7720. Southern Bank (New Orleans, LA)

Bank Information

Episode Type
Run Only
Bank Type
state
Start Date
October 15, 1857
Location
New Orleans, Louisiana (29.955, -90.075)

Metadata

Model
gpt-5-mini
Short Digest
9f449314

Response Measures

Accommodated withdrawals

Description

Multiple New Orleans articles from Oct 15-16, 1857 describe a widespread panic/run. Southern Bank is repeatedly mentioned as having 'stood the run' and paying specie; there is no mention of a suspension or closure for this bank. The run is described as an 'infernal panic' without cause, consistent with rumor/misinformation-driven panic.

Events (1)
1. October 15, 1857 Run
Cause
Rumor Or Misinformation
Cause Details
Contemporary reports call the disturbance an 'infernal panic' started without just cause and 'unprovoked,' indicating an unfounded general panic rather than bank-specific insolvency or correspondent failure.
Measures
Promptly complied with every demand; paid specie for its notes and returned large amounts of coin (reports note large coin payments and redemption of notes).
Newspaper Excerpt
the following Banks stood the run and promptly complied with every demand until the usual hour of closing ... the Southern Bank
Source
newspapers

Newspaper Articles (7)
1. October 16, 1857 New Orleans Daily Crescent New Orleans, LA
Article from New Orleans Daily Crescent, October 16, 1857

