7678. Mechanics & Traders Bank (New Orleans, LA)

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: state
Start Date: May 17, 1842
Location: New Orleans, Louisiana (29.955, -90.075)

Metadata

Model: gpt-5-mini
Short Digest: 0642f8ee

Response Measures

Accommodated withdrawals, Full suspension

Description

Mechanics & Traders Bank (New Orleans) participated in resumption on May 17, 1842 and experienced a brief run that day. On July 5, 1842 it suspended specie payments along with the Union Bank; by mid-July sources report it as failed/forced into liquidation. Cause of distress is primarily contagion from other local banks refusing to resume and general bank failures in New Orleans. OCR corrected minor punctuation/spacing in bank name.

Events (4)

1. May 17, 1842 Run

Cause: Local Banks
Cause Details: Run/withdrawals tied to other banks (Consolidated, Citizens', State) refusing to resume specie payments and general unease during city-wide resumption attempt.
Measures: Increased paying tellers; bank paid out specie (a trifling amount) and continued specie payments during resumption.
Newspaper Excerpt: At the Mechanics' and Traders', Carrollton and Commercial there was some stir early in the morning; but it was not kept up for more than forty minutes; after which time the demand for coin abated
Source: newspapers

2. July 5, 1842 Suspension

Cause: Local Banks
Cause Details: Suspension occurred amid broader New Orleans banking failures/pressure from other insolvent banks; contagion from failing institutions in the city.
Newspaper Excerpt: The Union Bank, and the Mechanics' and Traders' Bank suspended specie payments on the morning of the 5th day of July, 1842.
Source: newspapers

3. July 17, 1842 Other

Newspaper Excerpt: It appears that the Union Bank of New Orleans and the Mechanics' and Traders' Bank have failed, under the strong opposition which they encountered from the broken Banks
Source: newspapers

4. July 17, 1842 Receivership

Newspaper Excerpt: It appears that the Union Bank of New Orleans and the Mechanics' and Traders' Bank have failed... These failures may again cause the banks of Tennessee and Louisiana to hesitate in their resumption.
Source: newspapers

Newspaper Articles (8)

1. May 25, 1842 Daily Richmond Whig Richmond, VA

Article from Daily Richmond Whig, May 25, 1842

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, From the N. O. Bee, May 17. : THE CRISIS-THE FIRST DAY. I Yesterday morning. at nine o'c'ock. The Union, City, Louisiana, Carroliton, Commercial, Me I chanics' and Traders' and Canal Bank, opened their , doors under full resumption. The Consolidated , Bank, very unaccountably, withdrew from the arI rangement entered into on the Saturday before, by which it also had agreed to resume, and refused to throw open its vaults, alledging, as a reason for r such conduct, that the Citizens' and Louisiana State Banks had refused to undertake cash ments, would no. the and of that it, therefore, At paymeeting the Bank Presidents, of Saturday, at which resumption was agreed upon, the Citizens' , Bank was not represented, and the President of the ) State Bank refused to sanction the measure, as the Directors had not empowere.i him to decide, either , for or against resumption. The subsequent determination of those Banks, therefore, could scarcely ) be appealed to to justify the course of the Consoli) dated Bank Upon the opening of the Banks, a considerable run was made upon them by the holders of small sums. The excitement was increased materially by the refusal of the Consolidated, Citizens' and State Banks to join in cash payments, and until half past two o'clock. the calls for specie, at the Union, City, and Canal Bank, were constant. At the Mechanics' and Traders', Carrollton and Commercial there was some stir early in the morning; but it was not kept up for more than forty minutes; after which time the demand for coin abated, and to the expiration of banking hours few notes were presented for specie. The Union and City Banks were crowded with note holders until a later period; but before 3 0'clock, the demand for specie upon those institutions slackened off to such an extent, that there was not a man in either of them desirous of obtaining cash for his notes, unsatisfied. So far from any attempt being made to evade the full force and effect of resumption, the payir g tell. ers in the resuming banks were doubled and trebled, in order to detain note holders as little as possible. The banks "stood up to their fodder" like "Georgia majors," and made every exertion to pay out as fast as the notes were produced. The exact amount of coin taken from the vaults, we could not ascertain; but we were happy to remark a feeling of confidence gradually taking possession we noticed several of the under public mind, and persons, who, the previous excitement, had drawn specie, returning it to the banks, being perfectly satisfied to exchange it for the same notes they had so shortly before hurried over their counters for the coin. Had the Consolidated, State and Citizens' bank joined in the measure, there had been nothing left for us to regret; as it is, the resuming banks will, in our opinion, weather the crisis in fine style. The notes of the non resuming Banks are at a discount of course; and will continue to depreciate until they likewise resume. We have been furnished with the following statement of the specie drawn from the various Banks yesterday. The City Bank paid out $80,000 and received on deposite $15,000-loss $65,000. The Union Bank paid out about $50,000-Canal $25,000, Commercial $30,000, Carrotton about 2,000, Mechanics & Traders a trifling amount, and the Bank of Louisiana paid out $3,000 and received upon deposit $14.000-making in all a diminution of about $175,000 in the specie of the resuming banks. P. The Presidents of the resuming Banks have had a consultation, and are determined to go ahead. The best spirit prevailed amongst them, and they are convinced of their ability to sustain cash payments.

