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HARVARD UNIVERSITY
GRADUATE SCHOOL
OF BUSINESS
ADMINISTRATION
BAKER LIBRARY
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HARVARD ECONOMIC
STUDIES
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HARVARD UNIVERSITY PRESS
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HARVARD ECONOMIC STUDIES
PUBLISHED UNDER THE DIRECTION OF
THE DEPARTMENT OF ECONOMICS
VOL. XVI
NUMBER IV
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ESSAYS
IN THE EARLIER HISTORY OF
AMERICAN CORPORATIONS
NUMBER IV
EIGHTEENTH CENTURY
BUSINESS CORPORATIONS IN THE
UNITED STATES
BY
JOSEPH STANCLIFFE DAVIS, PH.D.
INSTRUCTOR IN ECONOMICS, HARVARD UNIVERSITY
VE
QO
LS
CAMBRIDGE
HARVARD UNIVERSITY PRESS
LONDON: HUMPHREY MILFORD
OXFORD UNIVERSITY PRESS
1917
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HC
D262
V.2
June 29,1917
GRADUATE SCHOOL OF
BUSINESS ADMINISTRATION.
COPYRIGHT, 1917
HARVARD UNIVERSITY PRESS
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CONTENTS
BOOK TWO
CHAPTER I
PAGES
INTRODUCTORY
3-33
Inclusiveness of the term "business corporation," 3. Colonial pro-
totypes and predecessors, and reasons for their paucity, 4. Conditions
after the Revolution favorable to the growth of corporations, 6.
General purpose of the present essay, 8.
Power of incorporation assumed by state legislatures, 8. A governor's
charter annulled, 9. Status of corporations with colonial charters, 9.
Incorporation powers of the Confederation Congress, in law and in
fact, IO. Proposals in the constitutional convention to give such powers
to the new Congress, I2. Attempts to secure constitutional restric-
tions on the power, 14. The test of the national bank charter, 14.
The case of corporations in the District of Columbia, 16.
Freedom of incorporation for non-business corporations, 16. Massa-
chusetts general incorporation act (1799) for aqueduct companies, 17.
North Carolina statute of 1795, relative to canal companies, probably
not in the same class, 18. Process of incorporation by special act, I9.
Variants from the usual method of incorporating, 20.
General view of eighteenth century charters: classification, distribu-
tion by years, types, and sources of charters, and relation to density of
population, 21. Corporations with more than one charter, 29. Busi-
ness cycles, 1781-1800, related to the growth of business corporations,
31. Material presented in this essay, 31.
CHAPTER II
BANKING COMPANIES
34-108
Commercial banks lacking in the colonies, 34. The so-called Penn-
sylvania Bank, 35. Plan for a Bank of North America, 36. Table of
bank charters, 37. Vicissitudes of the Bank of North America, 39. Its
success, 43. The Bank of New York, 44. Early days of the Massa-
chusetts Bank, 46. The Bank of Maryland, 49. Movement for a bank
in Providence, 49. A national bank proposed, 50. Establishment of
the Bank of the United States, 51. Possibilities of a unified banking
V
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CONTENTS
PAGES
system, by means of branches or inter-corporate relations, 52. The
decision in favor of a few branches in principal centers, and its conse-
quences, 56.
Increase of banks and banking capital after 1789, 59. The Providence
Bank, 60. The New Hampshire Bank, 63. Connecticut banks at Hart-
ford, New London, and New Haven, 63. Prosperity and criticisms of
the Massachusetts Bank, 65. Resulting attempts to tax it, to modify
its charter, and to establish a state bank, 68. The Boston Tontine
Association, 70. It becomes the Union Bank, 72. Relations with the
state, 74. Its early policies and practices, 75. The Essex Bank in
Salem, refused a charter, operates without one, 78. Virginia banks, at
Alexandria and Richmond, 78. The Bank of South Carolina, unincor-
porated until 1801, 80. The Bank of Albany, 80. The "bancomania"
in New York City (1792), 8r. Hamilton's relations, while Secretary
of the Treasury, with the Bank of New York, 91. The Bank of Penn-
sylvania, the principal example of a state bank before 1800, 95.
Other banks chartered after 1792: Banks of Columbia at Hudson,
N. Y., and the new federal district, 97. The Bank of Baltimore, 97.
Massachusetts institutions at Salem, Nantucket, Newburyport, Port-
land (Maine), and Gloucester, 98. Rhode Island banks at Newport,
Bristol, and Westerly, 99. Connecticut charters for Middletown and
Norwich banks, IOO. The Bank of Delaware, 100. The Manhattan Com-
pany's charter and bank, IOI. Other attempts to establish banks, IOI.
General considerations: naturalization of the bank in New England,
102; banking conducted largely by incorporated institutions, 102; bank
capitals and dividends, 103; charter provisions, 105; state participation
in banking, 107. Conclusion, 108.