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New Orleans Money Market. CRESCENT OFFICE, No. 70 Camp street, Thursday Evening, Oct. 15, 1857. The Infernal panic which was started yesterday in our mids without any just cause, without reason, without a shadow ( foundation, reached and attained its culminating point to-day Whatever the consequences may be, we have the sincere gratit cation of announcing that the following Banks stood the ru and promptly complied with every demand until the usual her of closing, say Citizens' Bank, the Canal Bank, the Bank Louisiana, the Louisiana State Bank, the Southern Bank, the Bank of James Robb. The NewOrleans Savings Institution, street, was dense crowded at an early hour. It met all obligations according contract, and by 12 o'clock there was not a person present. Th was cheering. The Mechanics' and Traders' Bank opened, as went on in its regular business, with the exception of redeemin its circulation. So did the Union. The Bank of New Orlea was enjoined at the suit of one of its Directors. This is singnir very singular, and shows a want of nerve and sagacity in management. We desire to hear no more of such finances. a Bank's own Directors have no faith in its management, th surely it is time to close. There has been entirely too mu haste in this movement. At a quarter past 2 o'clock yesterd the Bank closed its doors. A short time afterwards it was p tested at the request of one of its Directors on a note of five hu dred dollars. In the name of God, is this the kind of harmo that ought to prevail among twelve managers of a Bank WI is the public to understand from it? Fortunately for the go of our commercial community this spirit does not prevail amo the majority of our Bank Directors. If it did, we might 1 adien to the prosperity of our city. We learn that the Mechanics' and Traders' Bank and t Union Bank will go on as usual with their business. The Pro ident of the Union Bank is absent. If, however, some for R creditors will push matters to extremes, jeopardizing t interests of the whole, then on them be the consequence. T Banks in question will recover, if allowed to proceed. The e t culation of the two together does not reach $900,000, and t porte fewilles are considered good. To suppose that the occurrences of the past two days . et tend to destroy confidence in the future is not warranted. y X consider the crisis is now past ; that the worst has been realize n and although we may expect a tight money market for son days longer, yet the decided action of the New York Banks 1 evil or for good, has tended to relieve the general anxiety, a d the telegraphic advices, received to-day, if they are to credited, give us to understand that an improvement has alrea taken place in New York. All the Banks in that city have 1 suspended. We learn from Mobile that the Banks in that et have BO thought of suspending. This augurs well, but it wor of have been highly gratifying to us to have had it to state that re our own Banks had manfully stood up to the pressure. as There was also a run on the Bank of Commerce, of which t sa patriarchal Jacob Barker is chief manager. It met the r on fearlessly, and paid with the same promptitude as the Bank e Louisiana. There were no other important movements duri the day. er Of course there is not much to be said of the paper mark st There were some shaves, the greatest of which was a $50 Ba of Louisiana note ing sold to a broker on Canal street at $ 50. and a $5 note of the Southern Bank of Alabama being 80 for $3. We aliude to these merely to show what a pauie will i There was nothing done in exchange. The telegraph advis of sales of sterling in New York this morning at 105, but this on a reduced standard of currency or value. It will be some ti of W before we have any similar quotation to note in this mark CWe, however. confidently believe we shall get to work again two or three days, unless our moneyed institutions get into ad snarl among themselves, which we fervently hope they v avoid. erThe following is the memorial of the Banks of the city Philadelphia to the Legislature of At a meeting of the Board of Presidents of the Banks of city of Philadelphia, held on the 3d day of October, 1857, in following preamble and resolutions were unanimously adopt and directed to be forwarded to the Honorable the Senate a the House of Representatives of Pennsylvania. Whereas, The banks of this city, in consequence of the effe of the sudden and universal severity of the financial crisis wh has overtaken the country, have been reluctantly compelled suspend the payment of specie for the notes and obligatio 18notwithstanding every effort has been made by them to av such necessity and whereas, the mercautile, manufacturi as agricultural and all other classes of our citizens are greatly e 17 barrassed by the existing condition of things, towards whi under existing circumstances, it is not in the power of the bar Pto afford such relief as the exigencies of the community requi in consequence of heir laboring under the forfeitures and per les ties of the act of 1850 and other acts and, whereas, it is esdesire of the banks to resume the payment of specie at esearliest practical period, and to do what they can towards storing the currency to asound and healthy condition. and in a meantime assist the business portion of the community. wh all objects cannot be carried out unless the Legislative forfeitu and penalties are temporarily suspended. Therefore, Resolved, That in order to enable the banks of this city, H, of this Commonwealth, to resume the payment of specie at ion earliest practicable period, and in the meantime render such sistance as may be within the power of the banks to the mere iz: tile and business community, it is essential that the penalties ow forfeitures imposed by the act of 1850, and other acts be 1 porarily suspended. are Resolved. That in the event of the failure of the banks to tain from the Legislature relief from the forfeitures and per ties under which they at present labor, their remains no alter tive for them but that of going into liquidation, a measnre wh they are most desirous to avoid, on account of its disastrous LE fluence on the community and the banks. ess Signed by order of the Board of Presidents. J. B. MITCHELL, Chairma mp 1y JOHN JORDAN, JR., Secretary. Philadelphia, Oct. 3, 1857. C. Some days since it was reported that the banking house of 15 E. Culver, Louisville, had suspended payment. It appe however, before the suspension, the following guarantee made for the benefit of depositors. Y. The guaranty which we publish below confirms the er om confidence existing on the part of the depositors with our fell citizen, William E. Colver. We have heard of no apprehen of a run upon this bank but this guaranty, procured in a 8 time by a friend of Mr. Culver, makes assurance doubly sur RT LOUISVILLE, October 1, 185 ing We, the undersigned, agree to guaranty the depositor in William E. Culver, in the payment in full of their dema y against said Culver, on account of money deposited with hir We have entire confidence in his ability to meet all dema REAMES THOMPSON, AMES GUTHRIE,

