7865. Commonwealth Bank (Boston, MA)

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: January 12, 1838
Location: Boston, Massachusetts (42.358, -71.060)

Metadata

Model: gpt-5-mini
Short Digest: 69605c85

Response Measures

None

Description

Contemporary newspapers report the Commonwealth Bank suspended/closed in mid-January 1838 and was to be wound up (receivership/liquidation). Coverage attributes the collapse to inability to meet large government drafts and to mismanagement/fraud by directors; multiple pieces explicitly state the bank closed its doors or suspended payment and will wind up. Several accounts emphasize no run preceded the closure. I corrected OCR typos (e.g. 'Comamonwealth') and used Jan 12–16, 1838 time frame (articles mention Jan 11 notice and suspension announced mid-January).

Events (1)

1. January 12, 1838 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank unable to meet large government drafts and heavily indebted; report of fraud/mismanagement by directors and loans to insiders led to insolvency and suspension/closure.
Newspaper Excerpt: ANOTHER GOVERNMENT PET GONE ! - The Commonwealth Bank at Boston, one of the principal Government pets, or late deposite banks, has closed its doors. This is done without any runs being made upon it, as specie payments are suspended
Source: newspapers

Newspaper Articles (20)

1. January 15, 1838 Morning Herald New York, NY

Article from Morning Herald, January 15, 1838

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As soon as this notice was up, the seven discredited banks con- sulted together and endeavored to make a run on the State Bank. They offered $50,000 in specie to the Suffolk Bank, for the same amount of notes in State Bank paper. This was done in retaliation, and for the purpose of putting the State Bank un- der the penalty of 24 per cent, for refusing to pay specie. The Suffolk Bank refused-the excitement increased-the whole Association of Boston Banks was near coming to pieces. To prevent this a secret conclave was held, and it was determined to discredit, guillotine the Commonwealth's Bank alone, in or- der to save the others. Accordingly, after a long and violent debate among themselves, in which the seven banks, and sever- al others were censured for their expansions, the following no- tice was yesterday morning announced in the Boston papers of the 18th inst:- # BY AUTHORITY Of the Board of Commissioners of the associated Banks in Boston. At a meeting of the Board, thirty Banks being represented, held last evening to receive a report from the Standing Com- mittee on the present state of the Bank circulation, the Com- mittee made such a communication, as clearly showed that the bills of all the associated Banks (excepting the Common- wealth Bank, which has been stricken from the roll of the As- sociation) ought to be received hereafter in payment and on deposites by the Banks throughout this Commonwealth, as heretofore, and without a dissenting voice, it was Voted, That each of the Associate Banks will henceforth re- ceive in good faith the bills of all the Banks belonging to the Association, without discrimination. And it was also unanimously Resolved, That the vote adopted by the Standing Committee at its meeting on Wednesday last, requesting that the specie of such of the Associated Banks as is in a smaller proportion to their circulation than one to four, "should be increased to at least twenty-five per cent. upon its circulation, and that the process of increase should be commenced forthwith," be ap- proved by this Board. T. DROWN, Clerk. Thus stands the volcano at the last dates, but this catastrophe is only begun-not ended. The revulsion which began in March last is going on its course. Banks are composed of in- dividuals-and individuals are subject to all the influences of the times. The general suspension of specie payments only delays the final catastrophe that a large portion of the banks must undergo. It is our firm belief that the return to specie payments cannot be effected in eight years, without closing at least one third of the small banks throughout the country. The failure of the Commonwealth Bank of Boston is only the first explosion. In Albany, here, and elsewhere, the same process is going on as we have just witnessed in Boston. It is affirmed that all the Albany Banks have resumed specie payments. Be it so, but our monetary system can never be remedied till a large State Bank of $30,000,000 capital be organized, as indicated by Mr. Ogden of this city, in the legislature. The following is a statement of the other Boston Banks taken from the November Report.

2. January 16, 1838 Morning Herald New York, NY

Article from Morning Herald, January 16, 1838

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MO NIE Y N A RIK E T. MONDAY, Jan. 15th-12 M The sensation excited in Wall street by the failure of the Coramonwealth Bank of Boston, still continues. There was rumor this morning that four other Banks had failed in their obligations to each other: in their obligations to the public they have failed since their suspension. As the report wants confirmation we shall not publish the names. The Boston Banks have been pursuing a fatal policy of late. W hile in other places, New York and New Orleans especially, the amount of circulation has been constantly diminished, at Boston it has been increased. This has caused the trouble among them. It is possible that by this failure in Boston the Easters money may be driven out of the market, and that the passage of the small note bill in the Senate may be expedited. Mr. Ogden's plan, however, is the only one that can be of any real or lasting service-a State Bank Institution established in this city. Stockstoday are not quite so firm as on Saturday.

