7952. Merchants Bank (Boston, MA)

Bank Information

Episode Type
Suspension → Reopening
Bank Type
state
Start Date
May 4, 1838
Location
Boston, Massachusetts (42.358, -71.060)

Metadata

Model
gpt-5-mini
Short Digest
9f197681

Response Measures

None

Description

Articles report the Merchants' Bank of Boston have resumed specie payments in full in early May 1838. There is no mention of a depositor run; the bank had previously suspended specie payments (context of the 1837-38 crisis) and then resumed. I mark the overall episode as a suspension followed by reopening. Exact suspension date is not given in the articles, so suspension event is recorded without a precise date. Cause of suspension is coded as macro_news (broader financial crisis/suspension of specie payments) since articles discuss general banking disturbances and resumption movement rather than a bank-specific scandal or rumor.

Events (2)
1. May 4, 1838 Reopening
Newspaper Excerpt
The Boston Daily Advertiser states, that the Merchants', Columbian and North banks of that city, and perhaps others, have already resumed specie payments in full (Richmond Enquirer, 1838-05-04).
Source
newspapers
2. * Suspension
Cause
Macro News
Cause Details
Suspension was part of the wider disruption in specie payments during the 1837-38 banking crisis; article context discusses banks resuming specie after previously suspending payments.
Newspaper Excerpt
The Merchants' Bank had long since resumed specie payments.
Source
newspapers

Newspaper Articles (3)
1. May 4, 1838 Richmond Enquirer Richmond, VA
Article from Richmond Enquirer, May 4, 1838