2. October 17, 1857 The Washington Union Washington, DC
Article from The Washington Union, October 17, 1857

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Adolfo Oltague and brother, of Peru. Sefior A. Richon, consul of Belgium at Lima, partner in the house of Montane & Co., Puris, from Peru for New York. J. A. Thune, for New York; Sr. Escurda, for New York; S. de la Cova, infant and nurse, for Havana; Dr. Corpancho, for Havana; Santiago Olivia, for Havana; C. de Lasola, for Havana; Charles Taylor, for New York; J. McCarthy, for New York; F. M. B. Smith, for New York; William Graffus, for New York; Captain Walter, G. Dyer, for New York; J. Sellamer, for New York George Ganie, for New Orleans. STEERAGE. Otis Barlow, New York; Jas. O. Neil, do.; E. Flinader, Havana; M. Bertand, New Orleans; Frank Carpenter, W. Hemmel, Wm. Plasso, Mr. Olfur, A. Amm, C. W Griffeths, T. J. Morris, Wm. Osborn, F. Griffith, Thos. Maloney-32. LATER FROM CARSON VALLEY. The Sacramento Union has the following telegraphic despatch from Placerville, dated September 7th: Mr. Murdock has just arrived from Carson Valley, who brings important news. Messrs. Williams and McMarland left our city on Thursday last for Carson Valley. They put up at Silver Creek. Williams left Silver Creek at one o' clock on Saturday afternoon, and Mr. McMarland left about an hour later, intending to overtake Williams. [The despatch then relates the particulars of finding the body of McMarland, and the consequent certainty of the death of Williams, and the belief that the murder was committed by the Washoe Indians.] Great excitement exists here, as Williams and McMarland are well known and highlyesteemed citizens. STILL LATER. Smith, of Lake Valley, sends word that the Indians who committed the murders are in the vicinity of Silver Creek and the South Fork. The arrow with which McMarland was killed has been sent us. There is no doubt that it belonged to a Washoe. Sheriff Carson is now summoning a posse of 25 men, well armed, who are to leave within one hour for the scene of the murder, under the command of Deputies Turnman and Wallace. This makes the number who have been massacred within weeks twenty-four-the last within fifty miles of our city. The leading wagon of thirteen is just passing our office. DEATH OF JUDGE MURRAY. The San Francisco Herald of the 21st ultimo says With deep and heartfelt regret we have to announce this morning the death of the Hon. Hugh C. Murray, late chief justice of the supreme court of California. This melancholy event occurred on yesterday morning, before 1 o'clock, a. m. Though not unexpected, it has created an intense feeling in this community, and, doubtless, throughout the State. Judge Murray was about thirtythree or thirty-four years of age at the time of his decease. He arrived in California in the year 1849 or 1850, and soon, by the force of his talents, attracted attention. Almost his whole life in California was connected with official position. His first service was as a member of the municipal council of this city. From that place he was transferred to the bench of the superior court of San Francisco, which he occupied as presiding officer for a year or more. He was then elected to the bench of the supreme court, and subsequently, until his death, retained his place upon it. He has been chief justice for several years. FROM OREGON. At last dates the constitutional convention was in session in Oregon. We have reports of its proceedings from the 17th to the 29th of August, inclusive. The question of slavery will not occupy much of the attention of the convention, for the reason that, at the democratic territorial convention held previous to the submission of the question of the formation of a constitution, it was " Resolved, That as the people of Oregon called upon to elect delegates to a constitutional convention, and to pass upon the question of slavery in Oregon before the democratic party shall again be assembled, therefore, in the nomination and election of candidates to said convention, we will not discriminate between democrats who are in favor of or opposed to slavery in the future State of Oregon, because we hold that the delegates should not predetermine that question in the formation of the constitution, but should submit the same in a separate clause, to be voted upon directly by the people." The Financial Crisis. BOSTON, Oct. 16.-The meeting of the bank directors and leading merchants discussed the policy of the extension of money facilities. William and Nathan Appleton advocated the policy of increasing the loans thirteen millions of dollars. The bank officers expressed an earnest desire for the relief of the business community. The meeting then adjourned until to-morrow. BRIDGEPORT, (Conn.,) Oct. 16.-All the banksh have suspended. NEW ORLEANS, Oct. 15.-The Union and the Mechanics' and Traders' banks, and the Bank of New Orleans, suspended yesterday. Sales of cotton at 91 a 10 cents. NEW ORLEANS, Oct. 16.-There has been a run to-day on all the banks except the Southern, and all demands have been promptly met, except in the case of the Citizens' Bank, which pays specie for its notes, but refuses to pay its depositors. The other banks are expected to follow suit. The excitement has now subsided, and no failures reported. Nothing is doing in exchange, and business is paralyzed. Sr. LOUIS, Oct. 16.-There has been a heavy run on the Bank of the State of Missouri. The ability of the banks to hold out is doubted by some. Sr. LOUIS, Oct. 16.-The reported suspension of Doan. King, & Co., and Collins, Kirby, & Co., is authoritatively contradicted. They are regarded as the most solvent and responsible houses here. NASHVILLE, Oct. 16.-The Bank of Tennessee has suspended. The legislature is considering a bill for legalizing the suspension. NORFOLK, Oct. 16.-The banks here suspended specie payments this morning. Later from Havana. NEW YORK, Oct. 16.-The steamer Daniel Webster, from-New Orleans via Havana, has arrived. The Cuban news is unimportant. Railroad Disaster SYRACUSE, Oct. 16.-The mail train on the Central Railroad was thrown off the track west of this city last night in consequence of a piece of the road being washed away The whole train consisting of the

