Eagle Bank of New Haven $10 - Connecticut Obsolete Note - Broken Banknote

$10 note. New Haven, Connecticut.

Established in October 1811, the Eagle Bank of New Haven, situated on Chapel Street, was the second financial institution to be established in the city. During its early years, it played a pivotal role in the local economy, even proposing a grand six-columned building designed by renowned architect Ithiel Town. However, the bank’s legacy is predominantly defined by a history of severe mismanagement and fraudulent practices. Historical accounts reveal a pattern of reckless behavior, including the bank’s acquisition of its own stock and issuance of haphazard loans to directors and unreliable borrowers with minimal security.

The bank’s downfall occurred in 1825 with a catastrophic failure that reverberated throughout Connecticut’s financial system. An investigation uncovered that the bank had lent out more than its entire capital and deposits, amounting to approximately $1,500,000. Furthermore, the bank had distributed its currency at a value below face value in distant regions to evade immediate redemption. Consequently, when the notes were inevitably returned for payment, the bank collapsed, leaving creditors with only a minuscule portion of their claims.