17030. Watervliet Bank (Watervliet, NY)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
March 1, 1842*
Location
Watervliet, New York (42.730, -73.701)

Metadata

Model
gpt-5-mini
Short Digest
a90369a1

Response Measures

None

Description

Newspaper items state the Watervliet Bank was enjoined (suspended) and described as failed due to cashier fraud and absconding; no article describes a depositor run. The injunction/suspension appears permanent (failure). Enjoined in March last from the Feb 1843 article likely refers to March 1842.

Events (1)
1. March 1, 1842* Suspension
Cause
Bank Specific Adverse Info
Cause Details
Bank was enjoined (injunction) after discovery that the cashier committed a series of frauds, concealed by false entries, and absconded, causing insolvency.
Newspaper Excerpt
The Watervliet Bank was enjoined in March last. Its failure was occasioned by allowing the Cashier to control the whole affairs of the Bank. He committed, previous to Sept. 1841, a series of frauds, concealed by false entries, and finally absconded.
Source
newspapers

Newspaper Articles (3)
1. September 16, 1842 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, September 16, 1842

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Article Text

# MONEY MARKET, Sales at the Stock Exchange, Sept. 15. 25 Del & Hud. 530d 241 50 Harlem... ...sl0d 17 25 do.. 841 50 do b60d 17 50 do s20d 84 150 do. $30d 164 25 do .. 844 50 do b60d 171 25 do 843 50 do 174 37 Bank of Kentucky... 41 200 do. $300 164 50 Mohawk R.b60d 37 50 do 174 50 L. Island, .b60d 504 25 do. 174 100 do ..caslı 50% SECOND BOARD. 25 Mohawk R.. 37 25 Harlem .s3d 17 25 do .b3d 37 95 de 174 200 Long Island RR.50 # Commercial and Money Matters. THURSDAY P. M. The sales at the Board to day were not large, and prin- cipally of Harlem, which left off at 171, an improvement of per cent. Long Island was heavy. Delaware declined per cent. Mohawk sold at 37, a decline of 14 per cent. on the last sale. In State Stocks there was very little done. Prices were generally firm. The transactions were- $2,000 Illinois 6s, 1870.... 18 $3,000 Ohio 6s, 1860.660d 73 $1,000 do do. 18 The sales of Foreign Exchanges were to considerable extent, and some Sterling sold as high as 8 per cent. We quote 7 a 8 per cent. Francs 5.321. The supply of bills continues limited. Some doubt has been expressed as to the correctness of the statement touching the A labama interest money. We are assured, from the best authority, that it is already here, aad will go by the next steamer. The Commissioners of the Canal Fund have issued a no- tice that proposals will be received for a loan of $250,000, at 7 per cent interest, stock for which will be issued at the Manhattan Bank on the 1st of October. P. Chonteau, Jr. advertises that all drafts drawn by P. Chonteau, Jr. & Co. of St. Louis on the American Fur Company, will be duly paid at maturity. The suspension of the Company, it is anticipated, will only be temporary. It was produced mainly by having a large amount of funds locked up. We hope seon to see it in operation again. The Bank of Lyons has been enjoined by the Vice Chan- cellor of the Seventh District, on the application of the Bank Commissioners. The Bank has about $60,000 of the Canal Fund moneys. It had about $50,000 when the present State Officers came in, on which interest is due, and, being one of the Deposite Banks for the Collectors of Toll, has about $7,000 of the accruing revenue. We believe this Bank has been in difficulty once, it not twice before. The Evening Journal states that under the present officers the Bank has been well managed. The communication in the Argus some days since in rela- tion to the situation of the Safety Fund, which we copied, has drawn out the Comptroller, who has addressed the re- ceivers of the broken banks upon the subject of the amount which will probably be repaid to the Fund. The commu- nication alluded to, by the way, is ascribed to the State Bank of Albany, which holds $300,000 of the suspended bank notes, and to a large uncurrent money house in Wall- street, (the diamond pin victim,) also largely interested in broken notes. In answer to the Comptroller, Mr. Blatch- ford, Receiver of the Commercial Bank, says: There is no probability that any portion of the amount advanced by the Comptroller to redeem the circulation of the Commercial Bank will ever be repaid. The total amount of acknowledged liabilities of the Bank, exclusive of capital stock and circulating notes, was $175,728. Assets $114,320. If no more than the above is realized, there will be a deficiency of $61,408. I have also on hand securities, which are of but little value, I fear, to the amount of $137,- 250. From this statement, which is generally (though not meant to be entirely) accurate, you will be able to form some opinion whether there is any probability of the Safety Fund being reimbursed any thing." Mr. Beckman, Receiver of the Commercial Bank of O- wego, says: "The amount I have collected in current funds, as Re- ceiver of the Commercial Bank of Oswego, is $2,473. The assets in my hands will not, in all probability, pay any part of the circulation. If I shall be able with them to pay up the debts on the real estate and indemnify the Safety Fund against the debts, it will probably be all I shall be able to do." In relation to the payments of the Banks to the Safety Fund, the Comptroller says: "Twenty-four Banks have commuted; sixteen of them at 2 and the residue at 3 per cent. The total sum paid by these Banks is $183,673. This sum has been paid in the notes of insolvent Banks, as follows: Com. Bank, Buffalo.. $45,903, Lewis County Bank.. $504 Watervliet Bank 36,815 Lafayette Bank. Clinton Co. Bank... 22,569 3 $183,673 Com. Bank of Oswego 77,879 There has been presented for redemption, of the notes of he Bank of Buffalo, $416,000." The tolis at Rochester for the last three weeks amount to $18,343 42. It was stated thit the Columbia Bank and Bridge Com- pany was paying specie, then it was said it was not; now the Lancaster Intelligencer says it is. We don't know which way to think. Some of the Richmond Banks are now paying specie, and some of them have a dollar in paper for a dollar in spe- cie, and are much curtailed. At Mobile Exchange had improved. Bills are not in much demand, and the supply limited. Sales at S8 a 40 per cent. Specie 37 a 40. There is a great want at Chicago of a geod currency.- The circulation is made up of State Bank of Indiawa and Wiskonsin Fire and Marine Insurance Company, with a few Utica and other Eastern notes. The Daily American says that if they had sufficient circulation, Wheat would doubt- less be worth 10 to 15 cents per bushel more. At Buffalo Eastern Exchange is in demand, and moneyed operations were to much larger extent than for some time past.

