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The Suffolk Bank and the Panic of 1837

Author

Listed:
  • Arthur J. Rolnick
  • Bruce D. Smith
  • Warren E. Weber

Abstract

The Suffolk Bank in Boston is well known as having been the clearinghouse for virtually all the banknotes that circulated in New England between 1836 and 1858. An examination of 19th century bank balance sheets shows that during and after the U.S. banking Panic of 1837, this private commercial bank also provided some services that today are provided by central banks. These include lending reserves to other banks (providing a discount window) and keeping the payments system operating. Because of Suffolk's activities, banks in New England fared better than banks elsewhere during the Panic of 1837. And after the panic, when much of the United States suffered a prolonged economic slowdown, New England fared better than the rest of the country, at least partly because of Suffolk’s central bank-like activities.

Suggested Citation

  • Arthur J. Rolnick & Bruce D. Smith & Warren E. Weber, 2000. "The Suffolk Bank and the Panic of 1837," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 3-13.
  • Handle: RePEc:fip:fedmqr:y:2000:i:spr:p:3-13:n:v.24no.2
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    References listed on IDEAS

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    1. Bruce D. Smith & Warren E. Weber, 1999. "Private money creation and the Suffolk Banking System," Proceedings, Federal Reserve Bank of Cleveland, pages 624-667.
    2. Richard H. Timberlake & Jr., 1960. "The Specie Circular and Distribution of the Surplus," Journal of Political Economy, University of Chicago Press, vol. 68, pages 109-109.
    3. Arthur J. Rolnick & Bruce D. Smith & Warren E. Weber, 1998. "Lessons from a laissez-faire payments system: the Suffolk Banking System, 1825-58," Review, Federal Reserve Bank of St. Louis, issue May, pages 105-116.
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    Cited by:

    1. Laurent Le Maux, 2004. "L'émergence d'une banque supérieure sous le régime de la liberté bancaire," Recherches économiques de Louvain, De Boeck Université, vol. 70(2), pages 193-221.

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    Keywords

    Bank notes ; Banks and banking - History;

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