7669. Louisiana State Bank (New Orleans, LA)

Bank Information

Episode Type
Run → Suspension → Unsure
Bank Type
state
Start Date
May 31, 1842
Location
New Orleans, Louisiana (29.955, -90.075)

Metadata

Model
gpt-5-mini
Short Digest
d770ebab

Response Measures

Partial suspension

Other: Several banks paid out specie while others suspended; disagreements among banks cited as cause.

Description

Multiple contemporary articles report a heavy run in New Orleans (end of May 1842) that led the Louisiana State Bank to suspend specie payments until Dec. 5. Sources attribute the trigger to interbank disagreements/jealousy and loss of confidence following other banks' actions. There is no clear evidence in the provided clippings that the bank permanently closed or later reopened, so I classify this as run -> suspension with outcome uncertain.

Events (2)
1. May 31, 1842 Run
Cause
Local Banks
Cause Details
Panic and loss of confidence spreading among New Orleans banks after disagreements in policy and suspensions of other city banks; interbank jealousy cited as immediate trigger.
Measures
Paid out specie during the run where possible; subsequently suspended specie payments (see suspension event).
Newspaper Excerpt
There was a run made on the Citizens' Bank yesterday. About 12 o'clock the crowd increased and commenced drawing specie from the State Bank and the Consolidated Bank.
Source
newspapers
2. May 31, 1842 Suspension
Cause
Local Banks
Cause Details
Unable to meet heavy withdrawals after the run; suspension explicitly announced until Dec. 5 (per article).
Newspaper Excerpt
On the 31st May, the Citizens' Bank and the Louisiana State Bank announced their intention to suspend specie payments until the 5th of December next.
Source
newspapers

Newspaper Articles (5)
1. June 10, 1842 Holly Springs Gazette Holly Springs, MS
Article from Holly Springs Gazette, June 10, 1842

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Article Text

NE 10, 1842. VOLUME 1---NUMBER 46. From the Kennebeck Journal. THE Banks.-On Sunday morning we announced the PASS ROUND unanimous opinion of the Banks, with one solitary exception, to resume specie payments yesterday, and even that bank had The true Whig, published at Washington, reminds its not given a direct negative to the question of recumption-she readers and the public that in the two years previous to Gen. was merely not represented at the meeting, at which it was Jackson's war on our currency system, the number of tanks agreed ou. We hailed the announcement as le commencecreated was 22, with a capital of $8,000,0000: that in the ment of a new and a better era; we thought it would be the next two years the number of banks created was 268, with signal for the restoration of confidence--the prelude to the $368,000,000; that the former banks were generally sound, the that improveme of business-the harbinger of Leaer trade and and the latter have generally better times. Bu: what was our astonishmen: to find, yesterLoco Focos are now breaking down the very currency they day morning, that of the nine banks which had resolved to regave us, bad as it is, and are fast reducing us to the condition sume the payment of specie, two of them, the Consolidated of no currency at all. Bank and the Louisiana State Bank, withdrew from their reAnd pass it round, we add, that by the reports of the Secresolve, and in common with the Citizens Bank refused to pay tary of the Treasury, it appears that the bank bills in circuspecie on the opening of their doors yesterday morning. lation in the whole Union. in 1816, amounts to This circumstance, and the reports so industriously circu$68,000,000. lated by interested individuals, of the solvent condition of this This was before the charter of the second U. S. Bank, and institution and the bankrupt condition of that, created quite a when we had been without a National Bank for four years. panic among our community, and every one, from the holder The charter of that Bank wasthen granted, with a capital of of a V to him who had thousands placed to his credit in certain of the banks, seemed eager to convert it into the precious thirty five millions of dollars. Did expension follow? Oh metal. The consequence of this feeling was, tha: the seven no-very far from it. Fourteen years afterwards, or in banks that commenced the good work of resumption, had 1830, the whole amount of bank paper in circulation, from what is called in technical phrase, a run on them all day. all the banks, was They withstood it nobly. All hands were called to attend $61,323 898, to the desires of claimants; indeed, the wish seemed to be with being a decrease in fourteen years, while the U. S. Bank was them, not how little, but how much they could reekon and in operation, of nearly seven millions. pay out. As sheer justice to them, we will here give their Well, what next? The President vetoed a bill to re-charter names. They are-The Bank of Louisiana, The Union the Bank in 1832, and then what followed! In 1837, the Bank, The Canal Bank, The Mechanics and Traders Bank, bank paper in circulation had increased to The Carrolton Bank, The City Bank, The Commercial $149,185,890. Bank -N. O. Picayune of 24th May, 1842.

