15724. Dry Dock Bank (New York, NY)

Article Text

LANCASTER, WISCONSIN, THURSDAY, JUNE 21, 1877. laws against the collection of debts. expected to re. Coin, however, was more difficutl the loss of the steamer "Central levying taxes. to obtain than paper money, and the New York and Boston were fighting American," with a million of specie, slow but sure road to solid substantial achusetts, and these banks, hoping to obtain a mo enhanced the stringency. nopoly, and the United States Bank Following this were several failures this entirely. prosperity through a currency based increased its issue $3,000,000. ia, New Jersey, upon actual gold and silver basis, of more or less importance, and in redeemable at par, was not suited to la did so in part. English manufacturers were prosSeptember a large number suspended. went on, and in perous, and the demand for raw mathe progressive ideas of those who Stocks fell 40 to 50 per cent., and terial unprecedented. Cotton reached could discern more rapid wealth thro' preciation companic ensued. This short, sharp, twenty-seven cents, and corn was system of fraud as practiced by and severe, but did not reach the propulled up to plant cotton. Speculabanking institutions of that period. ductive powers of the country. The s were resorted tion was rife, and the excess of ex Coin could only be manufactured as recovery was rapid, the reaction d private comhealthy. The losses were immense,but ports over imports, in 1825, was $2, the metal was obtained; but paper e legal tender 646,290. money could be printed in sums ut with indifas Professor Sumner says, "it was meet the wants af all. only a bad stumble in a career of In July the prices in England fell, 9 the issue was In the midst of these reckless finanIt created a panic here. Fifty failures time the notes great prosperity. took place in New York before De cial theories there were a few good The public debt, Jan. 1, 1861, was one; and in 1780 men who foresaw inevitable.ru from $90,500,000. There were 1,605 banks, cember. Banks failed by the score, two cents on the and even the United States Bank again flooding the country with with $429,600,000 capital, $207,200,was in trouble. The Government had 000 deposits,$91,300,000 cheap substitute for money, and did is took charge $7,000,000 in coin to pay, and the 000,000 circulation, and $695, 700,000 all in their power to thwart a return notes were remoney wast come through this bank. loans, The number of failures during to the previous irresponsible banking thless, and yet The payment was delayed. When system. Governor Snyder, of Penn1861, cousequent upon the seceding re redeemed at paid, bank was debtor to the sylvania, in 1813 vetoed twenty-five of the Southern States and the polite, in Hamilton's State banks, and could not redeem its bank charters, but in 1814 forty were ical excitement of the period, was passed over his veto. 5,935, for $178,600,000. circulation. Then followed a repetitempt at subtion of 1819. Banks now multiplied on every February 25, 1863, a bill proposing much greater Niles, in his Register, under date hand, and the chief occupation of the present system of national at had precedthose in the Middle States was spec. of May 9, 1839, says that new banks passed became law, fixing the bank sufferings aris. ulating in Government stock. This opened and a period of speculation capital at $300,000,000. An act ap. pension of busibegan in 1834. In 1835,he adds: was a huge swindle, carried to the proved July 12, 1870, increased this nds of men out fullest extent, and laid the foundation "This became, wild, siezing upon cot $45,000,000, and January 14, 1875,all was an almost restriction on the amount was refor another collapse. Had the result ton, lands, negroes, city lots, western 1779 and 1780, lands, and every form of stock :" but fallen upon these banks, or the Govmoved. ealthy men of ernment, it would have been a rightthe administration having learned October 5, 1865, there were 66 into a specific wisdom from experience, foreshadoweous retribution;but they escaped with banks in operation. December, 1874 overnment bills ing the inevitable result, induced coffers full, while the honest, hardthe Comptroller of the Currency reed their own most of the States to forbid notes unworking people-the mechanic, farmported 2,200 banks as having been supplies for the der $5. organized, 35 of which had failed.137 er,and tradesman-were the principal 1781, this comsufferers. At that time there was supposed to closed business, and 2,028 remaining. d by Congress New Orleans banks refused to rebe $64,000,000 of specie in the banks. December 31, 1874, there was America. The less--2027. In the winters of 1835-36, however, deem in April, 1814; those of Phila ing questioned, indication of weakness became appardelphia in August of the same year. The bank capital at this time from PennsylThe Southern States went with the ent, and quotations began to fluctu. $495,800,000; loans, $955,800,000 I years, with a ate. A feeling of uneasiness pervadbonds to secure circulation, $412,900, rest, but Ohio and Kentucky paid e State charter specie till early in 1815, and the only ed the masses--especially affecting 000; specie, $22,400,000 United 1787 renewed bank then in Tennessee continued to States Treasury certificates of demanufacturing and agricultural in terests. posit, $130,500,000; legal tenders, redeem its circulation until August, ing apparently 1815. July 11, 1836, the Secretary of the $82,700,000; five per cent redemption tes adopted a fund,$76,900,000; circulation, $332, Directly upon this, the country Treasury issued a circular forbidding achusetts Bank