2. June 10, 1842 Holly Springs Gazette Holly Springs, MS

Article from Holly Springs Gazette, June 10, 1842

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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.

3. June 21, 1842 The Daily Madisonian Washington, DC

Article from The Daily Madisonian, June 21, 1842

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Fram the New Orleans Advertiser. THE BANKS AGAIN. A new move has been attempted in relation to the management of our Banks. The Board of Currency called a meeting of the Presidents, and suggested that the present specie paying Banks should suspend until December next, for the purpose of equalizing the value of the different notes. This is a singular step on the part of the Board of Currency. If the proposition was agreed to, it would make the notes, not all equally good, but all equally bad. The President of the Board, Mr. R. D. Sheppard, was opposed to it, and in consequence resigned his office. The proposition was promptly refused by the Presidents of the Bank of Louisiana, the Union Bank, and the Mechanics and Traders Bank, who declared that under no circumstances will they again suspend. We applaud them for their honesty and firmness of purpose-and we think that course the most advantageous to their interests, the opinion of the Courier to the contrary notwithstanding. They no doubt have discovered ere now how much more satisfactory it is to transact their business on the specie basis, with the confidence of the community assisting and cheering them in the good work. We have it on undoubted authority that the three honest Banks can neither be coaxed nor coerced into a deviation from the correct line of conduct. They occupy a strong position, and are fully able to sustain it. The Carrolton Bank agreed to suspend, but as it is in a state of liquidation, having very few notes out, it is not of much consequence. In the meantime, the rotten Banks are all at loggerheads among themsolves, refusing each other's notes, as each tries to appear better than its fellow. The discount on their notes varies occasionally, according to the demand or supply in the market. The following are latest rates-