3. January 17, 1838 The Rhode-Island Republican Newport, RI

Article from The Rhode-Island Republican, January 17, 1838

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wealth bank have been paid out, since tho first instant, by the Collector of Boston, as bounty money to fishermen, and is now in their hands. If the case of this bank does not afford a strong argument in favor of the prominent measure of the administration, to dissolve all connexion between the government and banks-we know not where to find one. Here is a bank, which, only a few days since, was considered by the public in as good standing as any that now remain-which, it appears, was thought worthy of holding funds of the government in its possession; and, of course, was deriving from them all the advantages which the opposition assert that they confer-yet it has been unable to sustain itself, even in these days of unredeemed promises, and, by its connexion with the government, has been enabled to cheat the needy fisherman out of the bounty awarded by his country to stimulate his enterprize and reward his toil and perseverance. Within the short space of one year, in addition to the general suspension of specie payments, no less than three banks in the city of Boston, have, to all intents and purposes, failed-and how soon more will follow suit is very uncertain. Such institutions are certainly excellent depositories of the public funds-if the object is to avoid the necessity of passing another distribution law. We hope and trust that some steps will be taken by the government to prevent the honest fishermen from sustaining the heavy loss to which this unfortunate explosion subjects them. It seems to us that such a course would be just and proper, even if the whole amount of bounty money should have to be paid over again. Let the loss fall on the public funds rather than on the hard-working and enterprizing "sons of the sea."

4. January 18, 1838 Richmond Enquirer Richmond, VA

Article from Richmond Enquirer, January 18, 1838

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BASKRUPTCT.-The failure of the Commonwealth Bank of Boston, has produced great excitement in that City, and several meetings were held among the officers of the Bank Association.-' The result of their canvassings was the striking the name of the Commonwealth Bank from the roll of the Association. The refusal to receive its bills on deposite seals the news of the failure, but the Boston Post expresses a belief that its bills will be ultimately redeemed. The failure was caused by Government drafts, which the Bank was unable to meet. This is the second deposite bank which has failed in Bos. ton, the Franklin having been one, and both have failed on government demands. The bills of nearly half the banks in that city were mutually refused on deposite during Friday, but the Board of Commissioners on Saturday published their intention, that the bills of the associated banke will henceforth bo received in good faith by the banks belonging to the association. The Commonwealth, Franklin, and Lafayette Banks do not belong to the association, and the Massachusetts Bank, which since its foundation. never suspended specie payments, has never joined it." A Correspondent of the National Intelligencer states, "that the Commonwealth Bank has a very large amount of bills in circulation. All the fishing bounties in this State have lately been paid out in their bills. Some few individuals owe them a large amount. John K. Simpson, in particular, owed them a very heavy sum, and his (recent) death has probably hastened their destruction. He was President of the Bank."

5. January 19, 1838 Vermont Phœnix Brattleboro, Bellows Falls, Ludlow, VT

Article from Vermont Phœnix, January 19, 1838

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VERMONT PHENIX. Friday Morning, January 19, 1838. ANOTHER PET BANK GONE III THE COMMONWEALTH BANK, at Boston, has failed, with a large amount of government funds in its hands. This was one of Gen. Jackson's favorite pets and has been managed, up to the present time, by devoted adherents to the Jackson Van Buren administrations, who have also held the highest offices in Boston in the gift of the President. In this bank, too, were placed the government funds, in Boston, when the public deposites were removed by the ex-President from the U.S. Bank, because, as he alledged, they were not safe in that institution !!In the "rags" of this bank, too. has the government paid off its creditors in Massachusetts, while it was exacting specie for duties and postages from the very same people, and while the Members of Congress were paid in gold. This bank, too, was one among others which Gen. Jackson highly extolled in this messages, and which he and "the au. thor of the letter to Sherrod Williams" once told us was managed by men of integrity, and which, with the other pets, was capable of performing all the financial duties which the U. S. Bank discharged for the government. This,too, was one of the banks which the government encouraged to increase its circulation on the strength of the deposites, that the public should not'so sensibly feel the vacuum occasioned by the destruction of the U.S. Bank. Gen. Jackson, by the advice of Mr Van Buren, tried one "experiment" of employing the State Banks as financial agents of government, in place of the United States Bank. The experiment failed. The same men now propose a new "experiment," the sub-Treasury scheme, making every petty postmaster and other collector of government dues a depositary of the public funds. And ought we to have any confidence in such pen'sexpediThe we a when gelous may have another run and risk tried total. sys. tem, which was sanctioned by Washington and Madison, and which worked so well for forty years? The new "experiment" also proposes to add to the risk of the former one, inasmuch as the depositaries now proposed re be used may not only fail like the pet banks and be unable to refund the money which is entrusted to them, but they have also dangerous appendages in the shape of LEGS, as Prentice says, and are liable to run off with the public money as they have already done in several instances Now be it remembered, (and it ought to be printed in capitals as a standing answer to the slang of the Loco Focos) while the in Dry Boston, Dock and in N. other York, pet the banks Commenwealth have failed, with the public funds in their hands, NOT ONE DOLLAR WAS EVER LOST WHILE THE r UNITED STATES BANK WAS THE FINANCIAL AGENT OF THE GOVERNMENT.

