16204. Merchants Bank (New York, NY)

Bank Information

Episode Type: Run → Suspension → Unsure
Bank Type: state
Start Date: May 9, 1837
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: 311d69b7

Response Measures

Accommodated withdrawals, Full suspension

Description

New York Merchants' Bank experienced heavy withdrawals (runs) on May 9–10, 1837 amid the broader panic triggered by the stoppage of the Dry Dock Bank and other failures. By May 10 most New York banks (including the Merchants') resolved to suspend specie payments. The sources show the run preceded the suspension, but do not state whether the Merchants' Bank later resumed specie payments or permanently closed; classification therefore is run_suspension_unsure. I corrected the bank name punctuation to the common historical form Merchants' Bank.

Events (2)

1. May 9, 1837 Run

Cause: Macro News
Cause Details: Systemic panic triggered by failures and stoppages (Dry Dock Bank, John Ward & Co.) leading to heavy withdrawals from multiple banks, with Merchants' Bank singled out for large drains.
Measures: Redeemed Dry Dock notes and, with other banks, attempted to support circulation; later participated in collective decision to suspend specie payments.
Newspaper Excerpt: a general run as made on every bank, but particularly on the Merchants' Bank. The abstraction of specie is now beginning to be terrific - the excitement very great
Source: newspapers

2. May 10, 1837 Suspension

Cause: Macro News
Cause Details: Collective decision by New York banks to suspend specie payments amid widespread panic and exhaustion of specie following runs and interbank failures (May 10, 1837).
Newspaper Excerpt: it was Resolved, That under existing circumstances, it is expedient and necessary to suspend payments in specie... it was ascertained... that they were the Merchants, the Manhattan and the America.
Source: newspapers

Newspaper Articles (4)

