16750. banks in New York (New York, NY)

Bank Information

Episode Type
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
568dd5eb

Response Measures

None

Description

New York city banks suspended specie payments during the October 1857 crisis (telegraphed suspensions and collective cessation of specie payment), and then resumed specie payments by late 1857/early 1858. Articles describe a systemic suspension tied to the wider financial crisis rather than a discrete depositor run on a single institution.

Events (2)
1. October 13, 1857 Suspension
Cause
Macro News
Cause Details
Systemic financial crisis of October 1857; telegraphed news of suspensions elsewhere and wide panic/market disturbance prompted collective cessation of specie payments
Newspaper Excerpt
On Wednesday morning, intelligence having been received by telegraph of the suspension of specie payments of the banks in Boston and New York, the officers of the several banks immediately convened, to and unanimously resolved to cease for the present specie for their liabilities
Source
newspapers
2. January 2, 1858 Reopening
Newspaper Excerpt
referring to the resumtion by the banks there of specie payment and the speedy and voluntary action on the part of the banks, by which specie payments have been resumed (Newspapers Jan 1858). }
Source
newspapers

Newspaper Articles (5)
1. October 20, 1857 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, October 20, 1857

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impossible to negotiate any paper both upon foreign the almost Exchanges continue unsettled, banks street. domestic. The stockholders of most of when the they and hoid their annual meeting next month, regard to a will e what course will be pursued in laid down determ: of specie payment at the time number of the resemption recent act of the Legislature. A and we unin the of the interior banks are here, hose of this Presidents will hold a conference to day with will be derstand when their course of action for the future there city, At the Stock Board this morning City decided little upon. more firmness, but without activity. The Sixes was & are heavy, but State Fives have improved. fancies attract but little attention. From The Toledo Blade Yester." 'ay a drove of cattle passed through our city cuto the Eastern markets which were all & the on their way They numbered 280 head, and came northern riority. from Texas. They were gathered in the forward way of Texas late last Fall, and driven Illinois, part Kansas and Missouri to Jacksonville, and Sumthrough where they were kept through the Winter From that to be fattened and prepared for market. Road, mer they came forward on the Wabash Valley in point will soon be on the tables of the gentlemen ten New. and York, after an adventurous journey of over order, They are all nearly of a size, in good length months. not heavy. and are remarkable for the from of but horns. In this respect they differ materially and their cattle. Their hores are, in fact. enormous, have our particularly dangerous and pokish appearance. our We cannot & help noticing in this connection how railroads are changing the course of trade, and drawing supplies for the East from the most remote regions. of the the Wabash Road, this destination has Without of the far West could not be. But this road made cattle it possible for New-York to draw supplies of beef from Texas, and we shall doubtless have many examples of what is now & novelty. The Portsmouth (N.H.) Gazette says: Business appears to be going on in a quiet which safe and there has not been a single failure Our would way, not have occurred in ordinary times. banks are managed with judgement, and have as good first & specie basis as any in the country. On the the Monday in September the liabilities, including capital stock, of the four banks of deposit and discount which in this city amounted to $1,281,032 16, to meet there were assets to the amount of $1,363,290 36, having a surplus of $82,258 20. On Monday last, October 12, the four banks of this city presented & statement, by which it appears that at that time the liabilities were $1,159,582.69, being a redu tion of $121,449 47 since September; $101,and the assets, $1,261,154 59-8 reduction of 635 77. Of these liabilities, the sum of $691,000 composes the capital stock of the banks. On Wednesday morning, intelligence having been received by telegraph of the suspension of specie payments of the banks in Boston and New York, the officers of the several banks immediately convened, to and unanimously resolved to cease for the present specie for their liabilities, and to use their exer- as tions pay to resume specie payments at as early day possible." From The St. Paul Minnesotian, Oet.14. The markets have presented no material Business change since last week, except in some particulars. and has seems be again resuming & better state, trade. become quite brisk in several departments their of Fall Many of our merchants have now received supply of goods. There is not, however, that liveliness and activity which would be prevalent at this season of the year were the money market in better condition. Though business has revived from the dull state of Summer necessarily, yet & general stagnation and pressure affairsseem to pervade it. As soon as the financial the derangement of which has caused this temporary embarraesment and apathy-become in & better state, which will doubtless be ere long, the markets will pre- is sent some features of interest. At present there scarcely enough doing to make a report on. From The St. Louis Democrat Oct. 16 was marked by some little excitement State in Yesterday mattere, growing out of a run upon the money Bank of Missouri. The demands upon the other chartered banks were not very unusual. The State Bank sustained the rush made upon her counters with a great deal of composure; and to show what she could do, her doors were kept open until one-half or threequarters of an hour beyond the usual time. The run will probably be entirely exhausted to-morrow, for im- the test made to day upon her specie seems to have parted a great desl of confidence regarding her Our re. sources and her real gold and gilver strength. business men feel more confident, too, and are pleased to contemplate the prospect of our banks going entirely through the mill, and sustaining their credit as specie paying concerns, while other banks in the country have been obliged to succumb. As business is almost at a dead stand-still, we have nothing at all to say of exchange. It is almost impossible to sell or buy bills at any price. Currency is unchanged. Illinois bills are getting scarcer, and in the retail circles are received with more favor, being preferred in many instances to Kentusky and other East. ern money, about which there is just now 80 much uncertsinty. No change to be noticed in currency. Illinois money is scarce, and is still passing freely among retail traders at to 15 P cent discount. A few trans. on actions for currency *ock place this morning change. It will not buy wheat or flour. From The Cleveland (Ohio) Herald, Oct. 16. We are hourly strengthened in our belief of the abundant solvency of our city banks. We have. in the last few issues. given facts, too, upon which our confidence is grounded. and mean neither to deceive ourselves nor our readers.

