Essex Bank (Guildhall, VT)

Episode Information

Episode UID
7349408190475
Episode Type
Suspension → Closure
Bank Type
state
Bank ID
734940819 hash
Start Date
July 9, 1839
Location
Guildhall, Vermont (44.565, -71.560)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
9591aa2988d2e6a8

Response Measures

None

Description

Receiver appointed by court October 25, 1841; failure rooted in insolvency and alleged fraudulent/speculative conduct.

Events (4)
1. July 9, 1839 Other
Newspaper Excerpt
The movements of the Essex bank of Guildhall, Vt. are viewed with distrust ... ceased to do so, when its notes fell to 25 a 50 per cent discount.
Source
newspapers
2. July 9, 1839 Run
Cause
Bank Specific Adverse Info
Cause Details
Cessation of redemption and suspected mismanagement/speculation caused notes to be deeply discounted and uncurrent
Measures
Bank bought up as much of its own paper as it could and resumed limited redemptions to restore confidence
Newspaper Excerpt
its notes fell to 25 a 50 per cent discount ... its notes are at present unsaleable in this city
Source
newspapers
3. October 25, 1841 Receivership
Newspaper Excerpt
Zebina Newell ... was appointed Receiver of all the property of said Bank, and to proceed under the requisitions of the general statutes of this state to reduce all said property ... to cash
Source
newspapers
4. October 25, 1841 Suspension
Cause
Government Action
Cause Details
Court injunction enjoining further proceedings due to violations of charter and insolvency; receiver appointed
Newspaper Excerpt
the President, Directors and Company of the Essex Bank ... has ... been by this Court enjoined from all further proceedings in the business of its incorporation, on the ground of its having ... become insolvent, and on that Occasion Zebina Newell ... was appointed Receiver
Source
newspapers

Newspaper Articles (5)
1. July 9, 1839 Rutland Herald Rutland, VT
Article from Rutland Herald, July 9, 1839

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Article Text

The Essex Bank Though we have been heretofore somewhat silent about this bank, we have not been ignorant of the ru. mors of mismanagement. And the reason that we have not called the attention of the public to the subject was because, though repeated inquiries were made, we could not obtain any facts to enlighten the community about its affairs, or the validity of the bills. We are rather in the dark yet in relation to the precise condition of it; yet we are aware that some unwarrantable speculations have transpired that render the bills a little suspicious, and hence they are uncurrent. We however have heretofore entertained an opinion that the bills must ultimately be redeemed at par. Our reasons for this opin. ion were that the safety fund banks (and this is one) are subject to pay ten per cent on all their net profits to make up any defalcation which may arise from misfortune ormismanagement of any i of the associated banks, and hence it will depend much upon the amount of the defalcation and the amount of the fund to meet it. If there has been a wanton abuse of the grant and an intention to practice an extensive fraud, beyond the ability of the fund to make good, there may be a loss. As might have been expected, there is no inconsiderable degree of murmuring about the affair, (and not without reason) that some light has not been given to the pub. lie long ago on the subject by those whose duty it was to do so. We copy what a foreign correct statistical paper says about this institution with only the additional remark, that the bills ought to be received with great caution either about home or abroad, on any terms, until the affairs of the bank are satisfactorily developed. " The movements of the Essex bank of Guildhall, Vt. are viewed with distrust, and justly so; for, after having redeemed its issues for several months in this city, from some unknown cause it ceased to do so, when its notes fell to 25 a 50 per cent discount. The bank then bought up as much of its own paper as it could get hold of, and again commenced their redemption in this city, in order to establish a confidence in the western part of the State, where it has been offering its notes without interest for notes payable by farmers, having 60 a 90 days, and even 4 months to run. This conduct has caused much suspicion and its notes are at present unsaleable in this city, and consequently of little real value to the holders -Sylvester's Reporter.

2. July 12, 1839 Vermont Phœnix Brattleboro, Bellows Falls, Ludlow, VT
Article from Vermont Phœnix, July 12, 1839

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Article Text

Essex Bank. We caution the public against receiving the Bills of this Bank. We learn that it has recently been purchased by western speculators, and no doubt is bought entirely for speculating purposes. Here will soon be a second edition of the "Windsor," "Lafayette," *Commonwealth," blow up, as like them it is under Loco Foco management-the Cashier is one of the "Faithful," and we presume the western speculators are Leg-Treasurers from the East. We commend this to the notice of our neighbor the Democrat, as he with his usual veracity, will call it a Whig speculation, the following article IS taken from Sylvester's (N. Y.) Reporter: The movements of the Essex Bank of Guildhall, (Vt.) are viewed with distrust, and justly so; for after having redeemed its issues for several months in this city, from some unknown cause it ceased to do so, when its notes fell to 25 a 50 per cent discount. The Bank then bought up as much of its own paper as it could get hold of, and again commenced their redemption in this city, in order to establish a confidence in the Western part of the State, where it has been offering its notes without interest for notes payable by farmers, having 60 a 90 days, and even 4 months to run. This conduct has caused much suspicion and its notes are at present unsaleable in this city, and consequently of little real value to the holders."