3. October 19, 1857 The Day Book Norfolk, VA
Article from The Day Book, October 19, 1857

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The News. The Steamer Asia arrived in New York on Saturday morning with Liverpool dates to the 3rd inst., which, however, had been anticipated by previous arrivals. Ten or twelve millions of acres of land were secured to the United States by a treaty lately concluded with the Pawnee Indians. A serious accident occurred on the Central Railroad, near Syracuse, N. Y., on Thursday evening. Particulars in another column. The Presidents of the Boston banks were to meet for further consultation on Saturday at 9 A. M. All the Banks of Lowell, (Mass.) suspended specie payments on Friday. It is supposed that the example of the Southern bank, of New Orleans, in paying specie for its own notes, but refusing it for deposites, will be followed by all the banks of that city. The excitement had subsided on Friday, and no further failures were reported. Election returns from sixty two counties in Ohio show a democratic gain of 10,561 votes. The vote is so close that it is thought only the official returns can determine the result. Both parties claim the State, but Chase (Repub.) is probably elected Governor by a small majority. From Kansas advices to the 13th inst., it appears that both parties claimed the victory in the late election there. All the banks of Augusta, (Georgia,) suspended on Friday morning. All the Savannah, (Ga.) banks suspended on the morning of Thursday. In New York, on Saturday, the market for Flour, Corn and Whiskey was firm; for Pork and Beef, heavy; for Wheat and Lard, quiet.

4. October 22, 1857 Yorkville Enquirer York, SC
Article from Yorkville Enquirer, October 22, 1857

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semi-annually of four per cent., it was thought to be extraordinary good fortune to have n share in such a bank. But latterly, the writer has seen that n bank of $500,000 has made a semi-annual dividend of five per cent., and laid up $81,000 of reserved profits-about eighteen per cent. more on the capital; all together, would make the enormous profit of twenty-cight per cent! This is usury never before heard of. Is this the legitimate result of banking? Beyond all doubt, it is not. The notes discounted by that bank would not yield n profit to pay the officers' salary How then-whence is this great profit? It arises from what is called domestic ex. change. Domestic exchange, indeed! It is from a regular process of shaving and speculating in paper in New York. There are to be seen the Presidents of such money-making banks operating like brokers; there is to be found the capital, which theoretically is to benefit the people of the community where the bank is situated, but which practically is their greatest curse. Is this course of business within the charter? Every bank in the State is chartered as a bank of discount and deposit. Is it legitimately within such a charter to purchase at a discount (greater than six per cent.) notes or bills of exchange at home or abroad? If it be, I confess I am greatly at fault. Such a course may be brokerage-it certainly is not banking." We will give as far as we are able a view of the progress of the crisis. The New York City Banks have all suspended and requested the Governor to convene the Legislature for the purpose of offering relief. It is not known how they will escape the restrictive clause of the State Constitution and avoid going into liquidation. The Albany Banks have likewise suspended. So have the Boston Banks. It will no doubt be a general suspension North of Virginia. The Bank of Virginia, Farmer's Bank, and the Exchange Bank have suspended. The Savannah Banks have gone in the same way and stopped specie payment. The Augusta Banks have suspended. In N. Orleans, the Southern Bank and the Bank of JAMES ROBB continued to pay specie. In Columbia all the Banks have suspended but the Commercial. In Charleston the Planter's and Mechanic's and the Farmer's and Exchange Banks have gone overboard. The Planter's Bank of Fairfield has followed the majority and suspended. The Tennessee Banks have all suspended and there is a heavy run on the St. Louis Banks.