2. December 17, 1857 Oroville Daily Butte Record Oroville, CA
Article from Oroville Daily Butte Record, December 17, 1857

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The U.S. guarantees the protection and neutrality of the route. The transit is to be free to all nations. The U. S reserves the the right to transport the mails across Isthmus. The usual stipulations of good will commences and negociations are Transit appended to the instrument Some of the Company are mentioned in the treaty. Despatches have been received at Wash- the ington confirmatory of the report of capture and destruction of government is sta provision trains by the Mormons. It ted that Col. Johnson was determined to enter the Valley of the Great Salt Lake, and the route had been changed in order to reach that point by a road less obstructed by SDOW, than the one originally adopted. The Mormons were assembling in large force to oppose the advance of the troops. Harney with a large force, will be des- as patched for the scene of action, as soon he can make an entrance into the territory The Banks of New Orieans have all resumed specie payment. The New York Banks, now almost bursting with a plethora of coin, will soon follow the example. The Coltins Steamship Adriatic returned from her Engineers trial trip, on Monday morning, having satisfied the competent fastest gentlemen on board that she is the steamship afloat Her greatest speed hour was 18 nautical and 21 statute miles in one and three minutes, using only about twothirds of her available steam, and about one-half laden. The factories in all parts of the country are resuming work. Col. THOMAS H. BENTON has puplished long communication in a Washington paa on the banks and the currency designper, ed to meet the suggestions in favor of the had establishment of a national bank, which the appeared in the public journals since commencement of the financial revulsions The Colonel still cherishes his ancient enmity the to bank notes, and warmly advocates imnt The drop steamship currency. Philadelphia, which left the 9th inst., for New York, encountered off on violent gale on the day following, when broke a coast of Florida. On the 13th she her shaft, thereby disabling her engines, but succeeded in reaching Charleston. The American horses Prioress and Baby lon made an inglorious performance for the 31 Cambridgshire Stakes at New Market. in horses ran, and Babylon actually came last, Mr. Parr's Odd Trick was the winner. California bonds 7s75; sold on the 19th Nov. at 69 ets. The Legislature of Texas declared Sena- J. P. Henderson and J. W. Campbell U. S. tors to succeed Gen. Heuston and Rusk According to the latest advices Wisconsin is has gone democratic and James B. Cross Governor elect. ALABAMA--The new Legislature of this State commenced at Montgomery, on Tues10th inst. J. M. Calhoun of Dallas day County was chosen President of the Senate, and C. M. Jackson Speaker of the House. MISSISSIPPI. The Legislature having counted votes for Governor of that State, folat October election, announced the cast lowing result: For Wm. MeWillie 28,376; for M Geiger 14,345 ; majority for McWillie sleep, 14,031. The democrats made a clean electing the State ticket by an average maj of 20,000 over the Republican. LOUISIANA.--The whole Democratic State ticket is elected in Louisiana. The Congressional election will consist of three democrats and one American. OHIO.-The legislature is Democratic- Gov. The plurality for Chase, (Repub.) for ernor over Payne, is 1503. Fremont's plurality over Buchanan was 16,623. Europe. Our advices are highly important. The steamers Arabia, City of Washington the Fulton, have taken out the news of Bosand suspension of the banks in New York, the and throughout the north, but reton. had not produced any serious effect mea- on ports London market, owing in a great the to the reception of the news in failures London sure the fall of Delhi. A number of of however reported, including the gusare pension of the borough of Liverpool. American stocks were unsettled, but there had been some operations in state securities