2. June 13, 1842 The New York Herald New York, NY
Article from The New York Herald, June 13, 1842

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Article Text

BY THE SOUTHERN MAIL. OCT The Southern Mail had not arrived at the time of our going to press. LATEST FROM NEW ORLEANS-PROGRESS OF THE REVULSION.-Our accounts last evening came down to the 4th inst. The confusion, paralysis, and com mercial fright, was beyond all precedent. The following are extracts:NEW ORLEANS, JUNE 1.-The specie paying banks sustained themselves well yesterday-indeed there was no run upon any but the Union, and that was a slight one. Our citizens seem to have become convinced that the banks that have held out thus far are sound, and no depositors were disposed to draw out specie further than their business wants required. The consequence was, that no run was made yesterday, and the five specie banks remained sound and undisturbed. Should these five institutions prove themselves able to maintain their specie paying stand, our city would be able to boast that pecie was the standard of some of her banks, even if the same banks had no promises to pay affoat? The Union Bank is now believed to be established in her specie-paying position. For the honor of our city it is hoped that she and the other four banks will hold out the hard money flag-though we the people must suffer greatly from being driven to the use of a currency (the only one obtainable for daily use) greatly below par.-Bulletin. REMARKS ON THE MARKET FOR THE LAST THREE DAYS.-Once again is our currency thrown into chaos, and trade may be said to be almost completely paralysed in consequence. In our last Wednesday's report we noticed the suspension of specie payments by the Citizen's and Louisiana State Banks, but strong hopes were entertained that all the others would maintain their position. These hopes, however, have been disappointed. A panic seemed to have seized upon both billholders and depositors, and on Wednesday and Thursday four others, viz : the Consolidated, Canal, Commercial, and City, declared another suspension. The banks which still maintain their payments in specie are the Union, Mechanics and Traders, Bank of Louisiana and Carrollton. We have thus emphatically and literally a "mixed currency," and prices of merchandize partake so much of a similar variety that we find it almost impossible to arrive at correct quotations until matters become more settled. -N. O. Price Current. GEORGIA GOLD MINES.-The Milledgeville Journal states that persons who follow the pursuit of digging for gold in that vicinity, have of late been much stimulated in their labor in consequence of the handsome profits they have in many instances realized. It is said that in the neighborhood of Dahlonga, there are from fifteen hundred to two thousand pennyweights found daily. At one mine, on Battle Branch, there was lately found one lump worth, it is said, one hundred and twenty-eight dollars. It is supposed, from present prospects, that there will be at least from $300,000 to $400,000 realized in that section from the pursuit within the present year. The late success in this business is drawing the attention of many others to it.

3. June 16, 1842 Lynchburg Virginian Lynchburg, VA
Article from Lynchburg Virginian, June 16, 1842

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Article Text

NEW ORLEANS BANK SUSPENSIONS. There has been a panic created in New Orleans, in consequence of some disagreement in matters of policy among the Banks of that city, and a heavy run was made upon them. followed by the suspension of specie payments on the part of several of the Banks. On the 31st May, the Citizens' Bank and the Louisi ana State Bank announced their intention to suspend specie payments until the 5th of December next. On the 1st instant the Commercial Bank, the Canal Bank and the Consolidated Association Bank also sus pended. The suspension of the City Bank was announced on the 2d instant. The New Orleans Bulletin of the 2d instant, speaking of the suspension of the City Bank, says-"This fact, we feel warranted in saying, settles the question of specie payments in New Orleans for the present. No Bank in the city, that issues notes will redeem them in specie before autumn at least." The Picayune of the 3d instant says "The present specie paying banks are the Mechanics' and Traders," the Carrollton, the Union, and the Bank of Louisiana. All these banks, except the Union, have but a nominal existence. They are neither issuing their own notes, nor discounting those of others; so that their position is a matter of little consequence to the public.Their liabilities are but small, and they are known to have means to meet them: there is, therefore, no anxiety-no excitement regarding them. It was not so yesterday with the Union Bank. There was a brisk run on her in the morning, but she promptly aswered all demands with silver.--Thiscreated confidence in her behalf, and long before the time for closing her doors the "run" declined to a very easy "walk," her counter in the meantime being filled with specie." It is said that two persons had died from injuries received in the crowd at one of the Banks. The New Orleans Courier of the 1st says "More than six hundred thousand dollars, !in specie, it is said. will have been exported from New Orleans during the fortnight ending Jane 4." The following are extracts from letters. New Orleans, May 31. "There was a run made on the Citizens' Bank yesterday. About 12 o'clock the crowd increased and commenced drawing specie from the State Bank and the Consolidated Bank. This morning the Cashiers of the Citizens' and State Banks have announced that they have suspended until the 5th December next. the time given by the Legislature. It is said that the Citizens' Bank has $500,000 in sterling exchange, which she has not been able to sell. No person appears to know what caused the run on the Banks. The Consolidated Bank has not suspended." "June 1. "The Consolidated Bank has suspended specie payments. The holders of her notes having lost confidence, owing to the suspension of the Citizens' and State Bank, made a run on her yesterday. The crowd was great, and the day being very warm. several persons fainted. and were carried cut of the Bank apparently lifeless.The run continued from 9 until 2 o'clock, and amounted almost to an impossibility to reach the paying teller's counter. Men were seen coming cutas wet from pers.

