7810. American Bank (Boston, MA)

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
state
Start Date
January 28, 1838
Location
Boston, Massachusetts (42.358, -71.060)

Metadata

Model
gpt-5-mini
Short Digest
587fae1f

Response Measures

Full suspension

Description

Newspapers in late Jan–early Feb 1838 describe a run on the American Bank of Boston (Jan 28/29), immediate suspension of specie payments, and by early Feb reports that the bank was closing/winding up (Feb 6). The run was triggered when associated banks refused to take the American Bank's bills after it issued a large amount of its own notes, so I classify the immediate cause as problems with local/associated banks leading to depositor panic. OCR errors corrected (dates inferred from publication dates).

Events (5)
1. January 28, 1838 Run
Cause
Local Banks
Cause Details
Associated/other Boston banks refused to take the American Bank's bills after the American Bank issued large quantities of its own notes, leading to a run.
Measures
Suspended specie payments; attempted to redeem notes (per later reports) but ultimately wound up.
Newspaper Excerpt
The Banks.- ... there was a run made yesterday, on the American Bank of this city, the effect of which was to render is necessary for it to suspend payment of its bills for the present
Source
newspapers
2. January 28, 1838 Suspension
Cause
Local Banks
Cause Details
Heavy withdrawals following refusal of associated banks to accept/discount its bills after issuance of large quantity of its own bills; suspension of specie payments followed the run.
Newspaper Excerpt
the effect of which was to render is necessary for it to suspend payment of its bills for the present, and to pause in its operations.
Source
newspapers
3. February 6, 1838 Other
Newspaper Excerpt
The American Bank of Boston has been obliged to close its concerns and wind up.
Source
newspapers
4. February 7, 1838 Other
Newspaper Excerpt
the American and Kilby banks of Boston, both ... have failed.
Source
newspapers
5. February 8, 1838 Other
Newspaper Excerpt
The American Bank of Boston, which attempted to redeem its notes, has been compelled again to suspend specie payment, in consequence of too heavy a run upon it.
Source
newspapers

Newspaper Articles (4)
1. January 29, 1838 Morning Herald New York, NY
Article from Morning Herald, January 29, 1838