6. January 19, 1838 Vermont Phœnix Brattleboro, Bellows Falls, Ludlow, VT

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The report of the failure of the Commonwealth Bank, in Boston, which reached Marblehead on Friday last, occasioned great excitement in that town. Large sums in the bills of this Bank, had recently been thrown into circulation amongst the laboring and poorer classes of the inhabitants, who, knowing this Bank to be one of General Jackson's "Pets," with which he had promised to furnish the country a "better currency" than was supplied by the United States Bank, and blindly pinning their faith on his word, regarded its bills with perfect confidence. All the fishermen's bounties, and revolutionary pensions, &c. were in bills of the Commonwealth Bank. The panic and distress among the holders, may easily be imagined. We are informed that a great many of them held their sole dependance for support through the winter, in bills of this Bank, which, although they may at some future time be partially redeemed, yet for present purposes they are rendered entirely valueless. Many widows and orphans and aged pensioners are thus thrown into peculiarly distressing circumstances.One lady, we are told, had received arrears of pension money to the amount of two thousand dollars, all in these bills.-Salem Gas

7. January 20, 1838 Morning Herald New York, NY

Article from Morning Herald, January 20, 1838

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[From our Evening Edition of yesterday.] [From our Boston Correspondent. Excitement in Boston-Commonwealth and other broken Banks,-Middsesex Bank-A row anticipated. BOSTON, Jan. 16,1836. We are in a state of great uneasiness and feeverish excitement. Since the failure of the Commonwealth Bank, and the upsetting of some half a dozen hitherto supposed wealthy individnals the public have felt that not only the Commonwealth, but most of the Boston Banks are insolvent. There are many circumstances which have led them to this opinion. One or two I will mention. 1. The Commonwealth Bank is one of the oldest in the State. The confidence of the people in that institution was unbounded. Many rumors have been put in circulation from time to time about other banks touching their solvency, but the name of the Commonwealth, was never mentioned. It was considered as firm as the Everlasting Hills." 2. When the failure of the Commonwealth was known, the different banks in the city would not, in many instances, receive any bills, (excepting their own) on deposite, or in payment of notes. The' State Bank which belongs to the " Associated Banks" came out and gave a list of Sixteen different Banks, whose bills they would not receive. 3. The banks were many of them sued, and their apecie attached. All classes were seen going to and fro with their hands full of rags, in order to obtain the better currency." Brokers asked ten per cent for specie, and received it in exchange for rags ! You are aware that we have an Association" of the different banks, for the purpose of sustaining the whole of the Boston banks. The Association was formed immediately after the suspension of specie payments. Since that time, however, three of the Boston " Associated Banks" have failed. Knowing that New York is flooded with small bills of Boston banks, my immediate object is to make known, through your judicious journal, the banks which are in. solvent. I wish that your numerous readers would bear in mind the names of the "lame ducks" which are insolvent. LAFAYETTE BANK. FRANKLIN BANK. COMMONWEALTH BANK. CHELSEA BANK. NAHANT BANK. The Suffolk Bank, which is considered the "cock of the walk," has decided that the Middlesex Bank is down. How that is, I do not know-butI would urge the New Yorkers not to keep many of the Boston rags OR hand, for if Bostonians have no confidence in them, why should the New Yorkers? Last evening there was a large collection in State street, before the Commonwealth Bank. It wasexpectwould be a serious riot man was ed that there for the A of having de spatched to the Navy Yard, purpose a company of marines ready at a warning-when the bell on Brattle street should toll but nothing was then done. How soon there will be remains to be seen. Again, 1 say to the readers of "Bennett's Herald"Beware how you take Boston rags. Yours truly, C.H.

8. January 23, 1838 Rutland Herald Rutland, VT

Article from Rutland Herald, January 23, 1838

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BANK FAILURES. The late failure of one of the Government Banks (the Common Wealth Bank, Bos. ton) and the unfavorable rumors in relation to some oth. ets has created a trifling bank panic. But we believe it is subsiding. The Government deposite in the Com mon wealth bank, is said to be near $400000. What will be the ultimate loss cannot yet be known. Without designing to excite any unnecessary alarin, we would barely suggest that too much caution cannot be exercised in taking bills of distant banks-that is, foreign non specie paying banks We have the utmost confidence in the solveney of most of the Vermont Banks-and are inclined to believe that they will be in a safe condition to resume specie payments in the Spring

9. January 23, 1838 Rutland Herald Rutland, VT

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From the Boston Garette. THE OMMONWEALTH BANK. The Commonwealth Bank, of this city, suspended pay ment yesterday, and will, no doubt, be compelled forthwith to wind up 118 concerns. Such an occurrence is calculated to create considerable sensation in the community. and there was much conversation on the subject yesterday The event was productive of ruthers in regard to several other respectable banks of the city; but 80 for as we have been able to collect facts. these rumors are without founda. tion. Atany rate, the bills of all the banks of the city, (with the exception of the bank named at the head of this article, and the Franklin and Lafayette Banks at South Boston, which two last suspended payment several months ago, were received currently by each other hank, at two o'clock the closing hour yesterday nor is there any thing that we can hear of connected with the failure of the Commonwealth Bank, calculated to impair the credit of any other bank is the city,