CHAPTER III
CORPORATIONS FOR IMPROVING INLAND NAVIGATION
109-185
Ante-revolutionary moves toward improving communication by
water, in Pennsylvania, 109; in Maryland and Virginia, particularly
the Potomac improvement, III. General view of enterprises chartered
before 1800, 116.
The first corporation, Maryland's Proprietors of the Susquehanna
Canal, 117. Table of charters, 118. The Potomac project revived,
supported by General Washington, and chartered by Maryland and
Virginia, I20. State support for the Potomac Company, 123. Subscrip-
tion and organization, 125. Labor policies and problems, I26. Diffi-
culties of engineering and superintendence, 128. Financial problems,
130. Progress in construction, 132. Failure and factors responsible,
135. Chesapeake and Delaware canal, 136. The James River Com-
pany, 137. The Dismal Swamp Company, 140. South Carolina en-
terprises: the Santee and Cooper, 142; the Edisto and Ashley, 146; the
Catawba and Wateree, chartered also by North Carolina, 146. North
Carolina repeals its charter, 147.
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The Pennsylvania Society for promoting the improvement of Roads and
Inland Navigation, - its formation, investigations, and recommenda-
tions, 149. A state policy formulated, 151. Charters for three "navi-
gations" and their flotation, 152. Activities amid opposition and usual
difficulties, 153. Liberal state support refused, and consequent aban-
donment, 156. Efforts of Christopher Colles in New York, 157. El-
kanah Watson's agitation, 158. Incorporation and flotation of New
York's northern and western inland navigations, 160. The western
company's progress, difficulties, and measure of success, 161. Vain
efforts of the northern company, 165.
New England projects to improve the navigation of the Connecticut,
at South Hadley and Montague, 167; at Bellows Falls, 168; at White
River Falls, 169; at Water Queche Falls, 170; between Hartford and
Middletown, 170. Locks and Canals on Merrimack River, 170. The
Middlesex Canal and its special significance, 171.
Experiences of the major canal enterprises summarized, 173. Various
abortive projects of considerable size, 174. Smaller corporate and non-
corporate undertakings to improve navigation, in North Carolina, 177;
in Virginia and other southern states, 180; in New Jersey, 181; in New
England, 182. Success of these companies, 184. Conclusion, 184.
CHAPTER IV
TOLL-BRIDGE AND TURNPIKE COMPANIES
186-230
Forerunners of the corporation in bridge construction and control,
186. The Charles River Bridge, Boston, 187. Table of toll-bridge
charters, 188. Malden Bridge, 189. Essex Bridge connecting Beverly
and Salem, 190. Newburyport Bridge, 191. West Boston Bridge, 192.
Four more Merrimac River bridges, at Lowell, Lawrence, and Haver-
hill, I94. Second ineffective charter, 1796, for a Connecticut River
bridge, 196. The New Bedford Bridge, 196. Summary of Massachu-
setts' experience, 196. Maine charters, 197. New Hampshire the
leader in toll-bridge charters, 198. Amoskeag, White River Falls, and
Piscataqua bridges, 199. Other New Hampshire charters, 200. Ver-
mont's five companies, 202. Companies of northern and western New
England compared with those near Boston, 202. Three Rhode Island
companies, 203.
New Jersey companies: the Passaic and Hackensack River bridges,
204; the New Brunswick Bridge, 208; Rancocus Toll-Bridge, 209; Dela-
ware River bridges at Easton and Trenton, 210. Inoperative Pennsyl-
vania charters, 211. The Schuylkill Permanent Bridge at Philadelphia,
212. New York's Cayuga bridge, 213. Maryland's Potomac bridge
companies, 213. Lone charters in South Carolina and Kentucky, 215.
Size of the toll-bridge companies, 215.
Turnpike companies in tabular view, 216. Forerunners of the turn-
pike corporation, 217. The Philadelphia and Lancaster Turnpike, 218.
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Other Pennsylvania charters, 220. Ineffectual promotion of a turnpike
to connect Philadelphia and New York, 220. Rhode Island's three com-
panies, 22I. Connecticut's leadership with twenty-three, and their
location, 22I. Massachusetts turnpikes, 222. The movement in New
York, 223. Four important New Hampshire companies, 224. Nine
Vermont turnpikes, 225. Virginia and Maryland companies the only
southern representatives, 226. Size of the turnpike companies, 227.
Outstanding features of charters of highway companies, 227.
CHAPTER V
INSURANCE, WATER SUPPLY, MANUFACTURING, AND MISCEL-
LANEOUS CORPORATIONS
231-290
Insurance business in eighteenth century America, - life, 231;
marine, 232; fire, 234. Table of insurance company charters, 235.
