North American Trust Company (New York, NY)

Episode Information

Episode Type
Suspension → Closure
Start Date
February 10, 1844
Location
New York, New York (40.714, -74.006)
Bank Type
trust

Metadata

Episode ID
Bank ID
City ID
360975772
Model
gpt-5-mini
Short Digest

Notes

Failure/receivership and long litigation/distribution of assets; no reopening reported.

Events (5)
1. February 10, 1844 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Bank became insolvent after speculative investments and improper trusts; directors' illegal transactions and loss of capital.
Newspaper Excerpt
Mr. Leavitt, the receiver of the broken North American Trust Company
Source
newspapers
2. February 10, 1844 Receivership
Newspaper Excerpt
reported by Mr. Leavitt, the receiver of the broken North American Trust Company - the general receiver, Mr. Leavitt
Source
newspapers
3. December 19, 1845 Other
Newspaper Excerpt
meeting of the stockholders of the North American Trust Company ... providing for the appointment of a committee to collect funds to enable Mr. Leavitt, the general receiver, to contest the validity of these various trusts
Source
newspapers
4. January 3, 1854 Other
Newspaper Excerpt
decision dismissing the Receiver's bill was adverse ... attempted to invalidate large portion of the securities of the old North American Trust Company
Source
newspapers
5. November 25, 1857 Other
Newspaper Excerpt
Mr. Palmer paid over to the agents of the claimants $1,321,485 30; payment made by the special Receiver of the North American Trust Company
Source
newspapers

Newspaper Articles (9)
1. February 10, 1844 The New York Herald New York, NY
Article from The New York Herald, February 10, 1844

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# Astounding Financial Development-The North American Trust Company. The Journal of Commerce of yesterday contained a very extraordinary report or statement made by Mr. Leavitt, the receiver of the broken North American Trust Company, a statement, too, that contains more astounding developments as to the morals and wisdom of Wall street financiers, than anything that has yet come before the public. In another part of this day's paper, we give the material portions of this extraordinary document to our readers; and we particularly call their attention to the facts which are there recorded by authority. We cannot, however, give this document to our readers without accompanying it with some few remarks applicable to its character and its developments. It will be perceived that the men concerned in getting up this banking company, or trust company, or bursting company rather, are those characters pretending to possess morality, virtue, intelligence, legal acquirements, and all those qualities of heart and head that constitute a respectable, a highly respectable individual in the highest degrees of our society. Some of these men, co-managers of this institution, assume the highest rank in society, both in this country and in England, for themselves and all connected with them, and look down with a degree of hauteur and superciliousness upon the great mass of the community, who earn their honest bread by honest labor. Yet look at their conduct! Look at their morality! Look at their principles, as developed in this astounding and atrocious report. Here are several millions of property, belonging to the industrious farmers, agriculturalists, small traders, widows and orphans, of this and neighboring communities, entrusted to their hands, and yet, in the short period of two or three years, we see the whole of that property attempted to be thrown away into the hands of 'speculators in other countries, and in other communities, without the slightest remorse, or the slightest feeling, for the injury they inflict upon those who confided their property to such care. Yet these are the men who call themselves respectable! These are the great financiers-the dignified Wall street characters-the moral members of moral churches-the leading characters in society-the men who appear at opera houses, and play houses, and fashionable soirées, and balls-the very men who occupy the first posts in the government, and perhaps may be managing the affairs of some department of public matters with the same inefficiency, folly, and absurdity, as they managed this Trust Company. What becomes of respectability, or what is meant by respectability, when we see such things pass before us, and not a throb of indignation rise up in the mind or heart of any man in the community? Why, almost the very stones in the streets cry out against such villainy, such folly and absurdity, and such roguery, as here is pictured; and if the fire from heaven were to fall down and consume both the just and the unjust, as it did in the case of Sodom and Gomorrah, it would be no more than doing justice to this wicked and unprincipled, but respectable, moral, religious, and refined generation.

2. February 12, 1844 The New York Herald New York, NY
Article from The New York Herald, February 12, 1844

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A HINT TO THE GRAND JURY.-If there be a Grand Jury in session at the present time, entertainingany regard for the morals of this city, for justice between man and man, is it not their duty to read over the report of Mr. Leavitt, the receiver in the case of the North American Trust Company-to read it over carefully and see what they ought to do in the premises. Here are several millions of property belonging to the widows and orphans, the farmers, the small annuitants and other persons in the middling and lower classes of society, utterly destroyed and squandered, conveyed away and wasted in the most reckless and shameless manner. It remains for the Grand Jury to say whether there is anything criminal in this system of wholesale plunder and profligacy. We think it is time for them to take up these matters. Here development after development, each more astounding and more atrocious than the others, comes before us, and the character, the reputation of this great commercial city is covered with disgrace It is absolutely necessary that now, at this important crisis in our commercial history, some authoritative ac. tion should be taken for the purpose of punishing the guilty, and preventing the repetition of such conduct, and redeeming the reputation of the city. Let some line of demarcation at once be drawn between the sheep and the goat-the honest man and the rogue and swindler. Come, come, it is time.