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Article Text

U. S MATTERS The New York Herald of Monday last states, "That the United States' Bank had been offered a large amount of specie to assist that institution in returning to specie payments. We now state that deputation left this a few days since to make the offer and was received rather cavalierly on the part of Mr. Biddle, who replied that he had 'taken his position, and should maintain it, without any assistance whatever -Mr. Biddle seems be in a fair way of making his Institution odious to e great body of an enlightened people. The Herald states, that the packets were to sail on Tuesday; but that "the business done in exchange on London has been very moderate, the demand generally much less than anticipated-the asking rate at opening by the leading drawers 7 per cent which soon gave place to 3-4 per cent at which the best bills, to small extent, were sold-the rate further declining to 6 1-4 and 61-2 per cent., at which prices the leading houses were offering their bills on Change. Late in the after noon we heard of sales at 6 per cent. of good bills. Bills on France opened at 32 1-2 a 35, and fell early to 5.37 1.2. "Otherwise it has been dull day as to quantity of business transacted, but we perceive no falling off in spirit and confidence The small attempt at resumption in Philadelphia has operated to produce a greater firmness in the rates at which the money of that city is held, but no material change in rates has yet taken place.-T dividends by the banks are daily declared -already six city banks have made dividends from 8 to 10 per cent for twelve months-the New York Gas Company dividend of 5 per cent. for six months The State stocks declare their dividend to morrow.-Specie is still flow. ing into the market. From Bermuda yesterday was ceived $250,000-also small sum from Tobasco to day At New Orleans, on the 21st, specie was at and 8 per cent. premium. The Globe remarks, that " all eyes are turned to the millions of New York, while the hundreds of thousands of New Orleans attract no attention. In this way it escapes observation that the West and Southwe are replenishing with specie, not so rapidly. but as fully and surely, as the Northeast. Every week we see two or three hundred thousand dollars noted as arriving at New Orleans, and on the 9th and 10th instant, $300,000 arrived in two days. The supply at New Orleans has this advantage over that at New York-it is perennial. It continues all the year round, and every year in suc. cession, and is the regular sequence of the Mexican trade Besides the coin which now comes to New Orleans, we see the arrivals of the bars of silver mentioned there. di rect from the Mexican mines, and brought to the U.S. Mint at New Orleans. This Mint is to become a main coiner of Mexican bullion The Boston Daily Advertiser states, that "the Merchants', Columbian and North banks of this city, and perhaps others, have already resumed specie pay. ments in full We have little doubt that their example will be soon followed by the other banks of this city and State; nor have we any doubt that they will persevere in it. It was evident some weeks since, that they had prepared themselves for such course, provided the state of the foreign exchanges favored the adoption of it. It has so happened that nothing could have been more fa. vorable than the state of the foreign exchanges, and the consequent influx of specie. The currency of Massa. chusetts, therefore, is restored to specie basis, and the first step is taken for the restoration of Mercantile con. fidence, credit and business. A small but cheering sign is given by the Philadelphia Sentinel of Tuesday last We learn that the banks of the city and county are making arrangements to pay in specie in a few days, all sums under one dollar. The City Councils have passed an ordinar authorizing the City Treasurer to issue new loan of $260,000, payable in May, 1840, to redeem the certificates now in circulation, which are due on the 12th inst. We understand the intention of the Treasurer to issue no certificate under one dollar. We trust that the loan companies and the incorporated districts will also make arrangements redeem all sums under one dollar as speedily as posst The great Regulator is now the great obstacle in the way of specie payments. But public sentiment is ing against him even at his own doors. We hail the following account of public meeting in Philadelphia, with the greatest satisfaction SPECIE PAYMENTS- public meeting (says the Pennsylvanian) on Monday evening at the county Court. house, in favor of a resumption of specie payments by the banks, was very numerously attended A multitude of people who caine forward in consequence of the call, were unable to obtain admittance. and had the room been many times larger than it is, it would have been com pletely crowded Mr Andrew Milleracte as chairman on the occasion- series of resolutions expressive the sense of the meeting upon the important subject under notice, was adopted, and a number of spirited ad. dresses were delivered The meeting adjourned to assemble again on Monday afternoon. May 14th. to hear the report of committee appointed to address the banks in reference to an early resumption "It is plain that the strongest feeling is abroad in ference to this matter, and that the people of Philadelphia are justly impatient at the continuance of state things from which their brethren of N York are now effect released. It is to be hoped, therefore that the move ments in this city, and the general course of public nion among men of all parties. will not be W without their legitimate effect, and that the first step towards resumption, as announced in the determination of the banks speedily to pay all sums under a dollar in specie, be immediately followed by a prompt adoption of that policy which alone can restore confidence and prosperity. It may be. as the bank letter assures the prerogative of strength, not to be afraid of the post ponement of fulfilling obligations-but the same policy is so often the necessity of weakness, that it is very ficult to discriminate between the -certain that the public do not; and so long as the suspension tinues, just so long will industry, energy and enterprise be 'bound in by saucy doubts and fears, and the dead weight of distrust and apprehension sit like an inculous upon Philadelphia. Every one sees that now, when specie is flowing rapidly in upon us from every part the world, is the movement for resumption- precisely the moment foretold in the bank manifesto of last year, and by all the logician's rules now must be the time for shaking off the crushing load of a totally irredeemable currency. Thus, from every quarter the screws are about to be put on Mr Biddle. He will be compelled by the force of the public sentiment. and the character and credit of his Bank in Europe, to resume. if he can. But. "Is ABLE TO RESUME? Under this head, the last Globe devotes more than two columns to an able discussion of the question We take the following extracts for to-day We shall publish the whole article hereafter: "The first item to be looked to in every bank is the amount of its specie in hand, and the proportion which that amount bears to its immediate liabilities Taking four millions of dollars, in round numbers, as the amount of the bank specie, we will see what are the liabilities which it must provide for either upon the instant, or in short time after the resumption At the head of these liabilities stands new item in the catalogue of this bank debts: that of its debt to local banks! This item alone announces the deplorable decline of the great re. gulator The amount due to State Banks is the enormous sum of $6,853,849 And this is an increasing balance. and known to be on interest. Eve. ry return since the stoppage of the bank shows an in. crease of this State debt: and nothing more is wanting to show the helpless condition of Mr. Biddle's bank, and the wretched manner in which it has been managed. Against this enormous debt due 10 the State banks, there is an apparent set off of $2,786,337 due from local banks to Mr. Biddle's If this set off was real, and was actually due from independent State institutions, the balance against it would take the whole of the specie which the bank possesses, and then lack near a quarter of million of meeting what is due to banks But it is not real set-off-it is not set off due from independent banks but is chiefly due from the numerous dependent local banks, now prostitut to the degraded condition of Bid die-bank agencies. The greater part of this apparent set-off is due from them: that to say, is due from Bid Biddle that due from nobody