1. May 2, 1837 The Herald New York, NY

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Article Text

M o E Y M A R K Tuesday, May 2. The money market is without any serious alteration. Stock transactions yesterday were very inconsiderable. although ger. erally the prices of Saturday were maintained. Indeed the business done in stocks in Wall street does not furnish commissions sufficient for two brokers instead of fifty. The Board of Brokers mayas well break up-sell their furniture-lease their apartment -and go to Wisconsin to sow wheat. What a change from last year, when the transactions of single day would sometimes average several millions of dollars. Stocks are now extremely low, and it would really appear that they had four bottom. Yet capitalists are fearful of investing. Are they waiting for the news from England, or the distribution of the next quarter ? The great talk of Wall street, yesterday, was the difficulties of Arthur Tappan. It appears that on Saturday, Arthur was under the necessity of asking for an extension f.om his creditors. He made a shift on Saturday afternoon. to meet all his payments, but not till three o'clock, and a bit beyond bank hours, had elapsed. Arthur does a very larga busineas in French goods. He called his creditors together, and exhibited a large surplus-about 8500,000, and yet, in consequence of the pressure, and the general dullness of the spr.ng trade, he came short $150,000 or thereabouts. The derangement of business at the south has only affected him incirectly. His abolition sentiments have entirely destroyed his southern business, but he has done, for years, vast trade in French dry goods with New England, western New York, and the north western states. It is calculated that his sales in 1836 amounted to $1,500,000, OR which he charged proft of per cent. His man ner of doing business has been singularly precise, scientific and aceurate. He was in the habit of altering the prices of his goods on hand. so as to correspond always with the market p ices. If he had lot of goods that had fallen in value, Arthur would mark down the prices, even if he had to sustain a loss, in order to adhere If to the rinciple of always selling his goods at the market price. he bought goods hear, in a rising market, he world chalk them up in the same way. In other respects, Ar hur has been a very carate and sensible business man. He has brought vast trade to New York. The only objection to him was his wild visionary notions about the negroes. If he would quit this nonsense, and be rational on the black topic, we might take Arthur into our good graces-but we cannot bear black concerns, especially as the warm weather is coming. It was rumored in the reet that his creditors had given him an extension, and that he had gone en again. Others said that the business will not be settled tili today. We learned, however, that before three 'clock yesterday, after a long consultation, he came to the conclusion to suspend entirely. The U. S. Bank agency agreed to renew his paper for $50,000. and the Bank of America for $303,000 His payments for May amounted to) $300,000. Any extension for that period, for a less sun than $200,000 or $150,000 was, therefore nugatory. The other banks refused to interfere altogether, under the plea that they could make no exceptions. This suspension will affect Bos ten and the east very heavily. Arthur is yet a man of large for tune, and although the pressure of the times has affected him for a few weeks, he is sound and substantial at the core-has transacted his business on legitimate principles-and will pay all his debts, with $500,00 at least over. The French and English packets sailed yesterday, carrying out a few bills of exchange, and less specie. In the French packet there-were probably $30,900-in the English, $70,000-in all not over $100,000 The lemittances in bills e' exchange were very limited. Only two houses now draw on Ung'and, or rather, the bills of only two will be bought. We allude to Prime & Co. and the Browns. Yet both are narrowed Lows to a few cash transactions, at high prices. The banks are in a very pesuliar condition. On the one side are the foreign bill drawers trying to catch the specie; and on the o her, the public, such as market women and others, draining them of gold and silver. It is astonishing to see the number of females with baskets. going into the banks in Wall street, and getting their notes chan g.d for specie. During the last two months, the Merchant's Bank, we learn, has paid out $200 000 in small sums for the redemption of their paper-and almost every other bank in proportion. Between the foreign drain and the domestic drain, fomented also by the agitators of public meetings, and the b ckerings of political partizans at Washington and Albany. the banks -even the most solvent-are placed in an unpleasant position. This run for specie has also been directed to the Savings Banks, the depositors of which are rapidly drawing out their little sums in specie or paper as fast as they can. W hen Mr. Peel compelled the Bank of England resume special payments in 1817, the value of gold and silver was augmented 30 per cent in a few months. Guineas worth 21 shillings sold for 28. The quarrels and contexts among banks and politicians here, will gradually lead this country into the same conditi on, and augment in a like proportion the value of gold and silver. Eachday and every new public meeting,o ly add to the evil that begies to spread around the country. Unless the executive, and the legislative power both of the Union and the States, unite in sustaining public centi lence in our banking institutions, in less than three months they will have to announce a general suspension of specie payments. The great mass of the people have taken up the ide of the Constitutional Currency stronger than the miserable politicians intended. Yet in spite of this singular revolu ion in our monetary afairs, business in all the middling ranks of life is very active and healthy. Prices are falling, and will llmore, but this fall will increase frucality, economy, and modera ian. In 1836, cotton wassupposed to be cash-and cash believed to be nothing better than cotton. Now it begins to be thought that economy is cash, frugality is very like silver and moderation equal to pure gold, 22 carrets fine. Thus wage the world. Dont despair-keep up thy spirits, rentle reader. GENERAL MARKETS. Yesterday was the most inactive day we have yet soticed. thing at public or private sale in Dry Goods, worthy of remarking, and ivery small operations in other description of goods. 7550 buthels damaged wheat were disposed of at auction at prices from 3rd to 93c cash Auction Sales, May 1st-49 bags coffee at 7 e.; 25 sacks salt at SI 20; 60 kegs raisins at 2) a 83 00; 57 axes bunch do at 80 e 93 do bloom at 70 a 721 c. 108 boxes muscatel at 624 c.; 24 do clusters at 65 c. : 52 half do. do. at 26 qr. do. at 40 c. cash: 2 cerears Carracoa indigo at $1.34 8 base coffee at 8c.; 400 drums Smyrns figs at 3c.: 5 bales almonds at 3 3 bris sugar attle cash: 15 qr. casks sweet vine at 40 a 49 c. ; 10 gr. casks portal 43c. 7 cases museat at $1.56 90 days. Flour continues very depressed, no sales take place of any impertance. We quate Western at $8.75 a 9.00. The other brands remain about the same. Receipts of Produce-Received down the North River, May 1st-2311 barrels flour-61 do ashes- 131 do provisions 62 packages cheese-34 casks sced-5k gs lard. [Correspondence of the Herald.] CANTON, January 7th. 1837. Dear Sir-Per brig Nabob, Captain Putnam, for your port, send to you a review of our market. Business is rather dull-very little is doing in all denominations of imports : money being very scarce. Cotton Manufacture continue du'l and the demand for longcloths and other descriptions of white goods is very laneuid. Cotton Yarn has declined 2a3 dollars. and even the reduction it is difficult to effect sales. Wollens, Spanish Stripes and Camblets almost unsaleat except at a great sacrifice. Long ells are ther advancing. Cotton.-There has been very little doing during the last week, and it would be difficult flect sales at our quotations. Bengal 10. Madras is most depressed at present, our quotations are $ 10,8. Manilia. none in the market. TeasPrices nominal. Optum- There RO change in the opium trade, our quo'ations therefore are quite nominal there being FO trans tions and no pregent indication of any relaxation in the measures of the government. We have no alteration to notice in the state of our market, for silk manufactures and raw silk continues at the H. R. H. same prices. Respectfully Yours, Sales of Stoc's the New York Exchange, May 1. 510 Del. & Hud. 22 Har. R. R., 516 310 Utica R R. 104 to 104 80 Farmers Trust Co..502 198 Merris Canal Co. 65 to 60 100 Res & Prov. R R. 89 to 88 100 Mohawk R. R., 571 te 57 422 Long Island R. R.,594

