Article Text
The Banks in Charleston. CHARLESTON, Oct. 12.-The Southwestern Railroad Bank and the Bank of South Carolina suspended this morning. There is a run on all the banks.
19920. Banks in Charleston (Charleston, SC)
Bank Information
- Episode Type
- Run → Suspension → Unsure
- Bank Type
- state
- Start Date
- October 12, 1857
- Location
- Charleston, South Carolina (32.777, -79.931)
Metadata
- Model
- gpt-5-mini
- Short Digest
17092907
Response Measures
Full suspension
Other: Multiple individual banks in Charleston suspended; episode concerns plural banks, not a single named institution.
Description
Article (Oct 12, 1857) reports a run on all banks in Charleston and that the Southwestern Railroad Bank and the Bank of South Carolina suspended the same morning. This is part of the wider 1857 panic (systemic). The articles do not state whether these specific Charleston banks later reopened, so I mark the outcome as unsure. Bank name given is plural in the prompt and the articles refer to multiple Charleston banks, so bank_name_unsure is true.
Events (2)
1.
October 12, 1857
Run
- Cause
- Macro News
- Cause Details
- Widespread panic/suspension of banks during the 1857 financial disturbance leading to heavy withdrawals across Charleston banks.
- Newspaper Excerpt
- There is a run on all the banks.
- Source
- newspapers
2.
October 12, 1857
Suspension
- Cause
- Macro News
- Cause Details
- Suspensions announced the same morning as runs amid the broader 1857 banking crisis; part of general suspensions at major commercial ports mentioned in other articles as well.
- Newspaper Excerpt
- The Southwestern Railroad Bank and the Bank of South Carolina suspended this morning.
- Source
- newspapers
Newspaper Articles (3)
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Article Text
COMMUNICATED WHAT SHALL BE DONE? In the present deranged state of the currency, resulting from the suspension of specie payments by the Banks generally, and particularly in our own S ate, we often hear the question asked: What shall be done?" True financial policy consists in adopting our me isures to our means and to the circumstances with which we are surrounded. The suspension of the Banks in New York, Boston, Philadelphia, Charleston and New Orleans, left no alternative to the Bank of Tennessee, consistent with her duty to the people and the State, but to suspend also. No one doubts her ability to resume whenever the Banks at the large commercial ports shall return to specie payments. Then let the Legislature sanction the suspension for the present, but prohibit the Bank from charging more than half to one per cent. in the sale of exchange on any place in the United States. This would prevent exhorbitant rates being demanded for exchange, during the period of suspension and compel them to resume cash payments with the Banks of our sister States. The Bank should be required to pay specie on all its notes under five dollars, and, after resumption, to issue no note that is not payable at the place of issue. Extend the benefits of the act to all the Banks in the State, Stock as well as Free. Provided that no Bank shall be entitled to any of the provisions of the act, that does not pay to its depositors on demand in current funds, (such as are received by the Bank of Tennessre,) and make satisfactory arrangement with that Bank for the reception, and short periodical redemption of its notes. No difficulty, it is confidently believed, would be experienced by the solvent Stock and Free Banks, im making such arrangement. Of the Union and Planters' Banks it is useless to speak. Their circulation is small and they are in strong positions. In the daily exchanges they are usually the creditor Banks. The Banks of smaller capital might make the arrange ment by a deposit of State Bonds or other collaterals by the discount of a portion of their Bills of Exchange, of which it is said they all have plenty, or by the deposit of a portion of their coin. The ability of the suspended Banks would thus be tested. Uniformity in the currency of the State, in ordinary transactions, and with the Banks produced, & large amount of Bank notes now uncurrent would enter into immediate circulation. Confidence, to a great extent, would be restored, and pecuniary embarrassment alleviated. The Banks that failed to pay depositors, or make the required arrangement with the Bank of Tennessee, in - days (15 or 20 would be sufficient,) should be put into liquidation. No time should be fixed by the Legislature for resumption. Desirable as is that event, it must depend upon circumstances beyond the limits or control of the State, which no man now can foresee. The produce of the country must besent to market, and the indebtedness, to a considerable extent, not only in this, but in other States, paid off before that should be attempted, or can be safely accom plished. The provision in regard to the sale of exchange will compel them to pay specie when the Banks of the other States resume. The right to Legislate in regard to all the Banks, or to wind them up, should be expressly reserved to any subsequent Legislature. This would give time for discussion and reflection, and for 8 thorough reformation of the Banking sysA MERCHANT. tem of the country. TAINSON
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Article Text