The first corporation, the mutual Philadelphia Contributionship, char-
tered, 235. Other mutual fire insurance companies after the Revolu-
tion, 236. The Baltimore joint stock company and its successor, 238.
The Universal Tontine develops into the Insurance Company of North
America, 239. Rival joint stock companies chartered in Philadelphia,
Baltimore, and New York, 242. The Massachusetts Fire, becoming
the Massachusetts Fire and Marine, and its competitor, the Boston
Marine, 242. Other companies in New England, 244. Distribution
and size of the insurance companies, 245. Their relations with banks,
245. Charter features, 246.
Water supply companies in colonial days, 247. Abortive schemes
and unincorporated associations after the Revolution, 248. The Balti-
more Water Company charter inoperative, 248. Table of charters, 250.
Massachusetts leadership, 250. The Boston Aqueduct Corporation,
251. The Manhattan Company's charter and insignificant accomplish-
ments, 252. Minor concerns, 252. Distribution and ill-success of water
companies, 253. Characteristics of their charters, 254.
Manufacturing in the household stage or the domestic system, 255-
Scale of operations, 256. Associations of tradesmen or to promote
manufactures, 257. Unincorporated joint stock manufacturing com-
panies appealing to various motives, 258. A New York iron company,
260. The Boston Duck or Sail Cloth Manufactory, and others, 260.
The Boston Glass Manufactory and others, 262. Activities of the
Pennsylvania Society, 264. The Hartford Woollen Manufactory, 266.
Other unincorporated joint stock companies, 267. Table of charters to
manufacturing corporations, 269. The peculiar Company of the Con-
necticut silk manufacturers, 269. The Beverly Cotton Manufactory, 270.
The New York Manufacturing Society, 275. The New Jersey "S.U.M."
275. The Newburyport Woollen Manufactory, 277. A Massachusetts
calico printing company, 278. The Hamilton Manufacturing Society,
278. The Salem Iron Factory Company, 279. Reasons for the failure of
manufacturing corporations, 279.
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PAGES
Miscellaneous business corporations difficult to segregate from non-
business corporations and unincorporated joint stock companies, 283.
Two wharf companies, 286. A Pennsylvania Company for promoting
the cultivation of vines, 286. An early mining company and unincor-
porated contemporaries, 286. Trading corporations lacking, despite
several proposals from high quarters, 287. A New Jersey map com-
pany, 289. A single incorporated land company, chartered by Con-
necticut, 289.
CHAPTER VI
CONCLUDING OBSERVATIONS
29I-330
Variations in size and success of the different groups of corporations,
291. Satisfactory statistics impossible to secure, 293. Relatively slight
importance of corporate securities, 294. Further comments on the
statistics of charters, in the light of facts revealed, 295. Reasons for
New England's prominence in the corporation movement, 295. The
lack of capital not an important factor limiting the rise of corporations,
297. Sources of capital, 298. Distribution of shares, 300. Tendency
to concentration of ownership present but not thorough-going, 302.
Prejudice against corporations, 303. Specific objections to particular
companies or groups of companies, 306. The defense, 308. Effects of
the opposition, 308. Its weakness attested by the growth of corpora-
tions, 309. Public policy toward the corporation expressed largely in
individual charters, 309. The question of the modification or repeal of
a corporate charter, with special reference to the Bank of North America,
310. Other instances of alteration or repeal, 313. Reservations of this
power, 315. The drafting of charters, 316. Features of the incorpora-
tion acts, 316. State favors to business corporations, including lottery
privileges, tax exemptions, loans, and subscriptions, 326. Reports to
the legislature, 328. Conclusion, 329.
APPENDIX A
AMERICAN COLONIAL BUSINESS CORPORATIONS INCORPORATED
AND OPERATING IN THE FUTURE UNITED STATES
33I
APPENDIX B
AMERICAN CHARTERS TO BUSINESS CORPORATIONS, 1781-1800 332-345
Sources of charters, 332. Banks, 332. Insurance corporations, 334.
Corporations for improving inland navigation, 335. Toll-bridge
corporations, 338. Turnpike corporations, 340. Corporations for
supplying water, 343. Manufacturing corporations, 344. Miscella-
neous corporations, 344. Charters excluded which appear on Judge
Baldwin's list, 345.