2. May 9, 1837 The Herald New York, NY

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Article Text

T. M o N E Y M A R K Tuesday, May 9. The panic increased yesterday. The termination of affairs o Saturday only created a gathering, to burst forth with additional fury. The stoppage and suspension now reach the banks and higher order of brokers. The Dry Dock has stopped entirely, and John Ward & Co., one of the largest monied houses in Wall street, were also reported gone," at an early hour. It appears that at a secret meeting held by the managers of e other banks on Saturday, it was determined to break the Dry Dock Bank entirely, by shutting it up on Monday, under the orderofthe Vice Chancellor. The balances due by the Dry Dock to the other banks amounted to $100,000. The Phenix owed the Dry Dock $20,000, and the Tradesmen's $1,000-yet these were the first banks which on Saturday morning discredited their bills. It further appears that the overdrafts of the Dry Dock amount to $400,000, while its capital only $200,000. It is, therefore, completely insolvent. The other banks determined to adhere to their policy, and to have nothing to do with the concern. When the crowd began to collect in Wall street yesterday morning, it carried terror in the minds of the other banks. It became necessary to do something. A meeting was held, and by order of the Vice Chancellor the injunction was issued, and all the assets and business placed under the charge of the Merchants' Bank. The other banks then agreed to redeem the Dry Dock notes for yesterday at least-particularly the Merchants' Bank. During the whole day crowds filled Wall street, and a general run as made on every bank, but particularly on the Merchants' Bank. The abstraction of specie is now beginning to be terrific-the excitement very great-and the end no one knows where. The failure of John Ward & Co. was perhaps more appaling in Wall street than the stoppage of the Dry Dock Bank. The Dry Dock has for a long time been suspected of the dry rotbut John Ward & Co. have traded on a real capital of $550,000. Their business in banking and domestic exchanges has been very extensive-probably to the amount of $5,000,000 per annum. It is generally said that during the last six months of 1856, they made $150,000 in clear profits-principally in shaving merchants' paper. A great many large capitalists out of business in New Bedford, Providence, and Boston, had placed their funds in deposit with this house. They were the agents for a large business with the east and west. The immediate cause of their stoppage is their want of funds from the Ohio and Michigan banks, who have drawn upon them for large amounts. The derangements and other stoppages that will accrue from this failure will be immense. They were in the habit of discounting large amounts of the auction and Pearl street paper, on which great losses will be sustained by the recent suspensions, The character of Mr. Ward, and the estimation in which he has been held, have been of the highest kind. His honor, integrity, generous, and benevolent disposition, have made for him " troops of friends" in prosperity. Under these calamitous events, there is a perfect and constant fever in the money and stock markets. United States Stock is down to 95. A more remarkable fall has not taken place since the great revolution of 1819-20, when it was on the verge of insolvency. Where it may stop we cannot tell.Morris Canal is merely nominal at 60, or thereabouts. This institution has been dealing largely in post notes, on the plan of the United States bank. We fear it has burned its fingers. The whole number of shares in this institution is 30,000, with a capital of $3,000,000. Of this stock, we learn that Thomas Biddle & Co., of Philadelphia, own 16,000 shares, being a majority of the whole. In March last, the stock was at par. The loss on 16,000 shares, at the present prices, will be nearly $700,000 in the short space of nearly two months. The effect of this tremendous loss will soon begin to develope itself, both in New York and Phil delphia. All bank stocks are rapidly going down. From appearances the whole banking system is on the eve of a general explosion. The great mass of small business people are daily abstracting the specie. The confidence in paper currency of all kinds, except in a few of our city banks, is utterly gone. The conduct of the bankers here and in Albany is daily precipitating the crisis upon us. The suspension of specie payments, and the legalization of such an act by the legislature, is now discussed openly in the streets, and privately in the banks. In one month the billholders and small depositors will have in their possession every dollar of specie contained in the banks of the large cities. A mere run on the banks to redeem their circulation is a trifle.The circulation of the city banks is small. But the moment the depositors take fright, it is all over with the banking system.There is, too, every reason to believe that the alarm will seize upon the depositors next. Should a general suspension of specie payments take place, either by compulsion or by an act of legislation, the bank paper would fall fifty per cent below specie. The same effect would not be produced by a suspension as was done during the last war. There is an immense amount of specie now in the counsufficient to perform all the or business. Bank paper would fail to what are these assets us In this state the assets all to an assets. try, actions analysis. quite Now composed of daily the and banks of the smaller Let value amount trans- of give its in commercial paper, based on the recent high prices A revolution in prices is now on, article down fifty per cent The bank assests will, therefore, in least half that amount, per have $60,000,000 will value of bring elapsed. products. at every twenty-five before going be diminished six cent-thus months which making the losses to the banks fully fifteen or twenty millions of dollars. The confusion, the panic, the breaking up of a corupt system, will increase these losses. Bank paper, by a suspension of specie payments, at this crisis, will produce a result similar to that of the issue of the old continental money, or the French assignats and mandats. It will not pass as a currency. Gold and silver are plenty enough now to perform small transactions, and the personal checks of known individuals of character and solvency, for $50, 8100, or $500, will become our paper currency, and take the place of depreciated, discredited bank paper. We are not, therefore, without resources, although all the banks go by the board, by their own weight, or the act of legislation. The banks are driving on the rocks, and we cannot see how they can be saved. They have sown the whirlwind, and they must reap the tempest. Last evening, we learn that a secret mission was sent to Albany to procure from the Legislature an act to authorise the banks to suspend specie payments. They need not be in such a hurry-they will suspend soon enough in spite of any act of the Legislature. GENERAL MARKETS