staggering under a worthless curthe receipt of anything but specie for 000,000; deposits, $682,800,000. ; Then, immepublic land Congress, fearful of the rency, banks increased more rapidly July, 1864, gold reached its highest rk,and another consequences, at once passed a resothan ever before, and this, too, while -285. May, 1865,it was down to 140. temporarily relution practically rescinding this or the notes of the new banks required ed of the counThe same startling premonitions der, whieh sent to the President, elaborate quotations Brokers had a preceding the financial disasters of gan to revive. and by him forwarded to the State rich harvest in negotiating them. sts assumed a the past were apparent in 1871-2,and Department, where it was filed March Niles' Register, from 1814 to 1820, ere significant of the approaching rance, and this 3, 1837. But the crisis was at hand. is full of bitter denunciation against absorption by expanding credit of the uninterrupted Early in March, 1837, an important the system of "shaving" practiced legally limited amount of paper based upon a firm New Orleans failed, because upon the people. Many incidents and rency. of decline in cotton, An equally exillustrations might be introduced, September 8, 1873, the New York al Constitution tensive establishment in New York showing the baneful influence upon this clause: Warehouse Security Company failed, closed its doors immediately upon the best interests of the country growThen one or two firms involved in oney, emit bills of this inability to redeem. receipt of this news. This was the railroad speculations. Confidence ything but gold beginning. The whole southwest In this condition of the currency, was at once shaken, and banks known der in paywas at once prostrated, and May October 17, 1814, Dallas, then Secreto be carrying this species of stock is did the wise eighth, of the same year, a run was tary of the Treasury, proposed a nawere subjects of suspicion, With less their commade or the Dry Dock Bank of New tional non-specie-paying bank. Calpast experience in such matters, to per system of York, causing its suspension, The houn proposed a bank on Treasury suspect was to act, and a run on the e, groaning un+ other banks throughout the country notes, which should not suspend deposits of these doubtful concerns were forced to succumb. Gold went acquiesced. specie payment. Dallas' scheme was made. September 18, 1873, Jay t period, howup to 10%, all specie had disappeared, passed the Senate, but was lost in the rable condition. Cook & Co. fell under this demand, and the market was once again floodHouse. Then a plan for a bank that and a panic ensued. currency, but it ed with worthless paper. should be prohibited from suspending ue. The ConThe crisis was ominous in its effects, passed both Houses, and was vetoed To present in detail a description more than of the various effects these monetary the President January 30, 1815. producing a general and widespread t collect revdoubt and want of confidence, and disasters produced, the sufferings of Dallas' scheme again passed the Sencounts. These stagnation of business was the result. the poor, the destruction of industrial ate February 17, 1851, but as before was defeated in the House. confusion, with schemes, the injury to husbandry, to Wages were at once reduced, and charge the reworkmen by the tens of thousands Calhoun, at the next session, reinevery species of individual and national interests, would fill volumes. discharged or put upon half time. troduced the bank proposition, and the Treasury assisted by Dallas, charter was It is, however, surprising with what The poor, as is ever the case, were the first to suffer. There has been ablished, with wonderful persistency the country, passed April 10. 1816. This bank as Secretary. marked lack of reviving courage and emerging from one of these reckless was to have $35,000,000 capital, $7,onal debt, Jan- 000,000 to be subscribed by the Gov. schemes, plunges headlong into enterprise the past two years. Mil42,000,000 doanother. lions upon millions of money are lying ernment in five per cent stock; $28.oreign; States, idle in banks or hoarded away, held 000,000 by the public. Of this, $7.In 1838 business again revived, and 000,000 wast be specie, $21,000,000 a moderate feeling of security took back through fear to enter upon any le array of figpossession of the masses. There was, six per cent United States stock. and commercial or manufacturing engageeient for needed ments. to issue no notes below $5. This bank however, a disposition to enter upon >posed a NaCalhoun and Dallas boastingly asa more careful system of banking; but June 30, 185, the total paper curserted "was established to correct the being no other a proper solution of the currency rency in circulation was: National incorporated by problem had not been made, and furcurrency, and be a financial provibank notes, $351,869,008; old demand with capital of dence to the country." ther experience was nesessary. and legal tender notes, $375,841,687; 000 subscribed Scarcely had the country settled See how well they kept the promise. fractional currency, $42,129,424. To burth in specie, down form the previous shock when Three brief years of existence, and tal, $769,840,119. the United States Bank became in ed States stock) upon the supposition the affairs of the In preparation for the redemption e Government volved in cotton speculation, and bank were not properly conducted, provided for in act of June 20, 1874, venty years,and Congress appointed a committee to there was again symptoms of trouble there has been deposited with the re to be issued. in