3. October 5, 1839 Morning Herald New York, NY
Article from Morning Herald, October 5, 1839

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Article Text

houses, and the merchants are sacrificing their property in vaia struggles to meet their payments. There is growing impression in Wall street, that the Philadelphia banks must soon suspend. It is also reported that a great anxiety exists in Philadelphia for the New York banks to take the lead in such a movement. That cannot be, however; the New York banks are in a situation which is impregnable, until the depositors withdraw their deposites-an event which is probable only in case a high premium for specie is created in Philadelphia by a previous suspension of the institutions there. There are many of the speculative class of dealers who are anxious to bring about a suspension to ease their own affairs.We are not, however, apprehensive that such will be the case The many suspensions which have recently taken place are principally of badly conducted institutions, among which were the following:-Middling Interest Bank, Boston, Jewett City Bank, Conn; Essex Bank, Guildhall, Vt.; City Bank of Detroit, Bank el River Raisin; Bank of Darien, Geo.; Chelsea Bank; Willoughby Bank. There is every probability that many of the Southern Banks will suspend in consequence of the delay caused to the crop by the prevailing sickness. The indebtedness of that region to New York is of such a nature, being old debts, that it is not depended upon as present means. In Philadelphia and Baltimore, however, large Jebts were accumulated last spring which will trouble the banks of those cities unless they can be realised. Should the delay of southern payment carry them to the point of suspension, New York may be obliged to follow in her wake, more especially should the news by the Liverpool be as gloomy as is anticipated. Sales at the Stock Exchange. $2000 Corporation Bonds, payable in October 1840, 97-5 shares U S Bk 100g. 5 do 100A-50 do Com 943, 50 do 95, 50 do 30 ds 95.75 do 95, :00 do 84 mes941-15 do Manhattan Com 118-6 do4State Bk New York 93)-155 do Del & Hud 574, 50 do 57th 50 do s 60 ds 574, 50 dos 60 ds 573. 150 do s 10 ds 58, 50 do S 30 ds 58, 190 do 5St, 100 do a 30 ds 58, 130 do 581, 50 do S 60 ds 58, 215 do 58, 200 do 58 100 do 8 30 ds 58. 100 do S 60 ds 58 82 do 581, 25 do nw 581, 50 do 5th, 50 do S 30 ds 58, 50 do n w 581 900 do b n W 581, 50 do S 30 ds 58-20 do Am Ex Bank 79}. 35 do 791-10 do N A Trust 531, 110 do 534. 25 dos 30 ds 53 25 do 8 30 ds 537, 50 do 54, 125 de S 30 ds 53g. 25 do s10 ds 53g. 13i do 54, 50 do s 30 ds 534. 190 do 54, 00 do b next wk 54, 25 do b 30 ds 55, 25 de 54. 25 do b 30 ds 544-150 do Vicks burg Bk. tomorrow 33-50 do Kentucky Bk Monday 72 50 do nw 724. 50 do Menday 721, 50 do nw 72.100 do 72-10do Morris Canal 29-10 do Manhattan Ins Co 1051-25 do New York Gas Co 124-50 do Mohawk 524, 25 do 521-50 do Boston and Providence 60 ds 100-25 do New Jersey RR SS-110 do Stonington 211-28 do Utica 1153-60 do Harlem Rail Road a 15 ds 124, 150 do 421, 100 do 424, 150 do b 10 ds 424, 100 de 421. State of Trade. The sale of dry goods advertised for today by John Haggerty & Sons, consisting of 194 pkgs, was but a sorry affair. Tle attendance was very thin, and the goods went off very heavily at prices mach lower than at former sales. The dry goods trade generally is very quiet at this moment. The latter part of the present month is looked forward to by the tr de with much confidence that a good business will be done. This impression is warranted by the prosperous state of the inland navigation, and the large movements of produce, the arrivals of which at Buffalo, during the month of September, were as follows 25,027 bbls. 168 239 bushs. Flour, Wheat, " 14 646 1,197 kgs. Lard, Corn, 453 bbls. 181 000 Staves, Pork and Fish, In this market, cotton is quiet. In flour there is more firmness, in consequence of the decreased arrivals. Holders are stiff at $5 75 a $5 87}.