10. January 30, 1838 The Caledonian Saint Johnsbury, VT

Article from The Caledonian, January 30, 1838

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TUESDAY, JANUARY 30, 1838. VAN BUREN'S "BETTER CURRENCY." We call the attention of our readers to the facts connected with the late Bank explosions in Boston, exhibiting in the clearest possible light the rottenness" of the Government and its pensioned agents. The Commonwealth Bank was owned and controlled by Government officers, and those in the confidence of the Executive. It was exclusively an administration Bank. It was selected by Gen. Jackson as one of the depositories of the public money when the deposites were removed from the United States Bank; and under the control of David Henshaw, then Collector of the Port of Boston, Isaac Hill of N. H, and others equally devoted to the administration, these funds were freely used in speculation. On the retirement of Henshaw from the Collectorship, that office was conferred on John K. Simpson, President of the Commonwealth Bank, that the favorite pet might be sustained from the funds of the Custom House department. At the time of suspension of specie payments, the situation of this Bank became apparent, and it was [boldly stated in the Boston Atlas that the Commonwealth Bank could|not have continued its operations another day. This was stoutly denied by the Post, the Van Buren organ {in Boston. Still the facts existedthe funds of the Bank and the deposites of the Government had been appropriated by the[government office holders who controlled them for the purchase of lands,-or in other words they had loaned these vast sums among themselves, and each had engaged in heavy speculations, while-like the felon, who, when he had stolen the pocket book, joined heartily in the cry of "stop thief," these swindlers were loudly declaiming against the danger of the Banks. At length, when an explosion bacame inevitable these officers of the Government, as appears by the debates in Congress, sent out large quantities of the bills of their rotten Bank, for the payment of fishermen's beunties-$100,000 to one town, $30,000 to another $20,000 to another; and when the claimants demanded specie or Treasury notes, the agents of Government replied that they must take Commonwealth Bank Bills or nothing We appeal to our readers whether an administration like this can be tolerated; whether knavery so unblushing should not meet the indignant frown of an enlightened public. And yet the Loco Foco Presses in this State are endeavoring to blind the eyes of their readers with the song that this is the legitimate effect of the Banking System, and that the government deposites can never be safe in any Bank. The fact is disguised, that, for forty years, during the existence of the first and second U. .S.Bank, these institutions were made the fiscal agents of the Government, without the loss of a dollar to the country,-and the attempt is

11. January 30, 1838 The Caledonian Saint Johnsbury, VT

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now made to humbug the people with the cry against the Banks, for the purpose of screening the vampyres who are fattening upon the spoils of office. The following letter from a gentleman in Boston exhibits the state of feeling existing in that city : BOSTON, JAN. 19, 1837. DEAR SIR :- Fine times we are having here, in the midst of Bank explosions ! The evils we labor under are great enough, failures (Bank) in reality sufficient, but the thousand and one rumors circulated greatly increase the alarm. Of the late six deposite Banks in the city, three have tailed, as well as the Middlesex, [Parmenter, loco foco Member of Congress, late President]; of the three remaining, one is good, but the other two I think will have to wind up : their bills, though now received, are doubted and passed quickly from hand to hand, and compose a large part of our circulating medium.The stock of one, the Fulton, sold yesterday at $45 for the $100 a discount unparalleled in a solvent Bank. Government had withdrawn its funds from all but the Commonwealth, and probably will not loose, except by that Bank the officers, pure Jackson men, having got all the capital, and the Government Unable from its own poverty longer to sustain them, they explode. Had not Simpson, President of the Commonwealth Bank, died, all the funds under control of the Collector (to which office he had just been appointed) would doubtless have been used to sustain the favorite pet of the Government and the Commonwealth Bank perhaps would have stood. What a commentary on the better currency! How much better (!!) the bills of the deposite Banks than the old U. S. Bank, whose bills have, since the suspension of specie payments, commanded from five to ten per cent premium in many parts of our country. The loss by the holders of Commonwealth bills will fall with most severity on the friends of the administration who were the largest holders. Yours truly, P.S. Broadhead, President of the Hancock (pet) Bank, has failed, and resigned his office of Navy Agent.

12. January 31, 1838 Martinsburg Gazette Martinsburg, WV

Article from Martinsburg Gazette, January 31, 1838

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ANOTHER GOVERNMENT PET GONE ! - The Commonwealth Bank at Boston, one of the principal Government pets, or late deposite banks, has closed its doors. This is done without any runs being made upon it, as specie payments are suspended, and must be the deliberate act of the Board of Directors, or of the officers of the institution, who have knowingly plunged it into inextricable ruin, and sacrificed the property of innocent and honest stockholders. They have been aided in this work by the Government, who have rewarded po litical partizans and speuclators by playing into their hands. The public should be protected against such swic. dling.- -Pennsylvania Telegroph.