5. October 22, 1857 New Orleans Daily Crescent New Orleans, LA
Article from New Orleans Daily Crescent, October 22, 1857

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B steamers will be may bring. The Europa's advices indicate that what the the Bank coming from Europe. It is idle for parties to specie 7 per cent., of England will enhance the rate of interest assert to that 1 consider to prevent coin from leaving England. This 63/2@ If coin is veritable nonsense. The laws of trade must be we from required to keep Manchester spinners and obeyed. ( coin starvation, it must come either by direct shipments operatives ended or in an equivalent. We consider that the crisis is of favoi New York. Though we have nothing of a about we feel character in our own market to notice this more uning much rejoiced that we have nothing of a more evening, on New spirit to note. There Were some sales of exchange depressthe Louisiana York-sight drafts at 1@1/1/2 to 2 per cent. discount to-day We did State Bank sold checks at one per cent. in not learn of any sales of time bills, or any discount. branches. sterling. We must wait a few days for a renewal movements in The proposals of the Bank of Louisiana to these approved much, sterling exchange, conditionally, did not receive as we said the word approved" was broadly amount construed. to they Although some of our factors may be hard pressed, we trust It is will stand the passing storm we believe it is nearly over. The something like an epidemic-runs its course speedily. Union Bank of Louisiana commenced redeeming its five dollar notes to-day in coin. This is another advance towards a return to confidence. But when we talk of a return of confidence, the public of consider of our remarks We have fondly hoped that after must the that events last week, and that there was indubitable evidence our Banks were and are able to redeem their circulation, pay their deposits, that there would be some proof of returning confidence. Not only do those who hold the notes of the Canal and other Banks, but particularly the notes of the Citizens' sented Bank, seem to be under the impression that they must be at the counters of the Banks for immediate payment pre- in coin, giving some credence to the report that the Bank or Banks are in failing circumstances. It is surprising that d chantsand traders, presumed to be persons of intellgence, should, merwhenever they receive a Citizens' Bank note, send it imme diately to the Bank for coin, when the notes can be used and passed know as current as before the late panic. The public ought to that this is no way to restore confidence, and we may expect to hear of the cry of hard times and searcity of money long views as this system is pursued. We will further illustrate our so dollar There is the Southern Bank, which has almost with all of its deposits and circulation represented in coin, yet when the strong appliances of coin, paper and bonds, people, ter for they receive one of its notes, forthwith send to the the coin. We shall hear of searcity of money and counsure We from now till dooms-day, if this course is persevered pres- in. observed an instance to-day: A merchant received two $50 notes usual of the Citizens' Bank instead of depositing them at to the hour where he kept his account, he sends them right the off counter of the Bank for coin. Is this the way to bring confidence back We think not. All Bank notes of the five Banks-Citizens', Louisiana, Canal, State fore. and Southern-are received by each other the same as beThe Citizens' Bank redeems all its notes in specie, and when would they are refused by the other Banks, we should think it ter and then be ample time for holders to be running to the coundemanding coin. We shall never have a return of for fidence as long as this practice is pursued. It will take one con8all the notes of the Citizens' Bank to be presented. Persons year RS will which consider the folly of running to the Bank with every note 17 may come into their possession. The Citizens' is solvent as much, or more so, than any other Bank in the city. It has surplus lions of $750,000. Its porte feuille consists of over four mil- a es and a half of dollars, according to its last return, of which esone million and six hundred thousand dollars are due within