4. July 17, 1842 The New York Herald New York, NY

Article from The New York Herald, July 17, 1842

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It appears that the Union Bank of New Orleans and the Mechanics' andTraders' Bank have failed, under the strong opposition which they encountered from the broken Banks The Bank of Louisiana is now the only sound bank remaining in that city. How she will be able to breast the storm is a problem. These failures may again cause the banks of Tennessee and Louisiana to hesitate in their resumption. The probability now is that nearly all the banks at New Orleans will be forced into liquidation Utter insolvency has apparently overtaken them. If the Union and the Mechanis' and Traders' pursue the right course, they may be able to recover themselves at the time prescribed by law; but of the others there is no hope, and the sooner the popular will puts them down the better for all parties. The question of a tariff is debated in Congress with various success. The high tariff men appear like "Sancho Panca, to have got into a labrynth of lies," from which the cool intelligence of the opposition is making hourly more difficult for them to escape. It is a little astonishing that a man like Mr. Appleton, of Boston, who can write a good deal of sound sense, should in Congress talk in the style which characterised his speech of July 5, on the ta* riff. His ostensible object is to protect a certain manufacturer, and he talks as follows :Many of the print works are now suspended, whilst the importers have equally found it a losing speculation. It will readily be perceived that this branch of manufacture requires a comparatively high protection, in order to in. duce the great outlay necessary to bringing out the higher class of printed goods. At the same time, nothing furnishes a fairer subject for revenue. Both the French and English Governments grant a copyright for designs or patterns; the English for only three months. The gentleman from Georgia referred to a report of my respected colleague (Mr. Adams) to sustain his argument against the minimum principle. This has been properly and well answered by the gentleman from New Jersey, (Mr. Randolph.) He referred to the graduated scale of duties on woollens, improperly called minimums. The fact is, the operation of the cotton minimum was so successful in extending the manufacture and reducing the price, that the attempt was made to apply the same principle where it was not applicable, as in the graduated scale on woollens. In flannels was otherwise, and the success was complete." A protective tariff is intended to act as a stimulus to excite labor into full and productive action. He states here that the importers, as well as the manufacturers, are suffering losses from their business. It must then be pretty evident that the cause of the distress is general, and does not arise from a low tariff. He then states that prints require protection, that they are a fit subject for revenue, and ultimately that prices will be reduced by the stimulating action of a protective tariff. These assertions appear to us contradictory in their nature. Protection must be derived from prohibition or from increased prices-if the former no revenue can be derived from the protected article. If from the latter the consumers necessarily pay a tax to the manufacturers. If prices are reduced there can be no benefit whatever derived to the manufacturer, and his pretences are false, and criminal, inasmuch as he seeks, by indirection, to deceive the masses of the people. The luminous and eloquent speech of Mr. Pickens, of South Carolina, of June 22, on the high tariff policy, breaks with a strong hand through the flimsy fallacies of the advocates of oppression, and strikes with a sure hand at the root of the existing evils. A most britliant speech is wound up with the following just vein :Mr. Chairman, in pressing any tax upon our importations in the present state of the commercial world, we must take into consideration the contracted state of our currency and circulation: and also that the interest on our debt abroad. amounting to near $10,000,000 annually, must be paid out of our exports, and will fall in some measure as a tax on our imports. Under these circumstances our commerce cannot bear a tax of 36 per cent. It will inevitably be avoided by smuggling, which will prove a benefit to British tonnage. (as far as the supplies of the interior west, through the St. Lawrence, may be concerned), and an injury to ours. You will be disappointed in your revenue; and those who expect protection will be

5. July 18, 1842 The New York Herald New York, NY

Article from The New York Herald, July 18, 1842

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Available means, 611,818 534,348 466,177 504,770 immed'e liabilities, 1,040,213 1,087,837 399.615 800,346 Excess liabilities, 398,395 473,189 333,438 295,576 This concern, it appears, after the failure of the U. S. Bank in February, 1841, assuming that resumption would be put off to a very distant day, rapidly expanded in defiance of all sound judgment, and not until the state of public opinion last spring admonished it of the danger of its course, did it pursue a proper line of conduct and curtail its business. The rate of exchange or the depreciation of Virginia bills, followed this movement of the banks, and has fallen from 12 per cent in April to 3 per cent, the present rate. The committee now state that they anticipate The day fixed by law for resumption, in order to remove the impression that they would not pay specie until coerced by law. The state of affairs in New Orleans since the failure of Union, and Mechanics' and Traders' Bank, is very embarrassing. No bank receives on deposite or in payment of debts, any paper but its own. The holder of any discription of paper is, therefore, obliged to sell it, and buy the discription that he requires. City and State Bank paper, for instance, ranks about the same value; but a man having State Bank paper on hand and a note to pay at the City Bank, cannot sell his State paper better than 20 per cent discount, and when he goes to buy City Bank notes, cannot procure them at better than 15 per cent, thus losing five per cent on one kind of paper in exchange for another really of equal value. The value of the paper of different banks, therefore, varies hourly, according to the payments that are made at each bank. If large payments fall due at the City, and moderate ones at the State, the bills of the former bank are in request, and those of other banks are a drug. The price of the former rises, and the latter declines. The next day the reverse may be the case, and the price of the State will rise, and those of the City decline. The public thus get ground between two stones, and fleeced out of their last shilling. Why? Because iniquitous legislation chose to permit insolvent banks to go on issuing irredeemable paper as a currency in defiance of even common honesty, and then when these institutions come forward to pay specie, and boldly take a stand in order to restore a better state of things, they were suffered to be victimized by the broken banks. Had honest legislators passed just laws, those swindling banks would have been wound up as soon as they suspended, and the well conducted institutions would have been at liberty to pursue an honorable line of conduct. New Orleans like New York, would then have been in possession of a sound currency, and industry have received the just reward of its labor. Official statements of the Island of Cuba, give the following figures in relation to its trade for three years :- Exports. Coffee, Sugar, Total exports, Duties and taxes, COMMERCE OF CUBA. 1839. 1840. 1841. 1,959,460 2,143,574 1,426,024 8,290,387 11,264,367 11,613,798 16,626,627 21,300,301 22,282,753 10,130,000 11,917,299 This gives a general improvement in the state of the business, being an aggregate increase of near $1,000,000 or 5 per cent in the exports, and of near 20 per cent in the revenues of the Island.