3. January 2, 1858 Grant County Herald Lancaster, WI
Article from Grant County Herald, January 2, 1858

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BUSINESS PROSPECTS.-The New York Tribune of the 17th,referring to the resumtion by the banks there of specie payment, says: "The rapid accumulation of specie in the vaults of the banks, particularly those of this city, by which the present suspension of specie payments was immediately fol. lowed, the maintenance at nearly specie value of the bank note circulation, and the speedy and voluntary action on the part of the banks, by which specie payments have been resumed, would seem to argue, after all that has been said, a degree of soundness and vitality in our currency, and a power of recuperation, vastly beyond that which existed at either of the former occa sions, to which we naturally refer for com parison. They afford ground, too, for expecting that we may now escape the af ter-claps which then proved even more dis astrous the first break-down."

4. February 20, 1858 The New York Herald New York, NY
Article from The New York Herald, February 20, 1858

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manufacturing villages has naturally produced a disproportionate demand for banking accommodation These causes have "probably added hundreds of millions of credits, all to be liquidated upon a basis sufficiently small for the safe transaction of our business in 1840." The competition of railroad companies and of land speculators for loans at extravagant rates of interest constituted another source of danger; but bankers, if they take proper precautions, are independent of the risks of commerce. It is only by imprudent proceedings of their own that they can be rendered unable to meet their engagements. "The result," as Mr. Cook justly observes. "has demonstrated, and that too in tones that cannot be mis. taken, and should not be forgotten, that a basis of one dollar in coin to nearly nine of immediate liabilities wild produce a home panic of bank creditors and a home demand for coin." It may be added that, as the specie reserve was of course unequally divided, some of the banks must necessarily have fallen far short of the average capacity to pay even one ninth of their liabilities in cash. A body of independent institu. tions ought to maintain a collective reserve beyond the amount which might be required by the Bank of England or the Bank of France. The dangers of the deposit system were aggravated by the practice of allowing interest on the balances due from one bank to another. The reserves of the provincial banks in part consisted of the sums which they were com pelled to keep in the city to meet their notes and other liabilities. The city banks, paying interest on these ba lances, were compelled to employ the amount in their own business; and, consequently, two separate operations of credit were based on the same limited capital. The consequent risk is, however, only an exaggerated form of that which necessarily arises when bankers become borrowers as well as lenders. In prosperous times trade is stimulated by the cometition of private savings with the capital ordinarily employed in commerce. Even when pressure is impending bankers are compelled to remunerate themselves for the interest which they allow to their customers. On the arrival of a crisis deposits are suddenly withdrawn, to the great inconvenience of trade, and to the ruin of speculative bankers. The Bank Superintendent of New York believes that the note circulation exercised no influence on the recent suspension; but after the beginning of August 'both banker and depositor commenced a mutual onslaught-the one upen his line of loans and discounts, the other upon his bank deposits." The unequal contest was decided in a few weeks. By the 10th of October the banks had reduced their discounts by twenty millions of dollars, but they had paid away more than thirty millions to their depositors. Three days afterward they suspended specie payments, although the circulation had only varied withsn narrow limits. One of the remedies proposed to the State Legislature may perhaps deserve consideration by the committee of the House of Commous. Mr. Cook recommends that all banks should be requiredito keep a reserve of coin equel to twenty per cent on their average weekly deposits of all descriptions. They would thus be compelled either to allow themselves a wider margin of profit on deposits, or to decline the payment of interest to their customers. A further suggestion, perhaps, exceeds the power of any Assembly or of Parliament. To enact measures "in such language as shall place their construction beyond the reach of judicial decisions" is a natural but vain aspiration. It is, perhaps, well for the interests of American jurisprudence that courts of law impose some restriction on the eloquence of legislators; judges habitually assign to every enactment the smallest possible meaning, and that which is least consistent with its supposed purpose; but for this wholesome check the Code of New York might perhaps be ornamented, like the official documents of the State, with figurative allusions to "storms" and "mutinica, to "balances, +flywheels," and "nature." Unfortunately, no rhetorical decoration can effectually conceal the intrin. sic baldness and dryness of all disquisitions on credit and currency.

