Full text of Records of the Federal Deposit Insurance Corporation, Record Group 34 : Materials Regarding Insurance of Bank Obligations in Vermont, 1831-1866 [2 of 2], Box 12, Folder 4

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Federal Reserve Bank of St. Louis

Vermont Historical Society
Montpelier, Vermont

September 9, 1951+

Edison H. Cramer, Chief
Division of Research and
Statistics
Federal Deposit Insurance Corpn.,
Washington 25, D. C.
Dear Mr. Cramer:
Dr. Peach has referred your letter of August 3rd to me
for reply. I had little information at hand, so made
inquiries of various department heads and officials.
I quote from the letter of W. A. Shepard, Deputy State
Treasurer; August 27, 1954

•

"Generally speaking, all matters pertaining to the birth
of early Vermont banks can be located through the
death
and
legislative acts, since their charters were granted by the
legislature and since the legislature took official action to
protect the creditors when they ran into difficulty.
I find on Page 35 of the Acts of 1841, a "resolution
relating to Essex County Bank". The legislature by this
resolution set up a "committee to investigate the situation and
concerns of the bank of Essex County." This committee was
empowered "to adopt and pursue such meausres, by suits and
otherwise, as said committee may deem expedient to protect the
Safety Fund and the public from loss". The legislature of
1857 took rather drastic action in connection with the matter
of banks, and Acts No. 41 through 46, inclusive, set up
safeguards in connection with their operation.

•

It is interesting to note that these acts refer to the
Commissioner of Banking, even though according to the Secretary
of State's Office, the present Commissioner of Bankinv was
not established until 1906. I assume that this meant the State
Treasurer in his capacity of Commissioner of Banking, which
he was at that time. No. 38 of the Acts of 1858 again refers
to the Essex Bank, and whereas I do not think that any details
as to the settlement are available, I believe we may safely
assume that its' affairs were wound up legally and equitably
for all concerned.
I did not go beyond the Acts of 1861 and I found no
reference to the Danby Bank, but I think we are safe in assuming

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ct.

Vermont Historical Society
Montpelier, Vermont

Edison H. Cramer, Chief
Division of Research and
Statistics

-2

that its' affairs were wound up under the legislation passed
in 1857 and that the Safety Fund was properly protected at
all times."
I find listed in our catalog, a report of the House of
Representatives Committee on affairs of the Essex County
Bank, Oct. 26, 1842. 7P.
There is a brief sketch of the Danby bank in The History
and Map of Danby, Vermont, by John C. Williams. Rutland, Vt.,
McLean & Robbins, 1869. The final paragraph reads: "The Bank
failed in Sept. 1857, and Hon. A. L. Miner of Manchester was
appointed Receiver, in Dec. following. When the Bank failed,
C. Hitchcock and J. T. Hatch of Buffalo, owed it $80,000,
which proved a total loss, and other bad debts made the loss
exceed twice the amount of the capital stock."
Probably the Vermont newspapersof 1841, 1857 and 1858
would yield comment and local sentiment at least, lacking other
first hand information.
The Vermont State Library has the
most complete collection of Vermont newspapers as far as we
know, but they must be used here in the building. They may
have the same report I mentioned, and other material which we
do not have.
Very truly yours,

Taut, F
Clara E. Follette
Librarian and Museum Director
CEF/emf

•

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Federal Reserve Bank of St. Louis

November 23, 1954

MEMORANDUM
TO:
Dr. Golembe
FROM:

Helen Thompson

SUBJECT:

Bank Committee of the State of Vermont

As of 1826 and thereafter a Bank Committee (Inspector)
was elected
by the General Assembly, annually. Until 1837 its genera
l duty was
to inspect and examine the several banks and to report
to the
legislature as to the state of the banks so examin
ed. As of 1837
the Bank Committee (Inspector) was vested with more
specific powers
than had been previously stipulated (same also grante
d to Bank
Commissioner) as follows:
"...empowered and directed to examine the books, papers
and any
officer or officers of the several banks in this state
under oath,
to ascertain what amount of dividend has been declar
ed by each bank,
from the surplus profits of such bank; and whether
that portion
of such dividend belonging to the state has been
paid into the
treasury thereof or not; also ascertain if any bank
or banks have
invested any portion of their surplus profit in stocks
or otherwise,
and if so invested, what amount has been paid into
the treasury of
the state, or the amount of the surplus profit so invest
ed; also
to ascertain if any bank or banks have been deducted
as items of
expenditure, the cost of these banking houses and plates
from the
surplus profits, and if so deducted what amount has been
withheld
thereby from the state by each bank, that said commit
tee and
commissioner be directed to report the facts in relati
on to each
specific subject of inquiry embraced in this resolution,
to the
legislature of the state." (Journal of the Senate,
1837)
The Bank Committee (Inspector) continued to inspec
t and examine
all banks until 1839. After this date the Committee's
inspections
were confined solely to those banks not members of the
Safety Fund
System.

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With respect to a detailed record of the debates or discussions
pertaining to the Vermont legislation on Page 118.
From the Vermont Watcgman of Novemebr 9, 1831 on the
debate of Tuesday November 1, 1831.
The Corn. on Banks., to km whom had been referred the
bill entitled an act regulating the chartering of banks"
rep)rted that it was inexpedient to pass the same.
( This bill provide the presidents and directors of all
the banks hereafter chartered, shall give their notes to the
Treasurer of the State to twice the anount of the capital
stock and upon failure to any bank the Treasurer shall make
a dividend on the notes in his hands and collect a sum
sufficient to redeem its bills. The last section of the bill
provides that if the stockholdrs of any bakk shall make their
private property hidden against failures, they shall not be
required to comply with other provisions of the act.)
The questions then recurring, shall the bill be read a
second time?
Mr. Smilie addressed the House in a pertinent speech,
in favor of a seeond reading of the bill, he went upon the
ground of the absolute necessity of a law protecting the
rights of the people as well as of incorporations; of the
necessity of secutity against the losses and ruins which are
occassioned by bank failures.
Mr. Lyman, chairman of the committee on Banks, observed
that the committee had not reported against the bill because
they were opposed to its principles; they were on the other
hand, unanimous in the opinion that a law of the kind contemplated
was indispensible to the security ar the people; but was about
to be brought into the House similar to a law now in operation
in the State of New York which provides that no bills shall
be issued from any Bank until the whole capital stock is
paid in, and that one half of one per cent oft the stock
shall be paid to commissioners appointed by the State, by them
to be used in redeeming the bills of any bakk which may failo
This nasamifttiasts measure , the committee thoughtms would
better secure the peopjae and be more acceptable to the
banks.
Mr. Follett made a few observations upon the systemxkis
which is now in operation in New York, showing its principles
and the benefit resulting from it.

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With respect to a detailed record of the debates or discussions pertaining to the Vermont legislation on page 118 of
the FDIC manuscript.
from the Vermont Watchman of November 9, 1831 on the debate
of Tuesday, November 1, 1831.
The Corn, on Banks, to whom had been referred the bill
entitled "an act regulating the chartering of Banks" reported
that it was inexpedient to pass the same.
(This bill provides the presidents and directors of all
the banks hereafter chartered, shall give their notes to the
Treasurer of the State to twice the amount of the capital
stock and upon failure to any bank the Treasurer shall make
a dividend on the notes in his hands and collect a sum sufficient to redeem its bills.

•

The last section of the bill

provides that if the stockholders of any bank shall make
their private property hidden against failures, they shall
not be required to comply with other provisions of the act.,
The questions then recurring, shall the bill be read
a second time?
Mr. Smilie addressed the House in a pertinent speech in
favor of a second reading of the bill, he went upon the ground
of the absolute necessity of a law protecting the rights of
the people as well as of incorporations; of the necessity of
security against the losses and ruins which are occasioned
by bank failures.
Mr. Lyman, chairman of the committee on Banks, observed

•

that the committee had not reported against the bill because
they were opposed to its principles; they were on the other

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•

hand, unanimous in the opinion that a law of the kind contemplated was indispensable to the security of the people;
but was about to be brought into the House similar to a law
now in operation in the State of New York which provides that
no bills shall be issued from any Bank intil the whole capital stock is paid in, and that one half of one per cent of
the stock shall be paid to commissioners appointed by the
State, by them to be used in redeeming the bills of any bank
which may fail.

This measure, the committee though would

better secure the people and be more acceptable to the banks.
Mr. Follett made a few observations upon the system
which is now in operation in New York, showing its principles
and the benefit resulting from it.

•

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•

From the Vermont Watchman of
Novembbr 16, 1831 on the debate
of Thursday Novermber 3, 1831
.

Mr. Lyman of H. called up the bill
regulating the
chartering of Banks in this Stat
e, when Mr. Whittemore
offered an amendment to the bill
, providing security
according to the New York sys#em
against the failures of
banks, which amendment together
with the bill, was referred to the Committee on Bank
s.

same paper debate of Saturday Nove
mber

1831

The Committee on Banks, reported
the bill regulating
the chartering of banks witibut cert
ain amendments, which amendments were agreed to, and th9
bill after several unsuccessful
motions to lay upon the table, was
read the second time and
ordered to be engrossed and read
a third time.

•

same paper debate of Wednesday Nove
mber 9, 1831
bill read a third time and engrosse
d

•

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Vermont Watchman, November 16, 1831.
concerning the debate of Thursday, November

3, 1831.

Mr. Lyman of H. called up the bill regulating the
chartering of Banks in this State, when Mr. Whittemore offered
an amendment to the bill, providing security according to
the New York system against the failures of banks, which
amendment together with the bill, was referred Vo the Committee on Banks.

same issue on the debate of Saturday, November

5, 1831.

The Committee on Banks, reported the bill regulating
the chartering of banks with certain amendments, which amend-

•

ments were agreed to, and the bill after several unsuccessful
motions to lay upon the table, was read the second time and
ordered to be engrossed and read a third time.

•

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Federal Reserve Bank of St. Louis

The Caledonian, St. Johnsbury, Vermont, September 25, 1838,

Essex Bank.

The Stock-Holders of the Essex Bank at

Guildhall, Vermont are hereby notified that the Directors
of said bank have ordered and determined that five dollars
on each share of the unpaid stock of said Bank, shall be
paid into said Bank, within 65 days from the date of this
order.
John Dewey
Greenlief Webb
Wm. Haywood, Jr.

Directors

Dated at Guildhall
Sept. 9th A. D., 1838

•

Same
Same
Same
Same

p. 3, Oct. 2, 1838
p. 4, Oct. 9, 1838
p. 4, Oct. 16, 1838
p. 4, Oct. 23, 1838

((Notice what else was taking place at the same time at Essex
Bank))

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•

The Caledonian, St. Johnsbury, Vermont, March 19, 183g.
concerning the Windsor Bank:
The story is this:

the President of the Bank, Tom

Emerson, its principal debtor, upon or previous to its
failure secreted his property, with the intention of avoiding
the payment of his liability to the bank, which would take
from the institution the means of redeeming its issues; the
directors have now obtained the legal possession of said
property for the liquidation of the claim of the bank upon
Emerson, and will use it for the purpose of redeeming its
bills.

•

We are told that is designed to put the bank in

operation again.

If so it should be under the restrictions

proposed by the last legislattre for the regulation of banks
which would effectually deprive such men as Emerson of the
facilities of imposing upon and robbing the public, which
we presume cannot be done unless the present charter is forfeited, and another granted, under the restrictive regulations
alluded to.

•

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Federal Reserve Bank of St. Louis

The bank commissioner is about to visit the bank.

The Caledonian, St. Johnsbury, Vermont.

from Oct.

1839 through Oct. 22, 1839

"Money is hard to be obtained in the Cities."

on Oct. 10, 1839
"Inquiry relative to Windsor and Essex Banks and also
the state of the Safety Fund, so far as to ascertain whether
the fund can prevent losses on the bills of the above banks."

•

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Federal Reserve Bank of St. Louis

BurlinEton Free Press, January 22, 1855, p. 2/2.
quoting the Watchman:

Essex Bank.

The final dividend of

411

on the claims

allowed by the Chancellor against the Safety Fund, in the
matter of the Essex Bank, Guildhall Vermont, is payable at
the Bank of Newberry, at Wells River, Vt.

This with two

former dividends, makes up the total sum of over 9700 on
the principal and interest claims allowed against said Bank,
all of which has been contributed by the Safety Fund Banks.

•

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Federal Reserve Bank of St. Louis

Burlington Free Press, October 10, 1858.

The Suffolk Bank and the Vermont Banks.
Under the above title we find the following which we
know to be from the pen of one of the ablest lawyers in the
State:

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By the law of Vermont the Banks are causes to pay
into the Treasury a tax of two percent on their capital
stock, per annum, under this provision and condition,
to wit:

if they keep a deposit of funds In Boston and

there "uniformly cause their bills to be redeemed at
par," then they are exempt from said tax; "but if they
shall so fail to redeem their bills for the period of
ten days in any one year, then the said tax shall be
paid for that year."
It is perfectly obvious that the redemption so to
be made in Boston must be at par and unconditional and
from any person and every person who shall present the
bills.
Most of the banks in Vermont have employed and paid
the Suffolk $ank for so redeeming their bills in Boston,
and they provide that Bank with funds for that purpose.
It now appears that the Suffolk Bank, even when so holding
our funds, refuses to redeem the bills of our Banks,
when presented by the Bank of Mutual Redemption.

It is

said they refuse to redeem them when presented by anyone,
unless it is by a Bank who employs and pays them.

p. 2

•
It is perfectly clear, if this be so, if the Suffolk
Bank declines to redeem the bills of our Banks when
presented by anyone,, for a time exceeding ten days, it
subjects our Banks to the payment of the two per cent
tax into the Treasury of that year.

This must and will

be exacted unless the Banks immediately employ a new
depository in Boston, who will make such redemption at
par, promptly and unconditionally, of every one.

The

Banks redeeming at home, and in Boston with other funds
after notice, will not save them from the tax.
There has been quite a stir for a week or two past
in Boston and some other parts of New England, on Bank

•

affairs.

We have not been disposed to say much on it,

believing that the chief points of contention between
the Suffolk Bank, the Bank of Mutual Redemption, and
some Banks outside of Boston, would, in all probability,
soon get adjusted, and the turmoil would be ended.

The

Vermont Banks, as a body are conducted, we believe, with
great prudence, keeping their bills in good credit, and
paying their stockholders as large dividends as they
ought to expect--and we hope no new legislation will
be gone into which shall allow them to become less safe
than they are.

Said Banks are not hurt by being kept

to a tight rule, and under a thorough watch on the part

•

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of the Government of the State and the public generally.

•

3
The act referred to above is a pretty stringent one,

and in case of failure to redeem, as provided by law,
the tax referred to would, of course be imposed--unless
relief was granted by further legislation.

We call to

mind one case where this was done, -- in favor of the
Bank of Castleton in 1854 -- the Legislature being
satisfied that the failure to redeem for a few days
arose from no blameworthiness of the Bank, and that no
harm accrued to anybody on account of it.

By another

act of 1854, Banks were allowed to redeem either in
Boston or New York, as might suit their convenience;
and, of course, if any one institution in either place

•

will not act as their agent to redeem, another can be
taken -- each Bank being left to its own discretion in
that particular.

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Federal Reserve Bank of St. Louis

•

VERMONT SAFETY FUND NOTES

Memo 1:

Journal of General Assemblz of Vermont, 1833, 2. 52-53

Taxes on stocks, suggested they be made some for people outside
State as within 10% local, 12% outside State. Suggestions for amendment: Safety Fund: Banks not to be visited by Bank Inspector; all
capital stock to be taxed, Foreign Bank Stock exempt.
Memo 2(a):

Bank of Newb412, 2L. 72, Journal of General Assembly, 1834

Z2,600 losses sustained by bond.
from bank, cost to recover some.
7;lemo 5:

Sums of money being purloined

Journal of House, 1837, page 138
Committee on:

Banks failing to comply with tax on profits.

Resolved: Senate to give the Commissioner and Committee power to
enter and examine offices and officers of banks to see if they have paid
any dividends in the past years. (See Tabulation "C")

•

Memo 8:

App. XXVI, Journal of Senate, 1838

Reported by Bank Inspector: Domestic Bills or drafts one-half
amount of "Bills Receivable", reach maturity within 60 days generally
fouhded on business transactions paid in full when due, gives banks
an easy remittance for redemption of notes. Drafts answer full purpose of Loecie.

Memo 9:

App. LXV., 1839, Journal of House

Report on Committee or Banks: For committee to inquire whether
it is expedient to charter or recharter any bank without making the
private property of the stockholders liable for all the debts of the
bank, or without making stockholders give ample security for the debts
of the bank, aid to report by bill or otherwise:
1.

Watchful vigilance for the security of bill holders: otherwise paper money loses all claims to public favor. Losses
by a very few banks.

The history of banking in this country demonstrates that
nearly all bank failures arise, either from want of actual
capital paid in, from fraudulent practices, or mismanagement.

Resolution2 App. LXI;II

•

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No bank should be chartered or rechartered without requiring
the stockholders of said bank to furnish bond, with responsible signers, or bond with mortgage, secured on unencumbered
improved real estate within State, to double the amount of
capital stock previous to its commencement of operation.
Security of each stockholder to be doubled, amount of his own
stock and said security to be given. Lodged with Treasurer
of ''ounty where bank is located.

That all banks chartered or rechartered as aforesaid, be exempt
from the provision of Safety Fund act.

That all such banks be made subject to, power and control of
the legislature so that charters, thereof, may be at times
modified, amended or repealed.

That any such bank shall not be permitted to issue more than
T2.00 for each T1.00 capital stock actually joaid in.

That the president, directors and all officers of such bank
be made subject to penal punishment for all fraudalent acts
in their official capacity.