the 28next and twenty days, People complain of the scarcity of money, a that yet they pursue the most direct way of making it scarcerall is, if they receive a Bank,note, they start forthwith for the counter of the Bank for coin. We have no room for further remarks at this moment. H, on A general suspension of payments has been the chief topic for remark the past two or three days. It appears to be the ab. iz: sorbing question in commercial and financial circles. We do ow are not coincide in the many enggestions to alleviate the present pressure nor do we exactly understand the true meaning of general suspension nor do we learn what is meant to be veyed by the remark. If it covers the great question that con- our Banks shall voluntarily suspend coin payments, then we must LE say it betrays R greater want of confidence in the faith and ess mp soundness of our general community than we are prepared at this moment to admit. 1y In the midst of all the feeling, in the height of the excite. H. ment, with an abundance of argument, there are no express in suggestions, no defined course recommended to be pursued. We R. are told something must be consummated. that relief may foleslow. But what is it to be? Is it an expansion of two or three a millions of Bank issues, or an immediate and voluntary stoppopage of the Banks, and then permit them to issue. Will and financier, will any well-informed merchant, free of debt, inform any us what ought to be pursued. We should like to know what res, ver the Banks can do more than they have been doing for three weeks past-that is, renewi g all paper when required. Tin at We desire that the advocates of suspension should po nt out how the community is to be relieved by the Banks. A sion will not do it-a suspension-will not enhance the price suspen- of NO co ton, nor will it place those who are 80 largely indebted in er. any more favorable position. An expansion or increase of discounts will be of no service in the present condition of the specie reserves of the Banks. Can the Banks, without the RT tainty of losing more coin, extend their loans? Can they endan- cer. ing ger their very existence? According to the admissions of in debtors themselves, they have been imprudent in the assump. many tion of liabilities maturing in the months of October and No. vember. The month of October never was deemed R month of any large commercial transactions, yet we credit the conversa. of tion on the street that the paltry transactions of this month are presumed to be pari passu with the months of February and March. Let us be understood we are devoted and as ardent in the general prosperity of this community as any, we care not ind who they are but we will not sanction R debasement of our thcurrency, or that our banking institutions should voluntary as ST sume the alternative of an ignoble and degraded attitude. and It has been freely commented that if the Bank of Louisiana, it the Cat al Bank, the Southern Bank, were to take two millions of sterling exchange, or perhaps less, there would be an immediate relaxation of the pressure. This is preposterous. These eaand Banks could take the exchange. Admit that, and pay out their notes or equivalent to them. The exchange might also go to the credit of depositors who have nothing to pay to the Banks. But the treachery and unsafeness of relying on deposits have been fully illustrated the past week. With only about two mil BY lions and a half of coin in the vaults of the Banks at this time ites it is inconceivable to us how our Banks can grant relief until their specie reserves are strengthened. There must be a stand the is ard of value. If our Banks do not furnish it, who will? Sus pension of coin payments has not yet been broached in the Bank my parlors of the old Banks, or in the Southern Bank, or at Jame or ich Robb's When the last dollar is paid out, it willjbe time enough to consider the question. in. In our view, there is no immediate remedy time alone will remove all disabilities under which our community labors. causeless and unjustifiable panic has been forced by the public A only. There were no e uses for it. If people will destroy con fidence, create unnecessary excitement, by them must the re sults be borne for good or for evil. adblecked Financial affairs annear to