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CONTENTS
CHARTS
PAGES
FIG. I. BIRD'S-EYE VIEW OF EIGHTEENTH CENTURY CHARTERS
TO BUSINESS CORPORATIONS, CLASSIFIED BY SOURCES, YEARS,
AND PURPOSES
22-23
FIG. 2. GRAPH OF AMERICAN ACTS OF INCORPORATION FOR
BUSINESS PURPOSES, 1780-1800
32
TABLES
I. SUMMARY OF CHARTERS BY GROUPS OF STATES, PERIODS, AND
PURPOSES
24
II. CHARTERS CLASSIFIED BY PURPOSES AND YEARS
25
III. CHARTERS CLASSIFIED BY STATES AND PURPOSES
26
IV. COMPARISON OF STATES WITH RESPECT TO POPULATION AND
NUMBER OF CHARTERS GRANTED TO BUSINESS CORPORA-
TIONS IN THE EIGHTEENTH CENTURY
27
V. CORPORATIONS WITH CHARTERS FROM Two OR MORE STATES
30
VI. BANK CHARTERS, CLASSIFIED BY STATES AND YEARS
37
VII. DIVIDENDS OF CERTAIN BANKS, 1782-1800
104
VIII. CHARTERS OF COMPANIES FOR IMPROVING INLAND NAVIGA-
TION, CLASSIFIED BY STATES AND YEARS
118
IX. TOLL-BRIDGE CHARTERS, CLASSIFIED BY STATES AND YEARS
188
X. TURNPIKE CHARTERS, CLASSIFIED BY STATES AND YEARS
216
XI. INSURANCE CHARTERS, CLASSIFIED BY STATES AND YEARS
235
XII. WATER SUPPLY CHARTERS, CLASSIFIED BY STATES AND YEARS
250
XIII. MANUFACTURING COMPANY CHARTERS, CLASSIFIED BY STATES
AND YEARS
269
BIBLIOGRAPHY, ESSAYS I-IV
PRELIMINARY NOTE
347
LIST OF REFERENCES
348-395
I. Histories of Corporations
348
II. Biographies, Letters, Collected Works, etc
352
III. Local Histories
360
IV. Public Documents
366
V. Miscellaneous Books and Articles
372
VI. Law Cases
390
VII. Newspapers and Periodicals
391
VIII. Manuscripts
394
INDEX TO VOLUME II
397
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ESSAY IV
EIGHTEENTH CENTURY
BUSINESS CORPORATIONS IN THE
UNITED STATES
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EIGHTEENTH CENTURY BUSINESS
CORPORATIONS
CHAPTER I
INTRODUCTORY
THE term "business corporation" has no precise technical
significance. In latter days it is frequently used in a narrow
sense. From it are excluded not only public corporations,
such as municipalities, and coöperative associations, but also
financial corporations - banks and insurance companies - and
public service companies. It includes all that heterogeny of
agricultural, manufacturing, mining, development, and com-
mercial companies which have not yet been set off in distinct
classes, designated by a special group name and subjected to
special legislation.¹ In a broader and perfectly legitimate sense,
however, the term may be used to designate all corporations
formed with the primary object of securing pecuniary gain or
avoiding pecuniary loss, for the benefit of the members. In
earlier days such companies were occasionally spoken of as
"money" or "moneyed" corporations.2 To the end of the
eighteenth century, however, not only had no classification of
business corporations been developed, but no sharp line was
drawn between these and corporations of other sorts.³ In the
1 It is in this sense that the term is used in W.E. Rappard's Les Corporations
d'Affaires au Massachusetts (Paris, 1908).
2 Daniel Raymond, Thoughts on Political Economy (Baltimore, 1820), 425-426.
3 Fisher Ames, in the debate in Congress on the charters to the Bank of the
United States, argued that in erecting the Northwest Territory Congress had estab-
lished a precedent for passing acts of incorporation, and Hamilton did not hesitate
to intimate the same: Clarke and Hall, Bank of the U.S., 48, 109. Cf. James
Wilson (Works, i, 408-411): "States are corporations or bodies politick of the
most dignified kind.
It will be difficult, I believe, to urge against the power of
Congress [1785] to grant a charter to the Bank of North America, any argument,
which may not, with equal strength and fitness, be urged against the power of
that body to form, execute, and promulgate a charter of compact for new states."
3
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EIGHTEENTH CENTURY BUSINESS CORPORATIONS
eye of the law a corporation was a corporation - that was all
there was to it. The common law as developed with reference
to corporations organized for religious or governmental pur-
poses was applied to others organized for business purposes.
Legislative committees on corporations handled petitions for
charters alike from towns, churches, banks, and manufactur-
ing companies - in New Jersey, at least, till nearly 1840.
Differentiation arose only by slow degrees, as the numbers in-
creased and general statutes were passed which applied only
to specified groups of corporations. Hardly a beginning of
this appeared before 1800. We are then under the necessity
of drawing for ourselves the line between the corporations with
business purposes and those predominantly for other ends,
and the decision is not always easy.¹ This lack of contempo-
rary differentiation, as well as the paucity of the charters,
makes advisable the use here of the term "business corpora-
tion" in its more inclusive sense.
In colonial days, as an earlier essay has indicated, American
corporations for business purposes were few and relatively un-
important. The water company of Boston (1652), not incon-
testably entitled to corporate rank, and Penn's Free Society
of Traders in Pennsylvania (1682), chartered and chiefly owned
in England, were the only seventeenth century representatives.