Memo 9(a):

Minority of Committee on Banks, LXVII, Journal of house, 1839

Resolved:
1.

That in all future bank charters, the stockholders, shall require to pay in the full amount of their capital stock, in
gold or silver, before they go into operation; and shall not
either directly or indirectly, withdraw any portion of the
same.

Each director give bond with two good and sufficient sureties,
neither of whom shall be stockholders. Shall be determined by
Judge of county court, aggregate amount of which bonds shall
be equal to the capital stock of bank.

That no director or stockholder shall directly or indirectly
be suffered to receive any discount at the banks for which
they serve.

Memo 10:

App.XXXV..2_ Journal of Senate, 1839, App. XL:

Bank Inspector: Reports: Have in domestic bills or drafts falling due in cities together with deposits, bills of other banks and
specie, an amount that will nearly take up their circulation without
taking much of their home debt.

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Memo 12:

Journal of Senate, 1841, App. 7

By bank commissioner 10-14-1841 and it is believed that the bill
holders will not surfer by any of the banks subject to the Safety Fund
Act as long as stock remains in bends of present owners. Other State
trying to gain control, using bills to discount drafts and notes.
Memo :

Safety Fund

So long as the moneys of which this consits stand subject to the
contingencies for which the fund is provided, they are not, in the via')
of the commissioner4. entitled to rank as assets to the several banks
that contributed: It may be e-pected, however, that under ordinary
circumstances, the contributions will be returned to the banks as their
charters expire. P. 53-54, Auditor of Accounts, 1847
Memo 18:

•

Auditor of Accounts, 2. 37, 1848

Bank of Vergennes: Began between 7-9 and 11-22-1847 to discounted
drafts drawn upon a company in Boston, large amount have not been collected. Company suspended, bank has judgment against coamissioner believes it will be collected. Statement* "The sudpended debt having
been, with propriety, practically treated as not part of the capital
for the purpose of circulation.
$ 100,000.00
82,615.00
7,769.00
319.00
25 566.00

Capital
Circulation
Due to banks
Dividends unpaid
Due depositors

-...L.UPAalas°°
Notes discounted
Domestic drafts
Real Estate
Deposits in country
Bills of other banks
Specie
Doubtful debts

82,595.00
108,194.00
10,037.00
3,998.00
6,520.00
10,970.00
3,000.00
$ 222,314.00

Memo 18(a):

Auditor of Accounts, 2. 55, 1350

Bank of Vergennes:
has increased.

•

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Federal Reserve Bank of St. Louis

Suspended debt still uncollected but surplus

Memo 19:

Auditor of Accounts, m. 39, 1848

Battenkill Bank: All Banks: 21 - banks in State.
;S1,604,225; Circulation 8-1 $1,733,482
Memo 20:

Auditor of Accounts, 2. 51, 1849

Vermont Bank: p. 50.

Paid in 430,000 since report.

Bank of Vergennes,
be paid.

55.

Memo 22:

Paid in capital

Total capital 480,000

Suspended report of Memo 18 - feel they will

Auditor of Accounts, 1351

View of Banking: Three-fourths of losses have been occasioned by
operation outside State. One-half by dealing with people of New York.
Seven-eighths of baA, suspended and doubtful debts are against. People
and companies outside State: Part of banks claim right of stockholders
and directors for over 5% of their capital, on bills of exchange, while
others confine to 5% on every specie of paper. Recommend a clarifying
of 17 Section of Act.

410

Memo 23:

1852

Page 74: Same as last year Memo 22.
Page 81: All banks redeem bills at par except South Royalton.
Al exempt from paying tax to State. Within 20 years banks have lost
$250,000 by agents in city.
Auditor of Accounts, 1852, :2. 48, Merchants Bank

Commissioner

Broker failed with $70,000 in hands. Suit against cashier for violation of directors transmitting funds to Houghton, gfeater amounts than
authorized. Suit against Director by stockholders by allowing broker indebtedness to exceed $15,000. Directors ordered assessment; withdrawn
requested legisl.lture to redeem capital to $100,000 rescinded assessment
of $45,000 complied. 417,000 of above is expected to be paid.
Page 63: Bank of L'aledonia has suspended debt of $5,600 depends on
glorious uncertainty of the law. Supreme Court favors bank.
Page 66.

•

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Bank of Vergennes.

No change in, condition.

See Memo 18(a).

Appendix
VERMONT BANKS, 1831-1858
Banks Members of Safety Fund

Date Chartered

Name

Authorized Capital

Battenkill Bank 1/

11-2-1846

$50,000

Bank of Bellows Falls

11-9-31

100,000

Bank of Black River

11-5-1845

50,000

Bank of Brattleboro

11-5-1821

100,000

Bank of Manchester

11-7-1832

100,000

Bank of Middlebury 2/

11-9-1831

100,000

Bank of Newbury

11-7-1832

100,000

Bank of Orleans

11-8-1832

60,000

Bank of Poultney

11-19-1839

100,000

Bank of Rutland 3/

11-1-1824

100,000

Bank of St. Albans

10-29-1825

100,000

Bank of Vergennes

10-27-1826

100,000

Bank of Woodstock
Bank of Woodstock

11-9-1831
1-1-1854

100,000

Danby Bank

11-13-1850

50,000

Essex Bank

11-7-1832

40,000

Farmers Bank

11-7-1833

100,000

Farmers & Merchants Bank

11-4-1834

150,000

(Green Mountain Bank
(Stark Bank

1-2-1846

50,000

Banks not Members Safety Fund
Ascutney Bank

11-12-1847

$ 50,000

Bradford Bank

11-30-1853

100,000

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Federal Reserve Bank of St. Louis

1/ Increased to $100 L000_, 1848.
'2/ Originally capita]. of- $75,000, increased by $25,000 as of 1856.
Ti Increased by $50,000, 1848.

ffe

Name
Brandon Bank

Banks not Members Safety Fund (cont)
Authorized Capital
Date Chartered
$ 50,000
11-13-1848
10,000

Bank of Bennington

10-25-1827

Bank of Burlington

11-9-1818

100,000

Bank of Caledonia

11-2-1825

100,000

Bank of Lyndon

11-14-1854

Bank of Castleton

7-1-1852

Bank of Montpelier
New Bank of Montpelier

10-25-1825
1853

100,000

Bank of Orange County
re chartered
Orange County Bank

11-3-1827

100,000

11-12-1842

Bank of Orange County

11-7-1855

Bank of Royalton

11-30-1853

100,000

Bank of Waterbury

11-5-1853

100,000

Bank of Windsor

11-9-1818

100,000

Commercial Bank

11-8-1847

150,000

Exchange Bank

11-5-1853

50,000

Franklin County Bank

11-12-1849

100,000

Freehold Bank

11-19-1839

100,000

Lamoille County Bank

11-9-1854

Merchants Bank

11-10-1849

150,000

Missisquai Bank

11-13-1849

50,000

Mutual Bank

10-28-1857

100,000

Northfield Bank

11-23-1853

100,000

Passumpsic Bank

11-13-1849

100,000

11-9-1850
Peoples Bank 1/
1/ 1856, increased to $75,000.

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Federal Reserve Bank of St. Louis

50,000
Not available

75,000

50,000

Banks not Members Safety Fund (cont)
Name
Rutland Railroad Bank

11-5-1836

So. Royalton B8nk

12-18-1851

Rutland County Bank

•

Date Chartered

Authorized Capital
$300,000

1861

100,000

Union Bank

11-13-1850

75,000

Vermont Bank

11-11-1848

100,000

Walloomsac Bank

11-9-1854

100,000

West River Bank

11-26-1853

100,000

White River Bank

11-13-1850

75,000

Windham County Bank

11-7-1856

150,000

Windsor County Bank
changed to Woodstock Bk.

10-26-1844

60,000

State Bank

4-3-1858

•

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Federal Reserve Bank of St. Louis

Not available.

•
Conant, "A History of Modern Banks of Issue"

Dillingham, Banking Interests of Vermont, in Davis, "The New England
States"

Dewey, D. R. "State Banking Before the Civil War"

Crockett, "History of Vermont"

Stone, "The Vermont of Today"

•

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Evolution of ,tate and National
Banking Supervision in Vermont

Frederick P. Smith

A Senior Thesis Submitted to the Depart-

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ment of Politics

Princeton "niversity

April, 1937

-12-

The Rise of Private Banks.
It is not difficult to see that the failure of the
stste in its attempt at banking would do little to dispel the lack of confidence which had prevailed in Vermont
in the early years of the nineteenth century.

Private

banks were still thoroughly distrusted end the failure of
the State Bank was attributed not to any mismanagement
of its own affairs, but rather to the impossibility of
working on a sound basis with the private banks of the
other,states.

Governor Galusha

admitting that he had

been opposed to the establishment of country banks,
nevertheless came to the defense of the Stnte Bank when
he declared his belief that the State Bank had saved many
citizens from great loss and some from total ruin, as
otherwise many persons would "have been possessed of
large sums of the depreciated paper of the failing private banks".
'
Trade and industry, however, were left at a great
disadvantage by the absence of banking institutions, and
the perpetual losses from bad paper nimey issued by the
2
banks of other states were devastating. Governor Galusha
reemphasized his idens on bankinG when he said: "While
we enjoy all the means of wealth and happiness, there is
a general complaint

the scarcity of circulating medium

and the consequent distress of individuals in discharging
1. Crockett, op. cit. Vol. III-, p. 28.
2. Stone, op. cit., Vol. II, p. 450.

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1
their private debts and managing their own concerns."
The lack of economy he considered the chief cause of
the prevailing distress.

He believed that where banks

were most numerous and the means of credit most easy,
the scarcity of money was greatest.2 He wL,s still critical
of banks end opposed to any increese in their number.
nevertheless, there was too limited a supply of specie
circulating in Vermont to meet the needs of business and,
since sentiment was against a repetition of the incorporation of banks as State-owned affairs, the only alternative
3
was the private bank. This, therefore, despite real opposition, was the mode of conducting the banking business
in Vermont from 1818 until the rise of the national system in 1863. The Bank of Burlington was incorporated
4
5
in 1818 and the bank of Brattleboro in 1821, the first
of a small flood of privately owned banks.
The powers, duties, and liabilities of each of these
banks were regulated by its special act of incorporation,
although all of these special charters were uniform in
their provisions.6

The amount of the capital of the

bank was specified and limited, but the bank might go
1.
2.
3.
4.
5.
6.

Crockett, op. cit., Vol. III, p. 162.
Ibid.
Stone, op. cit., Vol. II. p. 450.
Crockett, (32. cit., Vol. III, p. 161.
Ibid., p. 179.
The following description of the regulations found
in early charters is condensed from the charter of
the Bank of Burlington as printed in the Laws of
Vermont, 1818, pp. 183-192.

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into operation with only rt- out one tenth of its nominal
capital paid up, and the amount o2 additional and actual
capital employed depended upon such assessments upon
stockholders as the directors might think prope'r to make
from time to time.

The banks were required to redeem

their bills and pay their liabilities in specie on demand;
they were prohibited from dealing in real estate or goods,
and were limited to six percent discount or interest on
loans.

To contract debts to a greater amount than their

deposits and three times the amount of the capital stock
paid in was prohibited.

In case of excess of indebted-

ness, the directors, under whose administration it happened were liable for the same.

The banks were required

to pay into the state treasury six percent of their
profits, semi-annually, at the time of payin8 their
dividends.

These sums were invested in a School Pund.

All the property and funds of the corporation were made
liable to the satisfaction of its debts, and, as additional
security to the public, bonds were required of each of
the directors t- be held by the Treasurer of the State,
dependent upon "the faithful discharge of the duties of
the office, agreeably to the regulations, requirements,
and restrictions of the act of incorporation"...
general assembly at each session were to appoint

The
a

com-

mittee to examine into the affairs of the bank and report
to the assembly.

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This provision for an extnininE connittee is a
landmark, since it established the relationship between
bank and government which has existed ever since that
time.

The actual procedure of the committee WPS fairly

simple; for example, in 127, the Conr it- tee reports in
the following form:
'
April 1, 1827—The --7an:: of

- z-linjton owe the •followin

Stock paid in

45,00.00

Bills in circulation
Deposits

54,757.73
4311,474.20

They have the followinc, property on hand:
Discounted notes
Stock in St.Albans Bank
Real Estate at cost

93,b55S,0
4,700.00
10,450.50

Specie on hand, bills of
other solvent banks, end
funds deposited in Boston,
New York, and Troy--applicable to redemption of bills----4244,553.62
353,258.02
Every bank was reported as above by the Coririttee, which
consisted of one man, Robert Pierpoint, and after summarizing the totals for all of the banks, which numbered
eight, he commented as follows:

"I have not discovered

that any of the banks have exceeded the powers granted
1. Journal of the General Assembly, 1827, D. 50.

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-16-

them, but they all appear to have been conducted with n
due regyrd to the public safety end the interest of the
stockholders."1 This report was in turn referred to the
select comnittee which later testified they were satisfied tiv,t it was correct.

The simplicit:: of this report

stands in marked contrast to the corplexity of the modern
report.
Banking Concept a Changing Factor
Throughout this discussion of banking before the
Civil War, one important fact must be kept in' rind:—
The chief concern of banking legislation and regulation
was not to protect depositors, but to protect noteholders
from losses through bank failures or from depreciation
2
of bank paper by overissues. The reason for this is that
the chief function of country banks was note issue, deposits at that time being of small importance:3
It must be realized that the objectives of banking
have changed within the post century. A hundred years
ago alnost all banks were banks of issue—that is, they
had the power to issue paper money.

Since the Civil

War the government has monopolized note issue and the
entire technique of the business of banking has chanp,r,d.
1. Journal of the General Assembly, 1=L27, p. 50.
2. Chaddock, "The Safety Fund I3sankinp Syster if.
York, 1629-1866", p. 236.
3. Ibid.

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-17-

The bank was formerly merely a money lender and
moneymaker, a private enterprise for the purpose of giving
profit to the individuals who subscribed money for
its
stock.

The trust companies

of modern days still hove

this basic feature of makinE money for stockholders,
but their method of making it is different.

They

guarantee to pay interest to anyone else who wishes to
place the use of his money at their disposal.
savins bank

The mutual

has progressed a step fal-tl'er and has no

stock, being owned by and run for the benefit of the
individuals who deposit money in it.

This chance in

the purpose of banks has given them an even more public
character and has thus influenced the course of lez;islation.

This change did not begin to affect legislation

until about 1870 and will be dealt with mor'e fully at
the proper chronological point, but it is important to
realize the purpose behind the regulatory legislation
of this early period.
The State Experiments with Banking Insurance
Probably the most interesting experiment in preventing loss from non-redemption of bark notes wvs the safety
fund plan of insurance which was the next great change
in the Vermont banking system.

It originated in New

1. Note: In Vermont a trust company is usually what is
celled in other places a "stock savings bank."

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-18-

vor': in 1b291 and was adopted in Verr,ont in 1831.2The
mechanical side of the system is simple.

Every banking

corporation was required to pay to the ::tote 3/4 of
annually of its capital stock.

The payments continued

until every corporation had paid to the state 4-L of
its capital stock, thus cretin;

perpetual fund for

the payment of the debts of any of' the corporations
which might become insolvent.

The money was invested

by the State Treasure, and the income was paid back
annually to the banks in proportion to their respective
contributions.

This income was also expected to pay

the salary of the bank commissioners.

If depletions

occurred, further payments were contemplated to re3
plenish the fund.
Resulting Division of Authority
An interesting division of authority WPS brought
by this Pct.

The new act provided for the appointment

of three Bank Commissioners, "one or -lore of whom must
visit at lest once a year every mrmeyed corro-ation
bound by this act and must inspect affairs, exrrine the
books, papers, notes, bonds, rnd evidences of debt, compare
funds and property with statements to be made by them
1. Chaddock, sp. cit., p. 259.
2. Public Acts, 1831, n. 16.
3. Ibid., pp. 16-19.

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-19-

as hereinafter provided, ascertain quantity of specie
on hand, and generslly to ascertain the actual condition
of the corporation and its ebility to fulfill its engac-ements."1 If they were required to do

by any

bank subject to this law, they were to inspect it more
2
often than once a year. They might examine on oath.3
Difficulty arose from the fact that these three Commissioners had control only of those banks which were
chartered al"ter 1831, while the old commissioner continued to exercise control over all the banks.

The result

was that two separate and conflicting systems of supervision existed, acting under different lsws.

Disputes

sprang up, each authority fighting sgainst any diminution of its own power or increase in the power of its
rival.
Since this period of ten or twelve years appears
to have beer significant, both in bringing to light
abuses in supervision and banking and in correcting many
of these abuses, it will be dealt with in more detail
than might at first Glance appear to be justifiable. In
1833, the Committee of three s'Jggested that banks subject
to the Safety Fund should not be liable to inspection
also by the bank inspector, because assessment for two
inspections created an undeserved distinction between

I. PublicActs,

1831, p. 19.
2. Ibid.,
3. Ibid., p. 20.

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new and old banks.

They also said that the law of 1831

would be helpful in creating a feeling of mutual interest
among the banks.'
In 1834, relations remained amicable, but the year
is important because of the entry into the picture of
the man destined to raise the trouble.

John S. Pettibone

was, so far as can be ascertained from his reports, the
most active and out-spoken Inspector ever to have held
the position.

His suggestions and actions were in every

instance practical when put to the test of time, although
they were in most cases unpopular with the other Commissioners and with bankers.

He was almost continually

under fire from some angle, but on the whole he accomplished more than any of the others.