13. February 3, 1838 The Madisonian Washington, DC

Article from The Madisonian, February 3, 1838

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democratic as heretofore they have been csteemed, are now held up as odious monopolies-patterns of aristocracy, and the like, because FEDERALAUTHORITY has been pleased to assail them in the name of democracy! What a lesson! FEDERAL power-always the furthest removed from the people, and the least responsible to the people of any political power existing in the United States-denounces State institutions, with which the people are indaily communion, and over which the people hold a perpetual and instantaneous cortrol; and this is called Democracy! Those who dare to break this unexpected blow, and stand in defence of these State institutionsnot in defence of the abuses made of them by the men whom the Patriot eulogizes, or their like, however honest-and to resist this crusade of federal authority. are called federalists! How must the common sense of enlightened men revolt at such a misuse of phrases, and rebuke the men who thus endeavor to screen such anti-republican measures behind the old prejudices of party names. The Patriot's article is as follows: THE COMMONWEALTH BANK.- We have not learned what is the precise state and condition of the Commonwealth Bank at the time it was closed on Friday seven-night. There is good reason to believe that of the funds of the government deposited in that bank not a dollar will be lost. The holders of its bills will probably realize their full value in specie if they keep them until the Boston banks resume specie payments; at all events they ought not to part with them at present for less than the paper par value. The imprudence of the Directors of the Commonwealth Bank has probably been great, although not greater than that of ninety-nine in every hundred men who have been engaged in speculations. Theirs was a deposite bank, and the money of the government flowed abundantly into their coffers. They were generous not only in loaning this surplus to individials that they considered responsible, but they accommodated the neighboring banks with large balances. Firm was their health-their day was bright, And they presumed 'would ne'er be night." The rise of real estate to ten times, twenty times, an hundred times the amount of first purchase, tempted some one or more to dip into that speculation, two yearsago; the improvements at South Boston, the erection of the splendid Washington House, come out of this. A steamboat project on Merrimack river to one whose perseverance never tired, and who never engaged in any enterprise but with a justifiable motive, was one among the inducements to another to overstep the bounds of prudence. Others were indulged with loans for other objects ; and in this condition the distribution of the surplus to the States" suddenly found the Directors of the Bank struggling with the difficulties like men for more than a year, the lamented death of one of the number overwhelms the whole Board, and they yield to that stern necessity which more wealthy men perhaps could not have withstood. The mer. composing the directors and managers of the Commonwealth Bank, have long stood in the very first rank of enterprising, prudent and cautious merchants; they were of that class who most of all leave no enterprise uncertain so long as human effort can contribute to ts saccess. Some of them have done more good to their kind than will compensate for a total loss of all their obligations left in the bank-they are all, we believe, self-made men who have indulged in no undue extravagance or intemperance of living, who have never neglected their proper business and who have taken advantage of the necessities of no man to take his property, but on the contrary have invariably extended a generous hand to all young men who were following in their footsteps. Such men may have been imprudent; but under the circumstances, shall they be condemned ? Their fault has been that of almost the whole country. From this time henceforth and forever" let the connection between the funds of the government and the banks be dissolved, so the use of them deposited as the basis of discounts shall never again Lempt to speculations ruinous to individuals and highly injurious to the whole country. This is the true conservative doctrine;" and we have good reason to believe that the misfortune which has overtaken the Commonwealth Bank will have convinced some of our friends in the cities who, with the whole body of federalists are disposed to cling to the union of Bank and State, that they have been in an error.

14. February 7, 1838 The Rhode-Island Republican Newport, RI

Article from The Rhode-Island Republican, February 7, 1838

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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

15. February 13, 1838 The Caledonian Saint Johnsbury, VT

Article from The Caledonian, February 13, 1838

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THE MONEY MARKET. The disturbance in the money market, produced by the explosion of the Commonwealth and Middlesex Banks, as well as by the corruptions exposed in the two fancy banks, where, through the aid of the brothers-in-law of the Secretary of the Treasury, a portion of the public money was disposited) for "safe" keeping, has at length in a great measure subsided. The storm, while it has convulsed has purified, and a calm has now succeeded.-Ofth banks, which have been effected by the disturbance, the Fulton, Hancock, and Commercial, have given security to the associated banks, by whom their bills are redeemed at par. The American and Kilby have redeemed all their small billsat par; and will fulfill their remaining obligations to the public with fidelity. The panic produced by the explosiou of the administration deposite banks has led to a thorough examination of all the banks of the association in this city, and the result has been entirely satisfactory. Public confidence has in consequence been restored-and there is no longer any one bank of the association, to whichdistro st can be attached. The effect of this searching operation, and of the revival of confidence, must be to lighten the pressure upon the money market, which has been felt so severely during the last month, and to enable the banks to extend their cuntomary accmomodations to the public - Boston Allas.