The first of these probably did not long survive, and the second,
after a very brief active career, lingered on in a comatose con-
dition until 1723. In the eighteenth century, prior to the
Revolution, there is first to be mentioned the ill-starred New
London trading society, which was established only after certain
of its proposed characteristics and purposes were put out of
sight, and whose active career was summarily brought to an
end by legislative act within a year of its establishment. Less
pretentious but more enduring were the two groups of wharf
proprietors, in New Haven and Boston respectively, three little
water companies in Rhode Island, and a mutual fire insurance
society in Philadelphia - all of which survived the Revolution.
These comprise the total list of fully American, clearly corporate
1 Cf. infra, 283-285.
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INTRODUCTORY
5
business associations in those English colonies which developed
into the United States.¹
These pioneer business corporations are of historical interest.
It is obvious, however, that their significance, even for their
time, was but slight and local, and that they were distinctly
exceptions in the business world rather than the rule. They
seem, in the main, predecessors rather than prototypes of the
present-day business corporation. Only the local public serv-
ice corporation is well represented, and there is not a single
example of the great classes of later days - banks, high-
way and transportation companies, manufacturing and mining
companies.
Other predecessors were the joint stock companies, unincor-
porated, which long remained the English form for such joint
stock enterprise as was beyond the limits of ordinary partner-
ships. In the colonies these too were comparatively few and
far between, possibly in part because of the act of Parliament
in 1741 extending to America the operation of the Bubble Act
of 1720,2 but more largely, probably, because the economic
and psychological conditions did not require or favor their
development.
Reasons for the paucity of colonial business corporations -
applying in several instances equally to the slight extension of
other joint stock enterprise - have been suggested in an earlier
essay.⁸ Small-scale enterprise was still the order of the day,
particularly in America, where difficulties hindered coöperative
action, both by preventing the initial intercourse of men of
affairs and by hampering the continuance of all but local re-
lationships. Political conditions operated rather to check than
to promote such intercourse, especially between men in differ-
ent colonies. The independence of temper characteristic of the
American colonists was an adverse factor. The technique of
using the elements of large-scale enterprise - machinery, power,
labor - was still undeveloped, and with a large virgin area to
subdue in the most elementary fashion the colonists could
1 Essay I, 22-25, 4I-45, 87-90, and Appendix A of this Essay.
2 Essay I, 25-27, 9I-99.
3 Essay II, 178.
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EIGHTEENTH CENTURY BUSINESS CORPORATIONS
hardly make large strides in technical progress. Nor were
large supplies of capital or labor seeking employment. More-
over, even in the mother country the corporate form was yet
applied to a very limited extent to business enterprises, and
the most prominent examples of English business corporations
were the privileged and monopolistic companies for foreign
trade, against which no small prejudice existed. Restraints
imposed by the crown and its representatives, upon the rise of
manufactures and banking as well as upon direct grants of cor-
porate powers, while not of large importance in this connection,
also deserve passing mention.
During the Revolution few corporations of any sort were
chartered in the "united states," and but one was created
for any business purpose prior to the treaty of Versailles (Sept.
3, 1783). For this fact explanation need hardly be offered.
The state legislatures were busied with war measures and the
times were too unsettled for new business ventures. Till the
great question of independence or submission should be decided,
corporate privileges for business purposes were naturally neither
offered nor sought.
After the conclusion of peace the situation was materially
altered.¹ There was time to turn attention to internal prob-
lems; there was no occasion for waiting upon the opinion of
the English crown or proprietaries, or their representatives,
or Parliament - what was desired might at least be attempted;
there was fair prospect of continued peace and opportunity for
continuous independent development. Moreover, the need for
business enterprises of stability and considerable scale was
plainly evident to the newly united states. Means of com-
munication were imperatively demanded, as well by political
as by economic considerations; banks were seen to be of prime
importance; manufactures soon came to be thought of, by
1 Cf. Weeden, Econ. and Social Hist. of New England, ii, 853, commenting on
industrial developments of 1783-89: "Wars that do not actually impoverish their
peoples promote organized industries. The necessity of the movement stimulates
new inventions and new arrangements of labor. But beyond all this, people sink
their individualism for a time, overcome local isolation, and bend together in new
work. All this promotes enterprise in the largest sense."