With Pettibone's

first report cane the followin: statement:
'Your committee entertained some doubts
as to the propriety of departing from the form
of the reports which have before been submitted to theIegislature. The act authorizing
the committee's appointment makes it the duty
of such committee to inquire into the doings
of the incorporations. To enable the legislature more fully to ascertain the condition
of the several banks of this state, your committee has reported separately the amount of
specie on hand, funds deposited in banks and
funds in th9, hands of agents and private
companies.'
4
In 1835, neither supervising body made any comments.3
1. Journal of the House, 1833, p. 53.
2. Ibid., 1834, p. 47.
3. Ibid., 1835.

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-.21-

The new Committee contended 111 1836 that the "Inspector's
services were neither laborious nor responsible, and
that the said Inspector was not legally or equitably
entitled to the compensation exacted by him from the
banks which he examine d:1 Thrit basis they had for such
a claim is not evident, :.ince the lone Inspector was
still examining eighteen banIts, while the Commissioners,
examining only nine, were costing both the state and the
banks more money and were Ev:parently usine7, the same
type of examination.
In return, Inspector Pettibone spoke at length in
his report against the New Safety Rand System, and,
since his criticism was proved by time to be accurate,
it seems logical to grant that he had more justification

1. Journal of the House, 1836, p. 250.

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1
for speaking as he did.
The cause of this trouble was the fact that the
Essex Bank was reported by Pettibone to be in difficulties.
That he received no cooperation at all and, in fact,
much hindrance in trying to do his duty, shows that political considerations and tie-ups must have been involved.

John S. Marcy,chairman of the Committee on

Banks, reported on Pettibone's action in the Essex Bank
I. (note) Pettibone's criticism of the Safety Fund System
seems worth repeating:
"The act regulating the chartering of banks, called
Fund Act, provides that the bank c chartered
Safety
the
of
undcr that act shell pay to the State treasurer 4
their capital paid in, as a fund to meet any losses arising
from failure of any safety fund bank. This fund will
amount to but .20,025. This fund will be increased with
the increase of capital. This sum can be of no security
to the public.
The capital of all banks in this state enumerated
in the foregoing statement has been paid in agreeable to
the report. As long es the capitel yields to the stockholders an income as large as such capital would produce
in the hands of individuals, the capital will probably
remain in, and the concerns of our banks will be, as
they now are, under the direction of men of capital and
integrity. This is ample security to the public against
loss, and io the only security that can be relied on.
If any bank were disposed, it could at pleasure tdrow into
circulation bills to any amount. The means the Safety
Fund affords, to pledge bills of those banks as security
for private loans, may hove an injurious effect. This
fund is a heavy tax on the corporation. It presents a
false security to the public, and the repeal of that law,
it is believed by your comAttee, would increase, rather
than diminish the soundness of our bank currency."*
(It will be easily perceived that Mr. Pettibone has,
in his wrath, carried his argument so far that it becomes
obvious that he, no less than the other Committee, is
fighting for his job).
* Journal of the House, 1836, p. 55.

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Federal Reserve Bank of St. Louis

23-

case, saying that his report was in some parts "calcu1
lated to excite groundless alarm". Pettibone's report
stressed at length the necessity for a remedy for abuses
of corporate privileges which do not involve a forfeiture
2
of charter. The reason for this is apparent in the details of us action against the Essex Bank.

The chair-

man of the Committee which was appointed to hear his
complaints against the bank was a Safety Fund man.3 The
Committee summoned the President of the bank.
not look into the books

It did

the bank at all, but merely

relied on the memory of the President, upon ex parte,
affidavits from the Trustees, and on the report of the
Safety Fund Commissioners, favoring this evidence against
Pettibone's which he had gotten from the books of the
bank.

The bank refused to produce its books and the

court did not require their production.

Yet they disa-

greed with Pettibone's findings, and declared that the
bank was solvent.4 Pettibone's original complaint had
been that the bank, by loaning back to those who bought
stock almost as much cs they signed up for, actually
started business with only •,1,000 of eapita1.5 He desired
to put an end to such practices, arguing that if they
6
continued, the safety fund would be worthless.
1.
2.
3.
4.
5.
6.

Journal of the House,
Ibid., p. 52.
Ibid.,
Ibid.,
Ibid.,
Ibid.,

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250.

-24-

Pettibone's stubbornness showed in his next move.
Since the Committee had not said whether further proceedings were warranted, he continued his action.

was denied access to books and papers, which wns not
surprising under the circumstances.

However, his action

was ultimately justified by the fact that before 1840
the Essex Bank actually did fail, even though everyone
except Pettibone had said that it was in sound shape
1
in 1836. Followitv this dispute the Legislatire heeded
the earlier suggestion of the Commissioners and passed
an act confining the duties of the Bank Committee to
2
Banks not subject to the Bank Commissioner.
Throughout this period it seems to have been the
inspectors who desired to reform the methods of supervision, while the Connissioners were far more lenient.
In 1837, S.A. Webber, the Inspector following Pettibone,
spoke as follows:
"The statements and accompanying explanations were made to me b7 the several cashiers
under oath, and I made such reference to their
books, papers, and vaults as to satisfy myself
of their probably correctness and truth. I
took and noted their opinion of solvency and
of demands due them--to have done more would
have required weeks of examinstion."3
In this statement we see an idea which foreruns the
future development of supervision, namely: that the
1. Journal of the Senate, 183? Appendix, p. vi-xix.
2. Niblic Acts, 1836, p. 37.
3. Journal of the House, 1837, p. 213.

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Federal Reserve Bank of St. Louis

-25-

inspector should not have to take
the word of the bank
official for his information. The
merits of this idea
will be considered later in this thesi
s, but it is important to note that the idea is not moder
n. Mr. Webber
states that he made this report in more
detail than former
reports had shown because he thought thnt the
suspension
of specie payments which had occurred in that
year de1
manded a more careful treatment. A further
quotation
will show even more definitely that Mr.
Webber desired
an extension of his powers.
"Without public confidence in the solvency
and just manngement of the banks, it is appar
ent
they cannot extend in times of embarrassment,
the relief they otherwise could extend, and it
is equally clear that the confidence of the community can be extended to them only through an
assurance in their solvency and just management
which is to be obtained from a full and detailed
statement, from time to time, of their condition
made public, and a belief on the part of that
community that it has on the bank all checks,
guards and securities, enabling it to keep and
control them within the bounds intended, and
for the object for which they were granted.
When we regard banks as public agencies, through
which credit may be obtained, that they with
one hand receive to themselves the indebtedness
of the people, and with the other, on that
security, extend their indebtedness to that
same community, we see by looking into the
solvency of the banks, we necessarily look back
of them to the people indebted to them, and if
their debtors are good and held by proper securities, the banks are consequently so; the
public ultimately safe, provided it has sufficient provisions, by law, to so control them
1. Journal of the House, 18$7, p. 215.

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-26-

as to make their mans applicable to their
responsibilities."1
He suggests:
1. That the exchalv,e of bills be stopped.
2. That monthly ststements be required.
3. That provislons of the law in case of
charter violation are slow of action at present--the inspector should be able to stop the i-suing of bills immediately, leaving it for the bank to got an injunction
if the order is unnecessary or improper.
4. That stockholders should not be allowed to
draw to a certain extent on the credit of their stock,
but should produce reglaar security.
These quotations from Mr. Webber contain all the
seeds of the future development of banking supervision.
There can be no doubt that reforms were necessary.

The

financial crisis of 1836 had focussed attention on certain
bad practices which were prevalent, and, although failures
were limited to the banks at Essex and Windsor, there
was a considerable demand for more definite legal limits
to bind the bankers.
In 1838, the Windsor bank failed and this failure
was charged by Inspector Bradley to a practice adopted
by the directors of letting one member control its
1. Journal of the Huse, 1837, p. 215.
2. Ibid.

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Federal Reserve Bank of St. Louis

operations and become its principal debtor.
'
He also
criticized their policy of placing funds in the
hands
2
of an unknown Boston agent.
In this year, also, the supervisory situation was
simplified somewhat in that the number of Safety FundCommissioners was cut from three to one. 3

After this

time, the Inspector and Commissioner were usually the
same man, so the duplication which caused the trouble
was removed.
In 1840 Mr. Pettibone burst forth once more and
showered the Legislature with complaints and suggestions.
That he was still smarting from his previous experience
with the Essex Bank is shown by the following quotation,
which, in addition to stating further prevalent practices
which were unsafe, presented the astounding paradox of a
Bank InspeetOr who flatly stated to his employer he did
not feel himself bound to perform the task for which he
was drawing his salary.

A severe contraction in circula-

tion had taken place in the previous year, and it was in
speaking of this that the following statements were made
by Pettibone.4
T.
2.
3.
4.

Journalof the Senate, 1838, Appendix, p. xxvii.
Ibid.
Public Acts, 1830, p. 10.
16-aTigr-UT-the Senate, 1340, Appendix, p. xviii.

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-28-

"It is evident that the confidence in
the
soundness, as well as the usefulness of our
banking institutions, is greatly impaired, and nothin
g
short of a thorough examination of all the concerns of the corporation, and the result of
such
examination mpde public, can restoe confid
ence.
The transactions of the banks are shrouded in
darkness. The public have no means of distin
guishing the good from the bad. Even stockholders have
been denied the right of examining the books of
their own corporation. They do not know whether
the semi-annual dividends they receive are made
from the profits or the' capital of the bank. I
have known banks to make dividends when they had
no profits to divide. And this fraud upon the
honest stockholder and the public is effected
by the inventory of worthless notes as available
funds. Ought not the directors of the banks to
be required to note, in their statements of the
condition of the banks, all debts, which have
been due more than one year, as a suspended debt,
or unavailable funds; and that no dividends should
be made until the deficiency of available funds,
occasioned by such suspended debt,"--should be
made good, either :
b. the payment of more capital
by the stockholder, or by the application of the
profits, to make good such deficiency. This
would influence the honest stockholder to investigate the management of the bank. He is
apparently satisfied with the directors, so long
as he received his semi-annual dividend of 4
per cent. By the Safety Fund Act, the Directors
and stockholders are limited in the sum they may
be indebted to the bank to 2,000. This clause
in the law is easily evaded --an endorser of a
note is not considered a debtor by such endorsement. Itl is only a liability, no indebtedness.
Thus, the liabilities of a director may be „aogpoo
without violation of the statute, and the money
received on such endorsed note may be for his
own benefit. He has only to change the _corn of
the note, and the work is done. I have not discovered any violation of their acts of incorporation 1)7 any of the corporptions subject to my
inspection within the last year; if I had, I
should not feel it my duty to order information
to be filed against the corporation. For in 1835
I directed a prosecution against the Essex Bank.

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-29-

On applicetion, the Legislature refused to refund to me the money I expended in my endeavors
to bring that institution to justice. I could
not consider this act of the Legislsture in any
other light than a disapprobation of my proceedings.
The conduct of the bank was also justified
by a report of a Committee of the Legislature. A
majority of the Committee were Bank directors."
These long quotations are included beceuse they give a
vital and realistic picture of banking end bank supervision in this period.
The next Comrissioner who seemed to take his job
conscientiously was Hiland Hall, who held of7ice for tl,e
years of 1844 and 1845.

As his reports show, Mr. Hall

realized that the soundness of banks depends more on
the character of the funds making up their resources
than upon the amount.
For this reason, he tried to
'
ascertain the real value, examining the oficers of the
bank on oath.2

Again in 1845 he showed more diligence

than his predecessors, commenting separately on each
3
individual bank. Also in this yenr, for the first time,
the Co vissioner was required to exclude all bad debts
from his report and to report all doubtful debts.4 In
1848, Carlos Coolidge, then Commissioner, stated in
his report that "the general management of banking
1. Auditor's Report, 1844, p. 44.
2. 'Ibid., p. 103.
3. Ibid., 1845, p. 68.
4. Public Acts, 1844, n. 19.

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',Nap

-30-

operations has been improved.

The public will, inspired

by injuries inflicted upon people by corrupt and reckless- bank leaders, demanded and has obtained stronger
1
guarantees against abuse".
In 1854, it Was suggested by Daniel Roberts, the
Comr'issioner, that it might be a good idea to let the
Commissioners approve dividends before they were granted.
In 1855, Mr. Roberts made the same suggestion and added
several more to it.

Among other things he suggested

abandoning the Safety Fund, requiring weekly statements
from the various cashiers, prohibiting loans outside the
state (since he had noticed that nearly all the losses
of the banks were from out of state loans), and to
tightening the law limiting the indebtedness of individuals.2 Probably in the hope of getting some action,
Yr. Roberts accompanied his suggestions with the following statement:
ft I have made
the foregoing suggestions
under no little embarrassment, for, upon looking back through a series of years, I do not
find that any recommendation of any Bank Commissioner has ever been followed by the Legislature. From which it is fair to infer, that
the state has been singularly unfortunate in
its selection of Commissioners, or else the
control of Vermont legislation upon this subject has fallen into hands which would accord
to the banks the largest liberty".3
1. Auditor's Report, 1848, p. 40.
2. Ibid., 18E5, p. 154.
3. Ibid.

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Federal Reserve Bank of St. Louis

-31-

In this statement he was not accurate, since several
of
the suggestions heretofore quoted had already been incorporated into the statutes of the state, but, senseof
the quotation still holds, in that it Was probably true
that the Legislature was reluctant to check the bankers
excessively.
In 1859, A.B. Gardner mentioned the many violations
of the amount or indebtedness permitted to Dirept0S,1
• Ir
and in 1860, he states that the banking law of 1851:Was
not accomplishing what it was supposed to and recommended
that it be abolished.2Th1s was a so-called "free-banking"
law, under which any person or group of persons were
permitted to enter the banking business upon presentation
of a required and approved amount of capital of a certain
type.

The regulations were about the same as before,

but no charters were required.

However, although this

type of banking had proved fairly successful in New
York,'having been adopt.d there in 1838 as a result of
3
loud complaints of favoritism in granting charters, it
was not at all successful in Vermont where all of the
banks established under this plan failed within a very
few years.4 From this time until 1867, when the National
Bank Act had driven these banks either to become national
1.
2.
3.
4.

Bank Commissioner's i- eport, 1859, p. 151.
rbid., 1860, p. 126.
Helderman, National and State Banks, p. 18.
Bank Commissioner's Report, 1860, p. 126.

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Federal Reserve Bank of St. Louis

-32-

banks or to close up, there was notMng of great importance in the reports of the Commissioners.

In 1867

the office was done away with, since there remained no
state private banks for a commissioner to examine.
Luervisory Methods Definitely Formed.
We have now followed the state banks of issue from
beginning to end, and are in a position to see what we
have learned that is of value.

From the foregoing il-

lustrations of the actual workings of banking and bank
supervision of that day, we can draw interesting and important generalizations.

From the beginning of banking,

we have found that it has always been regulated in some
degree by the state.

The public character of the banking

business was recognized from the earliest times. The basic
reason for the necessity of bank supervision seems to
have been that management was either corrupt and unscrupulous or merely inefficient.

In other words, banks

have always been supervised because banks have always
needed supervision.
We have also seen that divided authority is a prelude
to trouble.

Duplications and disputes arise between the

authorities and immediately efficiency and effectiveness
are lost.

We have seen that a financial crisis by bring-

ing to light weak banks and bad practices and

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Federal Reserve Bank of St. Louis

tying up

-33-

the system, focusses attention upon the banks, rouses
public opinion and the state, and prepares the way for
reform.

There had been a steady increase in the number

of statutes, but they are still fairly General in
character.1
From the beginning, the Commissioners have suggested
Improvements which they thought would help then to do a
better job.

Particularly did effective and ambitious

men desire extensions of power.

However, there is no

evidence that these men were trying to do more than
improve the system.

The commissioner had, by statute,

more actual freedom than the commissioner of today, since
the statutes were not at all detailed as regards investment and the commissioner was apparently permitted to
put his judgment of the value of

loan against that of

the banker, in listing them as good, bad, and doubtful
In his report.