16. February 24, 1838 Liberty Advocate Liberty, MS

Article from Liberty Advocate, February 24, 1838

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From the Louisville Journal. COMMONWEALTHBANK-PuBLIC MONEYSUB-TREASURIES.----T Commonwealth Bank was the Government and the Custom house bank. It was controlled enfirely by Loco-Focos, some of them officers Government-by the men who cried; down with the United States Bank!--the public money IS not safe!-remove the deposites! and who since the suspension have cried-down with all banks! With a capital of $500,000, the Commonwealth Bank has extended its liabilities to $1, 400,000. It is said that it now offers to pay 25 cents on the dollar, so that the Government will only lose 75 per cent. of the large sum on deposit. One of the circumstances, says the Boston Atlas, made public by the explosion the Boston pet bank, is the fact, that six the immediate friends of the administration in New England, namely, John K. Simpson, Hall J. How, Charles Hood, Lewis, Wm. Parmenter, and Isaac Hill, are collectively indebted to the Commonwealth Bank, in a sum exceeding the whole amount of its capital of $500,000." Just before the failure of the Common wealth Bank, the following notice appeared in the Morning Post. The bank was no less than the Commonwealth "Norice.-Persons holding checks against the Custom-house, are requested to present them either at the bank or at this office for payment immediately. DAVID HENSHAW, Collector. Jan. 11." Upon this notice the Atlas makes the annexed forcible and just comment: "Is it not most remarkable that this notice, calling upon the holders of checks to present them at as THE Bank so for payment, or at the office, where we may fairly presume they would have received the bills of the bank, should have been published just thirty-six hours before the failof the bank was made public, and on the very day that the directors determinthe to stop payment? Why should holders of checks against the custom-house have been called upon at that particular and most suspicious time, to exchange them for the bill of a bank on the verge of bankruptcy? What need was there of a public, imperative call upon the holders of checks at that time? Did the Collector wish to save further losses to the government the of the community, or he at wish expense to rid himself in the did easiest way of his own personal responsibilities? The transaction wears a bad aspect." The Atlas further remarks: "The explosion of the great administration bank of New England naturally calls to mind an incident, to which we may trace the origin of the financial disasters, which have harrassed the people of this country for the last three or four years.It was in this city, while enjoying the hospitalities of our municipal authorities, that Gen. Jackson, at a time when his physicians had despaired of his recovery from a prostrating illness, signed in obedience to the solicitous instigations of Van Buren, Henshaw & Co., the order for the removal of the public money from its authorized place of deposite. It was in this city that the fruits of that detestable system have been developed in the overthrow of the bank. which was the first to solicit and contract for its portion of the spoils. "We still have justice here!" The bloody instructions have returned "to plague the inventor!" The spoilers have been spoiled!The plunderers plundered! The fate of the Government deposites in the Commonwealth Bank, and the which was made of those deposites give foretaste of the sub Treasury Scheme. been the aim control the money. It has ever public of the Jackson With this the were from view deposites It removed diffi the United States Bank. was not cult to find enough banks, like the Com monwealth, ready to use the public money obedience to the wishes of the Presi dent and his minions. The manner which that money was used is no longe a problem. It was loaned out by million to the partisans of the administrationeditors of newspapers and active dema gogues-no matter whether they lived Maine, Georgia or Kentucky-no matte whether a single endorser residing in

17. March 1, 1838 Herald of the Times Newport, RI

Article from Herald of the Times, March 1, 1838

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[From the New Bedford Mercury. # Commonwealth Bank. The Report of the Joint Committee of the Legislature in regard to the doings of the Commonwealth Bank, was made to the Legislature on Tuesday (15th,) and with the several appendices by which it is accompanied has been published at length in several of the Boston papers. Its great length has prevented us from attempting its republication entire in our columns, and we therefore give a synopsis of some of its principal features. The Committee say in the commencement of their report- In entering upon the enquiry the committee felt great anxiety as to the discharge of the responsible duty assigned to them; being fully acquainted with the public solicitude in regard to the affairs of this institution. The credit of the Commonwealth Bank has been long established. It has been under the management and influence of leading and distinguished individuals-was the favorite and confidential depository of the administration of the general government in the eastern section of the Union; and as such had the control of great means, and could command a widely extended circulation of its bills. Under such management, with such friends and such extensive resources, the failure of the Commonwealth Bank has excited a strong sensation in this community-and with many it was feared to be the precursor of a general failure of all our banking institutions. In this state of public excitement the committee deemed it their duty to look with more than ordinary diligence into the management of this corporation. This duty appears to have been faithfully performed-the report is an elaborate document, furnishing a mass of facts, proving incontestibly that a system of fraud and mismanagement has been adopted by those who have controlled the affairs of the institution which should not only excite the lasting indignation of a virtuous community, but which calls loudly for legal redress and punishment. It appears from this report that on the day of its failure the debts amounted to $523,479, of which the amount due the U. S. Government is $337,625-bills in circulation $358,952-post notes 11,500; besides which it owed the Boston Sav-