2. October 24, 1842 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, October 24, 1842

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Article Text

COMPTROLLER'S OFFICE, Albany. Oct. 15. 1342. REDEMPTION OF SAFETY FUND NOTES. The act, chapter 247 of the Laws of 1842, allowed the Safety Fund Banks until the 12th of October, instant, to make up their contributions to the Safety Fund, by paying into the Treasury not less than two nor more than three per cent of their capitals, in the notes of any Safety Fund Banking Corporation, against which an injunction had been issued. Sixty-four banks, with an aggregate capital of $22,665,248, have paid into the Treasdry, in the notes of the broken banks the sum of $477,600. Twenty-Jeveli banks have paid 2 per cest on their capital, two have paid 24 per cent, and thirty-five have paid per cent. The contributing banks are by the law allowed a rebate of interest at the rate of 7 per cent. from the time they pay the bills to the Treasurer, until the several periods when the payments of half of one cent on their respective capitals would becorile dtle.Theirtal amount of rebate on the aggregate sum for which the sixty-lour banks have commuted, is $74,185 41. There are sixteen banks having an aggregate capital of $6,£40,000, which have not commuted. The annual contributions of these banks at 4 of one per cent. will amount to $33,200. A statement is annexed, giving the names of the banks which have commuted and the amount paid in each case. The notes paid into the Treasury by the banks which have commuted, are will the following banks, viz: $138.528 Commercial Bank of Buffalo 140,530 Commercial Bank of Oswego 98,877 Watervl et Bank 73,679 Clinton County Bank 636 Lewis County Bank 25,545 Bank of Lyons 14 Lafayette Bank $477,609 In the Comptroller's circular of the 13th of July, the circulating notes of the Commercial Bank of Buffalo, the Commirrcrai Bank of Oswego, and the Watervliet, Clinton County $1,111,447 and Lewis County Banks. are given at The failure of the ank of Lyons will add to this 100,000 sum $1,211,447 Deduct notes paid by the banks which have com477,609 muted $733,833 And it leaves to be provided for If the Lewis County Bank resumes, there will remain about $600,000, to be provided for by the small balance of the fund on hand, and the future contributions of the banks. There has been redeemed of the notes of the Bank of Buffalo, up to the 15th of October, the sum of $12,587. This includes the $30,000, the redemption of which was suspended at the date of the last circular. The available balance of the fund may be put down at $60,000, which will leave about $540,000. to be paid from future contributions. The contributions of sixteen banks which have not comrouted will yield only $33,200 annually for four years. The whole of the circulation of the Commercial Bank of Buffalo cannot be taken up by the funds on hand and the contributions to be made until January, 1847. If the Banks which have omitted to pay the call of half of one per cent. should pay up, as estimated in the statement annexed. and the claim against Union College can be made available, a dividend or 35 or 40 per cent. on the notes of the Commercial Back of Buffalo may be made in January next. In January, 1847, the banks which have paid only two cent. on their commutation, will be required to contribute half of one per cent. The banks tbus situated have an Cggregate capital of $12,516,200, which added to the capital which has not commuted at all, makes a total of $19.156,200, 00 which half of one per cent. will be paid in January, 1847, yielding $95,781 to the Bank Fund. This may leave a balance of $15,000 or $20,000 of the notes of the Commercial Bank of Buffalo unredeemed; but the balance of notes outstanding of the Con:mercial Bank of Oswego being only $20,000, the contributions of 1848 will cover the balance, if any, of the Commercial Bank of Buffalo, and redeem those of the Commercial Bank of Oswego in full. The contributions in January, 1849, will be uponti whole capital of the Safety Fund Banks, as the commutation of of three per cent. pays up only to January, 1848. The total capital is $29,805,218, which at half of one per cent will make the contributions in January, 1849, $146,526 24. This stim will redeem the outstanding notes of the Watervleit, Clinton County and Lyons Bank. In the Comptrolier's circular of the 13th of July, the several statements were based on the assumption that the Safety Fund would be nade liable for a sum equal to the amount of notes of the several banks in circulation at the time they were respectively cojoined. Since the publication of the former circular, inquiries have been made of the Receivers, as to the probability of refunding to the Safety Fund any portion ot its advances, from the assets of the banks. And to test this question the Comptroller asked the Receivers to inform him how much they had collected from the assets of the banks respectively. in current funds; what the acknowledged liabilities of the backs are, and when a dividend to the creditors might be expected, and the amount of such dividend? The ackne wledged debts of the broken banks, over and above the outstanding notes, at the time they were enjoined, were as follows, viz: 000