1. General Statutes1_1862.
1..

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Federal Reserve Bank of St. Louis

a B4,44AQTUN

Laws 21 Vermont, LAU, ak.se
._;adital not to be witiAdrawn. Lirectors' Liability .iot over 5 percent of capital paid in. Aggregate Lmount of 5 percent of such capital stock
for each director.
Annual Report 2/2,

A4ditor of accounts, 1b45.,

T44 lASQLVbsT LaulAi

Am& AA

bk„...-dAUTUA

The unaers:gned has felt it his duty to examine a report of the receivers of the insolvent Bank of bennington, made ana filed with the Clerk
of
the Court of Chancery for the county of Bennington, and has founaed thereupo
n
an avlication to the chancellor, for a. s_le of the remaining effects
of the
bank at public vendue to the hibheat bidder, which sale has u)on such addlie
,
tion, been ordered by the chancellor to be _Lade on or before the first
day of
December next. Such sale seereu indispensable to apy final settlement
of the
concerns of the bank.
It appears fro the report of the receivers that Lied have collected
and settled of the debts due the bunk the sum of 41.26,88L.57; that
the assets
of the bank Ithich remain in the hands of the receivers, consist almost
wholly
of debts due the bunk, amounting to the sum of 0.05,8W.01; that the
claims
presented against the bf.nk within the time allowed by the chancellor,
and admitted by the receivers as valid, amount to .,so kifi..85; and that in
consequence
of the receipts for debts ',ale the bank, having been nearly all in bills
of the
bank, efficient available funas nave not been obtained by the
receivers to
pgy their charges for their services and expenditures. Most of the
debts still
due the bank are believed to be u.Drtaless, tho' some of the debtors
are supposed
to be able to make d4..,nt.
The embarrassments under which the receivers have labored in admin• istering the concerns of this bank, have sogtestaa to the lriersig
ned that
some audition.-1 drovisioas of law are necessary to produce a speedy
settlex.ent of the affairs of insolvent banks, as well as to insure
a just aistribution of their effects among their creditors.
By the charter of the b-nk of Bennington, its debtors had a right
to ptly their debts in its bills. The failure of the bank
necessarily cuused
an immediate depreciation of its bills; and the debtors of
the banks who did
not "appen to have them on hand, could reap the benefit of such
depreciation
to the amount of their liabilities, by buying tsem up at
a discount. This was

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•
Federal Reserve Bank of St. Louis

of course done to a considerable extent. But es the depreciation of the
bills continued to increase, it soon became s setter of caleulation to what
eetent it woula go, and masy of the debtors :ere in no hest to avail themselves of ea advastage which appeared to be constantly improving. The costs
which might be made against the eebtors being also by the charter dyable in
the bills of the bans, and being likely to be thus paid, the receivers for
the bent of funds, were unable to bring suits, ,nd they necessarily alloeed
the.debtorsto take their own the to make payment. The consequence :les been,
that many of the debts which might probably have bees otherwise collected,
remain unpaid. A portion of the bill holders els°, seeing little prospect
of obtaining any thin by elivcrink up their bills to the receivers end
claiming a divieend of the effects of the bank, have neglected to dresent
their claims, ..)refering to such preseutment, their chance of selling their
bills at a discount to the remaining debtors to the busk. This h-s left a
large amount of bills yet outstanding; and from the supposed continued right
of the debtors to make payment in steel, bills, the debts which still iemein
unpaid, and against responsible persons, •re rendered ,lmost seleeless. The
probable result eill be that the debts due the bank will sell for a mere
trifle, aria forever remain npaid; and thus the funds of the bear( will continue
in the hands of its debtors, and its creditors will get nothing.
While a beak relealue solveat there is greet propriety in alloeing
its debtors to discharge their debts in its bills. But the reasons uo not
adpear so strong for continuing such e privilege -fter the bank as stopped
payment, and its bills are at a discount. The driacipal effect of such e
leivilege then is, to enable the debtors to make a profit to themselves
out of the bill folders; and there is some uifficulty in finding a good
reason why the debtors of a beak Should be gainers by its failure, ehile all
others ere losers. The continuence of this privilege at lest for e time
after the insolvency of a bank, may insure a more speedy enn general payment
or the debts due it, and on that ground, and possibly on others may be
Seesed expedient. Upon the apposition Last the legislature say riot think
it auvisable wholly to deprive the debtors of an insolvent bank of the privilege of eying their debts in its eills, the undersigned eould respectfully
recomsend that some provision be made by lew, to guard, in future ceses,
against the difficulties that have erisen in the admisietration of the effects of the bunk of bennington. This, the undersigned thins may be done
by provioing that all costs, which shall accrue upon the nebte due a bunk
after its effects shall have gone into the hands of receivers, ssall be payable in specie; and that fter the time fixed by the chancellor for the presentation to the receivers of the claiss of the creditors of the bens shall
have expired, all debts remaining due the ben's, shall :Also be payable in
specie. The first provision in regard to costs will enable the receivers
to proceed, at once, in the collection of its debts, and the provision cannot
be deemed unjust to the debtors. The latter provision appears issiepensible
to e just aria equal distribution of the effects of an insolvent bank among
its creditors. It will give the debtors esple time to melte their payments in
the bills of the benss, if they ueuire to do 60; hasten the collection of the
aolvent debts due the beret, insure the presentation of all the claims of the
creeitors, anS enable the receivers to bring its concerns to e speedy close.

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141, Jourma of benate.

Ap.p. 7

Chhrter exteidet„ for two years. Notlfieo that they must comply with
generr-1 Laws a., licable. Gtrli sti€biy, fasaktut iLarjggi. 'take acylications lind court of chancery, ureeable to L3eotion 18, Oh; ter 79, 1(vised
btatutes.

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Federal Reserve Bank of St. Louis

131.1.44 A
.

Lues of Vermont, 1838, Alge 77
zio nolex of oriLin,1 stou elit.bl
e for durc.lase. No iOfl or
discount shh11 be made by virtue of
this act until WA, of addition,1 stoeK
shall be aetue4y daid in. Loans rest
ricted to uire,:torsxirn
41l above, all directors liable. Not
more th6n seven nor lcss tLan five
.

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Federal Reserve Bank of St. Louis

T. aL&LAL

i'e;AIrt 2r the ieuditor 21: Accounts, i8;aii, ,)04,,es1.
This Bunk Laving been cl.arterzJd ,Tevious to 1840, mnu not having
brought itself within the i_lrovisio.is of the. Bank act of
that year, a6ree-b1y
to Sec. 50 Ch. 64 Comp. St., is not subject to that
het.
Rizong the a-vantages of this exemption is the privilege under
the
charter of issuing bills to the amount of three tiaies its capital
; a privileo) of which it has at tiLlee avuileti .!tel.:, its cir„uietion
having been,
on the 11th October, 1855, 0.26,000.
Bi the 5d Sec. of the Let of lebo, extenuing the charter, it
is
atipuluted that the Bank "shall semiahnua11y, at the time at
which the
Lirectors shall declare the dividends of the profits of said
Bank, pay
into the Treasury of this State, for the use and beaefit or
this state,
ten der centum of the profits of said Bank, thether aivided or
not, on all
stock oLned b.v persons resi,iing within this State, and twelve
per centum
of said profits, on all stock owned by persons residing without
this St:Ae."
The last ?vment to the State under this provision :,as April
44, 184ii.
Sinee Sept. 1, 164j, this Bunk has at all times redeemed
its bills
at ?ar in Boston., und ilas been a contributor to the JA‘ety
Fund since Lecember, 1640. k'or these reasons, it claims, that it is, or
ought to be, excused fro: payment of this percentage upon its profits. It has
seemed to the
Commissioner, that, as the matter etands, this is a debt due
the State, being
the price which the Bank ;_greed to pay for the privileges granted by
the recharter, and that any relief therefrom lies in such equitable
consierations
as may be Areed upon the Legislature.

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Federal Reserve Bank of St. Louis

BANK DE WINDOR

The I.ank of Windsor (10) has not done any 1:Josinec flr the past
year, except in the collection of the iebts due the bank, and the redemption
of its bills presented for payment. A scire facial, is now ponciin,: in Windsor (.ourt autinst the bank and a final judgment thereon may be e:-7c- td at
the next term of the z.)upreme Court in that county.

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Federal Reserve Bank of St. Louis

ESSEX BANK

Journal of Senate, 1839.

App. 55.

Bank Commissioner.

Bank made large loans to Citizens of state which have become suspended debts. Not able to meet obligations. Just cause why a. receiver
should not be appointed. 10,10,1839 B.
Journal of Senate, 1840.

App. 10.

Bank Commissioner.

Placed in hands of receiver ana from what can be learned from receiver, I should conclude that effects in his hands ana all the Safety
Fund now paid in, and that the banks now chartered are required to pay in,
will not be sufficient to redeem the bills of that bank. 10-8-1840.
Acinual Report of the Auditor of Accounts, 1858, P. 173.

On examination of the Bank of Newbury, I found deposited to the
credit of Z. Newell, deceased, late*of Keene, in the State of New Hampshire,
and Receiver of the Essex County Bank, .628.13, which has been on deposit
since 1851, and learned tnat there were probably in his hands, at the time
of his decease, funds belonging to the creditors of tnat Bank, which, together with the aforesaid sum, would exceed 43,1,000, and that the following
namea creditors have not been paid, and that they are entitled to the sum
set opposite their respective names.
Total ,912.38

Annual Report of the Auditor of Accounts, 1859, P. 193.
George Leslie, Esq., of Newbury, in the County of Orange and tate
of Verliiont, was apointed Receiver in Chancry, of this Bank, on the 4th
clay of October, A. D. 1858, in the place of Zebina Newell, late Receiver,
deceased.
On the eighth day of February, 1859, Judge Poland made the follovJing order:
"Idiereas, it appears by the settlement of the account of Zebina
Eso., late Receiver of the Essex Bank, that unuer a uecree of the Chancellor, made Dec. 17, 1850, ordering a uiviuend paid upon the claims which had
been oresented and proved against said Bank, out of the Bank Safety hind,
that the following persons were entitled to the sums set to their respective names Allah have not been presented for dament, vix: . .
063.41.
It is now thereu-oon ordered that George 1,eslie, the present Receiver of
said Essex Bank, do give notice to the said claimants to present their said

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Federal Reserve Bank of St. Louis

claims for payment of said dividend at the Bank of Newbury, in Newbury
,
Vermont. on or before the first day of July next, by causing a
cooy of
this order to be :-ablished for six successive weeks, as soon as may
be,
in the Caledonian, printed at St. Johnsbury, Vermont, and in the
York iribune, irinted in the City of New Iork, wnich publications
shaill
be sufficient notice to such claimants, and all such claims as are
not
oresented to said Receiver, for payment by the time aforcsaic,
.:111 be
thereafter barred of all claims or right of payment from the Bank
L-afety
Fund.
' Given under my hand at St. Johnsbury, in the County of Caledonia,
and
State of Vermont, this 8th day of hebruary, 1859.
L. P. Poland, Chancellor.
inis order having been com?lieu with, on the part of the Receiver, and the time therein limited for claimants to present their claims
having expired, on the :';0th aay of September A. D. 1859, the Receiver appeared before Judge
Chancellor, at St. Johnsbury, a:1d settled his
account, and upon which the Chancellor made the following omer, viz:
.
dells River, Vt., -ent. FO, 1859
:o Hon. L. P. Poland, Chancellor:
The undersigned, Receiver of the hssex County Bank of Guildha
ll
would respectfully report that he receiveu from Mrs. Rebecca Newell,
executrix of the last will ana testament of Zebina Newell, deceasea,
late Receiver of said Essex bank, the sum of nine hundred forty-eight ao_lars
,
(948)anu tnaL he has paid out of saiu amount the folloAn,c: uiviuen
ds cue
• creditors of the Essex Bank, (as appears by your honor's order of Feb.
8,
1859,) viz:
Total ,,327.29
George Leslie, Lsq., of iewhury, Vermont, heretofore ap,)ointed by
me to be heceiver of the ssex Dank, in the pLace of 2,ebina Newell,
formerly Receiver, deceased, having presented his account as Receiver for allowance, on this 30th day of September, 1859, and notice of such applica
tion
havinf_, been given to A. B. Gardiner, Lsq., Bank Commissioner of
the State,
who appeared and examined saia Receiver's account:
It is now, therefore, Ordered, that said Receiver's account for expenses and services, ana for claims aia under my previous oraer as
aonears
uoon the receding )age, be pass€a and allowed, and the said Receive
r is ordered to retain in lis hands the sum of 429.39 allowed to Houghton
& Co.
and John T. Hildreth to await the result of the trustee suit mentione
d in

•

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Federal Reserve Bank of St. Louis

3
in said account, and the sum of 4,202.28 allowed to Lewis Co. bank
for R.
Gilchrist, the said Receiver is airected to pay to Charles
i'rentiss,
iso. of the city of New Iork, attorney for said parties, upon his
executing a discriarge or r-eceipt therefor. Ind the said balance of '42.35
reminiiig
the Receiver's hands of the said funds so receiver by nim from
the former Receiver, the said Receiver is ordered to pay forthwith into
the Treasury of the State.
Given under my hand at St. Johnsbury, this 30th day of L:eptember,

I. L. 1859.

LUKE P. POLAND, Chancellor.
The Ghancellor all6wed to N. Newell's estate, for his services
as Receiver, the sum of one hundred dollars (4100) making the whole sum
in his hands at the time of his Leath, ten hundred forty-eight collars and
twenty-one cents. (k1,,048.21)
On the 1st day of October, 1859, I countea and burnea the following amount in number and deonomination of the bills of this bank:
Of One dollar bills there were 5,896, F,mounting to
II
Two
"
5,68
II
Three 11
4,200
TI
Five
P
5,769
TI
II
Ten
300
II
Fifty ti
3
Five hundred
7
One thousand
10
21,603

',5,896
10,776
l',-,,600
:J3,645
:12,300
150
..=,,530
10.000
,75,067

At tne same time I countec an burned the ibliov;ing imoressions
or sheets of the bills of said sank, viz:
100 impressions of 1-1-2-5- si7-ned
7,200
do.
not sipneo

,930
64,600

The foreFoing are' all the bills and impressions of the hills of said
,--ere in the possession 6f the .-teceiver.

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Federal Reserve Bank of St. Louis

ORA4G1 COUNT1 BA;
164Z JourniU of House, App. 74. OrEhte County Beak:
10-17484F.

By Bank Commissioner

Incorporated 184! -- The chtirter of iumk of Ornnge County ex)ired
oith 1 — . i4Ink officers continue
cceuing

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Federal Reserve Bank of St. Louis

Tzde bp lication for
o fLr 'atvc ten

ointment of receiver fur t,n1k. '
Ao

ing as capital, olc :uspenoed debts of
ten years stending, et par,
was
teking an improper advt,hteLe of the
new subscribers. Arm the amn
iastoner is constrained to say, that
present a t,As-ences would noe
s to
Justify the com4aint. Lhort tur
ns are indispenAble to a bri
sk circulation, on -klich depend the
?rofite of our Benks; and old
suepended
cebts„ fven if ultimately secure
, can never be equal to cnsh,
for Beaking operations.
The underrigned, hae discov
ered no reason to -helieve, tha
t any
iAentional fraud was design
ed by the Lirectors, in ap .rai
sing the resources of this bank, anct red
ucing the stock to its par val
ue.
the present state of these Net
York claims clea-ly shows, tha tle
t
?raiser, cJusideraUy over
estimfAed their value, and that
the new
6tockholders are sustaining
h portion of that loss,
which should have
f llen rholly on the old one
s.
Althouteh the new Ltockholdere my
have reasonaLle grounds of com
plaint, the Commiscioner uoes net
find that he has an i Jowc-r to
cor7ect
the evil. L,hould the value of
thi -stock lecome eJ.uced, in con
sequence
of losses .)n the Ticonderoga . ,noi
ert-;,, justice would require tha
t this
loss should fall holly on the old
stockholder, nho o liberally
snared
the twenty-two Vloullio witadre..:n.
But to caforce such an act of
justice
requires a higher ,(:)ver.

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Federal Reserve Bank of St. Louis

b41144,

.Jank Uommisioner l s Leoorto annual neport of jibl_aucitor Q. aco.ints, 1666,
33
Sometisae in the month of 0.,:tober, 16b, H. G. Hubbell, then cashier of this ban, left the bunt, to be absent, Is was supoosed, but i short
time. Not returning as soon as -6 etpected, serious fears of his sofety
ere indulged in bi the other officers of the bant. I immediately apAolted
to the President for a statement of the affairs of the bant, who assured me
that all was ri,iht. On the 16th of January, 1666, upon examination by myself, the ?resident ftnu others, it Has aiscovered that there was a defalcation of 77,777.00. The circulation at this time ,K.is ,120,777.00, Ahereas
it apdeared, by the bant boots left by Mr. Hubbell, to be only ,43,U00.30.
The resources of the u,,nt at this time mere
Bills iJayable
Due froL City Banks
Leal Latate
C,ash
Bills on Jollection

0,8,306.74
14,122.00
6,017.00
400O1.00

427,3a6.74

To which will be added what can be outained from the property
of H. G. Hubbell, and collected on his bonds.
Some portion of the resoorces I calleu doubtful, but sudposed
enough would be realized to redeem the circulation.
Upon my applictiori for thc.,t plrpose, Juuge Pierpoint tranted
an injunction on the Bunt oti the 17th January, 1866, and appointed S. P.
imediately resigned, and L. L. Weed, of Ltheldon,
Carpeater, Eeceiver,
was appointed Receiver; since that time I have had no control of the Banc.

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Federal Reserve Bank of St. Louis

Annual Ile,aort 9_11 1111 A40.ittor of Accounts, 13,.nA Collaulis;A_Qacr's ;.edort, 1067,
pave lg.
This Bain( h,,s been under the control of the Hon. E. L. Teed, receiver, since JanaL.ry 1666, who reports that the Bills of the Dank, ,)reseated to
him up to July 1.th, 1866, for which he gave his receipts, amounted to

On the bth of August, 1666, he vc.s ordered by the Chancellor to day
a dividend of 50 cents on the dollar of the receipts which have generally
been presented and paid, but has ILA yet been -,ble to realize from the assets
of the Ban, funds to pay the balance: how/ever, is of the o,daion that he will
he able to do do, and )ay the balance.

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Federal Reserve Bank of St. Louis

•

Annual Feuort of the Auditor's 1:iccount, 1867, p. 10.
This bank has been under the control of the Hon. B. D. eed, Receiver, since January, 1866, who reports that the Bills of the Bank 7presented to him up to July 17th, 1866, for which he gave receipts, amounted
to
492,048.00
On the 8th of August, 1866, he was ordered by the Chancellor to
pay e Gividend of 50 cents on the dollar of the receipts which have Eenerally been t)resEnted and paid, but has Lot yet been able to reali2e from the
a;.sets, of the Bank, funds to pay the balance: however, is of the ()Anion
that he will be able to do so, and ,,ay the balance.

