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The statement was received here on Saturday night that the Erie bank had suspeuded payment.
18651. Erie Bank (Erie, PA)
Bank Information
- Episode Type
- Suspension → Closure
- Bank Type
- state
- Start Date
- May 5, 1848
- Location
- Erie, Pennsylvania (42.129, -80.085)
Metadata
- Model
- gpt-5-mini
- Short Digest
447d6084
Response Measures
None
Description
Contemporary newspapers report the Erie Bank (Erie, PA) 'suspended payment' in early May 1848 (around May 4–5). Reports attribute the stoppage to the failure of Charles M. Reed (principal stockholder) and to specie draining; directors/owner pledged assets and Reed paid some liabilities, but there is no clear evidence in these articles that the bank fully resumed normal operations. I therefore classify this as a suspension that led to permanent closure/impounded status (suspension_closure).
Events (1)
1.
May 5, 1848
Suspension
- Cause
- Bank Specific Adverse Info
- Cause Details
- Suspension attributed to failure of Mr. Reed (principal stockholder) and draining of specie by brokers; institution had insufficient coin relative to circulation, causing stoppage of payments and suspension of redemption of bills.
- Newspaper Excerpt
- The Erie Bank, at Erie, Pa, suspended payment on Friday last
- Source
- newspapers
Newspaper Articles (11)
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Another Bank Gone. The prospects are fair for the people ge:ting a surfeit of the blessings of rag money. There is scarcely a month rolls round that we do not have the announcement of the failure or suspension of some one of the numerous "rag mills' that are scatter ed over the country, But n few months have passed since several of the New York State banks and several banks in other States, the paper of which formed a considerable portion of the circulation of this State, had failed, cheating the honest and industrious noteholders out of their just dues. Scarcely has the sensation produced by the failure of the Bank of Wooster subsided, ere we have the intelligence of the fail. of another bank.-The Erie Bank, at Erie, Pa, "suspended" payment on Friday last, and lelt a large amount of its rollen pronises in the hands of the people. What is the amount of its circulation, or what the condition of the bank, we do not know; but we do know that there is considerable of its paper in the hands of people here who have given it credit, notwithstanding the unfavorable reports that were in circulation but about a month ago against the solven cy of the bank, because they believed Mr. Reed, who was the principal stockholder in, if not the sole owner of, the bank, was wealthy, and would sustain the credit of bank But the accounts state that the failure of the bank was in consequence of the failure of Reed. The Erie Observer contains the follow ing paragraph in relation to the failure of the bank: SUSPENSION OF THE ERIE BANK -We stop the press to say that the Erio Bank suspended payment to dny. We have ther time nor inclination for comment To bill holders we would say, don't sacrifice at present. The Cashier assures us it has means, though just not now available, to redeem its circulation dollar for dollar." It may be well for those who can, to heed the above caution, as nothing will be lost by holding on to the notes for n short time, and it may be that the bank will eventually redeem its entire circulation. It is a caution which is almost universally thrown out whenever a bank fails, for the purpose of allaying the storm of just indigdation which is incited by these villainous robberies of the people by the banks; and it has been but too successful. Had it not, been so, there would not now be a bank a bove ground to feed and fatten upon the productions of labor. But should this bank enventually redeem all of its liabilities, the bank advocates will claim that it has injured Hone, and that the community has not suffered in any degree by its existence. Yet such is not the case. It impossible that a bank should fail, having a large amount of its notes in circulation, without there being much of it in the hands of persons who are under the necessity of putting it to immediate use, and yel they cannot do so unless they dispose of it at a sacrifice of from 25 to 75 cents on the dollar. When the op portunity offers there are always enough greedy speculators, who have sufficient money, and who can wait until the bank can gather up its assets, to buy up the bills at a discount, and it is in this way that the avails of Inbor, through the instrumentality of bank failures and gross bank frauds, are transferred from the hands of the producers to whom they belong, to the hands of speculators and bank officers and agents who solt not neither do they spin." The liability of banks to fail is not the only objection to those institutions, though
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From the Buffalo Com. Adv. of Saturday. FAILURE OF THE ERIE (PA.) BANK-A rumor is quite current here to-day that the Erie (Pa.) Bank has gone by the board. The report is no doubt correct, as the institution has been tottering for months past, and the banks and community had lost all confidence in its stability, Theagent for redeeming the bills in this city ceased receiving any more 00 of its notes yesterday afternoon. The amount of the issues of the bank in circulation must be very large, as the charter was one of that class that gave all manner of privileges to those who had the control of its affairs, Such of our brokers as have been victimised are offering the notes of the bank to-day at 50 cents on the dollar.
