19531. Farmers & Mechanics Bank (Shippensburg, PA)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
April 2, 1875
Location
Shippensburg, Pennsylvania (40.051, -77.520)

Metadata

Model
gpt-5-mini
Short Digest
aed3e0ae

Response Measures

None

Description

The bank suspended payment on or about April 2–3, 1875 due to large bad loans on real-estate security. Articles describe no run — depositors inconvenienced but no panic. Stockholders are individually liable and proposed a multi-year compromise to pay depositors, consistent with a suspension leading to winding up/closure rather than a simple temporary halt.

Events (1)
1. April 2, 1875 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Large loans to favored borrowers on real-estate security went bad; bank could not realize on judgments and assets were locked up, forcing suspension.
Newspaper Excerpt
The Farmers and Mechanics' Bank of Shippensburg suspended on the 2d inst.
Source
newspapers

Newspaper Articles (6)
1. April 5, 1875 Wilmington Daily Commercial Wilmington, DE
Article from Wilmington Daily Commercial, April 5, 1875

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Article Text

Bank Suspension. FARMERS' AND MECHANICS' BANK OF SHIPPENSBURG, PA. A special telegram to the Baltimore American announces the suspension of the Farmers' and Mechanics' Bank of Shippeneburg, Pa. It was a State institution and had no notes out. Its deposits are stated to be about $290,000. The stockholders are individually liable, and the depositors will ultimately lose nothing. The cause of the suspension is precisely the same that has affected 80 many other State Institutions-large loans of money to favored borrowers on real estate security. The borrowers failed to pay, and in the depressed condition of the real estate market, the bank has been able to realize nothing on the judgments obtained against the debtors and their securieties.

2. April 6, 1875 Wilmington Daily Commercial Wilmington, DE
Article from Wilmington Daily Commercial, April 6, 1875

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Article Text

Bank Suspension. FARMERS' AND MECHANICS' BANK OF SHIPPENHBURG, PA. A special telegram to the Baltimore American announces the suspension of the Farmers' and Mechanics' Bank of Shippensburg, Pa. It was a State institution and had no notes out. Its deposits are stated to be about $290,000. The stockholders are individually liable, and the depositors will ultimately lose nothing. The cause of the suspension is precisely the same that has affected so many other State Institutions-large loans of money to favored borrowers on real estate security. The borrowere failed to pay, and in the depressed condition of the real estate market, the bank has been able to realize nothing on the judgments obtained against the debtors and their securieties.

3. April 10, 1875 Martinsburg Independent Martinsburg, WV
Article from Martinsburg Independent, April 10, 1875

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Article Text

Bank Suspension. SHIPPENSBURG, PA., April 3.The Farmers and Mechanics' Bank of Shippensburg suspended payment yesterday. The liabilities are not known, but at this season of the year the amount on deposit has generally been about $200,000, and it is supposed that the bank now owes about that sum to its depositors, This bank was chartered about twenty years ago under the laws of tde State of Pennsyl vania, and up to the time of the establishment of the national banking system was run as a bank of issue.— Shortly after the close of the war its circulation was withdrawn and since then it has been conducted exclusively as a bank of deposit.By a special provision of the charter the stocknolders are individually responsible for the liabilities of the bank to the full amount of their property. This renders the depositors entirely secure, altho' they will be put to great inconvenience in being compelled to wait until the bank is ready to make distribution. There is just a possibility that by gathering up its assets the bank may be able to resume payment without winding up in this way. The cause of the suspension is precisely the same that has affected so many solvent institutions.Large loans of money to favored borrowers on real estate security. The borrowers failed to pay, and in the depressed condition of the real estate market, the bank has been able to realize nothing on the judgments obtained against the debtors and their securities. A large portion of the funds of the bank has been locked up in this way. The depositors were mostly country people, who put their money in bank in order to be ready for the 1st of April payments, which is a general day for settiing accounts and discharging debts in Pennsylvania. The deferred payments on real estate purchases nearly always fall due on the 1st of April. The suspension of the bank infficts a great hardship on this class of debtors. A great many of the country people are in town, standing on the street corners in little groups, discussing the suspension, but there is no nnusual excitement.

4. April 14, 1875 The Somerset Herald Somerset, PA
Article from The Somerset Herald, April 14, 1875

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Article Text

THE Farmers and Mechanics' Bank, of Shippensburg, Pa., suspended on the 2d inst. We are not advised in regard to the position of the institution, but we hear it intimated that the capital stock, amounting to about seventy thousand dollars, will be entirely sunk. If the result is no worse than this, the depositors will not suffer. The stockholders, it is stated, are individnally liable for the deposits. The bank was a State institution, without circulation.

5. April 15, 1875 The Jeffersonian Stroudsburg, PA
Article from The Jeffersonian, April 15, 1875

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Article Text

The Farmers and Mechanics' bank of Shippensburgsuspended payment, last week. Its liabilities are understood to be about $200,000. It was chartered twenty years ago, under the State laws, and was conducted as a bank of issue until the national banking laws went into effect, since which time it has been conducted as a bank of deposit only. The stockholders are individually liable, and depositors will lose nothing. Large loans to favored borrowers on real estate security caused the suspension. There is a possibility that the concern will be able to settle in full and resume business.

6. April 21, 1875 Juniata Sentinel and Republican Mifflintown, PA
Article from Juniata Sentinel and Republican, April 21, 1875

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Article Text

ON the 2nd of April the Farmers' and Mechanics' Bank of Shippensturg suspended. A committee of depositors waited on the stockholders of the matitution a few days ago, and received this as their proposed basis of settlement: The stockholders of the Farmers' and Mechanics' Bank of Shippensburg propose to compromise with the depositors of said bank on the following basis, to wit: All deposits to bear interest at the rate of five per cent. per annum, the first payment of interest to be made April 1st, 1876, and payable semi-annually thereafter. The principal to be paid as follows: 25 per cent. on the first day of April, 1876 ; 25 per cent. on the first day of April, 1877 ; 25 per cent. on the first day of April, 1878 ; 25 per cent. on the first day of April, 1879. JOAB MARTIN, GEORGE CLEVER, HENRY SNYDER, DAVID HAYES, Committee of Stockholders. A few days will determine whether the proposal is acceptable. The liabilities of the bank are $184,654.46; the assets are $168,323.52.