•

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Federal Reserve Bank of St. Louis

iiM

of the Auditor of AccouaLs, 1ob4, )age 71
,0.eport
1
In my odiaion, there was such ....a ancertainte ,s to the resources
of this Lanit upon the 1st of July, that it as not -rranted in maxing its
th,t no other ouLht to be made, antil its
last aividend; and it is no
doubtful debts shall become productive.
Oct. 12, 1bb'6, the circulation of this banx w,s 0.00,sts6, ",
rhich
occurred through a mista4e," as A is Judd.
This Bunk has had an arrange2ent A.th a estern firm, under wi.ich
The Banit has forwarded its bills in dacKages of 45,JOO from time to time, to
the amount of from .,'.75,000 to 4100,000 in all, 9e
,t,fig
therewith for the Band at the rate of 7 der centOsa.'their agency. Aside
from the hazard of such a business to the Bank, it is clearly unlawful in two
respects:
1.rat, It is ue) tia6 to one outside the Bourd of Lirectors a disjorit oi the Lirectors alone,
cretion in discounting, which pertains to
secondly, it is tukint. more than six per cent. interest, paying the gent
fron. such excess. Upon aly remonstrance, this business has been discofitinued.

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Federal Reserve Bank of St. Louis

1857
1, 1o57
Chrxter granted in 1850 -

iii expire J.nuary 1, 1dv,J

Eesources
:iotes and bills discounted
Deposits in City Banics
t;ash Items
Foreign bills
Specie
Bankint, house and Lot

10,865.07
417.00
6,65L.ed
2.000.00
4156,72i1.42

Liabilities
Cadital stock
Circulation
Lue Depositors

50,000.00
97,983.00
4,501.75

Adarent Surplus

4,244.67

The Directors say that the loss on their uoubtf
ul paper
will nut exceed thtpr surplus.
Ao dividends have been declared since 1854.
Aver44.es for the iear _ellicAlu July, 16b7
Loans
Ledosits in
Specie
Circ.lation
lue Dedositors

4141,776.6i)
Banes and Foreign Bills 17,626.04

Imelac J. Vail, President

y8,173.00
6,074.18
John h. Vail, Cashier

Directors - Isac,c J. Vail, Enoch Swith, Udney
Burke,
C. M. Bruce and John H. Vail.
Thuuh it is nearly two years since they became
connected with the
Safety Fund, they had not, at tioigi time of 'Ay annual
visit, contributed any
part thereto. I have :Iirected then to ,)ay to
the Treasurer, Ls it became
due, and trust it will be soon clone.
I am now informed that the Directors have paid to
the Treasurer, towards the Safety Fund, as far as it has become
due.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

1657

A majority of their stock Oelongs to citizens of Vermont, as it stands
u.)on their stock book, yet western men on a lari_e interest in the Bank, and
large discounts have been made Ai western paper, s their extended circulation too plainly shows. The late panic in the money m4;r<et, eivecially .est,
has driven th4r bills home so rpialy, as to suspend their redemption t the
Suffolk Bank, and at their own counter, at least for a time. I am still asby an agent froa their Board of Lirectors, rho called on
sured, September
me, that they shall shortly have the means of establishing their credit, both
at home, and ut the Suffolk Bun. then at the Bank, I used all the means in
my power, to ascertain the i;oaness of their sec.;.rities, epecially for western loans, and from all I could lern, the irectors had ti_ken all the precaution in their power to tee) themselves safe -- save the true course, to
have done only a home business, or at least had all their .ascounts protected by kno-n securities at home. In the examination of their discounts, for
the year past, I find that their boots show that they have afforded sccomodation to a considerable extent, to the citizens of Lanby and n&Ighboring towns,
and that the Lirectors ilseue, that they discount )-11 ,00d home paper that is
?resented. Annual, heiort of Ills. Auditor of Accounts, 1.§.41

1858

This Bank failed to redeem its bills in Boston on the 4th of 6eptember,
1657, and immeaistely thereafter closed its doors .Lact suspended its business.
I made an examination ii its affairs in the month of November last, and after
a full examination became satisfied that the Ban was insolvent. I accordingly, on the 24th of November, made application to one of the Chancellors
of this Stete for an injunction acaiast the Bank, tuki that it pass into the
nands of a heceiver, upon the grounds that it had lost its entire capital,
and that it had suspended the payment of its Bills in Specie for more than
sixty days.
After several ineffectual attempts, I obtained a hearing before the
hon. Judge Pierpont at hutland, on the 4oth day of December. After a full
hearing, the CLiicellor granted the injunction and appointea the Hon. A. L.
Miner of Manchester, heceiver, who immeaiately entered uiJon the duties of
his office, took pousession of the Bank and its effects, and has since that
date reea closing the affairs of the bent, as fast as the nature of the case
an. the oruers of the Chancellor would permit. Wawa,fieport
the Auditor
ic_counte, 1051j.-

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Federal Reserve Bank of St. Louis

185w
Failed bept. 4, 1857

1850
Failed

e2t. 4, 11:557

This bank passed into the h;i.ida of the hon. A. L. kiner,
wLaichester
as f..eceiver in Chancery on the Zath day of Lecember, A. L. 11:367. The time
for presen.tink its bills to t',Ae, receiver expireu on the Ith day of December,
A. L. 1856. Aa much progresa has been made towards brinjng its affairs to
a close ,s LeiL complicatea nature Jula permit.
On the 4th and 5th days of July, the lath day of Auguat, and the ,-rd
day of September, A. L. 165a, I counteu and burned the follot-ini; amount in
number anu denomination Jf the bills of this Bank, vii
Of One Lollar bile there were 12,607, -.,,Aolditing
It
ft
w
w q.,vo
11
w
7,201,
w Isiree "
w
0
w
to
7,180,
Pt
tt
w
" ri7C
"
"
4,01,
" Ten
"
"
"
"
2,75B,
"
It Twenty"
if
w
w
w
7i),
p
p
p
" Fir -V "
104,
Total

Z4,465

to
"
n
Ft
"
w
p

14,402
21,540
22,155
27,0B0
1,5u0
t4%00
,105,504

At the same time I counted and burned the following impression:, or
sheets of the bills of said bank, vizi
100 ixi3ressions of u Twenty & Fifty dollar bill e ch, 47,000
The foregoing are all the Bills, and Impressions of the Bills of this
bank, which have come into the hands of the Receiver. (Annuiq Report of ,the
Auultor 2f. Accounts)

1860
This Bank passed into Lhe hands of the hon. A. L. killer of Manchester,
as Receiver in Ghancery, on the 2uth day of getkember
L. 1857; and Ls it
is still In his hands, it has not been examined by the Ban Commissioner.
I am informed by the Leceiver that he is closing its affairs as fast
as the nature of the case 4111 permit. (Annual he)ort of .1hg, :inditor
Accounts).

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

1861
C pit-1
jrterti in 1650
.5J,000.00
. Lied cadtember 4th, 1857
iieceiver hppointed December 29, 18b7
One yetir was allowed by the Chancellor for ,,reseating bills Lo th
iimount of Dills ?resented, including those
allowed by the Chancellor ac Saprewe
Court to Suffolk Bank,
;U p:581.55
Then Receiver was appointed there was a
Arculation of about
hits this there was presented for
dividend
1,31,681.00
Faiu on claims
10087.0U
In suffolk Bank, redeemed
784.00
In Bank, counted as Cir,ulation
2,871.00
AmoAnting to
55,025.00
Leaving ;ret outstandinL
.6,977.00

-eceiver.

It the time the Receiver wvs appointed there .as more thn '4150,000.00
of suspended paper -- mostly at the West -- and generally worthless or nearly so. There 's very little good dader
ci th,lt could all be pLid in the
bills of the Bank.
Claims atainst parties in tide StAe were settled, and some in the State
of New York.
The assets are no

as follows.-

Lee from parties at the fist, including interest, about
Of this little if arortLing is expected to be collected.

18,000.00.

There are also facia ,nd village mortgages in Wisconsin, and Illinois,
given to aid the kiesissippi and Eacine failroad, including interest, about
.,000.00.
These mortgages are contestou vi the Mortgagors, but it is believed
taat one half of their v:Aue may be re_lised. There is an interest in about
two acres of real estate near Cincinnati, from which it is hoped to receive
at least 'il,000.00.
The litnk has paid into the S.fety Fund, 050.00.
There will be
balance in Feceiver's hands when some ood paper is ?aid
which was taken on time to settle cloims aot collectable, about 41,800.J0.
A suit whit% has been eriuin JU21
ears with the Suffolk BallA rids decided last February by the Supreme Court against Danb, Bank, allowing Suffolk 'hank in bills preuented
01,61o.55
4
Also liquivating a debt claimed by 11,1aby
ainst tiffolk Bank of
oktie6.47
Making difference of
;0.5,U00.00

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Federal Reserve Bank of St. Louis

-5-.

ieceivet

chartered in 1850 -- Cu1t.1
ointed Lecember 2i), 1857.

bU p uOJ -- Failed September 4, 1857.

One year was allowed by the GeomApeIler for presenting bills to the Fedelver.
ount of Bills presented, Including those allowed
by the Supreme Court to Suffolk Bent
When the heceiver
lation of

AU0

appointed there

Of this there was presented for dividend
Paid on Claims
In Suffolk bank, rot:eased
In bank, counted as circulation
tmountin

eircu-

.61,6A.A.
10087.00
i),7d4.00
4L871.J0

Le;_sviat, yet outetanding

06,77.00

At the time the heceiver was appointed there was Qom than ‘15odoo.00
of sasoendeu aper, mostly at the C-st, and gelerally rortnless or nearly
so.
There was very little good )eier and thit could all be paid in bills
of the
Bank.
the claims ag_inst parties in teis State save been settled and
some
in the State of New Yore.
The asaets ,re no

as :ollowst -

Due from parties at the :eat, including interest,
about

1.5,300.30

Jf this little i# anything is expectee to be collected
.
There are also Farm and Village Mortgages in Wisconsin end Illinois,
given to aid the laicine and Mississippi hailroaa, amounting
to, including
interest, about
0.5,0W.30
These 1,:ortLat;es are contested by the kortgagors, but it is believed
that one-half of their value tiv-T be realised.
It is expected that they, and all the Wiscoasin pspe:., will be sc,1,:l
this
Autumn cr the coming Winter.
There is an interest in about tvo acres of heal Latbte ne-r Ci.icJuns&
ti,
from which it is hoped to receive, at least ,L1,000.
The Bank has paid into the S.fety Fund .750.00.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

It is now thought thk,t there wil
l be
b:aance in heceiver's ,v,ucti t fro
what has ee., received b.), way
m
of coromises, and from a clai
m against
er in Lathy, ,,fter paying all
far
mexpenses, and exclusive of wha
t may be hereafter
received at the West, about
the 814; of
:1I DUO•00
The suit thot has been
pending, for some , ars, with
the Suffolk Bank,
was decided February iota,
by the JuproJ.e Court, Lint
the Lanby Bank, slowing the Suffolk BL.nk in
bills iresen-,ed,
Also li,Ailating
-ebt claimed by Lnb
against Suffolk Bank, of

Bank

luking h differti.ce of

5.03.47
0.5,000.00

hon. A. L. wi;ter, or Laacheste
r, is the l'eceiver.

Oh,A-.tered in 1o50
Capital :,50,300. Failed ;epte.2i
ber 4, 1657. Hon.
A. L. Miner of ::.,an.chester was .1)p
ointed Receiver December 29,
1.157. The affairs of the Bank are now in :he
hands of the beceiver, and I
Lai informed by
turn thA the estern Aortgages
belonging to the Bank are soon
to be sold at
auction, imAlediately fter whic
h the business of the Bank wil
l be entirely
closed.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

•

.bANBi BANK

Annual Report of the Auditor of Accounts, 1854, page 71
In my opinion, there was such an uncertainty as to the resources
this
Bank
upon the 1st of July, that it was not Aarranted in making its
of
last dividend; and it is now clear that no other ought to be made, until its
doubtful debts shall become productive.
Oct. 1'4, 1863, the circulation of tnis Bank was 0108,36, "which
occurred through a mistake," as it is said.
This Bank has had an arrangement with a Western firm, under which
The Bank has forwarded its bills in packages of 45,000 from time to time, to
the amount of from :,75,000 to 0.00,000 in all, that firm discounting paper
therewith for the Bank at the rate of 7 per cent, for their agency. hside
from the hazara of such a business to the Bank, it is clearly unlawful in two
respects: :virst, It is uetia to one outsiue the Board of Directors a discretion in discounting, which pertains to a majority of the Directors alone,
secondly, it is taking more than six per cent. interest, paying the agent
from such excess. Upon my remonstrance, this business has been discontinued.

•

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

1857

•

DANBY BNK,

UGad 19

1857

Charter granted in 1850 - will expire January 1, 1866

hesources
Notes and bills discounted
Deposits in City Banks
Cash Items
Foreign Bills
Specie
Banking house and Lot

4;120,595.20
19,201.26
10,865.07
417.00
5,652.88
2,000.00
4156,729.42

Liabilities
Capital stock
Circulation
Due Depositors

Aparent Surplus

50,000.00
97,986.00
4,501.75
0_52,484.75
4,244.67

The Directors say that the loss on their doubtful paper
will not exceed thier surplus.
No dividends have been declared since 1854.
AverL,Les ,for

ypia ending ,i1z1,y, 16.L1

Loans
4,141,776.69
Deposits in City Banks and Foreign Bills 17,626.04
Specie
2,679.65
Circulation
98,175.00
Due Depositors
8,075.18
Isaac J. Vail, President

John h. Vail, Cashier

Directors - Isaac J. Vail, Enoch Smith, Udney Burke,
C. i\d. Bruce and John H. Vail.
Though it is nearly two years since they became connected with the
Safety Fund, they had not, at the time of my annual visit, contributed any
part thereto. I have directed then to pay to the Treasurer, as itbecame
due, and trust it will be soon aone.
I am now informed that the Directors have paid to the Treasurer, towarns the Safety hind, as far as it has become due.

•

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

-2 1857

A majority of their stock belongs to citizens of Vermont, as it stands
upon their stock book, yet western men own a lare interest in the Bank, and
large discounts have been made on western paper, as tneir extended circulation too plainly shows. The late panic in the money market, especiallL west,
has driven thier bills home so rapidly, as to suspend their redemption at the
Suffolk Bank, and at their own counter, at least for a time. I am still assured, September 8, by an agent from their Boara of Lirectors, who called on
me, that they shall shortly have the means of establishing their credit, both
at home, and at the Suffolk Bank. When at the Bank, I used all the means in
y power, to ascertain the goodness of their securities, especially for wesI
loans, and from all I could learn, the Lirectors had taken all the pretern
caution in their power to keep themselvessave the true course, to
have done only a home business, or at least had ail their discounts protected by knom securities at home. In the examination of their discounts, for
the year past, I find that tneir books show that they have afforded accomodation to a considerable extent, to the citizens of Danby and niekhboring towns,
and that the Directors assume v that they discount all &ood home paper that is
presented. Annual heport of the Auditor of Accounts, 18b7 P7.1

1858

•

This Bank failed to redeem its bills in Boston on the 4th of September,
1657, and immediately thereafter closed its doors and suspended its business.
I made an examination of its affairs in the month of November last, and after
a full examination became satisfied that the Bank was insolvent. I accordingly, on the 24th of November, made application to one of the Chancellors
of this State for an injunction against the Bank, and that it pass into the
hands of a heceiver, upon the grounds that it had lost its (intire capital,
and that it had suspended the payment of its Bills in Specie for more than
sixty days.
After several ineffectual attempts, I obtained a hearing before the
hon. Judge Pierpont at Rutland, on the 2th day of December. After a full
hearing, the Chancellor granted the injunction and appointed the Eon. R. L.
Miner of Manchester, heceiver, who immediately entered uoon the duties of
his office, took possession of the Bank and its effects, and has since that
date been closing the affairs of the Bann:, as fast as the nature of the case
and the orders of the Ghancellor would permit. (Annual Report of the Auditor
of Accounts, j.d58).
1859
Failed Sept. 4, 1657

•

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Federal Reserve Bank of St. Louis

-3-

•

159
Failed Sept. 4, 1857
This bank passed into the hands of the hon. A. L. Miner, of fianchester
as Receiver in Chancery on the 29th day of December, A. L. 1857. The time
for presenting its Bills to the receiver expired on the 29th day of December,
A. D. 1858. As much progress has been made towards bringing its affairs to
a close as their complicated nature would permit.
On the 4th and 5th days of July, the 19th day of August, and the 23rd
day of September, A. D. 1859, I counted and burned the following amount in
number and denomination of the Bills of this Bunk, viz:
Of One Lollar bile there were 12,697, amounting
II Two
If
(I
If
If
If
7,201,
ft
It
ff
It
It
Three It
7,180,
n
It
It
11
Five
4,431,
IT
If
It
II
ft
IT
Ten
2,793,
ft
If
11
tl
If
Twenty"
79,
It
N
it
11
11
Fifty "
104
Total

•

34,485

to
It
II
TiI
It
If
It

$ 12,697
14,402
21,540
22,155
27,930
1,580
5,200
0.05,504

At the same time I counted and burned the following impressions or
sheets of the bills of said Bank, viz:
100 iapressions of a Twenty & Fifty dollar bill each, 07,000
The foregoing are all the Bills, and Impressions of the Bills of this
Bank, which have come into the hands of the Receiver. (Annual Report of the
Auditor of Accounts) t,g4

1860
This Bank passed into the hands of the Hon. A. L. miner of iidanchester,
as Receiver in Chancery, on the 29th day of September A. D. 1857; and as it
is still in his hands, it has not been examined by the Bank Commissioner.
' I am informed by the Receiver that he is closing its affairs as fast
as the nature of the case will permit. (Annual Report of the Auditor of
Accounts).?

•

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Federal Reserve Bank of St. Louis

1667
AJLAJ.31: l. 1(357

LiABI

Charter granted in 1550 — %ill exdire J Away 1, 1860

hosources
elj,55.20
10,,J1.26
10,865.07
417.00
5,65L.86
4.000.00
fe156,7:..0.44.