3. October 8, 1844 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, October 8, 1844

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Vice Chancellor's Court. Before Hon. WM. T. McCoUN. Vice Chancellor. Decisions. NORTH AMERICAN TRUST COMPANY.-Lewis Curtis, Richard M. Blatchford and John L Graham. trustees, &c. VA David Leavilt, receiver. and others - The complainants filed a bill in relation to certain bonds and mortgages held by the North American Trust Comp any. and n cro bill was also filed by Mr. Leavitt, receiver It was determined. however. subsequently. to consolidate the whole cases into one. so as to avoid litigation, and n stipulation was entered into that Mr. John 1. Paliner should be appointed special receiver in re Intion to the bonds and mortgages in suit. so as to be able to convey title. and an order was made to that effect in 812. Motion was made to amend the bill, &c. Motion denied with costs. David Leavett receiver, &c. C8 Rich'd M. Blatchford, John L. Graham. Lewis Curtis. and others.-In relation to the bill and cross bill. on which the motion IN !nade to have a receiver appointed for all the property which has coixe into the hands of the trustees under the million and the first half million trusts. The Court. as in the case decided some months since. does not consider it necessary to give an opinion upon the general merits of the controversy. That must be lefttill at er the subject has been brought to a final hearing : and although the decision of is motion in relation to the appointment of a re. ceiver may touch somewhat upon the ments of the case, the views expressed are not to be considered final. as some new light may be thrown upon the case whi h will change its aspect. The object of the original bi I is for a receiver, and of the cross-bill is to set nside the trust. to overthrow the whole of the transaction out of which the trusts have arisen, and entitle Mr. Leavitt to take possession, as general receiver. of the property. consisting of bonds and mortgages of individuals executed to the association of the Trust and Banking Company. amount. ing. altogether. to nearly $2,000,000. A variety of objections to the validity of the trusts areset forth, but it is only necessary to refer to one or two of them. As to a portion, at least. of the Trust property. the parties have consented that Mr. Palmer should be appointed special receiver of certain bonds and mort. gages in suit at the time the order of 1842 was made, and they have been passed over to him in consequence of that stipulation and order. I do not see why they should be separated-why one part of the bonds and mortgages should be placed in the hands of the special receiver. and the remwinder kept in the hands of the Trustees, instead of being kept together, so that when the case has been di posed of they may be settled. One objection to the Trustees is, that the Boads of the Company out of which thetrusts haveari ea we Caltogether unauthor zed by law and invalid. and 10 validity could be given to the trusts in. asmuch as they have grown out of transactions which the bank had no right to go into. My opinion IS. after looking into the law establishing the bank that the objection is well- founded. The company was formed under the law of 1838 After having a large amount of capital paid in by individuals in the way of bonds and mortgages in payment of their shares in the concern, the company commenced buying state stocks. and bought to the extent of 5 or 6 millions in 1831. The purchases were not made for the purpose of deposit ing with the Comp troller as security for its issues. but for the purpose of speculation. In 1840 they became embarrassed, made an arrangement by which to send bonds to the house of Palmer. McKellop & Dent. 10 London. secured by bonds and mortgages now in question, which they placed in trust in the hand- of Mesars. Graham. Curt S & Blatchford, and on which security the London house accepted their bills, the Company already owing that house £700,000. The stockholders complain that the of ficers of the bank had DO right to make such trusts. or so dis pose of their bonds and montg ges, and contend that the whole transaction is void. It is certainly proper. the Vice Chanceller said. that the officers of a Company should be kept within the line of its charter. There is no doubt but Palmer, McKillop. and Dent gaveth money. supposing the security to be valid; but there is no reason. at any rate, why the whole of the assets of an institution should be given to certain faverite creditors to the 11 jury of the general creditors: and P. M. & D. have no right claim more than other an-1 previous bona tide credi ors. n hether the bend. sen: to them. and the trusts created in consequence, were not wholey invalid must be left for decision on the full bearing of the case. In the meantime order will be made that the Trustees transfer and deliver over to Mr Palmer special receiver, the whole of the bonds and mortgages. and other securities in th IF possession. to be disposed of by him. and the proceeds retained to abide the is. sue Order accordingly. Perre Van Cortlandt and others vs. Water Commixioners - Application for the appointment of a new apprais. er, &c. Granted.