18. April 2, 1838 Morning Herald New York, NY

Article from Morning Herald, April 2, 1838

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though the bank writer seems to be imprfectly acquainted with grammar. What was the design of the call on the part of the Senate, I have yet to learn, unless it was done to prejudice the minds of Congress against banks. Both houses have been exceedingly dull today. In one house, the Army Appropriation Bill, and in the HORACE. other, the Camberland Road. BOSTON, March 30, 1838. MR. BENNETT-We have little or no news in this region-still less business. Importing and jobbing, and, in fact, business of all kinds, seems to have paused in its operations. The banks are hauling in, and the merchants are obliged to pay the last dollar to cancel their liabilities. The associated banks here are determined to meet the Gothanites face to face; so that, whatever may be the determination on their part, they will agree upon, and act in concert. The managers of our banks have had some important private meetings, and from what can be learned out of doers, they intend to curtail and then resume, whether they have company or notin order, if possible, to re-establish the credit of the Boston banks. The Market Bank has published a statement, which is not very satisfactory to the public. That it is in difficulty, few question; and that it has been seriously run upon, is noterious. However, the report made by interested persons, is worth as much as any fairstory which was ever made by individuals who have property at stake. The banks here have fallen from an eminence which was once indeed a credit to Boston, but from which she will never recover. For instance, the exploded banks: American Bank will pay her bills in full. Commonwealth Bank (president deceased-cashier and some of the directors in pecuniary difficulties,) will pay about 40 per cent. Commercial Bank (president gone to Canada with $19,000 in gold,) will pay her bills probably in full. Their funds are loaned to a few individuals, which, if paid, will be favorable to the stockholders. Franklin Bank (president, cashier and directors, indicted, and are to he tried for mismanagement; president Dunham says he can't read or write so how,) will pay probably 15 cents. Fulton Bank (some of its officers are laboring under the pressure of the times.) will pay from 80 to 90 per cent. Kilby Bank (some of its officers have known what it is to be in hot water-funds of the institution distributed among the directors,) will pay not far from 90 cents. Lafayette Bank (the past and present presidents, with the directors, are indicted for mismanagement, and will have their trial in a few days one of their directors has just had his trial for stealing $10,000 of Lafayette bills, and has been acquitted; the bank has been miserably managed,) will pay possibly, 7 per cent. The banks to be wound up are the Washington Bank, Hancock Bank, and Oriental Bank; and many more, doubtless, will think it expedient to surrender, and die an honorable death rather than to linger on, and after all, be compelled to give up the ghost, in deep disgrace. Many failures have not taken place here within a short period, though in all probability they will occur in afew weeks to an alarming extent. Yet, indeed, the plan of mertgaging property is here all the go! The city clerk, with hisassistants, find but little leisure, while the lawyers are cudgelling their brains in devising howtheir clients can get out of a bad scrape, and not suspend payments. The mortgages of one large house which failed a short time since, covered one hundred and fifty pages. So, thus they contrive and plan. Many respectable houses, who are now in good standing, have get their stocks mortgaged The Misses Grimke are here and lecturing at the Odeon to crowded houses. Great anxiety is manifested to hear them. They are listened to with profound respect and attention. Abolition is making great headway in this State. I assure you, you might as well talk about putting spurs to the lightning, as even to (attempt to drive the thing faster, or to make Abolitionists more rapidly than they are ROW increasing in the East. The C. H. Lord prosper the cause of the just.

19. May 16, 1838 The Rhode-Island Republican Newport, RI

Article from The Rhode-Island Republican, May 16, 1838

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$32,126,058 the Total, ova made to the House of dated 26th appears ber resentatives, By report March, it Repof these eighty-eight banks, forty-six ssthe entire ase them. That of enhad that, discharged twenty-eight others, balances due of the them. from e-1in twenty 88had that date been drawn the by the (abalances tire balances at owing remaining remaining for, eight, and m. half H million as appears by a report to the 29th March,) were arfor the public made bout available service, considered and subnject to draft." '8The following banks have availed themhe selves of the act of the 12th of October last, d by giving bond with the requisite security ay $24,870 Buffalo, N. Y. Commercial Bank, to 781,316 Natchez, Miss. Agricultural Bank, Union Bank, 87,519 Nashville, Tenn. e 529,820 Louisvilla, Ky. Bank of Kentucky, 12,935 Bank of Wooster, Wooster, Ohio, 489,039 Detroit, Miche Bank of Michigan, of The following have claimed the benefit of the act of the 12th of October, " and bonds have been sent to them, which are, it is supposed, in the process of execution." $853,891 Branch Bank of Ala. Mobile, Ala. 864,409 Natchez, Miss. Planters' Bank, 10,304 Planters' Bank, Nashville, Ten. Franklin Bank, Cincinnati, Ohio, 328,924 377,762 Indiana, State Bank of Ind. 243,930 Farmers' & Mee. Bank, Detroit, Mich. The following banks have been sued: $39,636 Boston, Commonwealth Bank, do. Franklin Bank, 16,800 the same the several of the banks still " lil that, In report, Secretary held balan. states credit of officers," were in the course of paid out time to time, as which ces from at the disbursing needed." being is the history of the much abused banks. Of which held at the deposite This they period thirty-two of suspension, millions about them about a been twenty-seven by millions four have and already of half beand in the progress secured under the act Conand about fifty doling millions already gress, amply only thousand $16,800 of in suit. Of this sum, bank selected in 1836, under stances as elicited in in lars a placed lately the investiga- circumtions Boston, of not a very reputable and the entire to have been character, other at appears balance placed due there from 1st of October last, as at reported the bank to overto the amount of since the the Secretary the $2,600 therefore, that be date if shall be ultimately these common justice drawn of any thing banks, lost could by either hardly it to defect in the system. it is shown by the of e the own report, all Thus, attribute Treasury's that Secretary after the which has been not one will be lost by the banks, by the last mentioned dollar outery -Madisonian. made, unless inserted the above at the request of respected subscriber, we Having highly which would apoffer a few comments upon it, in pi pear to us necessary to place the subject in M its true position. [E: The above statement has reference solely to the liquidation of the debts due to the Government by the late Deposite Banks, and we are happy to perceive that a sum is considered liable to be ullost. That this is timately 60 small favorable eareful result manner mainly owing to the in which the government funds have been withdrawn from some of the Banks, and We time allowed to others in which to pay, we presume will not be denied. But the attempt to draw from the circumstances of cop the ultimate liquidation of all the governriot in the banks, an argument renewal of the ment in favor deposites of a connection beand them and the government, does not iss the at issue peoap tween meet question before the they The plain facts of the case, as par to us, are these-the ticl appear ple. government its equivadeposited in the bank specie or not lent, with the express stipulation of its repayment, when called for, in the same medium.-The banks suspended specie payments, and refused to pay the government er and other creditors, in any thing but irreto deemablepaper.-The governmentis bound the laws to offer nothing in payment to its but specie or its by creditors equivalent, banks, was and by this act of its agents, the tion thus rendered almost totally unable to comcon the ply with the requisitions of the laws; but drafts were as usual given on many of the full deposite banks, and the government creditor had the option of receiving depreciated bank paper in payment, or of protesting tha is draft, and waiting an uncertain period to his dues from the government, Most of these obtain legal currency. creditors in the preferred the first course, and in this way Me many of the deposite banks paid all their Ne debts to the government, while others have been unable even so to pay, and, on the the recommendation of the President, have been allowed several months to meet the demands ped of the Government upon them. We have thus briefly stated the facts, and So it remains for the people to decide if a syscou tem, which has brought discredit and emparrassment on the Government, and loss Ch the public creditor, is worthy of renewal fort even if no loss is ultimately sustained by the Government from its connection with tain he banks. the the the A water spout passed over Sullivan's