Sates unu bills Ciscuuuted
Deposits in City Bands
Cash Ites
Foreign
Specie
bahicinf !louse anci Lot

Liabilities
Ca?ital stuck
CirculAtion
tut) Depositors

Su p ouJ.J0
07,0o3.J0
4.501.75
el.4c34.75
67

Apurent Sarplum
The Lirectors say th,t the loss on their uoubtful paper
will nut exceed thiy surplus.
So dividends have been declared since lob4.
Aver14,e a far the jeas ea-146 JJalv o, leb7
Loans

Deposits in City Bunts and
Specie
Circ.lation
!ue repoeitors
Isaac J. Vail, President

4141,776.6
oreign Rills 17,626.04
2,070.65
08,175.00
E,J741.18
John h. Vil, Cashier

Directors — Isaac J. Vail, Enoch Smith, Udney Burks,
C. M. Bruce and John H. Vail.
Thoueh it is dearly two years since they became conneeted with the
annual visit, contributed any
Sufety Fund, thei had at, at the time of
the Treasurer, Ls it becalms
to
to
.)ay
,
ther
tUrectea
have
I
part thereto.
due, eai tr;et it will be soon toae.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

I am now Informed that the Directors have paid to the Treasurer, to—
the S:afety Fund, as far as it h!1.8 become due.

4,nual Fikdort al the Auditor of Accounts, /14,ctober .12., 1651.
This bank was chartered in letrks and expired in 1646, with a capital of $60,000. The charter wirc extended. by the Legislature, with
$40,000 additional capital; and the Bank commenced basinesE under its
ner charter in LAEJ.
The real estate, composing the Lest item of the reaourtec in the
foregoing statement, consists of 137 acres of land at the Lower }ells,
ia Ileonderals in the State of New York, with water power., houses and
mills thereon, *stint:tad at $04,510.96. the Bonk became the inrchaser
of this estate under a mortgage sale, in pursuance of the Laws of New
York. The debt, interest and cost, of the claim on which the Bank bid
in the estate, ememmted to the last mentioned mom, 1st Jenuery„ 1650.
Previous to receiving su:.an-iptions for the additionzl new stock,
the sum of 11,000 was withdrawn, and ,Avided among the old btockholcers,
443 surplus, suosed to have accumulatec ander the old charter; thereby
intending to reduce the stock to its .imr value, end placing the old and
neu owners on equal terms.
At Viet time, the debt an which the bank Itas been forced to take
the real estate at Ticonderoga, was appraised and inventoried at iAr;
and also another debt of about the same amount against individuals at
Ticonderoga; 'poth of which, had remained in the Bank for ten years as
suspended deLts, without the power of enforcing teir collection. These
two claims, now, comprise about one half of the capital of the Bank.
The last mentioned, however, is suponed to be ultimately safe. DLit
there are !lit slight hopes that the reR1 estate at Ticonceroge, which hascost the Bank $T45:20.96, can never be sold for that sum; and e considerloss will probably be sustained. The sooner these long protracted eoncern* are brought to e close, anu the real condition of the Bank aseert4Aned, the better for all concerned; and the Lirectors have given t:cir
assurance, that this property shell be disposed of, and converted into
cash or good paper, before aother isnual examination. And it is earter,tly to be hoped, that the Directors, who are active hnd efficient men
in their own concerns, All earnestly take this matter in 'nap., and have
It fully closed before the lapse of z.nother year.
6erious complaints nave been made by some of the new Ltocknolders,
that the old tAock vete shaved too close, and reduced below per, on taking
in new partners for the forty trlousend bOditional stock created by the
last charter; and that the withdrawal of ta,000 in cash, and aubstitut-

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Federal Reserve Bank of St. Louis

1657

A majority of tt,eir stock belongs to citizens of Vermont, as it sthrws
u?on their stock book, yet estern gien own a lerLe interest in the Bunk, .nG
large discounts have been mAe on western paper, :az their extended circulation too plainly shoAs. The lute panic in the money market, esJeciallr luau
hum 11-iven thtgir bills home so r•2idly, as to suspend tbsir redemption z,t the
Suffolk Bbnk, and at their own counter, at lc,ust for a time. I az. still OP..
sared, September 4, by an agent from their Board of '.'irectors, who called on
me, 'hat they shall shortly have the means or esUblishing their credit, both
at home, and at the Suft'olk Bank. *hen at the Bank, I use all the meuns in
my power, to scertain the goodness of their sec.Jities, el..peclally for eestern loans, and from all I could learn, the iirectors had ti,.ken 611 the ;44o-caution in their power to kee-,) themselves safe -- save the true course, to
:lave done only a home business, or at least had all their „giscounts proteoted by kno..n secarities at home. In the exumination
their dismounts, for
the year past, 1 find that their books show tivit they have afforded siccomoda,tion to a coasiJeruble extent, to the citizens of LA;m1by and akstghboring tons,
and that the Directors zleeuL.e, thbt they discount Al (_J100t3 home paper that is
Accolants, lti71t
,)resented. 4nnu4A, K;nort 21111 4uditor

1868

This Bank failed to redeem its bills in Boston on the 4th of September,
1657, and immediately thereafter closed its doors and suspended its business.
(14, an examination of its affairs In the month of November last, and after
1
a full examination became satisfied that the Bank was insolvent. I accordingly, on the 24th of November, made application to one of the Chancellors
of this tute for an in,iunction ;4„ain6t the Bank, and that it pass into the
haws or a heceiver, upon the grounds that it hed lost its entire capital,
and that it had suspended the dvment of its Bills in .;?ecie for more than
Jixty days.
4,.fter veverul ineffectual attempts, I obtained a hearing before the
ion. judge Pierpout at Rutland, on the i.wth day of December. after a full
i4aring, the Chancellor granted the injunction und ;Jppointe the 'Jou. A. L.
Miner of kanchester, heceiver, who immediutely entered uon the duties of
his office, took poneession uf the Bank and its effects, and has since that
&As teen closing the affairs of the Bang, as fast as the nature of the case
wri, the orders of the Chancellor would permit. (41_anuel Fnoort 91:JAMLi4Altor
21,* account,

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Federal Reserve Bank of St. Louis

Failed Sept. 4, 1c57

3-,

1869
Failed :ADA. 4, 1867
This blau, passed into the heads of the Lion. A. L. Miner, ,f
as heceiver in Chauccry on the 2ath day of ..ecember, A. L. 1857.
rar presenting its bill to tIlt reL.eiver expireu on the '4.th
y
A. L. 1056. As much progress hub been a.aoe towhrds brinLing its
,close
t...eir complicated nattart ,duld

i.anchester
The time
of Locember,
affairs to

in the 4th and 5th da4s of July, the lath day of August, and the ....5rd
(14 of Septewber, a. L. lt:58, I counted and burned the following amount in
nAmber aa, aeno.ination uf the bills of this Bank, 'dr.,

Total

54,4o5

v 10b,:104

At the same time I counted and burneo the following ia.presslons or
tiheets of the bills of said IJak, viii
100 impressions of i Twenty & Fifty dolicx bill

Lh, 0,0W

The foregoing are a11 the Bills, and Impressions of the Bills of this
Bank, which have come into the hands of the Receiver. (Arinu4 Reaort
9.1: accounts)

1860
This Bank passed into clic hands of the BET. A. L. kiner of Manchester,
as Receiver in Chkacery, on the L*th day of S'esitumber A. D. 1857; an...t as it
is still in his lianas, it Is not been examined by the Bank Commissioner.
am informed oy the receiver that be is closini its affairs us fast
es tne nAure oi the case till permit. (Anaue4 Re)ort 91.14&Au4itor 21
44.ccou4tS).
ri

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Federal Reserve Bank of St. Louis

1b61
Bank Chartereu in 16b0
Cit 1
4.5J,OUU.00
riled,e;;Iber ,;th, 1657
iieceiver zydointc LeceMber ;ji, 1067
One year was allowed 'oy
cl.ancellor for reaentini bills 1,,0 the feceiver.
Amount of Bills 2rescate..,, inciat; those
allowed by the Chancellor ht141 6apreme
Court to Suffolk Bank,
4t11661.:JE
Vhen eceiver as a.?poInted there Wail a
circuL.tion of about
00J.00
jf this there wc,a dzesented for
alvidend
',
1 61,&01.00
Paid on cluics
10067.0J
in suffolk
redeemed
a.),7A.00
In Bank, counted ,Les Ciruition
4,671.00
.mo,ntin6 to
51),,JZ.U0
Leaving .,-et outst4,adine
77.00
the time the Receiver 1..
appoiated thers was more Ulan t150,j00.00
Of auv,J1oe,1 paper -- mostly
the West -- Lrid ge,lert.11y worthless or nearly so. There .-s very little ,00d paper
th,A coAld all be ?aid in the
bills of,thz Bank.
a4 alast i2t.rties in this State were settled, Jau. some in the State
of New York,
The

ssets arm no. as follows.-

Lae from ?artless ut the 'est, includink, interLat, Eto..it :116000.00.
J: this little if anything is expecteu to be collecteu.
There .1-e J.so farm unci village mortLages in Wiscoasin. and Illinois,
tj.ven to id the Igisissippi anci iNaciae F,ailroad, incla:Ung interest, about
These mortgaises &ere contesteL (4
' the Mortors, but it is believed
that one half of their value lat4 be retlised. There is an .nterest in about
two acres of real estate near Cinciunuti, frop., eJich it Is hoped to receive
at least 1,000.U0.
The B,,nic has paid Into the S-feti Fund, 4760.00,
There 7411 be a balance in i-eceiverls hwids nert some good peer is ?aid
which was taken on time to settle claims not collectable, about 41,600.00.
A suit whiah is been ending some years with the Suffolk Balm was decided last iebruary bi the 6upreme Court against Lanb,i banA, allowing Suffolk Bank in bills presented
.;4,610.5Z
Also liquidating a debt claimed by Briby
a:net tufiolk Bank of
5.00Z.47
tin difference or

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Federal Reserve Bank of St. Louis

chartere6 in 1850 -- Cuzitc.1 0O0 L,U0 -- Failed September 4, 1057.
Receive: a,,jointed Lecember
1857.
V-,
0ne year waa allowed by theihmaptrekter for presenting bills to the Feceiver.
Amount of Bills ?resented, includinc those allowed
by the Supreme Court to Suffolk Bank

451,te1.55

NLen the 1:ficeiver t.n3 appointed tiaere was a circulation of

92,000.00

Of this there eat., c,reseated for dividend
Paid on Claims
In Suffolk 8nic, rekAtemed
In bLak, counted as circulation
Lmouittin

.61,5t)1.Jts
10,Ws7.00
ap7o4.00
4.2071.00

Leaving yet outstancing

4'66,677.00

At the time the Receiver was appointed then:: waa 4aaro than 4,160,000.00
of aus?caUe%A
er, ostly at the Vat,
ke.aerally torLisea or nerly so.
There was very little igoo ))er and th,A could :All be paic; in bills of the
Book.
Ali the claims ag-inst partit.s in td s 44ate ,lave been bottled and soma
in the State of Mew ror4.
The esaiete are no4 as 2ollowes
from partiee at the 4est, including interest,
about

Z1'45,000.00

J.1: this little JO anything is exdecteo to be collected.
There are a.leo Farm and Village Mortgages in Eigeonsia r‘ad Illinois,
6....vea to Laid the hacine and Mississipoi !hilroad, amounting to, including
Laterest, about
4,15,0W.00
These Mortga0.3tc arc contested by the .iortgagors, bit it ie believed
that one-half of their value maiy be rPalised.
It is expected that they, and all the Wiecoasin d..per, will be solo this
Autumn or the coming tinter.
There is bn interest in about to acres of Etal EstA.te near Ciacianati,
from which it is hor:ed to receive, at least a,000.

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Federal Reserve Bank of St. Louis

7he Euuk hi,s ?aid into the S.fety Fund ;L750.00.

from
:armrhekt has bee- received bj mg of co:IL,Jroa.isez, unc from 4 .dalM
eklasive of what mad be hereafte:
Jr in Daub'', after dving all expenses,
recetved at the West, A:boat the aua of
It is

now thought thtA there will be a balance

peceiver's

ara, with the Suffolk
The suit that has been danding, for aame
was decided February lora, by the 6upreLe Court, -6„,inst the Lanby BWIA, althe Suffol4 BLak in bills ?resented,
Also
-ebt
e i.Ist Suffolk BOMA, of

laimed by L-

bunk

,ifferextce of
Eon. A. L. ,aher, oi !.,,u,hester, is the iiecsiver.

altal
iailad :,epta,sher 4, lbb7. don.
ChLrtered in 1o50
Lecsaber 2w, 1:J57. The af1.:anzhester
was
heceiver
-;?pointed
A. L. Miner of
heoeiver,
And I aa informed b/
the
now
in
he
of
hands
fairs of the Bank are
Bank
are
soon to be sold at
the
Uortgages
to
belch:ging
him th_,t, the Western
will be entirely
the
Bank
of
A'ter
business
immediately
which
the
auction,
closed.

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Federal Reserve Bank of St. Louis

beieIn i.oiaLT=Jbi

L.,aal heport

the Auditor

lebk,

.A41.4e8

72-76,

The Association was foanned, Lecember b, 1651, ana the BanA was
orwAnized under articles of aLreement of that date, to continue in force
Antil the 1st of January, 1672, ,ith an hAnorized eapital of 53,JOU. All
moaies reeeivea of indiUicia,ls composing the Kasociution, have been expended
in the purchase of VirO.nia Bonds, at a premium of about 6 per eent. This
stock is no worth about 12 per cent. in the market. -- by a vote of the issoclution, March 22, :e5,000 was added to the eApital, end 425,e00 more b.,' a
vote of the 3d of July; of these two additions, only e11,4Ci0 appears to have
been paid in at the time of exaelinction, and that ia bonds and aortgages.
By the articles of Association, the Stock is ,:ledged by the owner
for ell debts due from him to the Bank, and loans are made on this security
reckoning the Stock at par. No restrictions have been imposed on Lirectors,
Stockholders, or others, limitink, the a;eount of their indebtedness, ,es in
-;ese of chartered Banks. The law of 1b40, prohibiting_ loans on pledge
the ,
of Stock, and confining the indebtedness of Lireeturs to 5 per cent. and all
others to 10 per 'ent. o- the capit....1, has not been treated as applieeble to
Bunks organized ander the het of 1b51.
This is the first experiment within the State, under the General
Banking Law; and it must be regretted that the Association have attempted
to set up a Bank, .athout so much as one dollar of oeking eepitel. It
wceild, at lest, tAiVe been more prudent, to have retained a portion of their
cash in the vault of the Benk. No Band can no e rebulAr and permanent business on eirculetion alone; Anleas their fhcilites re much treater for cir.:uLtion than most Banks enjoy. But there is nothing in the ldw, nor in
the articles of p.ssociation, o preclude the L)toetholders from devoting a
portion of their futures iesesalents to a permanent cash capita, to remain
In the Bank, as a basis for tne transaction of business. Thie osould be done
Working Lapital will be found as necessary for this Ban{, as for the Lhartered Banks; and may be uispensed with in, one case, as well as the other.
The Virginia Bonds, on which ;50,000 in bills have been issued,
will bring „56,000 aaaer the hammer; and the Mortgages are on improved
farxs, at three fifths their value, exelasive of buildings. These securities, backed by the Lirectors' bonds, must insure the redemption of the bills
beyond all reasonable doubt.
Annual he?ort of .the Auditor of Accounts. 1653, pages 76-61
This Lank as oronized under articles of agreement eeted Leeember
1851, with an authorized ,:apit,.1 of ;250,00U. All monies received of indivia,:lAis composing the ascociation, 1-!,ve been expended in the pe.rehase of

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Federal Reserve Bank of St. Louis

Virginia Stocks, at e jremium ef aboat 6 ,)er cent., c u this Stoce is now
,orth about the sae in the warket.
The law of 1640, prohibiting chartered Bas, from makir4, loans on
21edge of their stock, and lieiting the indebtedness of Lirectors to b der
ceat. and all others to 10 der cent, on the cupital, hue not been treated es
ap)licable to Banks organized under the General Bonking Lew. By the artieles
of this essacietion, the stoce of each owner is ..ledgee for all eebts due
from him to the Bank, and most of Lhe loans have been ieede on that security,
reckoning the stoce at per. This kind of security cannot alweys be safely relied on, or the value of the stock deeenes on the eoenuaess of the debts; ene
.orteleas, the stock cannot be much better, en- is therefore
if the debts are ,
ieadecieete secerity.
We have to regret that this first experiment under the Free Bening
Lew, has 50 signally failed to furnish the public with such aecomouations es
we are accestoeeu to expect from sie,iler institetione. eut few loans ere made
expedting to stoeeeeLders, ane the eublic in geaerei are more ennuyeu than
benefittea by the isenk, es near s can be ascerteined, more tnen tnree-fourths
of the a4;licetions of bill-holders for the reeemption of t-eir bills, have
not been met on the (ley of presentation. There is less excuse for this ieglect, hen we consider that most of the calls on the Bank have been for ,.urrent bille t and not for specie. The bill-holuers nave exercised as much forprotest haa seldom been reserteu to,
Learaece as could be expectea, end
even when the demand has been refused; but the bills neve been left at the
Bank, or in the neighborhood, to be redeemed at the convenience of the Bank.
Twenty-five packaees have been seat to the Treasurer Ander protest, to be redeemed there; of which twenty were under el„JOU, elle one as loe es 0.00. The
law requires, la case of protest, that the bills shall be sent to the State
Treasurer, and redeemed there by the jenk; thus imeosiug on the holder the
three-fold tase of presenting and protesting hie bills, then sending teem to
the Treasury, and at last, after the lapse of ten days, seeeing there for his
.eeney. But all this would be well enough, if not of too frequent occurrence.
If, however, the public must be put to this expense to get their bills reueeeed, common courtesy requires that the Beni( should impose this buruen on
the holders as sparintly as possible, and at all times hold themselves in
reeeiness to meet any ordinary cell thet eight reasonably be expected.
this is a ne Bantc, ana the first under a new les', eith its
reputation for probity and its eleies to confluence to acquire, we must lament that it has felled to fulfil the exectations of its friends. But ehen
the situation of its affairs and the menagemeA of its business are taeen
into account, their inability to redeem promptly, is no matter of surprise.
AS