4. December 19, 1845 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, December 19, 1845

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Total 2,505,151 lbs. At the meeting of the stockholders of the North American Trust Company. at the City Hotel, a series of resolutions was adopted condemnatory of the alleged illegal transactions of the directors in departing from the legitimate business of banking, for which the institution was incorporated. to speculate in stocks, cotton. &c. &c.; providing for the appointment of R committee to collect funds to enable Mr. Leavitt, the general receiver, to contest the validity of these various trusts, which swallowed up all the capital of the bank, while at the greatest point of circulation the average of notes was not exceeding $60,000.

5. April 30, 1847 The New York Herald New York, NY
Article from The New York Herald, April 30, 1847

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The demand for foreign exchange has not been so active during the past two days as was anticipated the rates have not been so firm, and the probability is that a decline will be submitted to before the close of the market for the packet. There is a largo supply of first rate sterling bills in the market, but as there is no demand of consequence from importers, and specie operators having partially abandoned that business for the present, we do not see what can sustain existing quotations. The Cambria brought back some bills protested for non-acceptance, drawn upon shipments of breadstuffs from this port. It appears that the bills were drawn upon a house in Hamburg, and sent out by the steamer from Beston, and shipments made from this port, the bills of lading for which were forwarded to reach Hamburg In time to protect the bills, but on account of some difficulty in the transportation of the mails between this city and Boston, the bag containing the bills of lading referred to, failed to reach the steamer in time, and consequently the bills of exchange were protested for non-acceptance, and returned by the Cambria. The only difficulty experienced is the delay, and the effect of the fact upon public confidence. Domestic Exchange continues very inactive, and our quoted rates cannot be considered other than nominal. A movement is on foot to induce the English creditors of the North American Trust Company, to become purchasers of stock to an amount sufficient to induce them to discontinue further litigation-the property in the hands of the receiver, now amounting to one and a half million of dollars, to be rateably divided. The property at present yields an income of about $40,000 per annum-a proportion of it being unproductive; but, in proper ownership, could be made to yield an annual interest of $100,000. Letters will be forwarded by the steamer of the 1st proximo, to London, inviting a consideration on the part of the creditors resident there. No claim has, thus far, been admitted by Mr. David Leavitt, that has not been fully proved to be a legal one. The whole amount of claims, it is believed, that can be legally established, will not amount to over two hundred thousand dollars. If the crediters would harmonise with the stockholders. more than fifty cents of their respective interest could be divided. An amicable arrangement could, doubtlessly, be effected, but for the manifest interest of lawyers here. to keep alive hopes of results favorable to creditors, which they know can never be realised. If We annex our usual table of quotations for the prin eipal State and other stocks used for investment :PRICES OF STOCKS IN THE NEW YORK MARKET.

6. September 28, 1849 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, September 28, 1849

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Law Courts. SUPREME COURT-General Term-John - J. Palmer Re ceicer of the North American Trust Company VB. Samuel R. Smith and others.-Bill to foreclose a mortgage for $8,000, but, with interest, we believe, amounts to nearly $15,000. on property at Staten Island, mortgaged to the Company. The claim is resisted, principally on the ground of invalidity on the part of the Company, kc.-Argument was heard, Mr. Barney appearing for the receiver, and Mr. Van Waggenen opposed

7. January 3, 1854 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, January 3, 1854

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A decision was made by the Supreme Court on SatFurday, in the case of Leavitt, Receiver of the North American Trust Company, against J. Horsley Palmer and others. The object of the action was to invalidate a large portion of the securities of the old North American Trust Company-some $2,000,000 value. The decision, dismissing the Receiver's bill, was adverse to the object above stated.