5. August 18, 1860 New Orleans Daily Crescent New Orleans, LA
Article from New Orleans Daily Crescent, August 18, 1860

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CRESCENT OFFICE, No. 70 Camp street, Friday Evening, August 17. 1860. The general money market was quiet to-day. Though the calls or offerings for discount at the banks were above the income, there were no rejections of paper or tenders of those who were really entitled to discounts. It is very hard work for some of our bank managers to say no, when personaaly appealed to. The very essence of banking is, however, to serve all alike. As regards those who say that they keep good balances at all times, and are entitled to consideration, it is to be ascertained what are a of case pressure in No balances. constitutes what or good or panic, as in October, 1857, we would no: given five cent piece for the deposit account of some scores of depositors in our banks: in fact, it was the depositors who made the greatest run on some S of our banks on the memorable 14th day of October, 1857. The present reputed wealthiest man in Louisiana-the owner of three r or four large sugar estates-was one of the first to take the alarm. and aided materially in closing the vaults of one of the free banks on Caual street. Now, what are such depositors n worth to a banking institution True, so long as the sun shines, they are willing to rest content but in the event of a crisis, they take the alarm, and run faster than the old women who sell vegetables in the market, or the butcher who deals out beef, pork and mutton. So in the city of New York, it was the large depositors-the agents of foreign houses-who withdrew their deposits, and forced the banks to a dead halt. But these foreign agents did not withdraw their balances from any doubt of their safety, but because they could make more by having their gold in their own iron chests. But in New Orleans many of the depositors acted more like children then men of mature age and intelligence. If another crisis or panic should come, we hope they will be more considerate. We have very little to say on the general paper market. The banks are discounting all good and satisfactory paper inside of ninety days, based on real legitimate business. On the street there is very little paper offering. Possibly the transactions may reach $20,000@$30,000 per diem, of 4, 6 and 9 months, at rates ranging from 9@ and 12 Bet. The tonsorial gentlementhey who go it deep-say they are doing very well at from 112@ 2 Pet. per month. Of real and large incisions, or rather taking skin and all, which covers figures from 2@3 Bct. per month, we have not heard of any movements but there are small borrowers, or borrowers of small sums, who have to succumb to the tonsors at from 14011 to 2 Bet. per month. Lenders at these figures are plenty, a majority of them never looking at first-class or Al paper. unless within their rates, as above. It is worthy of remark that for the last quarter of a century the lenders of money-the dealers in and buyers of paper-have lost more by investing in what has been termed strong paper in the bank parlor than from paper of second and third grades, which would not pass the ordeal of the circular table. We do not coincide with some views that because Mr. Harry happens to have a large balance in bank for a few days that he should be shown more t favors than are awarded to Mr. Richard or Dick, who may be a potato or corn dealer on the great levee, but who unfortunately f may not have those very respectable balances to his credit nevertheless, in the course of business he may keep in circulation more of the issues ot a bank than the large or reputed strong operator. Some comments have been made that our banks have been