Ieagine a Bank, destitute of workinc capital, with aeeely a hundred thousand in circulation, and no active means to redeem its ills; its
loans ie the hands of stoceholders and Directors, with but faint expectations of present payment; with raw hands aboard, and an adventurous pilot
to direct its coarse; and we have a tolerable picture of this institution.
Under such circumstances, ee are eore surdrisea that they have reeeeeed their
bills in apki manner, than at their uelays. Ao man but a giant could carry

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Federal Reserve Bank of St. Louis

-3 -

such a load, under so m-py .uverse circumetaaces,
and clot breed down under the
burden.
The Free Banxing act reeuires the Commission
er to redort the eiseuted
elaims eertainiag to this class of Banks. There
are two items under this head
a description of which I shall give by trans
cribing the written eteteeent of
the Ceseier and Lirectors. The first is
as followsl
"Jn the 4th of January, lbb5, Willi
am Uoefrey eposited ei,82.50
in this Bea& for safe eeepine; being the avail
s of an execution collected by
him, in favor of Bradley & Canfield, Against
i-niel Tarbell, Jr., aria on the
5th of the same month, Lorenzo Eichmond depos
ited 5,l75.67 in the Bane for
safe eeeping, collected on an execution betwe
en the same
rties. Seiu Terbell conzenceu a suit against Brenley & Canfi
eld, and trusteed this Berle as
the holner of said sums; and the Ben& still
retuins the money eat., intends to
nold the see, .atil the termination of the
suit; alad hole theeseives ready
to eey the money Ahenever the court shall decid
e to whoe it belones."
The feet that the same indivioded is Presi
dent of the Bene t uebtor
in the execetion, and the dlaintiff in the trust
ee eroceee, casts a., unpleasant shade over the transaction; and elle so
many are ready to indulge in derision of this Bane, it is rather unfortunat
e that arid circuesteeces should
exist, favoring the suspicion that the trust
ee action was commenced to obtain
the use of the money durinc the eendency of
the suit.
The stateeent of the other controverfly is

followe:

"We have a suit eenuini., ,Lainst the L)Affo
lic hanx, commenced in October last, on an alleugeu onarge ageinet the
Benx, for a :11-licioue attempt
to injure and breax us, by tekinge ,ad receiving
our bills of the neighboring
Banes aria sending them home for specie. In
Jtober last the Suffolx Bank
by their agent William Wyman, presented at
the counter of this Berle i27,000
for redemption. This Bane broeght a suit aguin
st the beffolic Bang, and attached the seid ire7,000 in the hands of the
egent. The aoney was receipted
by O. P. Chandler, and afterwards redeemed
by the Belie. A judgment AUS rendered at the last term of the County eour
t in favor of the 6uffolk Bz..nic, end
reviewed by this bank, and the suit is still
deceiee."
Some have been so uncharitable as to surmi
se thet the ettechment
was eade for the purport, of deley, and for
obtaining dossession of the bills
to exhunee or other funds, and thus furnish
the eeens for their own redemption. hut I know of no evidence warranting
a conclusion so dishonorable to
the lirectors, anu would be sloe to impute
to them so base e motive.
This transaction resents a novel feature
in the history of our
B-nking institutions, end perhaps 4 new
question in the scieuee of jurisprudence for our courts to decide. It is eresu
med, however, that their legal
acumen will be equal to the tusk.
The SIffolk Bane ie out of my precincts, and
have no sueervision
over its euties, nor control over its fate;
and must leave it to struegle
through the conflict del best it can. but unotn
er question arises, which may

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Federal Reserve Bank of St. Louis

-4

4•1Io

involve our own Benee .a the se .4-edicament. If it is unlawful for the
Suffolk Bank to receiv. the South iloyalton bills, "and send them home for
specie," -that shall be one with the "neighberiab 'eeries t" who reeeive tnem
of their custemers end deriegly „xesent them for redemption? one is as much
an offence as the other, and the "neighboring benes" mey also be prosecuted
for a "malicious atteeet" te ruin this
It is difficult to preserve our gravity *Len contemplating the affairs et' this institution. The history of its eoinws upper Lucre lite a
ludicroes farce, tLen the euelaess trensactions of a eubstantial Bank.
In 1.,8t year's report, m4 eoefieence in the safety of these bills
sas fully expressed; and notwithstueding the derk cleees ehich seem to overshadow this Bank, I must renew my essurance, that the final redeeptioa of
its bills is sebsteatielly secured; end that tnere can be no reasieuaele epprehenoions of u failure oe that score.

Annual h.eeort

heditor ..91* eccounts, le54, eeekee

-4.01

By the articles of associetioa, ell shares etand pledged to the
Benk for the payment of the indebteeness of the stoeshelders. gay W s, 1e54,
the 482 shares of stock, tbove nemeu, ,ere sold by a creditor of Lealel
Tarbell, Jr., upon exeeetion, for 'ei.) cents e shere; said Tarbell being then
iadebted to the B4.114, in an amount larber then the par value of said sharea.
Upon the 5th June, lob4, beid Tarbell assibned the shares to the bank in
dart discaurge of his iadebtedness to the Lane, fol the sum of e5L,L71. t&tim,ted as followst
402 sheres, par
per cent. premium
Earnings at 4 .„,er cent. from last eiviuend

i;4o,g00.00
2,410.00
1.801. j

Z.5•4.471.0‘)
Whole uueber of snares distribated is,
Owned by the Bank, as ,ibove
Representeu i moitgafe of $752,

404

7 52-10J

Whole number of shares

J18 52-1OO

There is due to the Cochituate Bank 46,00J, upon te;clve certificetes of deposite of Eaniel Tarbell, Jr., of 4500 eaeh, peyable in from 80
to 115 „Ivo, which -ere eased to that Bank for ,he indebtedness of this
Bank, and were severally protested for non-,:vment. There is also due, as
represented in the report of the Bane Commissioner of 1b55, for
Deposits of Henry Godfrey
Lorenzo ilichmond

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Federal Reserve Bank of St. Louis

;„1,882/55
Z2175.67
fA,058.26

These sums, with the sum eue Cochitu.te Bank, making ;,11,057.26,
ere to be added to the above reported list of the liabilitiles of hisBane.
The B4Lak hotiever ho3eia said Tarbell's ,uarantj to pay these debts, secured
by his geaerel mortLage, end has paid him for so doing by their diecherge
of his indebtethiess to that amount, ebraced in the sum of i52,271, before
stated.
Ieterest upon the Virginia stocks has been ;Aid up to and including July 1, 1654; 1CAS then paid to the Stete's Treasurer. Upon the capital
mortgages, interest has been paid only to January 1, le54; Wd8 then paid to
the Bank by adjusting with the mortgegors, (?ho ere stoceh)lders to the amount
of their mortgages), the interest due upon the mortgegea on the one hand, with
the divAend then declared on the other.
The dividend declared Januery 1, 1c54, was i'e5,722.40, being 4 per
cent. upoe the eepitel of t9t,060.
No loses here oeen eherged, either egeinst capital or profits.
The profit Laid expense

co.it, since Jenuary 1, 1654, is as fol-

loves
frefits
Interest and discoeat received on loans
!1,731.k.1
on atoces received by Treasurer
1,770.00
due am un)aid on mortgates, fro. Jen. 1 to July 1, le54 1.065.74
Total profits

44,504.95
F)uenses

Interest paid on deposites and loans,
41,00e.e4
„Lau protests paid Treew.lrer
224.95
Peid coeeissions for circal tion, &c.
9e(7.36
6 Lirectors1 and Cashier's services
500.4O
" other expenses
21.85
" 1 per cent, on eapitel to Treasurer, (See. 4e)
958e56
Total expenses
Belance

e5,6K._12
84.2.85

This Ben< has not redeee.ed its bille in B,ston. About two thirds
of its cirulation is in the State of New York. Uneer an arrengement with a
broker in the City of New York, he receives the bills of the Bank, and circulates them at o cert in cearge per cent. The Ben officers eere unable to
find the eritten coatract with this broter. By inspecting one of tis eecounts

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Federal Reserve Bank of St. Louis

readered, it appears that he has cherged one per cent. elseotnt upon funds
remitteu to him, and from one-half to three-fourths of one :er cent. for the
bills of the Bang cireulated b4 him. These bills are then bought in by him
J, certain rates of diecount, published as being three-fourths of one per
cent., arid ere then recirculated at a new charge to the Benx for sech recirculation of from one-half to three-fourths of one per eeat., end so on in
a circle. It is elaimete by the Benk, that this broker has chergea a higher
per centage, for circulating the bills, than the contract with him authorizes
that the charge for circulation and recircui-Ition by the contrect is but oneeighth of one per cent.; but tnere •ppaere croulted to hie, upoe the books
of the Bank, for sAch circulatio, one-fourth of one per cent. It is further
claimed, that by the ,_ontrect, ee as to redeem the bills at e aiscount
one-fourth o: one per eerie., but that he tv,16 te publish the rates at threefourths of one der cent. aiscount. It is :aore than proo-ble, that ft settleeent of aeeoents with him may vary the foregoing emount of e5,466.11, reported
among the reeoircea of the Bank; and that the saiplus reported is not releeble.
The President and Cashier say, thet in their "oiinion, the entire
credits of the IJnk are ood and eolleetible."
Since the lest report ninetly-nLne .eeeeegee of the bills have been
sent to the Stete's Treasurer, under protest, and redefeeed at his offiee.
:ione between June 'e7, 1654, and the dete of isy exasinution.
Annual 1eport of lut Aeultor of eeeoente. lteJ

as 126-126

There is a further claim ageinst the Bank, not acknowledged as a
debt, of elsO.J0; being ulaiws of George hoes arid John A. kluge, late Treasurer, for services.
Of the eelue of the "Notes end Bills discounted," eupeeial1y of
those represented es secured by aortgege, I am uneble to express en opiaion
from personal examination; -s I have relied upon receiving e report, not yet
come to hand, from a eemmittee who are investigetiag Ude. subject. In the
opinion of such of the officers of the Bank as %ere oxemined, "all the above
reported Resorces ere “yed and aveileble," with the exception of ;;.650 ebove
dedeeted.
The debt due Cochituete Bank, (.26,000,) ene the dedoeiee of henry
Godfrey -nd Lorenzo Lichmond, ;;5,056.26) in all 0.1,057.26, stead a. steted
in my 1\eport of 1b34.
Of the 4b2 shores of eteck owned by the Bank, and set down among
its 1esources in the Leport of 1854, only Z11 ktb-100 shares are no, owned by
the Benk; the beleace '-eving been sold. Further reflection has zetiefied we
that stock ownea by the Bank should hot be estimated along its resources. It
is ret,,er an absorption, or anniniletion, of so much of its capital.

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Federal Reserve Bank of St. Louis

-7...
aai infomed by the Cashier, under ate of A.4015t 2, that the
Bunk "has increased the umount of stocks in the Tre. Arer's hands, so that
he now has, of securities, in all ,iJ2,656. Upon this the Bunk has issued
certificates of stock to the amount of 4104,600, und received therefor cash
or approved notes. Of the above i i(J4,6J0 or stock., .:45,000 is taken contingently; thus leaving 47S,WO."
No dividends have been declared since j au-ry 1, 1654. No looses
have been charged avinst either capital or Tofits. heported balance of
,Iofits above expenses, for the past iear, is :e4,4c7.j.

1-,epurt.

There has been but one 2acage of bills proteeted since py last
This was :or ;':1,445.00, Lecember lo, 1&)4.

This Bang hae not redeemed its biii at per in Luston or Aew 'fork.
About two-tnirds of its circuiutiou is ia the Ltate of eew iurt, ta à ept
, ho eaargea one-reurth or one per ent.
broker, 4
oat by an arrange:lent Lwith
for re-circuLting, and not returning the bills to the Bank, and buys them
in A one oer ent, discount.
eousidered as an institution for doing the ordinary bunking business JL' its neighborhood, kitiCh as furnishing an ,iccrediteu currency, facilit,ting exchanges, disc9ulltinc business da?ers ec. this Bank may be regar.sed
as
failure. I cannot thing this a lault in auministration, rather than u
necessity of the system. Considered us a scheme for the advancement of individual interests, %.ithout any perticular JLthlicauvantige, yet Aith reasonable security to the )ublic agaiest loss, it seems well enough.
annuai hsport acli, 1111 eaditor of ACCQUntS, 1.00A dat4e, 110,
Lividend - Jugust 11, lo56, e-A,500 of the surplus earnings of the
then pest year, as of May 1, lob, were uividea ailiong the stockhlders.
This Bank, eonsidered as an institution for uoing the ordinary
,s furnishing the usual faciliBanking business of its uek,hborhood, 61
ties of a Bank of Liscount, as not improved, and with its irge suspended
and uncoatrolable debt, cannot be expected to do much in furnishing an aucredited ourreAqy-, or•discounting ordinary and regular business ,per. This,
the Lirectors, at the present time, do not profees to be their first object,
but to lout ,,fter, and to tnce care of *hat has already bee4 done. The Lirectore are no at -ark in securing aria improving the condition of t_eir sus?ended debts, and have 0.:ireay Lione much in improving their condition within
the LIst year. There has been no bills protested within the last ie-r, and
though they _o not redeem their paper in Bosto, they readily furnish current
funds to redeem uL their own counter. The lar,est ortion of their circulation is n the state f New fort, under the agency of a broker in the eity
of New lort, to whow they dey one-fourth of one per cent. for recirculation
he buying them in ,t one er cent. discount.

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Federal Reserve Bank of St. Louis

MID

•••••

Auaual Pe-doit of the Auai:or, of .64couats, 1Jo7, 2a);,e li6
This Association has gone into lividation, on
,2p1ication to
the Chncellor of the second Judicial L:ircuit, by some of the sibners of the
bonds to the jtate .rfteaJarer, under the fiftieth se.:tioA of --n _ct to authorize the business of banxiag, and -u additional drovision af an c.t, relating
thereto )assed _A the last session of the Legislat, Are. The Cha.neellor has
/Lade the necessary orders &ad decrees for closing its affairs, :-.11(1 the assets
have been ,Aseed in the hands of a heceiver, Tho *LI dre,)are -s soon .ts nvvr
be, that distrib itioa
It is su,Jdosed L',:a.t the eAritie. L ,oseession of th,
: TrE:asurer
will nearly or
redee31 the bills n circal-tion, hat thA the shareholders will s.ffer an g3ntire loss of the stock.

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Federal Reserve Bank of St. Louis

nANK o:

Annual Report 21

Additor of ,,cco Juts, lo56, )1-kes

-5

Aothing has been lost, and n, bau or doubtful uebts L.re .nAna to
exist.
Indebtedness of Lirectors, 0‘,500.
A dividend of 42,725 LaS been voted Iv the L.irectors, to be paid
out of the above profits.
The bills obtineti from the State Treasurer aiLount to v 76,060; of
which ;37 are on hand, leuviag 4,75,6o3 in circulation.
The sum of 065,000 has been subscribed and paid ia cash by the
stockhAders, and also ,;61,160 in Bonds and mortgages; out of which Z4d,050
has beea expended for Virginia Stocks, at a premium of '14,050, leaving
15,o50 in the Bank for working capital. In addition to the last mentioned
sum, the Savings Bans aad citizens of the vicinity, have deosited in this
the instItution in the
Bank 4::42,649, at an interest of 6 per cent, to
comme!iceiLeat of is ousiness. These two sums afford the Bank nearly 440,j00
in cash for their operations, in addition to their bills froa. theTreasurer;
with a reasonable prospect of an increased supAy, should the business of
the Bank reuire it.
This Is the second Bunt under the General Banking Law of this
State, and was organized January 1, 1853, under articles of association
dated July 1, 1°5E, and to continue in force until A. D. 2000. Loans arc
not permitted on pledge of its stock, and its affairs appear to be donducted with a proper :egurd to the safety of all concerned. Its stock and
general management are in the hands of uiscreet and ( rudent ;Len, who are
entitled to the confidence of the coLimunity.
Annual i.ekiort, 1d54,.0.4%ek 67-6
In the amount "Due Depositors," is included the sum of '..13,07o.45
borroweu of Castleton Savings Bank at an interest of 5 per cent. .er aanum
,,hyble semi-annually, this B.nk performing the obligtions of the Savings
Bank to its depositors under the By-Laws. The:e is also included the sum
of 4q.,,olv.19 paid in by 6tockholders under ,vote of juki 11, 16b4, layig
an assess:Aont of 40 per cent. upon the shares.
The real estate is a bu.nking-house only, valued at ,..1,6u0; one
part of ilhich is occupied by the Bank for the transaction of its basluess,
_nu the other part is on rent at the rate of 450.00 per annum.

