15606. Chemical Bank (New York, NY)

Bank Information

Episode Type
Run Only
Bank Type
state
Start Date
October 14, 1857
Location
New York, New York (40.714, -74.006)

Metadata

Model
gpt-5-mini
Short Digest
4851b77d

Response Measures

Accommodated withdrawals

Other: Chemical Bank continued specie payments during the October 1857 panic; other banks suspended but Chemical paid out coin and thereby accommodated withdrawals.

Description

During the panic of October 1857 there were heavy withdrawals from New York banks (systemic panic). Chemical Bank is repeatedly reported as continuing to pay specie and remaining open; an anecdote mentions $40,000 drawn from Chemical and returned later. No suspension or receivership of Chemical is reported, so this is a run-only episode (bank remained open and paid specie).

Events (1)

1. October 14, 1857 Run
Cause
Macro News
Cause Details
General financial panic of October 1857 produced runs and heavy withdrawals on New York savings and city banks; Chemical faced withdrawals but continued specie payments.
Measures
Continued to pay specie (honored specie demands); maintained regular operations despite withdrawals.
Newspaper Excerpt
The Bank of America and the Chemical Bank continue to pay specie... Several of the banks which closed yesterday resumed to-day.
Source
newspapers

Newspaper Articles (5)

Article from The Daily Dispatch, October 15, 1857

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[SECOND DISPATCH.] NEW YORK, Oct. 14.-The city is comparativ ely quiet. The run on the Savings Banks was prov iptly met. At a meeting of their presidents, held this afternoon, it was proposed to pay ten per cent. on the deposits. The Bank of America and the Chemical Bank continue to pay specie, and the Manhattan is said to be doing the same. Gold is selling at 4a5 per cent. premium. Several of the banks which closed yesterday resumed to-day. The Judges of "the Supreme Court have decided to issue no process except after giving notice in usual form.


Article from Evening Star, October 15, 1857

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action to that end. A committee of eight was accordingly anpointed; which proceeded to Albany this evening. The meeting of the officers of the several Savings Banks of New York York and Brooklyn which was held this afternoon, resolved to pay depositors only in the notes of city banks. Several of the banks which closed their doors yesterday resumed business to-day. The Supreme Court judges to-day held a meeting and decided to issue no process against the form. banks excepting upon notice given in the usual The action of the merchants' meeting fails to give satisfaction. Richard Schell, Esq., was present with resolutions censuring the banks for demanding specie of each other, when they withheld it from their customers, but he was induced to withhold them. A strong movement is progressing among the republican leaders against the proposed extra session of the Legislature or any other recognition of the suspension. while a large majority of the democrats and a few Americans and republicans banks. are uniting in support of the relief of the P. M-The bank suspension has had a beneficial effect, and stocks largely advanced. The feeling generally is improved and the excitement subsided. The banks paid out five millions of specie yesterday. They continue business as usual, except paying specie. The Chemical and Bank of America pay everything. specie included. The other banks are indignant at such a course. Gold commands a premium of four to five per cent., and city bank bills sell at five per cent. discount. At a meeting of bank officers this afternoon, it was resolved to suspend the specie clause in the clearing house, substituting therefor an agreement balances. by which the debtor banks pay interest on The banks which have already gone into the hands of receivers will immediately enter upon the business of winding up, unless they can retrace their steps and resume their places in the ranks of the clearing house. The American Exchange and the Metropolitan Banks have resolved to receive State money at par, but the other banks are yet undecided. Several of the city savings banks refuse further payments of coin at present. The Chemical Bank announced its determination to continue specie payments. This bank was the only one that went through the crash of 1837 unharmed. pended. Every one of the Williamsburg banks have susA meeting of the merchants was held this afternoon, and voted that they had full confidence in the banks, notwithstanding their unfortunate suspension. They also resolved to use every effort to restore the prosperity of the city. BOSTON, Oct. 14.-All of the Fall River banks have suspended. Since the bank meeting this morning everything is quiet. Stocks are unsettled, with symptoms favora ble to a rise. The Massachusetts Insurance Com any has declared a dividend of 20 per cent. The Massachusetts Bank paid specie up to the closing to-day. Its circulation is one hundred and thirty-six thousand dollars, and its specie three hundred and seventy thousand dollars. P. M -The suspension of our banks has caused but littieexcitement. They have resolved to continue the exchange house and to resume specie payment as soon as possible. The banks of New Bedford. Worcester, Fair Haven. and other principal places havesuspended. The Nantu and Lowell banks paid specie throughout to-day, but the suspension will be general in New England. ALBANY, October 14.-The banks here have resolved to receive on deposit and in payment of debts, the notes of all State banks redeemable in New York: NEWARK, N. J., Oct. 13.-There was a great run on the Newark Savings bank here to-day, but it is thought they will fully sustain themselves. BOSTON, Oct. 14.-Every bank here voted to suspend specie payment. The Banks throughout the State will follow suit. PETERSBURG, October 14.-The branch of the Farmers' Bank of Virginia at this place has suspended. The branches of the Virginia and Exchange banks are still paying specie. AUGUSTA, Oct 14.-The Georgia Railroad Bank has suspended. DETROIT, Oct. 14.-The Michigan Insurance Co. has suspended specie payment. SECOND DISPATCH. RICHMOND, Oct. 15.-The Farmers' and Exchange Banks here suspended this morning. The Bank 0. Virginia still holds out. AUGUSTA, Oct. 15-A public meeting of the citizens here recommended all the banks to suspend. The Union Bank suspended this morning. Philadrlphia, Oct. 15-The banks here today manifest a disposition to not accept the provisions of the relief bill, and there is an additional gloom in business circles. Sata Fe Traders at St. Louis. ST. LOUIS, Oct. 13.-A number of Santa Fe merchants have arrived to-night, with upwards $100,000 in gold, for the purpose of settling up their old accounts and purchrsing new goods. Marine Disaster. NORFOLK, Oct. 14.-Arrived to-day bark Lucerne, from the coast of Africa, bound to New York, in a leaking condition, spars damaged and crew sick.