6. July 19, 1842 Richmond Enquirer Richmond, VA

Article from Richmond Enquirer, July 19, 1842

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The Tables turned'- We hope. The news of the election in New Orleans had cheer ed up the Whigs-and filled their trumpet of triumph. They expected to carry the whole State. But the victory in the city turns out not to be very homorable to them, and their triumph in the whole State seems about to turn to dust and ashes. In the City, it is true, they have carried their ticket by a majority of 251-The New Orleans Jeffersonian says: "Even this lean majority was obtained by one of the most open barefaced and disgraceful frauds ever perpetrated upon popular rights. Of the full extent of this fraud we have at present no knowledge, but we have no doubt that by the investigation which will be made, it will be found to have extended to the manufacture of at least 500 votes. On the 4th day of July, Mr. Michel Aime and others signed tax receipts in blank, for car. riages, negroes, &c., which were left at the office of J. P. Benjamin, one of the Whig candidates, and with the different Whig committees at the polls, where they were filled up and delivered to every loafer who would vote the Whig ticket. Men who had never owned a wheelbar. row, became voters by their receipts for taxes on their carriages- Men who have not a whole shirt to their backs had tax receipts for their negroes and voted the Whig ticket. The following is a copy of the receipts by which the 187th of these votes was made. It was signed by Michel Aime in blank-and filled up by J. P. Benjamin, &c." The Jeffersonian states, as the first fruits of this Whig victory, that "The Union Bank, and the Mechanics' and Traders' Bank suspended specie payments on the morning of the 5th day of July, 1842. No wonder those Whigs in white hats and gold watch guards bel-

7. July 28, 1842 Staunton Spectator, and General Advertiser Staunton, VA

Article from Staunton Spectator, and General Advertiser, July 28, 1842

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New ORLEANS BANKS.-T'wo more of the Banks of New Orleans suspended specie payments on the 5th instant, namely, the Union Bank and the Mechanics' and Traders'. The Louisiana and Gas Banks are ROW the only specie paying institutions in that city.

8. August 26, 1842 The Yazoo Whig and Political Register Yazoo City, MS

Article from The Yazoo Whig and Political Register, August 26, 1842

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Bank Note Table, Corrected Weekly, NEW-ORLEANS MONEY MARKET. Adapted for Yasoo City Market. Gas Light and Banking Company, par. Bank of Louisiana, par. SUSPENDED BANKS. 25 dis. City Bank of New Orleans, 8 Mechanics and Traders', " Union Bank, 12 " 18 State Bank, " 30 Canal Bank, " 20 Commercial Bank, " Consolidated Bank 35 u 25 Carrollton Bank, " 45 Citizens' Bank, REPUDIATED BANKS, Exchange Bank, 25 c per dol. 30 c dob Improvement do. 25 c Bank of Orleans, 15 c do. Atchafalaya, Blue Backs, 60 to 55 pr d. MUNICIPALITY NOTES. Municipality No. 1, 8 pr ct. dis. " 8 No. 2, sb No. 3 50 40 Alabama, n 8 Tennessee, South Carolina, par. Kentucky, par.