2. May 8, 1838 The Caledonian Saint Johnsbury, VT
Article from The Caledonian, May 8, 1838

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Article Text

WINDSOR BANK. The Windsor Chronicle says: -If the rumors here, about the vigilance and success of the Directors are to be credited-as we suppose they are. to a greater or less extent-holders of Windsor Bills will best consult their interest by refusing to part with them at any such discount as has been common for some weeks past. All the Canadian prisoners at Toronto and Ham. ilton under sentence of death, except Theller, have been reprieved till the decission of the Home Government as to their fate, shall have been known. The Territory of Wisconsin has been divided by law of Congress-that part west of the Mississippi to constitute after the 3d of July next, a separate territorial government, by the name of Iowa. The Boston Daily Advertiser says the Merchants, Columbian, and North Banks of that city, have resumed specie payments in full. Most of the other Banks pay specie on their small bills. AWFUL! The Van Buren Legislature of Virginia has passed an act legalizing the suspension of specie payments by the banks of that state until the 1st of April 1839, and requiring the banks to issue small bills until that time.

3. June 19, 1838 Richmond Enquirer Richmond, VA
Article from Richmond Enquirer, June 19, 1838

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Article Text

The OCR of the image is: tend to promote their benefit. The Secretary, then, in requiring of collectors and re- ceivers not to take bank paper of a less denomination than twenty dollars, had acted with reference to the ex- isting state of things, and with reference to the existing Jaw of the land. He had authorised the receipt of that description of paper money, which alone could be dis- bursed. He well knew that the banks were no longer the fiscal agents of the Government. That the collect- ors of the customs, and the receivers at the land offices, were charged with the duty of receiving and disbursing the public money; and it seemed to him that there would be a most glaring absurdity in requiring these public of ficers to take what they could not disburse to receive notes of a less denomination than twenty dollars, when, by the express terms of the statute, no such paper mo ney could be paid to any of the public creditors. This then was the head and the front of the Secreta- ry's offence. That by reason of the recent legislation of Congress, and to secure to the community the bene- fits of the joint resolution of 1816, he had issued a gene- ra! order to collectors and receivers to take that descrip tion of paper, and that only, justified by existing law; and the notes of those banks, and of those banks only, which the deposite act of 1836 permitted. He had done what the law authorized, and what it seemed the law required him to do; he had done nothing more; and if there was cause of offence, it was not to be traced to that act of the Secretary of the Treasury, but to the positive enact- ments of Congress. He wished to say a word or two upon the proposition of the Senator from Massachusetts. He could not be- lieve that a majority of either House of Congress would be found to legalize the receipts of bills of a less de- nomination than five dollars for the public dues. Such a proposition could find no favor with him; and he should be slow to believe that Congress would, by its own legislation, expel from circulation the specie which the existing policy of the Government was well calculated to keep in circulation. He believed that the Legisla ture of his own State, and the Legislatures of all the New England States, would ere long prohibit the banks from issuing bills of a less denomination than five dol- lars. It was, in his judgment, greatly to be desired. The direct effect of such legislation would be to intro- duce at once specie into circulation for that description of paper. The consequence of such an improvement in the circulating medium would be most sensibly felt by the laboring classes of the community-a portion of our citizens more likely to be injured than any other, and mucl: less able to bear loss than any other, by a depre- ciated paper currency. He hoped, therefore, as a mat- ter of great public convenience, that Congress, as well as the State Legislatures, would, by their public sets, increase the specie and diminish the paper circulation. In no way could this be done more effectually than to carry out the policy of the deposite act of 1836 The papers presented this morning by the Senator from Massachusetts look to a departure from that policy. All he would say was, that he was wholly opposed to the object avowed. Nor was he of the opinion that there was any great inconvenience experienced or felt in Boston by the importing merchants, as things now ex isted. He had read in one of the public journals of that city a journal not in favor of the present Admi nistration-and he had received letters from that city; and he could not believe, relying on these sources of information, that there was much practical embarrass- ment produced among the mercantile community in consequence of the act of July, 1836, and of the recent Treasury Order prohibiting the receipt for customs of the notes of banks which had issued bills of a less de nomination than