Article from Daily Nashville Patriot, October 22, 1857

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The "Lone Star." The Chemical Bank is the only one of the three score banks of the city of New York, that continues to pay specie. The N. Y. Mirror of the 16th says in regard to this Institution : "The p prsistency of the Chemical Bank in twice resisting the progr 98 of panies, and paving specie through two susp naions, is natur illv much ad ir ed. Its course is in triking contrast with the oth Γ great money lending establishm Dts in the citv. Thos. who have su pended, ane. r at it as a family Bank-a private kin I of thing; but it is 8 pity W had not "more of the same sort." It is one of our richest, most successful and most mon- y making institutions. The reason is that it has not gone out of its regular business, and this fact has attract d towards it the deposits and th conti lence of a 188 of wealthy men. Let the other Banks of the itv imitate the management of the Chemical Bank, and we shall never have another 81 nsion of sp cie P yments." It would appear from this that there is a method of banking, which, if adopted, can withstand any amount of pressure, and laugh to scorn the strongest siege of specie mongers We should be gratified to see an explanation of it. Possibly some of the many astute writers who figure on banks and banking in the Union and American can give the inquiring publi clight. Shall they not have it. ?


Article from Evening Star, October 3, 1873

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"THE MODEL PANIC MAKER." -Under this head the New York Express says: "This individual for the present lives in Washington, and went to one of the banks the other day, drew out $16,000, and then hired a safe and locked it up. What he did next is not stated, but the probability is that he urged everybody he met to go and do likewise. That he and those like him met with tolerable success is apparent from a statement of the Washington Chronicle that of the $1,375,000 currency paid out by the city savings and other banks during the pending excitement, there is no question that "99 per cent. is either hid away in stocking legs and chimney breasts, or used in private speculation." It is such facts as these that explain how it happens that it has turned out that all the business operations of the country, in the very midst of a prosperous season, have been arrested by the sudden drying up of the supply of money. The army of panicmakers absorbed it. In 1857 a panic party drew over $40,000 in gold from the Chemical Bank in four days, and took it back in four other days, after sleeping upon it, and being in dread of burglars, murderers, and all the alarms incident to having so much money at home. The fools are not all dead yet."


Article from The Republican Journal, December 3, 1874

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twenty years after, he had a factory which turned out an excellent wagon every seven minutes. SECRETS OF SUCCESS. It is essentially the same story with all these Kings of Business. They learn how to do one thing superlatively well, and then they keep on doing it better and better. Near Pittsburg there is the great Cambia Iron Works, which employ seven thousand persons in making steel rails and iron-a great town of people, all in the service of one company. "What is the secret of such a development of business as this?" a visitor asked of the president and ruling spirit, Daniel J. Morrill, His answer was: "We have no secret. We always try to beat our last batch of rails. That's all the secret we've got, and we don't care who knows it." Why are the Rothchild's the first bankers of the world? Because in a business career of one hundred and two years they have never failed to keep an engagement. Why is the Chemical Bank in New York the most solid and profitable bank in America Because in the panie of 1857. when all other banks ceased to pay gold for their notes, that bank did not and never has. When gold was at 286, if you presented one of its $50 notes at the counter. and asked for its equivalent in gold, you got $50 in gold. Why is the Atna Insurance Company of Hartford, the first of its kind in America Simply because, after the great fires of New York, Portland, Chicago and Boston, it did what it had undertaken and engaged to do-paid its losses. In the whole I do not believe there can be found a business fifty years old which is not founded on the principle of rendering an equivalent for all that it receives.