3. February 16, 1843 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, February 16, 1843

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Article Text

# MONEY MARKET. Sales at the Stock Exchange, Feb. 15. $2,500 N Y 7s. 1849 .164½ $1,000 Ohio 6s, 1860. 66 1,000 State 6s, 1862101½ 75 shrs Manhat Bk. 65¾ 3,000 do..blods 101¼ 20 do Bk of Amer.... 86 500 State 5s, 1858. 90¼ 6 do Del. & Hud 82½ 1,000 Illinois 6s, 1870.... 21½ 27 do Canton Co. 16¼ 5,000 do..b60d 22 60 do do. 16½ 1,000 Kentucky 6s.. 84 35 do do 17 1,000 do 84 40 do Moh'k R.... 27½ 4,000 do 85¾ 50 do Harlem R 16¾ 3,000 do 83¼ 41 do Ut & Sch R.115 5,000 do... b6od 84 25 do Au & Rech R.... 90 SECOND BOARD. $2,000 Kentucky 6s 84 200 shrs Harlem R.. 16½ 1,000 do 5s 70 5 do Canton Co. 17¼ 2.000 Ohio 6s. 66½ 5 do Lafayette R 54 5,000 dossd 66½ # Commercial and Money Matters. WEDNESDAY P. M. The sales at the Board to-day were not large, but at im- proving rates in State Securities, excepting for Kentucky, which declined farther 1 per cent. State 6s sold at 1½, an advance; and Ohio 6s improved 1½ per ct. Mohawk de- clined ¼; Canton improved ½. Not much doing in Foreign Exchange. We quote Ster- ling 5¼ a 5½; Francs 5 45. Alabama to-day is selling at 30 discount. The letters from Mobile state that matters were rather on the mending order. We give the following condensed abstract of the Bank Commissioners' Report. The process of contraction has been steadily going forward since 1839. The domestic ex- changes of the State indicate a depressed but healthy ac- tion on the part of the Banks. The redemption law has worked with admirable effect, and has prevented the es- tablishment of free banks at places difficult of access. The circulation and debts of the Lafayette Bank have been paid, and the stockholders will receive about one-fourth of their capital. The embarrassments of the Bank were owing to large loans to directors and others, for speculative purpo- ses. The Watervliet Bank was erjoined in March last. Its failure was occasioned by allowing the Cashier to control the whole affairs of the Bank. He committed, previous to Sept. 1841, a series of frauds, concealed by false entries, and finally absconded. The Commissioners consider their powers too limited, as they cannot arrest the operations of a Bank until it is hopelessly insolvent, and until unjust pre- ferences have been made among its creditors; and suggest that they have authority to arrest the proceedings of a Bank at any moment when they shall believe the public good re- quires it. They object to officers of Banks being engaged in other business. The Clinton County Bank, and the Bank of Lyons, failed by the same causes which have pros- trated so many Banks, being managed exclusively by the President and Cashier, and the funds of the Bank loaned to favorites for speculating purposes. A detailed statement is given in relation to the over issues of the Bank of Buffalo, which have already been received to the extent of $287,731. The loss to the Fund, from the over issues of the three Buf- falo Banks, amounts to $425,000. It is recommended, to prevent a repetition of these frauds, that the Banks be re- quired to deposit their plates with an officer appointed for the purpose. The item 'Bank Fund,' in several of the Bank statements, is an item of no value, and should be charged to profit and loss. The Commissioners recommend that they be authorised to visit a Bank and require its an- nual statement, not at any stipulated time, but at a time during the year when the Bank does not expect such a visit, and cannot prepare itself by contraction, &c. The receivers of the old Howard Insurance Company have declared a final dividend. Edmund Harrison has been elected President of the Mo- bile branch of the State Bank.