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Federal Reserve Bank of St. Louis

Besides the Virginia :;tocks, the bank holds 5, shares 041"uP)

of the eutland & Whitehall h.. R. Co. as collateral security for 4 debt.
This road is leesed to the 'ihiteeell. & Saratoga h. R. Co. at ,. rent of 7
?sr cent. per a:meet dayuble seei-annau14. The rent has been regul-rly
deid, ana the Dire.tors value the stock at .s0
.
per cent.
The Virginia 6toces are set down as :hove at is 5-4 per cent. ,)remium #eerly. 5.heir eearket v-lue is now something less -- say 5 der cent.
eremiue, making a. difference of f2,470.00 Lo be added to the above deficit.
The interest has been paid u,,on said etoces and morteeges up to and ineluding Ju] I, 1854, and was ?aid to the bane, except ,1,00U retained by the
etate's Tre surer, neing 1 .Jer cent, of the capital, for the Be.ix's failure
to redeem its biiis in Boston, a,eording to Sec. 4 of the benerel b-heing
Act.
The indebtedness of the present Directors is
Directors, directly and ieeireetly, Zni,715.80.

,773; of tomer

A debt of ,•46,014.is4 is suspended to key
18o6. It is secured
by mortg ges -nd other*ise, enc.: is regarded ty tee Lirectors -0 safe.

The aggregete reapeusibiliti of the atockholuers, eho h-ve Liven
bonus to the Treasurer for the redemption of tne bills, ie estim-ted at
4226,000. With the stocks and mortguges in addition, t:.ere seems to be no
ground for questioning the perfect secirity of the bill-holders.
4n1a-1

eoort, 1055, ,,eges eJ-61

The ,Jemium daid by the bank, upon the stoces above, Was
:6,621.80. The stoees are no quoted in reareet at
,er cent. Interest
'.1..)ori then is paid to July 1, 1855. No dividends have eeen declared since
January 1064. The Bank has at all times redeemed its bills at par in Boston since June L, 1854.
Annual Reeort, 106d, eaees 71-72
This Bank has made no dividends of Lite, and though they have a
large suspended debt, but
they neve sundry coll-terals for security, the
officers of the Bank entertain a strong belief that these oebts *ill be paid
and that their stock will be 600d. Their bills for the last t*o ;,.eurs or
eore have -eeen redeemed at par, in boston, and at their owe counter.
Annual Report, 1857, pages 70-71
No dividends have been declared since 1854, and the arectors
no not intend to declare one until they can froe clear profits LJoove their
capital. Their bills are redeemed at der at the Suffolk Bent, Bosto..
They have recently eede a large sale of lumber, held as collateral an their
suspended debt, so tie-it their prospects are improving. By an alteration in
their By-Laws, thymay now have from three to five :directors, who have the
Aiole manageE:lent of the Bane. At the present time they have only four Lirectdrs.

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Federal Reserve Bank of St. Louis

- 5 -

ieport on Gastleton Savings &Ink attached.

I‘e)ort of tne

Jailor 21: 4.ccounta, /o J, ,J-4,Us 01'412

The Casnier of this Ban.. does the business of the Gastleton Savings Bank, 'Ana has the inspection of its books and papers.
On the tith day of July, A. L. lo&r), this bb.nx, by a vote of its
Lirectors, ceased to be a Bank of discount; and on tne 2eth day of July A. L.
1d6'S, in the presence of the C44anier of said ,,Jalc, the tate's Treasurer and
6ecretary of tate, I counted ana burned of the Bille of said Bank
1,Z,b0
1,43U
444(34
;4.63
127

Une LollLr Bills
Two
"
.
I
iive 11
11
Ten
Twenty"

tl,Z5J
Looti0
7,440
2,3bU
b4U
,16,50U

it being all of the bills of said Bank not in actual circulation.
Ana at the same time I counted ana burneu all the iayreabions or
sheets of the Bills of aaia Bank, whIch had not been issued viz:

125 Impres-ions of 1 Dollar Bills,
41.5
II
752
1-1
"
1,504
tab
"
7,875
ipUb0
10
"
10 :WO
O,004
ti-x st,me time the Bank plate

*ere Lieatroyed.

Annual heport o.t the Auaitor .21j ftcouats, 1d612 ptAxe 30
Organised under the General Banking 1w, co=encea business January 1, lob6, and closed its business as a Bunk of discount on the 6th day
of July lobs.
The outstanding circulation of this Bank is no 4;1,5415, for the
redemption of Which a deposit is made itn the Mutuid Bank oi Gastleton.
The stockholders have already drawn three fifths of the estimatea vLlue
of their stock, and are only satLitin4 the terwination of a s4t -t law in
vnich they ,,re interested to receive the balance of their stock, when the
offices of the B$,.nk *ill be entirely ,losea.

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Federal Reserve Bank of St. Louis

Annual report, 1861, oa.,e
An effort has been m-de in certaiu quarters, from sinister motives
.pprehend, to conneet thia B-nk with the Bank of Castleton, thereby striving to injure the credit of this bank. They are in no way connected -- the
Bank of Liastleton having been organised uuder the general B,nking Law of 1851,
and the Mutual B-nk Porkia„ urioer a sdecia1 charter gr nted in 1857. Its
bill holders need have no fears of its safety.
Annual Report

166$1 dttge, 24

Organized under the Leaeral Bankin6 Law, commenced business January
1, 1863 and closed its businesb
a BanA of Liscount on the 6th uay of July,
1659.
The outstanding circulation of this Bank is now $1,645, for the
redem,)tion of which a deposit is made witll the kutual Bank of Lastieton.
The Stockholders ..ave alreacv drawn three-fifths of the estimated value of
their stock, and are only awaiting the termination of ft suit at law in which
they are interested, to receive the balance of their btocit, :then the business
of the Bank will be entirely closed.
Annual Feport, 1865, Jage. 47
The outstanding circulation of this bank is i.1,46b, for the redemption of which a deposit is made Aith the Mutual Bank at L'astieton. A dividend of 60 k)er cent. of the Stock 11,,e. been mde to the :Aockholders which
has been the estimated value of the 6tock. TherE., will, however, probably be
nother sill dividend made, ,shen the business of the an will be entirely
closed.
Annual .leport, 1664, Ale

jel

The outstanding circulation of this BaMA is N,1,166, for the redem?tion of which the k.ashier of the Mutual Bank, L'astleton, has 6:Oren his
bond.

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Federal Reserve Bank of St. Louis

Lastleton_ .,a.virues banx

crtered 11/11;1052

L...

r.ied 1/1/1c0U.

rarst redort -- July 17, 1054.

!
annual hwdort 21: Vat Auditor 21 Accounts, 1..A),e, Alike 1Zo
The entire _Amount is lo ned to the Bank of i;estieton, at an intereet of 4 der ,ent. der annum, payable semi-annually, s_ad Bank performing
the obli,ations of the 6avinbs an to the depositors, under the charter
!Ind
by-laws ithout chark,e to the Savings Batik. The loah is secured by .
bone
of several of the LAockholders of the Bank of Uastleton. upon examinatio
n,
I am satisfied of the sufficiency of the bond.
Lurin the last year, two dividends of interest of 2;, ..er cent.
each, staking 060.27, have been declared ,./.1d paid J.In. I and
July 1.
Annual report, 1655, ,),aket, 1,41
The entire amo-Int of dedosites is loaned to the B40,1 of Castleton
at an interest of 5- per cent. der annk.v, payable semi-annua4y, said Bank,
performing the oblikations of the 6evings bank to the depositors, under the
charter and by-laws, without chkkrge to the Javings LicalK. The loan is well
secured, by the bond of several of the stockholders of the Bank of Castleton.

required

The Treasurer has 61en no bond to the grobete Court, as by law

AnJual iiedor,
t, 1856, page. ill
The Leposits are all lo,neu to the Bank of idastleton, at an interest of five per cent. per annum, dvable semi-annually, and the loan
,v11 secured by a boau signed by several of the stockholders of the Bank
of ,ostleton.
Annual hedort, 16574 „Awe
The Leposits are ell loaned to the bank of kstleton, A, an interest rate of five per cent, per annum dayaule semiannually, and this
loan well secured by 4 bond signed by several of the stockholders of the
Bank of eastleton.
AmAll he:Dort, 1858, p.ake
The ueposits are ,11 loaned to the Lana of tdastleton, at an interest rate of five per cent., payable semi-annually. The loan is well
secured.

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Federal Reserve Bank of St. Louis

Annual heport, lo, 1 ae, AO
The deposits re all loaneu to the Bank of Custleton, at five
per cent. interest, Avtle semi-aanuaily. The loan is xell secured, and
the interest has been pau prompt4.
C. M. illaru, the Casnier of the Bank of Castieton and Mutual
Bank, does the business of this bank, and has inspection of the books,
papers
and business of the three Banks -- See "an act relatint; to savings
Banks,"
approved Nov. 10, lbb7, also Sec. 5 of "an act relhting to Bunks," a.i.roveu
November 25, 1658.
Annual 1-.eport, lo604 page 1,04
This Bari
cesea to receive ueposites, ana, .8 fast as possible, is closing its business. All tLe aeposites have been said to the
uepositors e cept thrty-ei6ht dollers aau eighty-two cents; -ac, that sum
has been ,
;eposite
a in the iutdal Bank, to be paid to the depositors whenever they can be found.

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Federal Reserve Bank of St. Louis

AA4ual reo t of the ,iuitor of Acc;ounts, 16554 )aged 14e-147
This Bank went into operaLiou April 1, 164. The stockholders are
all stockholders in the Woodstock Bank, and the list eisbraces all the stockholders of that Bank with few exceptions. The officers are the sane with the
an interest of 6 per
officers of that Bank. The Wooastock B,Inx ._ws to
cent. upon the circul-ting notes tnd the at,.sh reso..rces, less the deposites
the price of the :itocts ran don,
in Suffolk bank, ana pays. all expeases.
the PLonk, on the 26th of ifecember, 1654, returned to t;le Treasurer ,b,J00 of
0,000 of circulating notes then o. hand.
the
It is Untended that no division of profits be declared, until the
wow shall exceed the amount )aid as ?remium.
Annual Report, 1856,

uie 134

The Lirectors of this Bank have bi a vote of the stockholders, re,0010, not
turned to the Treaurer ;:28,000 of the Bank Notes, leaving only
a
the
have
Trea.i.urer
given
they
yet returnee to the Treasurer, for which
Bank.
Dep. Certificate for that amount in the V.00dstock
Lire..tors have .isposed of the Virginia six per cent. bonus,
and the whole .latter is to be closed July 1, 1857.

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Federal
Reserve Bank of St. Louis
AR--

BANK OF rOODSTOCK

Annual Re)ort of the Auditor, 21 Sccgunts,

a
toter jj

mu. ,

Bf_nk and the
The stockholders are z11 tockholders in l'600dstock
few exceptions.
list embraces all the stockholcers of that Bank, with
ock Tank.
The officers are th( same with the officers of 7,00dst
expended in
The capital ($60,300) is all :Add in -- t?l,600 was
premium. The stocks
the yurchase of t50,000 Virginia Stocks at 6 per et.
of circulating notes
were deposited with the z=tate's Treasurer and /50,000
for reception
received therefor. 1i..,000 i deposited with Suffolk Bank
circulating
0
he balance of cash ($26,200), with the t70,30 in
of Alla.
st of 6
intere
an
at
notes, making t56,000, is loaned to ioodstock 2;-nk,
)er cent. ,iayable semi-nnually.
The above rEpor.ted Eurplus of i1,:58.34, is the amount of interant. is sub1.
est ac rued upon said stocks, and loan to r‘oodstock 3enk,
but esained,
ject to an abatement of expenses, not yet fully ascert
timr,ted at
tb0.00
t
percen
5
say
tocks,
.
;:i
on
Loss pf premium

Balance of profits,

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Federal Reserve Bank of St. Louis

9&0.O0
,Y76.Z4
tl,P56.7.4

.1.L9 .101.
The stockholcers are til tocknolders in 'oodritock Bink and the
list embraces all t. ,tockholders of that Bank, witn few exceptions.
The officers are the aane with the officers of ,,00cetock
Thc ce4ta1 (t60000) is all .11.1ci in -- $71,bA was ex ended in
The .ck$
the :mrchase of IF.0,000 Virginia Stock; LL 6 per et.
were deposited with the :::tate's Iree:surer bnd tr,:)oo of circulating notes
received therefor. (,000 is de:)osited with LAiffolk Bank for rec4nption
of
he balance of oat& (t16,k00), with the t10,000 in circulating
notes, making $56,000, is loaned to ;oodstock irnk,. et an interevt of 6
:)er cent. ,Allyable Lemi-unnually.
The 411,ove reported Zurplus of 41,1-58.74, is the amount of interest ac rued u.,,on said stocks, and loan to ;oodstock Bank, ant. is subject to tal abatement of expenses, not yet fully ascertained, but estirw,tec at
tb0.00
Loss pt premium on btocks, say 15 percent 999,00

Balance of profits,

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Federal Reserve Bank of St. Louis

/980.00
218•5t
$1,P58.14

'
1 11484 RL)074.941.Wit Aucitor.2i. 1 cePu4144 ''Svrtcr

Lai.:

The stockholders are L11 tockhoicers in 7. oodatock Bank and the
list embraces all the stockholders of that Bank, vath few exceptions.
The oJficero are the same with the

facers of ":43ocetock Funk.

Thu c4tal a60,300) is ell rtii in -- $7.10:00 waf? exended in
et. :remits". The .- toeks
the parohase of tZ0,000 Virginia Stooke ;A; 6 •
were deposited with the. tatees Treasurer le i7,1'.)0 of circulating nAes
received therefor. t1.000 is deposited with :,uffolk Of,.nk for reemption
of Tials. the balance of cash (106,200), with the tTOODJ in circulating
notes, asking t16000, is loaned to goodstock Zrik, t an 1terest of 6
)er cent. .41yabis seoi-annualiy.
.rtpo-ted burplus of #1,1 508.:54, is the utsount of inter.
nk, an is subet ac rued upon said stocks, and loan to toodstock
ject to all abatement of expenses, not yet fully ascertined, but estizitec; tqt
180•00

LOOS pf Avaiva on :..4ock3, :say Lc percent

WO.JJ

t960.010
lance of profits,

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Federal Reserve Bank of St. Louis

t1,56.74

bTaTL

dLi

Anqual tedort of the hitor of Lc.ouate, 15o,
The Vermont six der cent. notes cl.?.do:Ated with the state Treasurer
and u2on shich Bills have beea issued, are sabstaatially in the form followings
0TATL

Vi.kukJed
Treasurer's Office
Aorthfield, Ji-nuary it 17

I have this day borrowed and received of h. B.
,_LJ1lars,
Ayable on demand to the bearer, At!: interest at the rate of six ,Jer cent
2er aanum,
,t the Bunt of
h. M. Bates,
Treasurer of zAate of ver.ont

Annual fe,:ort, 1860, ,hhe
The Lirectors of t-is B..nes, on the first .4ay fJanuary, Ai L. lo60
in addition to the j'ore,,oing dividend, divided to the stoLAcholuers 450,000,
it being the:. entire capital of the bank, and the 843.me was paid by dassing it
to their crcaito, ,..nd it ap,eurs in the sthtement, in the item, "Lue Ledositors." The Bktnx now siveLrs us having no c-dital.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

6TATI BANK

i1R

4-nnua1 Re3ort 21:.111,Auditor of Accountk, 1661

/ 47/

4, the underzioed, beret
e.-7tif,y that in accortklice with an
act of the LegisLAure ye have burried, in the z)reene f each other,
bills of the state Bank es follows, viz:
1,211 Impression plate, 12E5
1
5
8,462 Bills of one uollar
4,246
two collbrs
*
4,25F "
five dollars

ri10,8?9
5
6,4
21,265
149,14t

Fift thousand
11 s only of the bills of this Bank have been
istiued. There ia aoy. eiot hundrea and fifty—seven aollars in circula—
tion, for the security of the reamption of Anich there remains depos—
ited with the State lreasurer one thousand dollars of Vermont :Astro
Bonds. The other securities havt been returned to the Bank.

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Federal Reserve Bank of St. Louis

§Tiat B04.

Asia Emma saL ala #pditor

,i.cnounts. Ufa

be, the undersigned, hereby cei-tify‘ that in accoreunce with un
act of the Legialaturm we have burned, in the ?TV:eft '0 of each other,
bills of the :=4,,atr Bank es follows, via
1,211 Impression plute, 1,125
•
5
1
6,46Z ills of one collar
two dollars
4,146 "
*
five dollars
4,25t

$10,899
8,4&32
8,491
21A35
$49,143

Tift:e thousurto _olla s only of the bills of this Bank have been
is6ued. There ic lo: clot hundred end fifty-seven collars in circulatiou, for thc eecarity of the redemption of 14a/oh there rewaiins cope'sited with the Etate ireasurer one thousand dollars of Velment :Astro
Boncie. The other securities have been -eturned to the bank.

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Federal Reserve Bank of St. Louis

STAJit

Annual Report, (21 the Luditor

LLflR

1-,counts, 1861

.a, the undersigned, hereby certify that in accord&nce with 611
act of the Legis16ture we have burned, in the :)refene of each other,
bills of the tate Bank as follows, viz:
1,«11 Impreseion 71ate, 1,1«5
5
1
8,48« Bills of one dollar
two collars
4,«.46
five dollars
4,255 "

0.0,899
5
8,482
8,492
«65

Fifty thousand olla s only of the bills of this Bank have been
issued. There ia no eight hundred and fifty-seven dollars in circulation, for the security of the redemption of which there remains de?osited with the State lreasurer one thousand dollars of Vermont Ltate
Boris. The other securities have been returned to the Bank.

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Federal Reserve Bank of St. Louis

Full text of Records of the Federal Deposit Insurance Corporation, Record Group 34 : Materials Regarding Insurance of Bank Obligations in Vermont, 1831-1866 [2 of 2], Box 12, Folder 4

FRASER