liberal with some parties. There are no grounds for these complaints they have pursued an indiscrimi nating course. It is not to be expected that Mr. Brown, the horse or mule trader, coming to market with a drove of stock, and sells on the coast or in the interior to planters for their drafts on their agents in the city, payable on the sales of erop, and not before, can expect such paper to be discounted yet, every week there are drafts of this nature presented to our banks for discounts, without even the usual formality of being accepted by the drawees. The season of the year is now at hand, in fact, ar rived, when paper of this description is plentiful, and we may expect to hear of our banks being denounced by the residents of the West, or perhaps the man in the moon may be drawing drafts, payable when his crop, is sold. However, we are in the aggregate moving along very well. The banks are in good and strong position, but mandators do not regard kites consequently we look for a healthy state of finance for the autumn, supported, as it will be, by good stocks of cotton, even if they should be less than last year. The Exchange market was quiet to-day. There were round sums of sight drafts on New York sold at 3-16@½ prem. Bank checks steady at % prem. The supply free, with the market tending in favor of buyers and remitters. Sixty days sight raled from 1@1% and 14@1% dis. ten days sight par. Sterling firm at from 109% and 110. The banks having very little to draw, their rates are nominal. Francs are offering more freely, 08 some operators in cotton for France appear inclined to move, but in a very light way. Franes we quote at 5.20@5.15extremely dull. Bank shares dull, and no demand nor no desire to sell. In Bonds the market is quiet. There has been considerable in. quiry for Opelousas Railroad shares this week. There have been sales at $7 per share, with-a-very fair inquiry at this figure, which cannot be supplied. The feeling toward this read, though high, is still improving. It commends itself to all capitaliste and dealers in bonds who have money to invest in good 8 Pet. securities at a figure less than part, equivalent to a 10 Bet. per annum investment. There has been very little doing in uncurrent money this week. The brokers on Camp street are idle, not making their daily expenses. The epithet shavers will not apply to them just at this moment, for with the exception of some few Mexican dollars, they have not anything offered during the week. A few small sums of American silver coin are offered daily, and taken within the range of quotations in the table below. As the season of the year is approaching, when the travelers and temporary sojourners will be passing through our city, we have to note that the current funds of their respective localities can be negotiated here in New Orleans: that the coins of all nations, and the issues of all banks of any pretended standing, can be placed on Camp street and changed into gold forthwith. Our Branch Mint is apparently idle. The deposits for recoinage are few and far between. The coinage for the last month (July) only reached $75,000 in coin 3787 in bars. The deposits for the month were only $109,222, of which $98,000 in amount was bullion. The Mint cannot compete in the open market with dealers in and buyers of Mexican Eagle dollars, which comprise over threefourths of the importations of specie into our port. We append our usual weekly quotations of coin and uncurrent bank notes, being those of John Wood & Co., Camp street SPECIE. 1½@2 Bet. American half Dollars, old coinage prem. 1 @1% American quarter Dollars, old coinage prem. discount. American Silver, new coinage 12@1 Mexican Dollars last sales 9 @9% Pet. prem. 7 prem. @9 Spanish Pillar Dollars. 05/2