6. December 22, 1857 New Orleans Daily Crescent New Orleans, LA
Article from New Orleans Daily Crescent, December 22, 1857

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New Orleans Money Market. CRESCENT OFFICE, No. 70 Camp, street, Monday Evening, Dec. 21, 1857. 5 The general money market to-day opened very quietly There was very little paper offering on the street though the offerings in bank were large, we learn that the discounts were free, but the best of security is required. The Exchange market was heavy. The banks were selling checks on New York at ½ per cent. discount. On the street there was no change from Saturday's figures, say 1@1% discount. Sixty days sight was taken at 3%@4 per cent. discount. Sterling opened heavi'y, and closed in the same way. We quote bills with shipping documents at 1021/203% ; clear good to A 1 bills at 103%@104 and 1043/2 though sales were made on Saturday at 105 to dealers, we did not learn of any sales at that figure to-day. Francs dull at 5.70@5.55. There were no transactions in stocks to-day. The Europa's mails were received to-day. We learn that many orders for cotton are countermanded. Many complaints are made, we may say iterated and reiterated, regarding the contraction of the banks, or as it is termed the want of disposition and willingness to grant dis counts and expand (possibly on the high pressure principle.) A great share of the public do not understand the mysteries of finance, and probably our commercial community, as well as the agricultural, will be surprised when we inform them that the eight banks of this city have now under discount and invested in exchange nearly fifty per cent. more than what they actually own, or what has been committed to the care and management of the several Board of Directors, directly or fiducially. The capital of these eight banks paid up is fifteen millions one hundred thousand dollars, with some surplus, is all that the banks can really and actually control. They have under discount and loan $17,818,222, and bills of exchange running to maturity to the amount of $3,256,929. Total, $21,345,151. Exchange balances or accounts may be deemed in the same category as paper discounted. The banks have nearly ten millions in coin in vault, and they owe depositors $11,000,000, which may be called for at any moment, and nearly $4,500,000 of notes in circulation. It is overlooked by the community that the depositors have something to say about the use-of their money or deposits. For instance, the State of Louisiana has on deposit in the State Bank about 750,000 dollars. Has this bank any right to discount or loan out this money The Citizens' Bank has the trust funds of the city on deposit. We think it will readily be acknowledged that the city has no money to loan, and that its deposits in bank cannot well be used for discounting, commer cial or other paper. To what extent it will be deemed good policy for our banks to discount on a line of deposits, one-half of which go in one day and drawn out the next, is not a mooted question, but is one that can be decided at once in the negative that deposits are not a safe reliance. We can point to the action of depositors in October with the Citizens' Bank, the Mechanics and Traders', the Canal, the Union Bank and the Bank of New Orleans-In fact to all the banks. The cry was gold, gold, coming from city depositors more than other sources. The mercantile community, including every merchant, trader dealer in every branch of business are refusing to sell on credit, even for the very best security, or what is termed good paper which will be paid at maturity. If sellers of merchandise have come to this determination to refuse the usual paper, how can it be expected that the banks will receive or discount the same paper, or paper of the very same character, which has been declined for merchandise or refused in the course of trade It is useless to refer to other cities for a mode of doing business, particularly where banks have been and are still under suspension. The banks of this city are restricted in all their movements by a supervisory statute, which is now receiving the highest praises throughout the country. It must not be overlooked that the free banking law of this State is very stringent in its provisions. Independent of the coin required to be in the vaults of the bank to meet deposits, an amount sufficient to meet circulation has also to be kept on hand, notwithstanding dollar for dollar is deposited in the hands of the State authorities to secure direclation. Some allusion has been made on the street the position of the Southern Bank on Saturday last, which returned in coin $374,918, when the law required it only to have $83,000. Even the law, as onerous as it is, will not shield the bank, nor any bank, from being called on at any moment for specie to the full amount of deposits and circulation. Thus the circulation of this bank was $152,195, and deposits $249,548. Total, $410,243. In addition to this, there is deposited in the Auditor's office $407.040 in bonds, Though It cannot be expected that an immediate demand for deposits and circulation could be made, yet the law implies as much, and during the unsettled condition of financial affairs in all parts of the world, it is incumbent on all banks to be watchful and guarded and as the majority of our banks, particularly the four old banks, have already loaned out more than they own, we think it will be some time hence before there can be any expansion of discounts. By the European mail, received to-day, we learn the result of

7. September 1, 1858 New Orleans Daily Crescent New Orleans, LA
Article from New Orleans Daily Crescent, September 1, 1858