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Article Text

MON E Y M ARKET Sunday, Jan. 28 6, P.M. The war between the different elements of which our monetary system is composed, waxes warmer and warmer. The Journal of Commerce. the organ of the Wall street clique,and the Courier and Enquirer, the organ of the Chestnut street clique, have entered the lists with great fury. The controver-4 sy ISSO mingled up with paltry personal and political verbiage. that the real merits of the great financial question, which now agitates the country, are measurably lost sight of. Now what this question? It is not xactly resumption-it is the question of a National Bank. Mr. Biddle's policy is to act upon the great interests of the country, till they unite in favor of such an institution ; and he will succeed in the end. We do not believe that any general resumption of specie payments will take place for a long time to come- and it begins new to be probable that a new and protracted crisis in commercial afairs is coming on. Our accounts from England, of the money and cotton markets, are favorable, but the financial policy of the elements of commerce in England is precisely identical with the like elements in this country. During the year past, the Bank of England, the Joint-stock banks,the private banks, ,together with all the banks in this country have been contracting and curtailing. Thesabtreasury scheme and the policy of Mr. Biddle act unitedly to repress the currency, and to prelong the present system. The identity of the polic pursued by the Banks in England and the United States can best be seen in the following tables: BANKS IN ENGLAND Totals. Cir.& Dep of Bik of Eng. Cow'y Bks £11,733,955 £43.998.945 £32,265,000 18S6, Sept. 10,142,049 40,049 049 29,996,000 1837, " £3,949,896 Dimisutionin one year, $19 749,590-or This represents the aggregate curtailment in England alone for one year-including Scotland and Ireland, it prebably amounts to $25,000,000. In this period, however, the specie has increased, whereas in the United States, our actual paper mo ney has diminished as well as the specie. This will appear in the following table. taken from the Secretary's Report: BANKS IN THE UNITED STATES. Jan 1837. Dim in6mo. July 1837. Jan'ry 1836. Loans, $457,506,080 $522,891,461 $502,557,093 $20,253,368 Specie, 40,019,594 $3,708,995 $0,027,004 8.671.991 Circulation, 149,S 11,038 151,303,120 117 764,729 38.528 361 Deposites, 115,104,440 129,663 096 93,756,750 25,905,237 By this statement it will appear that our curtailments of dis. counts and circulation, in six months, are more than double those of England, to which we may add the diminution of specie. It is a singular fact, also, that nearly the amount which the bullion of the Bank of England has been increased, is aimost the same which our specie basis has diminished. The condition of our currency is therefore more healthy than that of England, but so far. trade is more cramped, and commerce more paralysed. la this state of things, we ask what is Biddle to do ? what are our banks to do? We have still disastrous accounts from Bosten. The Kilby and American banks are both suspended by the Suffolk alliance," and placed in the same category with the Fulton and I other extended banks. According to the latest statements, the Kilby and American banks stood as follows:Deposits. Circulation. Specie. s 25,851 112,082 $85,667 Kilby, 216.504 63,:96 31,210 American, t Oathis subject we find the following statement in the Boston e Courier of Saturday:; ANOTHER BANK IN TROULE - Considerable excitement was created yesterday, by the refusal of the Associated Banks, or 1 some of them, to take the bills of the American Bank of this city. Asnear as we can learn, the American Bank, on Thursday, contrary to an understanding, or an implied promise to its associates, issued forty thousand dollars of its own bills, t which of course found their way into theother banks, and created some trouble. A meeting of the banks' committee was held last evening, the result of which, at the time of writing h this paragraph, we have not heard. S It is reported in State street that the Washington Bank has 1 withdrawn from the association, but offers to receive the bills of all banks in good standing at par, and redeem its own bills : in Boston money, and pay one per cent premium for them on presentation at its own counter, We have heard that the diI rectors of another bank in the city, have been notified to at8 end a special meeting this morning, for the purpose of passing a vote to the same effect. If these reports are correct, the two banks last referred to, e show theirown soundness and independence, and come nearer 0 tea resumption of specie payment, than any we have yet heard of in the country. t The following is from the Boston Centinel I THE BANKS.-I consequence of the troubled state of the times,there was a run made yesterday, on the American Bank of this city, the effect of which was to render is necessary for / it to suspend payment of its bills for the present, and to pause g in its operations. From the character of the Bank. however, and its Directors, we have no doubt that it will be able. finally, $ to redeem all its bills, and that the holders will ultimately lose h nothing. There was also considerable conversation in regard S to ope or two other Banks, but their bills were taken yesterday, as usual, at the counters of the Associated Banks. e This Association will probably soon break up and go to the temb of the Capulets. How singular! The Boston and New e York banks all quarrelling among themselves-the Philadelphia all united. Thus we go. e We have received the Bank returns for Kentucky of Nov, e. 30. They are as follows 1° KENTUCKY BANKS-November, 1837. Circulation, 10,441,340 d Specie, 1,957,160 Derosits, / 1,304,444 is This shows that the Kentucky banks are in a sound condition-being good as those of New York or Philadelphia, and y far stronger than those of Bosten or Baltimore. We have the December statements of the Illinois State Bank t and Branches, as follows:ILLINOIS STATE BANK AND BRANCHES-Dec 1837. Discounts. $2,686,126 g Bills of Exchange, 532,616 Specie, 518,356 is Circulation, 1,650,670 Deposits, 169,684 This institution isin a good condition-the prepertion of spee cie to immediate liabilities being nearly to 54. We understand e that a most extensive forgery has been committed within a few days on this bank, an account of which will be found in anoit teer part of our paper. Notes equal to $250,000 of these forgeries are afloat. From Albany we learn that the first section of the Auction y Bill has passed the Assembly. It is prebable the whole bill r will pass. This is an important move. A great state bank is still before the legislature of Tennessee but not yet passed. The law to allow a United States Bank s agency in Obio, is now before the senate of that state. It has e already passed the House. Today there will he some 1