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INTRODUCTORY
7
many, as almost equally important. For many enterprises of
these types it was inevitable that incorporation, with the privi-
lege of limited liability and the conditions of more stable or-
ganization, should be sought. There were several favoring cir-
cumstances. Capital, accumulated during the war by many
members of the community, was available for investment;
fortunes in property other than real estate were undoubtedly
larger than before the war. The disbanding of the army set
free a labor supply, and throngs of immigrants rapidly added
largely to it. The war had done much to bring into mutual
acquaintance men of business acumen and property, had forced
some experience in cöoperative activity, and had necessitated
the exercise of ingenuity in a thousand directions. With
the coming of peace these developed resources sought employ-
ment in other fields. Moreover, the day was one of bold ex-
perimentation, enthusiastic exploitation of new methods, eager
exploration of new paths, confident undertaking of new enter-
prises. One gigantic speculation had been notably successful -
the achieving of independence. Political precedents had been
broken and new political expedients were being tried. Economic
"speculations," new economic devices, likewise came naturally
to the fore, and legislatures were willing to permit them and
to encourage them as well. Furthermore, the English tradition
that corporate powers were to be granted only in rare instances,
never deeply intrenched here, was opposed by a strong and
growing prejudice in favor of equality - a prejudice which led
almost at once to the enactment of general incorporation acts
for ecclesiastical, educational, and literary corporations.¹ Par-
tiality in according such powers was to be expected of the English
crown, but it was a serious charge to lay at the door of demo-
cratic legislatures after a Declaration of Independence which
asserted so vigorously the natural equality of rights and privi-
leges. Not least important, the physical ease of securing
charters was far greater in the new states than in England, and,
considering the royal right of review, greater than in the col-
onies. Legislatures were not overworked and did business
1 See infra, 16-19.
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EIGHTEENTH CENTURY BUSINESS CORPORATIONS
free of charge and with reasonable promptness, whereas both
the cost and the delays incident to securing royal charters
always tended to discourage application for them. Finally,
the practice in creating corporations for non-business purposes,
though it did not lead promptly to granting freedom of incor-
poration to business corporations, undoubtedly smoothed the
way for special acts incorporating business associations.
Together these factors brought about a considerable exten-
sion of corporate enterprise in the field of business before the
end of the eighteenth century, notably after the critical period
of disunion and constitution making had passed. Prior to 1801
over three hundred charters were granted for business corpora-
tions, ninety per cent of them after 1789. Judged by twentieth
century standards these seem few indeed, but neither in the
colonies nor in the mother country was there precedent for such
a development; and these American charters reflect a note-
worthy experiment in business organization and in public
policy toward business enterprise.
In this essay we have principally to examine the course of
this development from 1783 to 1800, in different states and
in different classes of corporations; the vicissitudes through
which the new corporations had to pass; the contributions
which they made; the causes of their success or failure; the
attitude of the public, and the emergence of public policies
toward them. As a preliminary, however, it is necessary to
consider briefly the source from which corporate powers were
derived in the new political system, the extent to which it was
divided or shared, and the methods by which these powers
were obtained by those who sought them.
The power of granting corporate privileges, long recognized
as an attribute of sovereignty, was assumed by the state govern-
ments as the British control was thrown off, and the granting
of charters became a function of the law-making body. This
was obviously the natural procedure: precedents in parlia-
mentary acts of incorporation and in charters granted by colo-
nial assemblies, while absolutely few in number, were numerous
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INTRODUCTORY
9
enough, and no crown existed to assume even a share, indirect
or direct, in the chartering process. Reference was not usually
made to the power in the newly adopted state constitutions,
both because of its implied inclusion in powers of legislation
and because the significance of the power was not yet recognized.¹
A single attempt to usurp this power was promptly rebuffed.
William Livingston, governor of New Jersey, once followed the
common colonial precedent of his jurisdiction by issuing a
charter, under the "great seal" of the state but without au-
thorization from the assembly, to the First Day Baptist Church
of Hopewell Township, Cumberland County. The patent bore
date of March 18, 1778. On Oct. 9, 1779, the assembly
"Resolved unanimously, that the said charter or instrument of writing
is not warranted by law, and therefore void.
That the power of
granting patents of incorporation, under the present Constitution, is vested
solely in the Legislature of the State."
Livingston acquiesced, and the question was settled for good.
A number of the colonial corporations were in existence
when the Declaration of Independence was adopted. The
legality of their basis for existence under the new régime was
readily open to question. The Pennsylvania legislature re-
peatedly enunciated the theory that a corporation "deriving
its existence and freedoms from the authority of the crown of
Great Britain, became upon the declaration of independence
of this state from that crown immediately dissolved."³ Cer-
tain New Jersey acts contain the same kind of expressions.4
In most instances, however, the legislatures were not unwilling
to reëstablish the old corporations on new charters substan-
tially identical with the old except in pure formalities or modi-
1 Constitutions of Pennsylvania (1776) and Vermont (1786, 1793) definitely
empowered the legislature to grant charters of incorporation: Poore, Charters and
Consts., ii, 1543, 1870, 1878. Generally the power was implied.
