Farmers Bank of Seneca County

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: February 1, 1840*
Location: Romulus, New York (42.752, -76.834)

Metadata

Model: gpt-5-mini
Short Digest: 6c007bb9

Response Measures

None

Description

Article (1840-02-27) reports Farmers' Bank of Seneca County had issued $116,000 in notes and $50,000 of them lies at Romulus in the hands of lawyers, protested for non payment. This indicates the bank failed/was unable to pay its notes (insolvency/closure). The piece does not describe a depositor run, only nonpayment/protests, so classified as a suspension/closure (permanent failure). Date of failure not given explicitly; using article date month/year as reference.

Events (1)

1. February 1, 1840* Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank issued large amount of notes ($116,000); about $50,000 of notes at Romulus were protested for nonpayment, indicating insolvency/failure.
Newspaper Excerpt: will all meet with the same fate as the Farmers' Bank of Seneca County, which has issued $116,000, and 50,000 of it now lies at Romulus, in the hands of lawyers, protested for non payment.
Source: newspapers

Newspaper Articles (1)

1. February 27, 1840 Morning Herald New York, NY

Article from Morning Herald, February 27, 1840

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Article Text

held. The following are the leading features of some other of the institutions. Circulation. Loans. Deposites. Specie. 865 1,315 9,696 5,229 Bank of Lodi, 62,453 12,422 11,742 Far. Bk. Sen. Co, 173,782 12,693 35,461 115,600 Canal Bk. .Lockp't 100,449 17,309 1,696 65,996 69,405 Staten Island, 97,251 303,210 159,872 924,413 Am. Ex. Bank, Mer. & Far. Bank 47,911 15,129 75,139 67,533 Ithaca, 4,103 4,190 32,058 Far. Bk. Pen Yan, 29,273 421,401 Total, 1,274,250 107,316 513,006 It will be seen in these statements, that the Canal Bank, of Lockport, and the Staten Island Bank, have on hand a less amount of specie, than that required by law. The free banking law imperatively requires that the institutions doing business under it, shall keep on hand, at all times, 12} per cent of their circulation in specie. In case of non-compliance, the shareholders are responsible as joint partners. It appears, however that the infractions of the law, committed by the new banks, do not attract the notice of the Comptroller. One of its most express provisions, is, that all bills circulated by them as money, shall be made payable on demand. Post notes of $1, are, however, daily put in circulation as money, by these conand cerns, without eliciting any rebuke. The City Trust Banking Company, has become so bold in their operations, that branch concern has been established, calling itself the North American Banking Company, expressly to issue post notes. A person, named Jackson, has gone west. with $150.000 of these notes, to purchase produce, and the President of the City Trust, Mr. Munson, has now in his possession, invoices of produce, parchased therewith. We can but reiterate our caution to those who sell for this description of paper, that it is illegal, and worthless, and will all meet with the same fate as the Farmers' Bank of Seneca County, which has issued $116,000, and 50,000 of it now lies at Romulus, n,the hands of lawyers, protested for non payment. The United States Bank has made another return up to February 1, 1840, by which it appears that the following changes have taken place in the liabilities and resources, during the month of January :Liabilities. Resources. Loans decreased 210,100 Circulation increased, 559,695 " 343,161 223,000 Due State Banks, Contingent interest 457,396 Post notes decreased, 157,143 Foreign Exchange Bonds and mortgages 751,587 increased. 200.000 Interest, &c. 557,477 145,054 London agency, U. S. Bank increased, 368.362 329,171 Deposites, Specie increased, 382,154 Notes U. S. Bank The state of financial affairs in the United States is a matter of most absorbing interest to the whole community. Forthree years the currency has been in a most disturbed state. The Federal government have been endeavoring to create a new currency and change the manner of doing business, which had for forty years previous accompanied the growth of the country.The contest elicited by this attempt has shaken the prosperity of the country to itscentre. It has resulted in two suspensions of the banks, and a universal stagnation of trade, and yet the Government have effected nothing. For six months past the public have been kept in suspense as to the issue of the suspension of the Philadelphia Banks, and the anxious enquiry is, Where is this to end? When is a regular currency to be restored? Before this effected long and fearful struggle for the mastery will be made by the U.S. Bank and these in its interest. When the present Pennsy Ivania Legislature was about to assemble, the executive of that State had a secret understanding with the officers of the Bank, by which the interest of the State'debts was to be provided for up to August next. This arrangement enabled the friends of the Bank to put off the resumption resolution at least for the present. But there is no doubt that the Bank is entirely unable to resume for many years to com: 1They propose now to resume in 1841, 18 order to gain a little more time. We have information from a direct source, of the highest authority, that Mr. Biddle, although name does not appear, is still manager of the concerns of the bank, and consultations have been held frequently, the object of which is to put off the resump tion, not only for 1, but for 5, 10, 15 or 20 years, and the same arguments are used in support of the measure, as were advanced in favor of the suspension of the Bank, of England, for a like period. The ground OR which this position is taken, is not only the present inconvertibility of securities of the bank, but the great indebtedness of the State, and the fear of the dominant parties to resort to taxation. The present government of Penusylvania, althoughstrongly locofoco, dare not destroy the banks at a time, when, without their assistance, they must resort to taxation, and thus jeopardize their interest in the coming Presidential election, already sufficiently in danger by the re-action of public opinion, in consequence of the fall in prices of produce. This position places them within the power of the bank which calculating upon the increased chances of the succession fGen. Harrison, looks forward to the measure of his administration renewal of its former privileges. A change of adminis tration would undoubtedly be the precursor of a National Bank, Whether, however, that will consist of an entire new institution, situated in New York, with its branches extending over the Union, or a reinstatement of the United States Bank of Mr. Biddle, is a problem. ensure the latter event, all the powers of the present bank will be concentrated. New York and New York institutions it will be first necessary to get under her control. To do this every exertion will be made to accumulate balances against them, to cramp their movements and cut off their assets. How far our institutions, in their present weak and shattered condition, will be able to sustain them" selves is uncertain. They will be forced to exercise the utmost caution, and by this the business classes must suffer. Should Gen. Harrison succeed, a new contest will commence between the friends of a National Bank in New York and the friends and influence of the Philadelphia concern. This is the project now contemplated by the Philadelphia financiers. That the measure of suspension was unnecessary in October, on the part of majority of the Philadelphia banks, is evident by the following official table of their returns for October, 1839, as compared with the aggregates of January, 1839.