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ico to Yucatan and supply their places with new volunteers. Mr. Crittenden opposed both the bill and amendment.Mr. Foote defended the measure and the Administration, and without taking the question, the Senate adjourned. The Erie Bank has failed. So say gentlemen direct from Erie. New YORK, May 4th-3 P. M. A letter from Charleston dated on Sun. day, say that a suspension of the banks was talked of Several failures have 00curred, including C. F. Osborn and James Dunlap. Well informed sources at Washington give reason to hope that the Mexican Treaty will be ratified. The Union also talks as though peace prospects were fa. vorable. While the workmen were taking down the building at the corner of Frankfort and Chatham Street on the 2d inst. at N. York, a building fell wounding several workmen badly- one is supposed will die. It is supposed a little girl 18 buried under the ruins.
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E. Z. Andrews & Co., com'ssion merchants,. N. Orleans. Besides the above there have been two large failures in St. Louis, produce dealers; one in Charleston, S. C., commission merchant; two in Boston; also four bank failures: the Atlas Bank, New York; Memphis Bank, Tennessee; Bank of Wooster, Ohio, and Erie Bank, Pennsylvania. Several banks in this State, not named, suspended, but have since resumed, and are again actively engaged in business. The immense amount which the houses named above must have lost before becoming bankrupts, and the losses which have fallen upon all those connected in any way with the foreign trade of the country, can be imagined by reference to the annexed statement of depreciated prices for our staples:- DEPRECIATED VALUE OF AMERICAN PRODUCE.
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COMMERCIAL AFFAIRS. MONEY MARKET. Tuesday, May 16.6 P. M. There was something of a panic in Wall stre et today, but it was confined to the bulls in Norwicha and Worcester, a decline of 1/4 per cent having been r ealized at the first board. This had an unfavorable effect upon other fancies, and prices fell off a fraction all round. Long Island declined 1/4 per cent; Harlem, X; 'Farmers' Loan, 1/6; Morris Canal, 1/a; Erie Railroad, full, X: Reading Mortgage Bonds advanced 1 per (30 nt. The inprovement in Reading Bonds has been qaused, no doubt, by the favorable prospect of a satisfactory disposal of the new stock. An election for directors of the Harlom Railroad Company, for the ensuing year, took place to-day, when the following gentlemen were elected:NEW YORK AND HARLEM RAILROAD-BOARD OF DrRECTORS. 1-Robert Schuyler. 8-Morris Ketchum, 2-George Barker, 9-Thomas W. Ludlow, 3-Richard M. Blatchford, 10-George L. Schulyer, 4-Edward K. Collins, 11-Jonathan Sturges, 5-Philip Dater, 12-William C. Wetmore, 6-John Ewen, 13-William S. Wetmore. 7-Samuel Jaudon. This is a good ticket, and we believe under its administration the affairs of the company will be placed upon a sound basis, and the extension of the road progress rapidly. The company is doing a heavy business; the receipts thus far this month, averaging about one thousand dollars per day. The Western Railroad Corporation has declared a half-yearly dividend of four per 00 nt, payable on the 1st of July to holders of stock on the 31st of May. The suspension of the Erie Bank of Pennsylvania has created considerable excitement in the vicinity of its location. At the time of its stoppage it had a large circulation, and up to the time of failure enjoyed a high credit. The amount of specie on hand was so exceedingly small in proportion to its issues, that the slightest demand for coin drained it at once. Its resources, however, are ample, and its bills are worth one hundred cents on the dollar. The *president of the bank is a man of immense wealth, a nd his property, both real and personal, amounting to $2,000,000, has been pledged to the payment of the deposits, circulation, and other debts of the ins titution. The annexed statement exhibits the condition of the bank on the 8th instant:ERIE BANK, PENN SYLVANIA. Resources of the Bank. Due from solvent debtors $198.315 75 Eric Canal bonds and certifi. sates 236,409 26 Erie Canal stock 5,000 Cash on hand 1,602 75 Real estate at its present cash value 4,604 66 $446,859 38 Liabili ties of the Bank. Notes in circulation $286,130 00 Due depositors 31,376 96 All other indebtedness 13,582 28 $331,089 28 It appears by this, that there is a margin of $115,770 10, for depreciation in the appraised or par value of the assets. so that in the event of the amount due from solvent debtors to the bank, netting less than fifty cents on the dollar, the resources will be sufficient to pay every farthing of the liabilities. It will be perceived that the assets are in a very good shape, and can be made available without much delay. Bills of this bank were selling in Buffalo for fifty cents on the dollar, a depreciation not warranted by the position of the bank. For the past week or two there have been reports in circulation relative to the solvency of the banks of South Carolina. There was no foundation for the statement, and we annex an exhibit of the condition of the banks of South Carolina at the latest dates, compared with several previous reports:-
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It The Erie Bank of Pennsylvania has suspended, blowed up and gone to Hades. Circulation $300,000-capital stock $50, 000. Look out for more, particularly the Norwalk, and Sandusky banks of Ohio, as their notes are already discredited in that State.