3 William Nelson, in N. J. Hist. Soc. Proceedings, 3d Series, iii, 117 (1906).
3 Act of June 19, 1777, rechartering the borough of Lancaster: Pa. Stats. at Large,
ix, 128. For similar statements, see ibid., x, 83, xii, 68.
4 Session Laws, 1783, p. 6, Nov. 17, 1784, p. I26 (relating to churches), May 27,
31, 1799, pp. 515, 518 (relating to Princeton and Rutgers colleges). Entirely new
charters were given to the five boroughs and cities of New Jersey after the Revo-
lution. For the foundation of the view here cited, see Blackstone, Commentaries,
i, 484.
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IO EIGHTEENTH CENTURY BUSINESS CORPORATIONS
fications which time and new conditions made desirable.¹ It
happened, however, that without exception the few business
corporations which lived down to the Revolution had received
their corporate privileges from provincial legislatures rather
than from the crown or proprietary authorities. Accordingly
no objection seems to have been raised to their continuing to
exist under the original acts of incorporation, the new legisla-
tures being the direct successors of the colonial assemblies.
Whether the Congress of the Confederation also might grant
charters of incorporation was a moot point in 1781 when
Robert Morris, newly appointed Superintendent of Finance,
wished to have the aid of the commercial bank and requested
Congress to establish the institution. The Articles of Con-
federation, lately ratified (July 9, 1778), were silent on the
point. The question was debated in May, 1781, when Congress
passed a resolution in favor of the bank, and again in Decem-
ber, when a complete charter of incorporation was granted.
Madison, though approving the scheme for the bank, saw no
warrant for believing that Congress possessed the power to
incorporate. Writing to Edmund Pendleton, Jan. 8, 1782, he
reported
the general opinion, tho' with some exceptions, was that the Confederation
gave no such power, and that the exercise of it would not bear the test of
a forensic disquisition, and consequently would not avail the Institution.
The Bank, however, supposing that such a sanction from Congress would
at least give it a dignity and preeminence in the public opinion, urged the
engagement of Congress [referring to the preliminary resolution]; that on
this engagement the subscriptions had been made, and that a disappoint-
ment would leave the subscribers free to withdraw their names.
The
immediate interposition of Congress was rendered the more essential, too,
by the sudden adjournment of the Assembly of this State [Pennsylvania], to
whom the Bank might have been referred for the desired incorporation,
which, it was the opinion of many, would have given them a sufficient legal
existence in every state.
Something like a middle way finally produced
an acquiescing, rather than an affirmative vote. A charter of incorporation
was granted, with a recommendation to the States to give it all the necessary
validity within their respective jurisdictions. As this is a tacit admission of
1 Philadelphia's charter, granted by the proprietor in 1701, was not replaced until
1789.
2 Journals of Congress, May 26, Dec. 31, 1781.
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INTRODUCTORY
II
a defect of power, I hope it will be an antidote against the poisonous ten-
dency of precedents of usurpation."1
Only Massachusetts voted against the original resolution, though
Pennsylvania was divided, and Rhode Island and Connecticut
were not sufficiently represented to count. On the final passage
there seems to have been no division. In accordance with the
recommendation of Congress, several auxiliary charters or vali-
dating acts were passed by different states, including the home
state, Pennsylvania.2 Opinions differed as to the significance
of these different charters. Peletiah Webster said early in
1786 that the state charter given by Pennsylvania merely al-
layed prejudices: "I never heard that anybody at that time,
disputed or called in question the legal authority of Congress
to give a charter to the bank."⁸ James Wilson argued later,
and possibly at this time as well, that since the new bank was
to be "commensurate to the United States," the states indi-
vidually had no powers adequate to incorporate it; "The
consequence is that this is not an act of sovereignty, or a power,
jurisdiction, or right, which, by the second article of confedera-
tion, must be expressly delegated to congress in order to be
possessed by that body;" and accordingly he argued that
"Whenever an object occurs to the direction of which no par-
ticular state is competent the management of it must, of ne-
cessity, belong to the United States in congress assembled."⁴
But undoubtedly many agreed with Madison, and many more
did not take the trouble to decide what they thought.
The issue was not again raised while the Confederation lasted
under the articles of 1778. Actions, however, spoke louder
than words.5 When in 1785, for reasons to be mentioned
below, the Pennsylvania legislature repealed its act incorporat-
ing the bank, the directors were not content to rely upon the
federal charter, but took the precaution to secure a new charter
from Delaware, prepared to fight the repealing act in the state
courts, and within two years accepted a new charter from Penn-
1
Madison, Works, i, 167-169.
2
See infra, 38.
3 Essays, 454.
4
Wilson, Works, i, 550-564.
5
See infra, 42-43.