3. May 10, 1837 The Herald New York, NY

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MONEY Wednesday, May 10. more the banks increased yesterday, erisis. and The became Merchants' The run than on it yet has been during the State Bank, City Bank, general Company, the these drains for Bank, the Manhattan more or less subject to attend and many others, were Bank has its own business to run of specie. The Merchants' Dry Dock and U. S. Bank agency. concentrated The on the to, besides the appeared to be more During the yesterday, therefore, than on any other in the street. immense. The Merchants' Bank the crowd in Wall street was banks, and realwhole morning to have lost all confidence in the brought on by people would seem seem as if this calamity had conduct-by been their ignoly it themselves-by their foolish business. the banks and want of general knowledge in Dock their Bank own by on inrance The closing of the of Vice the Chancellor, doors of the will Dry likely The be the injunction beginning was junction last act of the drama. Directors-not that of the end"-the the request of the President and and entire ability to granted at least doubt of their solvency on demand, they had the because their engagements, large banks pay their debts, for but their immediate resources. assistance, The although in were the 100 street large seeing this, not only denied first to throw discredit upon security was offered, them still but further were the by refusing to receive Fish, the of Dry the and embarrass in the regular course of business. train Mr. to injure his Dock notes Bank, was foremost in the Fund banks, Tradesmen's and Mr. Gallatin followed. The Safety and whose promineighbor, first cried out against the U. S. Bank, have never been rewho regulate the domestic exchanges shake off the little Bank ses deemea, to charter thought was it a an good independent time to and weak unrestricted and unprotect- one.whose the opportunity when she was her the least ed, Watching they refused her notes without giving bill holders and depositors notice. excitement yesterday among found the Bank shutup, continued The to be very great, when wisely they began to be alarmed about State and very naturally not and knowing, very the precise day small when fry the up town, other bank notes, the Union, and the himself quite as Bank, the Mechanics', too; and each man, deeming a steady drain would shut up as these concerns, commenced Nassau and good a depository banks generally. Wall street, between drawn out was very upon the was crowded, and the amount the specie is all William, will doubtless be repeated until drew out of the large, and the bills exhausted. One person another State drawn Bank out, or $25,000, and carried its for safe-keeping, to place-namely, was so his alarming, own dwelling even on house. Monday, to aid his of Honor the other the The run he was afraid he should have to ask and they Mayor, and that the called his brother Presidents together, Dock money, to Banks, it policy to redeem the Dry delegated to go at once thought excitement; and Mr. Lawrence was Dock notes allay the assemblage, and announce that the Dry course was probefore the by the other banks. This were would be redeemed evening meeting, but the majority first hour, them posed at the but Sunday the amount of specie drawn out the and depositors opposed ; to their senses. The bill-holders the bills on Saturbrought be so easily satisfied. Why offer refuse redeem all the cirwill day, not and on Monday $200,000? come out and It certainly to shews great weakculation-say learn nearly that the one hour's operations brought they would some ness, and we down to their gold, which is the last coin, and it is of the banks Half eagles are a very pretty banker when he can wish no great to part trouble with. for every man to act as his OWB get gold. also are on foot to get authority to suspend A specie meetMeasures without the penalty of losing their charters. object. Therepayments held in the Exchange yesterday for that will draw out the ing fore was the for run their must money continue, before as the every authority man is out. granted-i. e., if they gold can get Dock their Bank's turn before assets the on gold paper rw.s shew the about real $260,000 estate, The Dry their liabilities, without counting valuable more than all the banking house in Wall street, and day a or two consisting at of and near the Dry Dock, estimated, (though now a in no way property ago, by Mr. Stebbins, formerly at over cashier, half a million of dollars. So, connected with the $250,000 bank) is lost in winding up, the stockhold- themers if not will more have than all the real estate left to divide among selves. tell what amount of protested southern paper received the Who can and what amount of protested paper The stock State bills Bank on London, holds, at 15 to 20 per cent premium? paid out half eagles! sold for yesterday at 70-and Geo. yesterday Griswold received they for the exchange cent Where are the Cryder notes & Co., London-sold at 18 to of 20 America? per on Morrison, Were they discounted at the Bank taken up? premium? those which have gone into protest been but it brought And have arrival from England yesterday, water. The We had au alter the position of things across the belief that all the nothing opinion to is now settling down into the and Morrigeneral houses, except the Barings, the the Browns, board. Nothing American son would & Cryder, appear capable have long of altering since gone this by opinion, but direct and positive information continue to fall-United to the contrary. States Bank still and at rising. 95-MorStocks nominal at 30-Rail Roads are firm Indeed, we r is Canal is still continue among the merchants. meetings, and are Failures believe that the merchants by their contributed to indisposed to and their private efforts have 300 who have their feelings, for specie. " The banks" say the turn round crease the have runs crushed us to save themselves This feeling us of asfailed-" compel them to stop paying specie." has increased fearand towards the banks and their managers will be a general curperity the last few days. There runs, and of fully during discounts, in consequence of these as water. tailment of failures. Gold and silver is now plenty it at precourse more draw out their deposites in gold, sell yesterday, a Indeed, many more. We heard of one transaction par value mium and get sovereigns were sold for $5.30-the of dein is $4.24. which English Paper is already beginning to shew symptoms preciation. the present state of things are increased by the of The evils of merchants towards the banks-the agitations the new corbitterness of the the general scramble for office been in boasting of politicians-and ten years past, the banks have 25 cent in poration. dividends-some For 12, some 16, and some per their shamaking Where are their profits now? Where heart will are shew to one year. Where is the pity that any and mevings now? their day of calamity? The merchants the banksnot one. wards chanics them have in not a single feeling in common with