five dollars. The Merchants' Bank had long since resumed specie payments. He believ ed that two or three other banks had, also, by a vote of their boards of directors, resumed specie payments for their liabilities; and, although the Merchants' Bank could not, under the deposite act of 1836, be selected as a depository of the public money, having paid out the notes of other corporations of a less denomination than five dollars, yet that bank had not issued, since the passage of the deposite act of 1836, its own bills of & less denomination than five dollars. The notes, there fore, of that bank were receivable for public dues; and, since its resumption of specie payments, he believed that more than two hundred thousand dollars had ac- tually been paid into the custom-house for duties, of the bills of that institution He was advised, and verily be. lieved, that every possible accommodation was afforded to the mercantile community by that institution. He, therefore, was not aware of any special inconvenience that was felt by the mercantile community by reason of the prohibitions mentioned in the act of July, 1936, and he certainly could not agree to any change of the policy as manifested by that statute. In his own State, there were 27 banks-all, with the exception of two, had issued and still continued to issue their own notes of a less de- nomination than $5; and those two had paid, in the course of their business, other bank paper of a less denomina- tion than $5. The two banks to which he referred-one at Portsmouth, the other at Concord-had not issued their own paper of a less denomination than $5, and there could be no doubt that the bills of the Commercial Bank at Portsmouth, and of the Mechanics' Bank at Concord, if he was not mistaken as to their course, would be re ceived for the Government dues; and it was equally clear, that the bills of all the other banks could not be received, without an entire departure from the act of July, 1836 They had not been received at any time since the pas sage of that act, and they would not be hereafter received, because they would not desist from issuing bills of a denomination. It was more for their interest to pursue this course, than to have their paper received for Go- vernment dues. And so it is with a great proportion of the banks of Massachusetts. But, while he was wholly opposed to any material change of the provisions of the act of 1836, he would have no objection to placing all the banks upon the same ground. He would say to themall, if hereafter you will cease to issue or to pay out bills of a less denomination than $5, he would agree to receive their paper for customs and for lands. Beyond this, he would not go. Beyond this, with view to the practical convenience of the importing merchants, be did not be lieve it was necessary to go. He hoped, therefore, that the future legislation of Congress, in relation to this mat ter, would be so directed as to add to, not diminish, the specie circulation of the country. ### MR BUCHANAN Mr Buchanan observed that it could not be denied, that, under the operation of existing laws, there was now a total disconnection between the Government and the banks, even if they resumed specie payments. The separation was complete and entire, so far as that the Government could not employ any banking institutions which have issued notes under five dollars; and this fact ought to be known to the country and to Congress, be ause the banks themselves bad produced the separation, evin in case they resume. There might be a few colitary excesions; but he had heard of no bank in the country, with the exception of those of Missouri and Arkansas, which hat not either issued small notes of its own, or paid out thos issued by other banks or corporations. None of the bates of Pennslyvania had issued notes of less than five dolars, but they had generally paid out notes issued by other corporations, and therefore, by the deposite act, they brame disqualified as public de positories. [Mr. Preston here interruptea Mr. B. to say, that none of the banks of South Carolina tad issued or paid out notes under five dollars] Mr. Buchanan resumed. The question now was as to renewing the connection between the Government and the banks. He did not think he should vote for a bill to renew the connection. There was another quea- tion raised by the Senator from Massachusetts, and that was, relative to the difference betweentyse which have issued notes under five dollars others. He did not think there was any digererse in point of morality or propriety. Mr. B. said he never would agree to repeal the provision referred entirely; but, for the sake of giving the banks time to resume, he would be willing to suspend its oration for a time-say to the 6th of October nexレ Mr. Weber believed that the interdiction after the 6th Octer next would be the most pernicious measure that could be adopted in the event of a resumption. fr. Smith of Indiana said he rose simply to correct a statement of the Senater from Pennsylvania, that the banks of all the States, except Missouri and Arkansas, received or paid out notes of a less denomination than ive dollars. He believed the remark was incorrect, so far as the banks of the State of Indiana were concerned. Those banks are not authorized by their charters to issue notes ot a less denomination than fuo dull