COMMUNICATED. # THE BANK OF TENNESSEE AND ITS MANAGEMENT. As there has been much said against the Bank of Tennessee and its present able and distinguished head, and little or nothing in favor of them, something on that subject, it is hoped, may not be considered improper. The suspension of specie payments by that bank has been condemned by some. To this it may be replied, that most of the best managed and soundest banks int he United States have suspended-banks over which men of the highest grade of mercantile integrity, honor, and punctuality, preside; men whose whole lives, public and private, like that of the head of the State Bank, are examples of justice and good faith to all men. Every well-informed man in the community knows that the suspension of cash payments by the State Bank was a matter of indispensable necessity, resulting from surrounding circumstances, and not a matter of choice, with a view to make a profit thereby to the State, by the injury to the holders of its million and a half of notes. A suspension by the State Bank, singly and alone, would, in most conceivable cases, have brought disgrace on its managers; but the State Bank is only one of 400 in the United States, the largest portion of which, and all at the great commercial centres, New York, Philadelphia, New Orleans, &c., have suspended. It is not necessary here to attempt an elucidation of the causes which have led to this result. A succession ef good crops and the high prices of our staples, Australian and California gold, and a general spirit of speculation and extravagance, engendered by a variety of causes, and aggravated by multiplication of banks, and by injudicious and indiscriminate loans, and the arbitrary displacement of masses of specie by the Eastern wars, must be regarded as amongst the most prominent causes which have produced the present difficulties throughout the whole commercial world. Under the operation of the general spirit of the times, the Legislature of Tennessee (an interior agricultural State, the trade of which consists almost entirely of the purchase of dry goods, groceries, &c., and the sale of raw produce) has put in operation upwards of forty banks, competing with each other for business, and pushing their notes into circulation-the pittance of specie required by the statutes not being sufficient, even if on hand, to meet an unfavorable state of exchanges, much less a panic. The banks at the great commercial centres, New York, Charleston, Savannah, New Orleans, and Philadelphia, in this state of things, had suspended. What was the State Bank to do under such circumstances? It was bound to pay near $100,000 in gold in the city of New York, on the first day of January last, either directly or contingently. A previous legislature had authorised a sale of the State stock in the Union and Planters' Bank, withs a view to increase the capital of the State Bank and to pay a debt of $125,000, due on matured bonds. That stock was not sold and the bank had to meet the debt out of its profits. It was paid. It had to pay interest on State bonds ($150,000.) It did pay it. It was responsible on endorsed bonds of railroad companies. It had to be in readiness to meet that interest to save the State from dishonor in the contingency of a failure of any railroad to meet the demand. One company did fail and the bank paid $12,000, and did save that road and the State from dishonor. The bank furnished gold in the city of New York for the whole of the railroad payments in lieu of State paper. All these liabilities, direct or contingent, it was bound to be prepared to meet in discharge of duties imposed on it by previous legislatures. To meet these and other liabilities, the bank had $2,000,000 in bills falling due at the commercial centres in suspended banks. The door by which it was expected to obtain gold was closed, and the only resource left was to collect in gold a portion of the notes discounted for the citizens of Tennessee, to wit: $1,600,000, to meet the metallic demand in New York and elsewhere. Just so certain as the bank had continued to pay specie in the midst of the circumstances by which it was surrounded, just so certain would every dollar of its cash have been drawn from it by brokers, as an article of traffic, shipped and sold where banks had suspended, and where it would have commanded a sufficient premium to make its shipment a profitable speculation; and just so certain would the bank have been left without the means of doing business, the people in some measure without a circulating medium, the State dishonored, and the president of the bank declared unfit for the position he occupies. Although suspended, it has paid out in gold $200,000 to those who needed it, yet did not obtain it as an article of traffic. It has furnished a large amount of exchange at one per cent, when it could at the market rates have exacted larger amounts. It has discharged all the obligations imposed on it by the State. It has been enabled to sustain its circulation, so as (like the Bank of England) to lighten the blow on the debtor interest to some extent, inflicted by a sudden reduction of the currency from, say $3,000,000 to $4,000,000; and its notes will now pay all domestic debts at par, and purchase all property, real or personal, at cash prices. It may be asked, did not the Bank of Tennessee contribute, by its management, to the suspension which now exists? To this, it is replied, that there is nothing to be found in the conduct of the bank to sustain in the slightest degree such a charge. It is evident from the past history of the bank for the four years under which it has been under the direction of its present vigilant directory, and its present condition, that there has been a consistent effort to avoid such an increase of its circulation and such injudicious loans, not based on the produce of the country, as would lead to imprudent and heedless speculation and indebtedness. It is well known to the author of this communication, as well as to many other persons, that the sagacious President of this bank has been predicting the present state of things, and that he has held the bank in a condition to meet the crisis which has come, as well as it could readily be done consistently with the duty imposed on it of supplying the community with circulation and answering in other respects the purposes of its creation. The amount of its circulation for the last four years, since Colonel Johnson has been at its head, is as follows: irculation 1st July. 1854 $2.471.830