4. November 8, 1841 Vermont Watchman and State Journal Montpelier, VT
Article from Vermont Watchman and State Journal, November 8, 1841

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Article Text

HEREAS a certain banking corporation known by W the name of the President, Directors and Comp any of the Essex Bank, chartered by the General Asserably of this State, at their October session, A. D. 1832, and located at Guildhall, in the County of Essex, hith been by this Court enjoined from all further proceedings in the business of its incorporation, on the ground of its having. in many respects, violated the requisitions of its charter, and become insolvent, and on that Occasion Zebina Newell, of Newbury, in the C bunty of Orange, was appointed Receiver of al the property of said Bank, and to proceed under the requisitions of the general statutes of this state to ICduce all said property, which was available, to cash, and also to receive all bills of said bank, and outstanding liabilities of the same,-.And wherens 11 IS necessary, in order to enable the said receiver to close the concerns of said bank, and make bis final report to this Court of the exact state of the same, that some time should be limited for the holders of the bills of said bank, and creditors thereof, to present their claims to said receiver. It is therefore ordered by the Court, that all claims a gainst said Bank shall be presented to said receiver, on or before the first day of September next, and in defaust there. of the holders of such claims will be forever barred of all right to payment of any part thereof, unless there should be found available funds sufficient to meet all the outstanding liabilities of said bank; and it is further ordered, that notice of the above order be given to such claimants, by publishing this order three weeks successively. in the Cale. donian and North Star, newspapers published in the countv of Caledonia, and in the Vermont Patriot and Vermont Watchman and State Journal, newspapers published in the county of Washington, within sixty days from this date. Dated at Montpeter, in the county of Washington, this 25th day of October, A. D. 1841. 29 ISAAC F. REDFIELD, Chancellor.

5. July 19, 1844 Vermont Phœnix Brattleboro, Bellows Falls, Ludlow, VT
Article from Vermont Phœnix, July 19, 1844

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Article Text

ESSEX COUNTY BANK AT GUILDHALL The New York Express, in one of its money articles, has the following "We believe it is now seven years since the assets of the Guildhall Bank, Vt., passed into the hands of Receivers, and from that day to this, not a dollar, not even a statement of what they have collected, or what they have done, has been furnished to the creditors." There are very good reasons why the Receiver has never furnished a dollar to the creditors of the Bank. There are no dollars to furnish. The assets of the Bank at the time of its failure, were nearly worthless, and there has not been enough realized from them to pay the expenses of examination and settlement. The whole amount collected by the Receiver from the assets, is $6,402, of which $5,639 was collected in the bills of the Bank, leaving only $763 in the hands of the Receiver towards paying expenses. There had been deposited with the Receiver by claimants, during the time limited by the Chancellor for the presentation of claims, bills to the amount of $34,426, to meet which he has not a single dollar in his hands. This sum of $34,426 must be paid by the Safety Fund, unless there exists some sufficient objection to the validity of the claims, or some portion of them. The Banks interested in the Safety Fund a believe that such objection does exist towards large portion of this sum. They believe that about $28,000 of these bills have been actually redeemed by the Agents of the Bank, and were in the hands of such Agents as redeemed bills, at the time of the failure of the Bank. The Safety Fund was estab lished to secure the creditors of the Bank, consequently, if these bills have been redeemed, they are no longer debts against the Bank, and cannot be presented as valid claims against the Safety Fund, for the Bank has already by its agents done what the Safety Fund was established to do-it has redeemed the bills. The facts briefly stated are these. At the time of the failure of the Bank, and for a year before, it belonged to Mack & Townshend, of Western New e York, and they undoubtedly intended to give the Bank a false credit for the purpose of defrauding the people, and they employed some well known brokers in New York to redeem the bills at one per d cent. discount at their offices, and for this purpose placed considerable sums of money in their hands. e These brokers redeemed bills to the amount placed in their hands, and upon the credit of Mack I of & Townshend, continued to redeem beyond that t amount. They did not buy the bills, trustingito the credit of the Bank, or for the purpose of selling again, but as Agents for Mack & Townshend, the owners of the Bank, they redeemed the bills. The bills then had done their office work-they had been circulated and redeemed, and as bills were not t claims against the Bank until re-issued. If Mack . & Townsend have any claims against the Bank for redeeming these bills, the Bank will meet them e when presented, with Mack & Townsend's paper, n of which, unfortunately, it has a large supply. Some $28,000 of the $34,426 of bills presented d e are claimed by brokers who received them in the way stated. The sound banks believe them to be redeemed bills, and consequently not chargable upon u e the Safety Fund, and the matter is now pending in Chancery. When adjudicated, the Safety Fund r will promptly meet all the liabilities that devolve e upon it. We have thought best to say thus much in exit planation of the delay in closing the affairs of the is ; Essex County Bank. We are sorry that the New of Yorkers should have tried their hand at banking in k, Vermont, and thus in any way have injured the to fair fame of our State and its institutions.