2. February 6, 1838 Richmond Enquirer Richmond, VA
Article from Richmond Enquirer, February 6, 1838

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Article Text

1535. Jan. It will be seen that within the year ending the 1st January, the reduction in circulation has been $11,766,000, or a fraction short of one half of the entire amount; and in loans and discounts $18,314,000; that the circulation is less by one million now than on the 1st January 1834, four years since, and no greater than in the "panic" spring of that year, with an increase of 26 banks and 24 million of capital; that the proportion of loans and discounts is less now than four years since, it being then double the amount of capital, and now 12 millions below that amount; and that the aggregate amount of specie is reduced within the last year, $2,418,000, yet that it is now double the amount of 1834 Under this condition of things, no one can doubt the ability of the banks of this State to resume specie payments, especiaily in the recent state of the foreign exchange and the entire absence of a demand for coin for exportation; and we trust that. whatever may be the efforts of the Phi. ladelphia Bank and its satellites to present it, and to cm. barrass the operations of the banks of this and other States, they will not disappoint the public expectation by delaying concerne an carly day for resumption." Boston Banks. The last N. Y. Er. Post gives the following statistics: "The American Bank of Boston has been obliged to close its concerns and wind up. "The Cashier of the Middling Interest Bank gives notice that its bills will be redeemed in future at its own counter, having hitherto been redeemed at the American Bank "According to the Boston Advocate, the Directors of the latter express a confident opinion that not only the bill-holders. but the stockholders will be paid in full. "A committee in the House of Representatives of Massachusetts, has reported a bill prohibiting the bank from paying any dividends during the suspension of specie payments, under a penalty of forfeiting to the Com. monwealth a sum for each offence equal to the amount of the dividend paid. "It seems the Kilby Bank was on the point of yielding last week. but a timely arrangement with the associated banks, sared it from dishonor." Connecticut Banks. The Middletown Sentinel of the 31st ult. states, that The Middletown and the Middlesex County Banks, the only two in this city, resumed the payment of their bills in specie, with the exception of those issued under a law of the last Legislature, which are payable in current bille, as expressed on the face of them. The Banks in New Haven have adopted the same plan. This is a good measure. and the community should sustain our banks in thus fulfilling their obligations. by avoiding running to the banks with every specie bill they may obtain."The same paper furnishes a schedule of 33 Banks. which pay specie, under certain regulations in the U. S-and among them, enumerates nine in Connecticut-Hutrah for the Land of Steady Habits

3. February 7, 1838 The Rhode-Island Republican Newport, RI
Article from The Rhode-Island Republican, February 7, 1838

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Article Text

The Tables Turned.- When the Comnonwealth Bank of Boston failed, the whig papers from the Boston Atlas down to the "little daily" of our city, were loud and boisterous in their denunciations of its managers; they were, as they said, democrats, (they were conservatives in fact, and brethren of the same principles with the whigs, so far at least as banks and banking are concerned,) and forthwith their names and the names of real and supposed debtors were paraded before the public, coupled with unmeasured abuse. Crocodile tears were shed in great profusion for the poor fishermen and others holding Commonwealth bills, together with a quantum sufficit of slang about Jackson, Van Buren, Tory, Loco Foco, and the wicked Administration. With the past week the American and Kilby banks of Boston, both thoroughgoing whig banks, and managed entirely by whigs of the first water, have failed. When lo and behold ! the tables are turnednot a solitary word appears in the whig pa. pers about profligate managers and debtors -not a tear is shed, or a word of cotnmiseration ottered for the poor fishermen" or others holding their bills. We confess we are astonished that Mr. Biddle's whig friends, who manage the associated whig banks of Boston, should suffer one of their number to fail. We expect them to excrt their utmost power to crush reputed democratic banks, and all others, who refuse to join Biddle & Co. to make hard times harder, and to keep up panic, pressure, and distress, for the purpose of foreing Congress to charter for them a United States bank, thereby making them, the rich, richer, and the poor poorer. These Boston whig banks which have failed, must most assuredly have been bad indeed, or they would undoubtedly have been sustained by the other whig banks, unless it is as much as the best of them can do to save themselves. There are some ten or a dozen others of the banks in Massachusetts, that are shivering in the wind-several - of which have petitioned the Legislature to take back their charters, to suffer them to wind up their concerns, and permit them to die in peace. If one or more of these broken and breaking banks should happen to be exlied A democratic

4. February 8, 1838 Virginia Free Press Charles Town, WV
Article from Virginia Free Press, February 8, 1838

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Article Text

The Franklin Bank of Boston, was one of Gen. Jackson's pet substitutes for the U. S. Bank, and was under the control of the political friends of the President. During a late examination of its affairs by a committee appointed by the Legislature, one of its officers testified, under oath, that false returns of its affairs have from time to time been made, both to the U. States and State governments. and at the sanie times worn to be correct-all by the direction of the directors, and for two especial good reasons, the one to obtain a part of the spoils, or government deposites, and the other to prevent the Legislature from putting a stop to its proceedings !! "Truth will out--humbugs will explode--and politleal jugglery come to light!" The "American Bank" of Boston, which attempted to redeem its notes, has been compelled again to suspend specie payment, in consequence of too heavy a run upon it.