the finances. The old bank worked investigate January 16, 1819; this United States Treasurer, for purposes rnment sold its hard to sustain itself, but there was committee made its report, fully susof retiring bank circulation, $19,709,d 40 per cent. no coin, and the notes were sold in taining the charges. Thereupon the 666. a wonderful inNew York and Boston at 18 to 24 President and managers resiguod,and The operations of the three mintscent. discount. ion ran high. Langdon Cheves took charge of the Philadelphia, San Francisco, and Car. e hundred and bank. He found the institution inUpon this several banks failed son City-in total for the year endrtered, and exsolvent, and the liabilities not less in different parts of the country. ing June 1875, were as follows: than $3,000,000. Throughout the Western States, esGold, $33,553,965; silver, $10,070,is took the form This was the ey-note of another pecially Michigan and Illinois, sus368, new financial pensions were mumerous. The notes general suspension-another strain in fine condiProfessor Sumner says: "For us of several joint stock companies were upon the country's honor, and came utmost capacithe currency question is of the first discounted at 25 to 60 per cent. with a yengeance. Twenty thousand importance, and we cannot solve it ie insignificant, Alabama, during 1838, created a persons in Philadelphia alone were the issues. The nor escape it by ignoring it. W.e debt of $15,000,000 to found banks. thrown out of employment. New leed scarce,and This was nearly all lost. Mississippi, York, Baltimore, and Pittsburghhave got to face it and work through e collected unit, and the best way to begin is, not great manufacturing centers-were the same year borrowed $7,000,000 bankers was in the same condition. The entire by wrangling bout speculative for similar purposes, and the whole bank to bank industrial interests of the nation were bt eventually was repudiated. opinions as to untried schemes, but go inspector. back to history and try and get hold paralyzed hopelessly prostrated September 10, 1839, a draft of circumstances through this course of cheap substithe United States Bank was refused of some firmly established principle ame in 1809. from which we can proceed with tute for money. in Paris. A respite, however, was some degree of confidence and a cerare reported as Niles, under date of May 17, 1823, obtained through small loans. This tain unanimity." peeie, with cirin his Register, alluding to this period, could not long continue. The bank ng from $100,says: "The banks were gambling $20,000,000 in New York, $800. Hon John Sherman says: "Con. few of banks hells.' He further tells us that there 000 in Boston. vince the commercial world that you pecie, and none were three grades of paper, "called spirit of rivalry seems to have will redeem this currency in gold money" afloat at that time. The first y considerable always existed among banks, and this when presented, and it becomes par notes of incorporated companies in gold. It will then buy as much indebtedness was promptly brought ange Bank of that still retained some pretense to food and clothing as the best gold home for payment. The pressure and, chartered solvency the second was notes of coin issued from the mint. Then the too great, and October 10, 1839 presentation of banks which had no local habitation, the doors were closed. note and the gold will circulate side at that time,and save in a name, the bills being printed by side, the one interchangeable for This event was followed by the facts relative to in some obscure counting-room, the other. To accomplish t this is now suspension of nearly every bank the known only to the initiated, and inreach a proper the highest object of statesmanship the South and West. New England others. variably circulated at a distance, so and the greatest good to all classes. held out for a time, but finally susas put down on that by the time they reached home In view of the past, we have it from pended wholly or in part. Three 000. Only $19,for redemption the bank had ceased history, and in the presence of the hundred and fourty-three banks, out er paid in, and exist, or could not be found; the present, seen and comprehended of eight hundred and fifty closed out drew out until third consisted of counterfeits, and through enlarged experience and tirely, sixty-two partially and over of these there was a bountiful stock. capital of only through tests, can there be any doubt, $2,000,000 Government deposits were The total amount of the three so we are told, any hesitency, in the proper action to lost. he directors at species in circulation cannot even be be taken? No man possessed of his Again we have an instance of the from the bank approximated, but the number of reasoning faculties, having the indisrecuperative powers of the nation. rrowed of the banks was not far from three hundred putable proofs accumulated through There was a period oi universal pros. ninety-seven. was a sharp a period of two hundred and fifty perity from 1841 to 1853. Business ler, and threw Notwithstanding these salutary lesyears without a single deviation in men had gained confidence and all truptcy. When sons, which should have taught the results, and having the best interests classes expanded their engagements, in specie, with people better than again venturing of his country at heart, pronounce man, howevea goeing far beyond the ation of not less upon the sea of an uncertain circulatin favor of inflation. procection of their resources. This ing medium, in 1824 all the banks exwas particularly the case of those panded Pennsylvania re chartered developed all