Financial History Issue 114 (Summer 2015) | Page 16

Collection of the Museum of American Finance

Blank schedule of securities from the State Bank, Boston, 1812.

Bank, for instance, assets declined by
25% to $660,000 during the first four
months of the panic, barely allowing the
institution enough to cover its operating
expenses and pay a small dividend. While
many carried on their business, over a
dozen Boston banks failed or had their
charters revoked, many of them having
been created in better times only a few
years before the panic.
One of the reforms of the period was
increased regulation by the commonwealth, which created a Board of Bank
Commissioners to help examine bank
records and prevent bad bank practices
while protecting depositors and holders
of the banks’ notes. By the Panic of 1857,
banks performed much better; specie was
suspended for only two months and no
Boston bank failed. Under the National
Bank Law, enacted during the Civil War
in 1863, every bank in Boston was encouraged to become (upon pain of a new tax
on state bank notes) a national bank, with
“national” in its name, by 1865.
Boston banks continued to do well
during the Panic of 1873, difficulties in

the mid-1880s, the depression of the early
1890s, and even the Panic of 1907, “which
carried down numerous large New York
banking institutions.” During the 1884
panic, “Boston banks were in such a strong
position when the storm broke that