Banks in New Orleans - New Orleans, LA

Bank Information

Episode Type: Run → Suspension → Reopening
Bank Type: state
Start Date: October 1, 1857*
Location: New Orleans, Louisiana (29.955, -90.075)

Metadata

Model: gpt-5-mini
Short Digest: 37f56da6

Response Measures

Accommodated withdrawals, Full suspension

Other: Multiple New Orleans banks suspended specie payments during the 1857 panic; later resumed specie payments in December 1857.

Description

Newspapers describe runs on multiple New Orleans banks in mid-October 1857, many banks closed/suspended payments, and by December 1857 the banks had resumed specie payments. The entry refers to banks collectively rather than a single institution, so bank_name_unsure is true.

Events (3)

1. October 1, 1857* Suspension

Cause: Macro News
Cause Details: Banks in New Orleans suspended specie payments and closed doors as part of the wider panic and suspension by major commercial banks (New York, Boston, Philadelphia, Charleston and New Orleans).
Newspaper Excerpt: Many of them bent to the storm and closed their doors.
Source: newspapers

2. October 16, 1857 Run

Cause: Macro News
Cause Details: Panic of 1857: broad suspension of specie payments and general financial panic triggered widespread runs in major commercial centers including New Orleans.
Measures: Banks paid out specie and redeemed notes where possible (e.g., Citizen's Bank paid out about $150,000 during the rush).
Newspaper Excerpt: In New Orleans great excitement prevailed yesterday and the day before, and there was a run upon all the banks.
Source: newspapers

3. December 14, 1857 Reopening

Newspaper Excerpt: The banks in that city ... have again resumed. ... They resumed several weeks ago. (Dec. 1857 reports of resumption of specie payments.)
Source: newspapers

Newspaper Articles (6)

1. October 21, 1857 Nashville Union and American Nashville, TN

Article from Nashville Union and American, October 21, 1857

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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

2. October 24, 1857 Grant County Herald Lancaster, WI

Article from Grant County Herald, October 24, 1857

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Article Text

# The Crisis Over. The crisis is over. We are entering upon a period of dullness. The panic has subsided, and there are no exciting incidents in the history of yesterday to chronicle. Business moves on sluggishly. But few failures are announced, though there are many renewals of notes upon extended time. Money is still difficult to obtain at the highest rates of interest. Stocks are advancing, and more business in them is done. Specie commands but from ½ to 1 per cent premium. Trade in dry goods is prostrated; the wholesale dealers are selling at retail, and the retailers find few customers. The little that is doing in any branch of business is for cash. The banks are perfecting the details of the new arrangement at the Clearing House which will soon be made, it is believed, are satisfactory to all parties. Accounts from abroad are, for the most part not cheering. A deeper gloom seems to have come upon Philadelphia and Baltimore, and other cities seem to be whistling to keep their courage up. More bank suspensions are reported. In New Orleans great excitement prevailed yesterday and the day before, and there was a run upon all the banks. Many of them bent to the storm and closed their doors. In St. Louis there was also a serious run yesterday. [New York Tribune, October 16th.

3. November 4, 1857 Semi-Weekly Standard Raleigh, NC

Article from Semi-Weekly Standard, November 4, 1857

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Article Text

THE BANK PANIC AT NEW ORLEANS.-As the telegraph informed us several days ago, when the sis" reached New Orleans and the banks commenced crisuspending, there was intense excitement, which has since died away. The Crescent, describing the scene says: on the occasion of the run on the Citizen's Bank, When the door opened a scene of the wildest confusion followed. The crowd acted like Bediam broke loose-scrambling, fighting, shouting, losing hats and coat-tails, and densely jamming the interior of the bank in an instant. The bank officers, fin. ding themselves besieged by a secured the vaults and mounted the crowd from scrambling over. tried to clamber in at the windows but were hurled back. Intelligence of this being sent to the chief of police, that officer dispatched all his specials to the scene. They arrived, fought their way through the crowd to the counter, and then turned against them. They got an iron door-bar, with which they faced the crowd, having to fight. freely with their fists at the belligerent. same time, some of the besiegers being highly "Finally the mayor had to send down sixty additional policemen, who managed to preserve something like order, when the work of redeeming the notes commenced. For several hours was the rush kept up, and the panorama of faces-men of all class. es and colors, women ditto, and boys-was variegated in the extreme. Anxiety, fright, grief, and in some cases the wildest despair, were visible in the faces which streamed into the bank. We never witnessed such a spectacle. Everybody seemed to think he or she was just a little too late. By one o'clock the rush had subsided considerably, and when the bank closed at three-having paid ont about erate. $150,000-the calls were comparatively modOne man with $120 in silver, purchased of his acquaintances in the fourth district, $380 in notes on the Louisiana and Citizens' Banks. Another bought $400 on the Louisiana with $50 in specie, and $200 on the Citizens' with $18. Another man bought a check on James Robb for $37 with $3 in cash Many others permitted themselves, in the excitement, to be swindled to the same extent.-One man in the crowd had his coat-tail, containing $1,000, cut off by some wary sharper, and another had his pocket picked of $600.

4. December 10, 1857 Fayetteville Observer Fayetteville, TN

Article from Fayetteville Observer, December 10, 1857

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FAYETTEVILLE, TENN: Thursday Morning, December 10,1857 Resumption of Specie Payments. A dispatch from New Orleans, says the Baltimore Sun, announces that the banks in that city, which sus. pended specie payments during the late panic, have again resumed. This is agreeable intelligence, and We hope to see our own and other supended banks adopt the same course at an early day. The Banks of Boston, it is said, are prepared to resume. Specie is rapidly pouring into New York, and a letter from that city, dated Tuesday evening, says: 'Our city banks are now S0 strong in their specie reserves ($20,000,000) that they are abundantly able to resume specie payments. Some of the prominent bank men in the street to-day said they are willing to take that step as soon as the country banks are ready to 'second the motion.' In point of fact, specie payments at the counters of the principal banks are already resumed.Gold is S0 plenty that the suspension is only nominal, "While these cheering signs are visible in financial circles, there is much to encourage a hope of better times elsewhere. Many of the up-town shops that were panic-struck a few weeks since are taking back some of their discharged hands, and preparing to resume business. The grading of the Central Park is going to give work to 1,000 laborers Dearly all winter, and it is expected that by the 1st of January 500 more will find something to do on the new Post Office, to be built at the lower end of the Park." The New York Journal of Commerce estimates that the specie in the banks of that city next week will equal $22,000,000 - a larger amount by several millions than was ever in the banks before.

5. December 14, 1857 Evening Star Washington, DC

Article from Evening Star, December 14, 1857

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# RESUMPTION OF SPECIE PAYMENTS The Banks of the city of New York have unanimously resolved to resume specie payments for all their liabilities, the resumption to commence to day. It is said that their condition was never so strong as at present. Having twenty-six millions of dollars in their vaults, they will sustain the resumption with ease. In the meeting which resolved on the resumption thirty-eight of the city banks were represented. Eight of the un-represented banks are now understood to be also ready to fall into line. It is now just two months since the suspension. The Banks of Albany have also resolved to resume specie payments to-day; also, the Banks in Boston. The Banks of New England and other States, will, no doubt, soon follow example. On the 31st of October the Banks in New Orleans had an actual coin basis of nearly four million dollars. They now have eight millions. They resumed several weeks ago.

6. January 23, 1858 Nashville Union and American Nashville, TN

Article from Nashville Union and American, January 23, 1858

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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