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60 days best bills, per cent discount, and commercial, discount, with loans of money being made at the rate of month. ner telegraph hourly brought accounts of the intensity and of the panic in distant cities. Our absent citizens rein numbers, giving dubious and doleful accounts of the financial condition of the country: Cotton arrived but was almost unsaleable, so much SO that factors had for foreign exchange, which they passed to the backs of their obligations. Parties who had been pr d+ denouncing the banks for their incapability of pure' 488change or extending discounts became still more c' amornouncing in unmeasured terms the course pursur d by the which course afterward proved to have beer the salva. our city. Stocks and bonds were almost unsaleable receded to 74 and 75 Bank of Louis Jana stock was 115@120. 13th October, we wrote as follo WS: "There is very be said about the money market this evening a large our community, instead of at sending to its own immeaffairs, are watching the tel sgraphic wires. This is unwe said three weeks "ince that 27 out of the 54 banks of New York, would suspend, and the advices this state 17 had suspended. This was not unexpected, and useless for parties to endeavor to create the im that these suspensions were not expected. We have along that we should receive the most unfavorable acor rather that bank suspensions and failures In Northern night ba considered a fixed fact." minor banks in New York began to close their doors, as their vaults on the 11th of the month, followed on the some of the larger ones. On the 13th 8 general run on all the banks, and Wall street was an excited which resulted in R general suspension of coin paywith the exception of one bank-the Chemical. Thus stood bankrupted, what else could have been expected followed the previous wild course and mismanagement of in expanding discounts to the extent of one hundred venty-two millions of dollars, one specie basis of the trifling of twelve millions of dollars, and then foreing curtailreduction to an amount exceeding twenty-tv millions in the short period of eight weeks, when the produce country could not be used. he meantime, say about the 10th of October, there had slent withdrawal of deposits from some of our banks, of their circulation being presented. This was folwith considerable briskness on the 12th and 13th. On of the 14th, intelligence was received here of the suspension of the New York Banks. And on the same some of our free banks could not liquidate their balwith the old chartered banks, which led to a reluctant rereceive the issues of three. The chartered banks were with a run, which had already commenced on the Bank, the Bank of NewOrleans and the Mechanics' and Bank, which led to a close of the doors of these instiuntil the following day. The closing of the doors of was forced on then by the action of depositors the bill holders at large did not take the alarm till the day. On the evening of the 14th, the run on the Citicommenced, which was continued the following day; day, the 15th, the run commenced on all the banks, Southern Bank, Louisiana State Bank, Bank of Louisiana, Bank and Bank of James Robb. On the Citizens' Bank the peared of the wildest kind, and we might say the poputhose who had a dollar on deposit, or held a note, were The brunt of the run was on this Bank, from what not to this day been learned. Its great popularity, its management, its liberality to the public the great which had attended its course the high value of $160; its connection with the State, through which over of dollars in bonds were to be liquidated its nuquessolvency-all, all were considered as naught, and a and unparalleled run commenced on the 14th of Octocontinued during the 15th, up to the close of which one million of dollars were paid out. The annals of do not contain another such instance of unprovoked and for assault, and one which was met with 80 much and alacrity. Though a temporary suspension to depositors followed, it must not be forgotten that alone was the panic against this bank mainly about. The same remark will apply to the three free which were forced temporarily to suspend. As to the dewe have yet to learn of a solitary indivi Jual who lost a is no doubt but the panic received its chief impetus discrediting of the notes of the three free banks on the was deemed A measure of prudence and safety to the themselves, for it was manifest that they had HS much could do to protect themselves and carry out their duties depositors and it was not known at what hour the burst on our ci y, Coupled with the refusal of the the accounts of the stoppage of the banks of New which came to hand the same hour. So much was said regarding the compulsory action of the old banks, to the course pursued towards the free banks S to, that it is not out of place to remark that some of been in arrears for a week or ten days previous to the a October. D close of the 15th, it was pretty well ascertained that f fear had done its worst. On the evening of that day, in our monetary column, as follows tl panic which started yesterday in our midst, with0 just cause, without reason, without shadow of found. and attained its colminating point to-day. Whatc consequences may be. we have the sincere gratification 3 uncing that the following banks stood the run and e complied with every demand until the usual hour of Citizens' Bank, Canal Bank, Bank of Louisiana, Lou1 Bank, Southern Bank. and Bank of James Robb. 1 Orleans Saving Institution, Canal street, was densely 5. at an early hour. It met all obligations according to and by 12 o'clock there was not a person present. This a The Mechanics' and raders Bank opened, and regular business, with the exception of redeeming So did the Union. The Bank of New Orleans in at the suit of one of its Directors. This is singular. e that the occurrences of the past two days will tend P confidence in the future, is not warranted. We concrisis is now past that the worst has been realized. we may expect tight money market for some di yet the decided action of the New York banks for good, has tended to relieve the general anxiety, and cadvices, received to-day, if they are to be credit to understand that an improvement has already in New York. We learn from Mobile that the banks have no thought of suspending. This augurs well, S have been highly gratifying to us to have had it to all our own banks had manfully stood up to the presT time affairs commenced to improve, confidence be and we might say, reason resumed its empire with e Individuals who appeared to have been bereft of it. di however, no paper nor money market. Some few ta were entered into, towards the close of the month, be aging from 2½ per cent. per month. Cotton came and the prospects for sugar were flattering. Under a J in cotton, factors did not offer the receipts freely, W to sell in large lots at which, thirty days be. D September,) commanded 14%@15c. Exchange was 01 demand only in small sums, large transactions only qt in the way of barter. Sight drafts on New York la made conditionally, that is, payable in the currency on they sold at the reduced rate of 314@ and 5 per CO Between the 20th and 30th of the month, eight