4. June 17, 1842 The Illinois Free Trader and Lasalle County Commercial Advertiser Ottawa, IL
Article from The Illinois Free Trader and Lasalle County Commercial Advertiser, June 17, 1842

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Article Text

Latest from New Orleans. Last week we had the pleasure of informing our readers that all the banks of New Orleans had resumed specie payments, and that there was scareely a doubt of their solidity. This week, we are sorry to say, our information from that city is not so favorable. The N. O. correspondent of the St. Louis New Era of the 31st ultimo. says: "At an early hour yesterday, reports were rife, in most parts of the city, discreditable to the standing and solidity ofsome of our Banking institutions. The consequences were that a run was made on them all, and keptup with spirit throughout the day. The Citizens and Louisiana State Bank were, it seems, unable to meet the crisis, and have therefore been compelled again to suspend specie payments until December next. This was unlooked for, and has, I am most sorry to say, cast a gloom over our community, which will not easily be removed. The run on the other Banks has been renewed this morning, and kept up to the present moment, 2 o'clock, without, however, any show of reluctance on the part of their officers to meet every demand promptly. How all this is to end, seems difficult at present to conjecture."

5. June 21, 1842 Indiana State Sentinel Indianapolis, IN
Article from Indiana State Sentinel, June 21, 1842

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Article Text

Annals of Bank Swindling. NEW ORLEANS BANKS.-The New Orleans Bulletin of the second inst. says the run on the banks in that city the day previous was so great as to force five of them to suspend specie payments, viz : the Citizens', the Consolidated Association, the Commercial, the Louisiana State Bank, the Canal and the City. The Union, the Mechanics' and Traders' and the Carrollton still continued to pay specie, and it was supposed had the ability to maintain their ground. The Bulletin, however, is of the opinion that none of them will pay out specie again until next August at least. The immediate cause of the run which forced these institutions to a suspension, is attributed to the jealousy and want of confidence existing among themselves. The New Orleans Advertiser says the Citizens' Bank will never resume, and that it is doubtful whether she will ever be able to meet her liabilities. The Canal Bank is supposed to be wholly insolvent, having invested over a million of dollars in the construction of the new canal, and made heavy dis. counts to individuals from whom little or nothing can ever be collected. The Commercial Bank is represented as in a condition to save the stockholders from any great loss. The North Western Bank of Virginia has had the au dacity to authorize the publication of a notice, that she will redeem her own notes, either in drafts or specie, at 8 per cent discount! This is equivalent to a notice of bankruptcy with a declaration of 92 cents on the dollar. and yet such a concern is allowed to go on and do business. BEAUTIES OF BANKING.-In a late number of Sylvester's Counterfeit Detector. we find a list of the names of upwards of 1200 banks in the United States. Upon a careful examination, we find that of 1200, upwards of 300 are broken or "no sale." which means the same thing sixtv-four are fraudulent institutions ; forty-four are are either closed or closing; fifty-five are at a discount of from 25 to 90 per cent ; sixty-two are from 2 to 20 per cent. discount, and but fifty-two are at par, or worth 100 cents on the dollar, in the city of New York: the same paper also contains a list of over 800 different counterfeits on the various banking institutions in the Union. It may not be amisss to inform our readers, although we had almost forgotten it, that the Branch of the State Bank located at this place, has been removed. We hope the fears some time since expressed, by some of its friends through the Register, lest the people of the country should assemble and demolish it, have received a quietus. Its departure did not, so far as we know, occasion one sigh, or extract one tear. It may be that some of its officers here, whom it took in hungry and naked and kindly fed and clothed will feel some regret in parting with so kind a patron. To such we would say, however, cheer up-the world is large -mankind generous, and loafing a new profession.-.Mt d Carmel Republican. The President of the State Bank of Illinois, has TO r cently been off upon a shaving expedition. He happened to come in contact with one of our citizens at Pittsburgh engaged in the same business; feeling rather ill at ease as we suppose, in being caught in the very act of shaving his own paper, by a gentleman from Illinois, he said he was only shiving a little State Bank paper for a Sister Good !-Wabash Republican.