4. May 24, 1837 Constantine Republican Constantine, MI

Article from Constantine Republican, May 24, 1837

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SUSPENSION OF SPECIE PAYMENTS IN NEW YORK, PHILADELPHIA AND BALTIMORE. The New York Courier and Enquirer of May 10th has the following notice: Notice to the Public in relation to the Banks. At a meeting last evening of all the Banks in this city except three it was Resolved, That under existing circumstances, it is expedient and necessary to suspend payments in specie. In the mean time, the notes of all the Banks will be received at the different Banks as usual, in payment of debts, and in deposit ;--and as the indebtedness of the community to the Banks, exceeds three times the amount of their indebtedness to the public, it is hoped and expected that the notes of the different Banks will pass current as usual, and the state of the times will soon be such as to render the resumption of specie payments practicable. May 10, 1837. From the New York Daily Express. May 10. WEDNESDAY, 12 M. The public were astounded at the news contained in the various papers, that all the banks but three had suspended specie payments. Inquiries were made, which were the three banks that held out; none knew, but it was generally understood that they were the Merchants, the Manhattan and the America. It was ascertained, however, that those banks could not stand, and they yielded to necessity, and came into the measure. The sensation in Wall street, at so unexpected a result was very great. On the whole the public appeared gratified, and the whole collection of persons wore smiling countenances. It would, no doubt, have saved a large number of merchants from failing had the banks adopted this measure a month ago, for it has been apparent that either or both the merchants and banks must stop. The merchants have consequently been sacrificed. Still it is questionable whether the public would have sustained the banks had they stopped a month ago; it would have been believed that they stopped from interest and not from necessity. Now there is no question on the sebject. The banks are exhausted and can pay no longer. The public will now unite in sustaining them. And why should they not They are as sound and healthy as ever, their solvency does not depend on the specie in vault, but on the strength of paper under discount. The merchants will now be sustained.-The public will receive the notes of the banks, and we have no doubt the change is for the better. The new city government, Mayor and Aldermen, were at their posts till two o'clock this morning, every arrangement was made to put down e any mob, should there be any riotings. The watch was doubled and the military were under arms, but fortunately there was no disturbance to require any interference of either the civil officers or military. e Stocks have gone up astonishingly to-day, as the following table will show :-