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The Erie Observer, speaking of the suspension of the Erie Bank, says, "The cashier says that he has means, but not at present available, to redeem all the bills in circulation." On this, the Ledger very justly remarks, We never knew an officer of a broken bank to say otherwise, and yet not one in twenty of the banks that break, make good their liabilities. The 'suspension of public opinion, usually solicited, is too frequently used in plundering still deeper the poor holders of their bills."
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TO THE PUBLIC. In consequence of the numerous reports which are daily fabricated and put in circulation for the purpose of destroying all confidence in the ability of the Erie Bank to redeem its liabilities, as well as for the purpose of injuring me individually, 1 feel it my duty to ask the public not to make up their minds too hastily or give credit to reports with out first knowing there are at least some grounds for their circulation. Every effort is making to redeem the bills, and pay the indebteduess of the bank. 1 am glad to receive the paper upon all debts, bonds and mortgages due me, and will be most happy to exchange any property have, real or personal, at its lowest cash value, for Erie Bank bills, have not pure based one dollar of the paper at H discount, but am daily giving other funds in change to those who have small sums. and require it for immediate are. I am willing at all times, and have never refused. to give my paper. or secure to the satisfaction of the holder. the ultimate payment-principal and interest-of any amount of the bills of the Bank. I have arranged with the Erie Canal Company. on my personal liability, that for the next thirty days the paper will be rocerved for all tolk on the camu from Erie to Beaver. Since the sus pen-ion, I have myself paid $33,000 of the Bank's liabilities, and shall continue my efforts until the entire circulation is taken up. I am will ing to make any secrifice in my property to effect this object. All that inarked of the bill holder is not to make sacrifices. and to allow time CHAS. M. REED. for the nitimate payment of all the paper. Erie, May 23, 1848.
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The Erie bank directors have issued a card showing that the Institution has assets sufficient to meet all its liabilities. Gen. Reed has, besides, made himself responsible for the debts. The Gazette says the draining of specie by the brokers caosed the suspension.
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The main increase is in local travel, a portion of which is to be ascribed to the opening of the Nashua connection. The freight item has also improved—all of which is evidence of a sound improvement in the condition of the Company. The sale of surplus dépôt lands at Worcester to the Worcester and Boston Road for $58,000 has enabled the Company to pay off a considerable amount of debt. The bills of the Banks which have broken during the last year are selling as follows: Bank of Norwalk, Ohio, 50 cts; Bank of Sandusky, Ohio, 37 cts.; Canal Bank, Albany, 90 cts.; Bank of Wooster, Ohio, 20 cts.; New Hope Delaware Bridge, 20 cts; Atlas Bank, real estate notes, 70 cts. N. Y. stock notes, 95 cts; Erie Bank, Pa. 85 cts.; Hamilton, R. I. 25c. We annex a list of the latest counterfeits, from Thompson's Bank-Note Reporter: Threes, on the Mechanics' Bank, of New-Haven—vignette, three female; Tens, on the Bank of Waterville, N Y—vignette, Declaration of Independence; Tens, on the Camden Bank, N J; Tens on the Tolland County Bank, Conn; Fives, on the Troy City Bank, Threes, on the Camden Bank, N Y; Threes, on the Bank of Westfield, N Y; Tens, on the Claremont Bank, N H; Threes, on the Stamford Bank, Mass; Threes, on the Otego County Bank; Fifties, on the State Bank, Newark; Twenties, on the Cumberland Bank, Md; Fives, on the Troy City Bank; Twenties, on the Stark Bank, East Bennington, Vt; Fives, on the Franklin County Bank, Malone, N Y—altered from Ones, by the pasting operation. Hon. Jas. K. Moorhead has been elected President of the Cincinnati and Louisville Telegraph Co. The Stock market is running upward at Philadelphia as well as here. Almost all descriptions are in speculative demand. The Governor of Connecticut has signed the bill chartering the Hartford County Bank. The Farmers' Bank of Bridgeport has passed both Houses.