20. January 12, 1839 The Madisonian Washington, DC

Article from The Madisonian, January 12, 1839

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# SUB-TREASURY CANDOR. In his last annual report, the Secretary of the Treasury says, "recent occurrences have shown that the whole treasure of the United States, when entrusted to banks, is liable, in critical periods, to be swept at once from the use and control of the General Government." What recent occurrences justify such a declaration-such an assault on the integrity and correct dealings of the banks? There are none whatever. The whole is an invention and misrepresentation, for the purpose of prejudicing the banks and promoting the Sub-treasury scheme. In another part of the report the Secretary says, "the remaining dues from them (the deposite banks) to the Treasurer on defaults accruing between 1834 and October, 1837, though at first very large, have been reduced to about $2,400,000, and most if not all of these debts, with some others owing to public disbursing officers for money on deposite, it is confidently expected will, in the end, be paid." Why did the Secretary go back to 1834, when not a single defalcation occurred till the general suspension of specie payments took place in May, 1837, an event which his own mismanagement of the public funds mainly rendered necessary? Does he intend to convey the idea, that the whole of the money in the banks, at the time of suspension, was "swept at once from the use and control of the Government?" If so, the facts contradict the assertion. When the suspension took place on the 10th May, 1837, they held of the public money about $32,000,000. On the 28th day of August following, the sum had been reduced by payments made of the drafts of the Treasury, to less than $9,000,000, at the credit of the Treasurer in the banks, as is shown by the table appended to the report of the Secretary, at the extra session. And this enormous reduction took place in the space of one hundred and ten days; yet the Secretary would convey the idea, that it had been "swept from the use of the Government!" On the first of the present month, a second installment fell due and payable by the banks that availed themselves of the credit authorized by Congress in October, 1837, and we doubt if the balance owing by the banks now exceeds a million and a quarter of dollars, the most of which is well secured, and will be paid as it falls due. A great outcry has been made, and but the other day brought forward in Congress by Mr. Taylor, of New York, that in consequence of the credit given to some of the banks, the Government had been obliged to issue Treasury Notes, and to pay interest on the same, at the rate of from two to six per cent. per annum. And were not the banks under the act, compelled to pay interest at the rate of six per cent.! And what amount of Treasury Notes has been issued? Why nearly sixteen millions; while the whole amount the banks took of the credit authorized, amounted only to about four millions and a half of dollars! Why is it that the Secretary has avoided, throughout his whole report and documents accompanying, even mentioning the names of the Commonwealth, and Franklin Bank, of Boston? Those are the only two banks by which it is even suspected that a dollar will be lost that have been employed since 1833? We want to know how it happened that about $40,000 stood at the credit of the Treasurer at the time the former bank failed, when in October, 1837, nearly every dollar had been drawn out. We want to know something as to the reasons for placing a large sum in that bank at the credit of the Commissioners for purchasing a site for a Custom House, when the purchase had neither been made, nor the site agreed upon? We want to know too, something about the manner in which the latter bank was selected-the collusion between it and another bank whose President was the brother-in-law of the Secretary of the Treasury, and was Naval Officer at the time-his agency in coming on to Washington and getting the bank selected, all of which was partially set forth in the report of a committee of the Massachusetts Legislature last year. These defalcations would be proper subjects, in our opinion, for investigation by a committee. Since the Sub-Treasuryites are resolved to continue their warfare against the banks, the deposite system, and the currency of the country, we will carry the war into Africa.