of October opened in the midst of a financial panic of the most intense character. With- in our whole history as a nation, nothing equal to it had ever before been realized. The failure of seve- ral of our largest private banking houses was an- nounced early in the month. Several railroad com- panies went to protest on their floating debts, and made assignments. The Cumberland Coal Company suspended and assigned; several banks in the city and its immediate vicinity failed and went into the hands of receivers, and on the 14th of the month after a serious run upon them for specie from their depositors, the banks of the city of New York sus- pended specie payments. At that time the contrac- tion in loans had reduced the aggregate below one hundred millions of dollars, and at the date of sus- pension the specie reserve ranged below seven mil- lions of dollars. At a meeting of the bank officers at the Clearing House, on the evening of the 13th of October, it resolved to suspend specie payments, and it was also resolved to receive on deposit, the same as their own bills, those of all the country banks of the State of New York. This measure was hailed with much satisfaction, and the impression prevailed in the public mind that the worst was over that the back- bone of the panic and revulsion had been broken, and that a steady improvement would be realized from that date. It is a very extraordinary fact that most of the largest failures occurred previous to the suspension of the banks, although there was no change made at the time in the movements of these institutions. The savings banks at that time sus- pended, or rather availed themselves of the privilege of claiming the sixty days grace before paying de- positors. The Secretary of the Treasury gave no- tice about the middle of October that no more gov- ernment stocks would be redeemed upon any terms. His surplus had become reduced below the point required by law, and a suspension was the result. About that time the advices from Europe began to be bad and foreshadow a financial revulsion in Great Britain and on the Continent. The arrival in Lon- don of accounts from this side, and the complete suspension of remittances in every shape, were calculated to create difficulties, and it was not long before they were fully developed. The moment remittances from the United States stopped, the entire financial machinery of Europe became deranged. It only required some cause to send the whole fabric toppling to the ground. The entire credit system had become so expanded, and the bubble had become so enormously inflated that a trifling event was sure to produce the explosion. That event developed itself when remit- tances from this country to Europe suddenly and un- expectedly ceased, and the result is before the world. While this suspension relieved us, it bankrupted, or rather exposed the bankruptcy of hundreds of bank- ing and commercial firms on the other side, and their prostration and depression will linger long after our recovery has been established. From the date of the suspension of specie payments by the banks of this city, the stock market pretty steadily im- proved. In money matters there was no important change, for the policy of our banks remained the same, and the contraction continued. The first week after the suspension the specie reserve of the banks increased about two and a half million of dollars. The month of November inaugurated a period of quiet and inactivity among business men generally. Throughout there was a very steady bank movement. In no week was there a variation of more than half a million in the line of discounts, and at the close the contraction for the month did not exceed one million of dollars. From the date of the bank suspension the specie reserve rapidly and regularly increased. Up to the close of November the increase amounted to about sixteen millions of dollars, having risen from $7,843,230 to $24,303,145. With this no ease in the money market was realized among business men. Loans were freely offered on call at low rates of in- terest, and speculators in stocks for a rise found no difficulty in hypothecating railroad securities with favorable margins. It continued as difficult to raise money on commercial paper as at any time during the revulsion, and business matters were depressed beyond all hope of speedy recovery. The importation and exportation of specie going on at this port at the same time was sufficient to show the complete derangement of all financial and com- mercial laws. After a time the importations nearly ceased, when the exportation increased and the current set almost wholly one way. During the month there was quite an active movement in the stock market, but it was confined to the regu- lar speculators of the street, and could not be forced beyond. The banks, anxious to find employ- ment for their accumulating funds, loaned freely on stock securities at five and six per cent interest, and were glad to get that. Outside of Wall street the money stringency continued in full force. No im- portant change in financial affairs was realized in the early part of December. The money market remained the same. The brokers in stock could get all the money they wanted on the right kind of security. The banks for the first time since the sus- pension expanded their line of discounts the first week in the month. At that time the specie reserve had reached the immense sum of twenty-six million of dollars. This great accumu-

5. October 7, 1859 The New York Herald New York, NY

Article from The New York Herald, October 7, 1859

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ing Association, which failed in 1857, was, after two unsuccessful attempts, readmitted to the association by a vote at the Clearing House. What business had the banks to make this matter private? What right had they to conceal from the public their reasons, at one time, for refusing to admit the new bank; at another, for admitting it? The questions on which their decisions must have turned were of the highest public import. Our correspondent, who says that the Clearing House is " merely a place where the bank exchanges are cted," has evidently forgotten 1857. If he will look back to the records of that year, be will find that on the 12th October, " at a meeting of bank officers held at the Clearing House, the following resolution was, after a long preamble, adopted:Resolved, That the banks of the city of New York are determined at all hazards and under all circumstances to perform their duty to the country and to all its great interests, in the maintenance of specie payments, and that all classes of the community should sustain them in carrying out this determination. This resolution is signed Thos. Tileston, chairman," and Jas. Gallatin, secretary." Can it be seriously pretended that the ground covered by this resolution Was private, or that the banks have any right to exclude the public from discussions of such vital public consequence? Again, on the following day, 18th October, a meeting of the associated banks was held at the Clearing House, at which, "on motion of Mr. Knapp, seconded by Mr. Durham," the following preamble and resolution were adopted :- :Whereas, in view of the excitement prevailing in this community, and the fact of the actual suspension of severa banks, Resolved, That it is expedient that the Banks of this city suspend specie payments to-morrow. Other resolutions were also adopted, one calling for a law to meet the emergency: another recommending the banks to resume as soon as possible. If the suspension of specie payments by the banks of New York was private matter," concerning a few bank presidents only, we should like to know what constitutes a public matter." And if the public have no right to know what the banks are doing, when the action of those banks convulses trade, overwhelms credit, and revolutionizes society, it would be curious to know what rights the banks are willing to concede to the public. Have they any rights at all, beyond that of depositing their money in the banks for those institutions to lend out and speculate with? If the public exists only for the convenience and by the permission of the banks, then, of course, our correspondent is right; if otherwise, then the attempt of the banks to exclude the representatives of the public from the Clearing House is an impudent assumption of authority which cannot be tolerated. We notice that a morning cotemporary declares that, "in his opinion, he has no right to demand a (Imittance to the Clearing House." Very likely. Our cotemporary knows best where he is wanted, and we hope that nothing we may say will induce him to intrude where he feels that he would be out of place For our part, we hold that it, is our business and our right to report the proceedings of the most authoritative assembly of bankers on this continent; but if, as our cotemporary intimates, he has nothing to do with such matters, why, we sincerely trust he will stay away.