Phoenix Bank - New York, NY

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: January 1, 1840*
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: 09fba2c4

Response Measures

None

Description

Article describes the historical failure/insolvency of the Commercial Bank during the speculative crisis of 1836–1840 and mentions its 'failure' (closure). No explicit description of a depositor run is given; the cause is losses from speculative loans and defalcations. Date is inferred from text (issues cited 1836–1841); I use 1840 as approximate year of failure.

Events (1)

1. January 1, 1840* Suspension

Cause: Bank Specific Adverse Info
Cause Details: Heavy losses from loans to speculators, defalcations and bad investments during the 1836–1840 speculative period; led to insolvency and failure.
Newspaper Excerpt: The failures of the Commercial Bank and the L2, Fayette Bank, each having a capital of half a million of dollars, was owing also to the operations and defalcations of the speculators of 1836 to 1840.
Source: newspapers

Newspaper Articles (1)

1. July 31, 1854 The New York Herald New York, NY

Article from The New York Herald, July 31, 1854

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Article Text

Thus it will be seen that on a capital of two mil lions the directors of the Manhattan Company had accommodated the business men of the city to an amount less than one halt of their capital, while they bad invested over two millions in stocks and loans to brokers, speculators, and operators in real estate, in long loans on bonds receivable. No wonder they were compelled to come to a ' dead lock," change the officers of the bank, and devote several years of labor to reinstate their capital, withholding dividends from their stockholders for the time, of course. The losses of this institution by various loans to speculators and defaulters, it is difficult to estimate; but for a long time the price of their stock in market showed an apparent loss in the difference before and after the difficulties of 1839, of over one million of dollars. It is unsecessary to say that, under the management of its officers and directors since 1840, it has regained its former high rank among our city institutions. The Phoenix Bank is another institution which suffered heavily by the operations of the speculators and defaulters from 1836 to 1840. During the speculative period, its capital had been increased half a million of dollars by act of the Legislature, but so great were its losses that in 1841 they were compelled to apply to the Legislature for a reduction of three hundred thousand dollars, after having suspended dividends for several years. The failures of the Commercial Bank and the L2, Fayette Bank, each having a capital of half a million of dollars, was owing also to the operations and defalcations of the speculators of 1836 to 1840. To these may be added the North American Trust and Banking Company, with a nominal capital of two millions, and several minor institutions which were organized under the General Banking law of 1838, and after a brief existence became insolvent. The summary of those broken banks whose capital has been used up by speculators and defaulters, is as follows:-