Mechanics' Bank - Philadelphia, PA

Bank Information

Episode Type: Suspension → Reopening
Bank Type: state
Start Date: October 17, 1839
Location: Philadelphia, Pennsylvania (39.952, -75.164)

Metadata

Model: gpt-5-mini
Short Digest: f434a9e3

Response Measures

None

Description

1839 Philadelphia banks collectively suspended specie payments amid heavy foreign drafts and coin outflows. Article describes banks (including Bank of North America) voting initially but then refusing to redeem notes in specie when several banks declined at opening, producing a general suspension. No mention of a run on this specific bank, and suspension appears to be part of a temporary, citywide suspension rather than a permanent failure.

Events (1)

1. October 17, 1839 Suspension

Cause: Macro News
Cause Details: Heavy foreign drafts and large demands for coin leading banks to fear discounting and to suspend specie payments (citywide liquidity strain).
Newspaper Excerpt: several of the banks immediately upon opening, declined to redeem their notes in specie, and as soon as the fact became known to the others a general suspension took place.
Source: newspapers

Newspaper Articles (1)

1. October 17, 1839 Martinsburg Gazette Martinsburg, WV

Article from Martinsburg Gazette, October 17, 1839

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Article Text

that, unless the banks extended their accommoda- tione, serious distress would inevitably follow-and that matters had now assumed such a shape that either the banks must enlarge their facilities, or that trade must be prostrated. In this contingency he said, the Board he represented were clearly of opinion that if the foreign drafts upon the banks were such as to make them fearful of discounting largely, they ought at once to suspend specie pay- ments. After this statement he withdrew, and the representatives of the different banks who were present discussed at length the matter presented to them. Finally, a motion was made (and carried) that under existing circumstances 'it was inexpedi- ent to suspend specie payments;' and, upon this motion the banks through their delegates, voted as follows: In the affirmative, the banks of North America, Pennsylvania, Commercial, Penn Town- ship, Philadelphia, Manufacturers' and Mechanics', Northern Liberties, Mechanics', and Farmers' and Mechanics, 9; and in the negative, the United States, Girard, Southwark, Western, and Schuylkill 5; and then the meeting adjourned indefinitely. "Yesterday morning, notwithstanding the reso- lution of the previous evening, several of the banks immediately upon opening, declined to redeem their notes in specie, and as soon as the fact became known to the others a general suspension took place." The New Yorker of the 12th inst., in speaking of the Suspension, has the following:-" But the worst feature of the case is the consideration that the same causes which have produced suspension in Philadelphia will probably exert the same influ- ence elsewhere; and we now expect to hear, by re- turn of mail, of a General Suspension throughout the country south of the Delaware. We have hopes that Virginia, the Carolinas, and New Orleans will stand fire, as they are less affected than other sec- tions of the country by the trade and heavy indebt- edness of the new States. (Alabama and Missis- sippi have been virtually non-specie-paying for a long time.) North of the Delaware, we hope the banks will weather the storm triumphantly. We know the determination of our banks is fixed, to count nothing a sacrifice which shall be necessary to enable them to fulfil scrupulously their engage- ments, and to continue their payments in specie so long as they can command a dollar to pay. In en- forcing this just resolution, we trust they will have the cordial and zealous co operation of the commu- nity. If, in defiance of the severe pressure every where, and the colapse at Philadelphia, the banks of the Northern States shall ride out the tempest, the credit of those States and banks will be placed on a proud pre-eminence. Of course, the business Interests of the North will be required to suffer a while longer the depression from which those of Philadelphia have partially relieved themselves.- We believe, however, that, should the North main- tain Specie Payments, we shall feel seriously the general relief to business which the Philadelphia movement is calculated to afford, without incurring any of its discredit." # THE NEW YORK BANKS. The New York Banks have resolved without exception, to continue the the payment of specie for all their obligations. The Courier and Enquirer says: We were wait- ed apon yesterday afternoon by a number of gen- tlemen connected with our institutions-gentlemen whose declarations admit of no question, and whose knowledge of the state of our banks enables them to speak authoritatively who assured us that the deposites in the banks are so small, and the line of discounts reduced so low, that it is entirely in the power of the Banks in the city to continue specie payments without resorting to a farther curtail- ment of one dollar, and that THEY ARE FULLY DE- TERMINED TO CONTINUE TO MEET ALL THEIR OBLI- GATIONS IN GOLD AND SILVER, LET THE COURSE OF BANKS IN OTHER CITIES BE WHAT IT MAY. A general meeting of the officers of the different banks took place last evening, at which it was re- solved that they should continue to meet all de- mands upon them in gold and silver, and so long as they have a dollar of specie at their disposal, assist each other in carrying this resolution into ef- fect. # SUSPENSION AT FREDERICK. The Banks in Fre- derick have suspended specie payments. The spe- cie in their vaults exceeds the amount of their notes in circulation. The Frederick County Bank, a most excellent institution, is the only Banking House in Maryland that has the right, by its charter, to is- sue notes of a less denomination than five dollars. # PHILADELPHIA BANKS The Commercial Bank, which at first refused to suspend, has since come so far into the measure as to redeem nothing but its five dollar notes. The Girard Bank which had is-sued one dollar bills now redeem them in specie.-Since the receipt of the Governor's Manifesto and the Circular of the Attorney General, the Philadelphia Banks have all refused to issue notes under ten dollars. # THE BOSTON BANKS. The Banks in Boston have resolved to continue the payment of specie.-The papers all express the utmost degree of confi-dence in the ability of the Banks there to maintain themselves in their resolution to continue to redeem their notes. # WASHINGTON COUNTY BANK. At a meeting of the Board of Directors of the Washington County Bank convened on the 11th inst., in consequence of the intelligence received, relative to the suspension of specie payments by the Banks in the cities, the following resolutions were passed. Resolved, That this Board have this morning learned with deep regret from Philadelphia and Baltimore, that the Banks of those cities have been constrained from the severity of the times and the great demand for coin to be taken out of the country, to suspend payments in specie. Resolved, That in consequence of this step of the Banks in said cities, this Board acting upon the same principle of self defence which has governed them, and with a view to prevent the specie in our vaults, from being taken out of the country do therefore direct the officers of the Bank to decline payments in specie until the further order of this Board to the contrary. Resolved, That the weekly statements of the Bank exhibited to the Board yesterday, and the examination made by the Board this day shows its condition to be perfectly safe and sound, and that there is not the least danger of a depreciation in the value of its notes or stock. Resolved, That this Board entertain the hope that the present suspension will be of a short continuance and they do pledge themselves to all interest that their operations in the meantime will be conducted with a view to preserve and continue the present very wholesome condition of the institution, and that they will be prepared for resuming specie payments at the earliest period that may be adopted as expedient for the purpose. Resolved, That these resolutions be published. JOHN B DALL Pres'd.