8. November 25, 1857 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, November 25, 1857

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very wide in several instances: Ask'd. Bid. Ask'd. Bid. 06 88 96 90 Am. Exchange New-York 60 50 Chatbaus 120 Manhattan 117h 98 95 Republic Merchants' 78 -lanover 772 96 Mechanics' 95 05 98 Metropolitan Union I 88 da ket 105 City 87 75 (assau 116 Fuiton 95 90 Commercial Ex 95 94 National 87 95 Continental 120 110 Leather 91 95 94 top & Traders' Commerce 85 82 65 Park 50 Ocean 45 40 Artizane' 100 Mercantile The Exchange market for the steamer has been irregular but strong, with & fair amount of business doing. There has been much care exhibited in se lecting bills, and some parties have preferred to ship coin, even at higher cost. Sterling has ranged from 105 to 1081 for document and commercial bills, and banks' and bankers' signatures have sold at 1081 @ 1091. Of late, good commercial bills, with bills of lading attached, have taken higher rank in the opinion of remitters than heretofore. Southern bank bills with city indorsements sold at 108 a 1082, and thirty day Government bills at 1101. Francs are 5 30 @5 188. Freights continue dull and nominal. The engigements to Liverpool are 180 bales Cotton at 5-32d 60 tuns Oil Cake at 20s. To Rotterdam, 1,000 bbls. Rosia at 3s. 6d. A schooner from St. Mary's River to Port Spain or Trinidad, with Lumber, at $11. The business of the Sub. Treasury was: Receipts, $73,128 42-$73,000 from Customs; Payments, $74,550 68; Balance, $4,816,169 23. The gold shipment by the steamer to-morrow promises to be a large one. As many small lots go direct with ut passiog through the hands of the ballion brokers, it is difficult to ascertain the exact amount. It will probably reach $1,500,000 from the usual shippers, and will include $200,000 on account of the payment made to-day by the special Receiver of the North American Trust Company to the agent of Messrs Palmer, McKitlop, Dent & Co. The effect of the receipt in England of this million and & half of dollars and of the six hundred thousand dollars by the Persia, cannot but be very favorable. It will show that we both can and will pay & portion of our debt at least to Europe. A large portion of the shipment tomorrow is in sovereigns, which are selling at $1 86 a $1 87. Gold is fu} premium, and the demand has been freely met.

9. November 25, 1857 New-York Daily Tribune New York, NY
Article from New-York Daily Tribune, November 25, 1857

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The bus ness of the Clearing House to-day was $13,352,000. Two of the State Banks-the Addison Bank and the Elmira Bank, which have been unable or nowilling to stand up to the Metropolitan Bank arrangement, are to day thrown out at that institution. Some eight or ten others will probably fall into the same category within & week or two. The late decision of the Court of Appeals in the 0830 of the trusts of the North American Trust Company confirming their legality, bas perated to distribute the large amount of funds which have been for the last fif teen years accumulating in the handsof the Special Receiver, to the proper owners. The decision of the Court and the receipt of the funds by the bondholders will go far to do away with the unfaverable impression in regard to American bonesty caused by the decision in the case of the Drg Dock Bank and other decisions of like character, which have operated to swindle European capitalists out of their money. Mr. John J. Paimer was appointed, we think, in 1843, Special Receiver of what is C& led "the million trust" and "the first half million trust." These trusts were formed to secure certain bondholders and the securities under them consisted mainly, if not entirely of bonds and mortgages and real estate. The question as to the le. gality of the trusts whether the securities should apply specially to the bonds named in them or to the aggregate liabi of the Company, has been in lit gation since the appointment of Mr. Palmer until t:e decision of the Court alluded to. Judgment under that decision was taken on the 16:h inst., and to-day Mr. Palmer paid over to the agents of the claimants $1,321,485 30. The funds, 88 collected by Mr. Palmer have been deposited with the New-York Life and Trust Company, who have been preparing for some th B to make this lirge payment, and have withdrawa money 80 gradually from the street 88 to cause no inconvenience. A large proportion of the payments from these trusts is on foreign account. The negotiation of the Million Loan have been mainly with Messrs. Palmer, McKillop, Dent & Co. of Londor. A portion of the money, we understand, will be invested here in stocks, &3, but $200,000. goes forward to-morrow by the steamer to Messrs. P., McK, Dent & Co. The payment was made in ore check by the Truet Company on the Bank of America, to the order of J.J. Palmer, Special Receiver. The disbursement 6-11 account of the Million Trust was $800,717 76 Of which there was to Mr Chas Ang Davis, as agent of Measure Palmer, MeKiliop Dent $341 815.00 & Co, on account of 499 bonds sold 258,345.00 On account of 377 bonds as collateral To the agent of Mr Jae. Halford's estate 16,40 00 Returned to the Trust for certain pur184217 76 poses 800,717 76 The disbursement on account of the Half Million $519,767 54 Trust was Of which there was paid to Mr. Davis as agent of Measrs P., McK, Dent & Co, on bonds as col. $190,800 € 00 lateral To Mr. R. M. Blatchford as agent of the 143,100.00 Guard Bank, Philadelphia Also as agent of Measrs. Morrisons of 148,100 00 London Returned to the Trust for certain pur42,767 54 poses 519,767 5,