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I2 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
sylvania. Plainly they considered the congressional charter
worth little as a practical matter. Furthermore, it is to be
noted that inhabitants of Pennsylvania, Maryland, and Vir-
ginia, seeking to promote river communication across their
borders during these years, undertook the difficult task of se-
curing concurrent charters from the states interested rather
than rely upon a congressional charter. The fact was that
with peace the Congress had grown weaker and the states took
more and more pride in their independence. Whatever the
theoretical legality of a charter from the Congress of the Con-
federation, its practical force would have been nil in a state
which refused to recognize it, and effective excuses for such
refusal would have been easy to find. In this as in other fields
the Congress in fact did not possess power requisite to the need.
The convention of 1787, which undertook to prepare a plan
for a "more perfect union," was aware of this weakness in the
old Confederation instrument. Madison himself urged upon
the convention the specification of a power of Congress "To
grant charters of incorporation in cases where the public good
may require them, and the authority of a single state may be
incompetent." Pinckney proposed on August 18 that one of
the additional powers delegated to the new Congress be "To
grant charters of incorporation." Both proposals were re-
ferred to committee, but there they slept. On September 14
Dr. Franklin, ex-postmaster-general of the colonies, moved
"to add after the words 'post roads'
'a power to provide
for cutting canals where deemed necessary," and James Wilson
of Pennsylvania seconded the motion. Madison thereupon
repeated his suggestion in a more general form, urging that
"the primary object was, however, to secure an easy communication be-
tween the States which the free intercourse now to be opened, seemed to call
for. The political obstacles being removed, a removal of the natural ones
as far as possible ought to follow."
Randolph seconded Madison's motion, and Wilson urged that
it was "necessary to prevent a State from obstructing the
general welfare." Rufus King, however, "thought the power
unnecessary" - meaning evidently the specific grant of the
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INTRODUCTORY
13
power - and argued the inexpediency of mentioning the
matter.
"The States will be prejudiced and divided into parties by it - In Phila-
da. & New York, it will be referred to the establishment of a Bank, which
has been a subject of contention in those Cities.¹ In other places it will be
referred to mercantile monopolies."
Whereupon
"Mr Wilson mentioned the importance of facilitating by canals, the
communication with the Western Settlements - - As to Banks he did not
think with M King that the power in that point of view would excite the
prejudices & parties apprehended. As to mercantile monopolies they are
already included in the power to regulate trade."
This last was a dangerous suggestion. George Mason of
Virginia
"was for limiting the power to the single case of Canals. He was afraid of
monopolies of every sort, which he did not think were by any means already
implied by the Constitution as supposed by M Wilson."
Limited, then, to the case of canals, the question was brought
to a vote, but even so only Pennsylvania, Virginia, and Georgia
voted pro, and New Hampshire, Massachusetts, Connecticut,
New Jersey, Delaware, Maryland, North Carolina, and South
Carolina con. Accordingly no vote was taken on the wider
proposition, and the Constitution issued silent on the subject.2
On the other hand there was no disposition to prohibit to
Congress the exercise of the power; the convention went twice
on record in favor of giving Congress all powers to legislate
in cases where the states should not be severally competent;
and the Constitution as adopted contained a clause to this effect.
It is highly probable that many delegates to the conven-
tion believed with Rufus King that the new Congress would
1 See infra, 81-88.
2 Farrand, Records of the Federal Convention, ii, 321-322, 324-325, 615-616, 620.
Jefferson, in his memoirs (March II, 1798), said that Robert Morris had proposed
that Congress be given power to establish a national bank, but that Gouverneur
Morris opposed the idea on the ground that the ratification of the Constitution
bade fair to be quite difficult enough without it: Elliot's Debates, iv, 611-612.
The records of the convention do not substantiate this story, but it is not inherently
improbable. Cf. Hamilton's discussion in his opinion on the constitutionality of the
bank charter, in Works, iv, 116-117.
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I4 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
possess, without specific grant, limited powers to incorporate,
and that the omission of authorization in so many words was
due chiefly to the fear of unnecessarily arousing sentiment
hostile to the whole scheme, which in any case was sure to have
a severe gauntlet to run.
This policy was in the main successful. At one point, how-
ever, silence was made the ground of attack on the instrument.
When the Constitution, adopted without Mason's signature,
was subject for ratification, he presented as a dangerous loop-
hole the uncertainty on the subject of mercantile monopolies.¹
To resolve such doubts the Massachusetts ratifying convention,
on motion of Samuel Adams, voted to recommend as an amend-
ment "That Congress erect no company of merchants with ex-
clusive advantages of commerce," and substantially the same
recommendation was adopted by the conventions of New
Hampshire, New York, North Carolina, and Rhode Island.
The issue was at no time in the foreground, however, and when
the amendinent was taken up in Congress - in August and
September, 1789, and again in 1793 - the sentiment for it
was insufficient even to bring it to a vote.2 Had the amend-
ment been adopted, the power of incorporation would have
been only slightly restricted, and in the discussion of the Con-
stitution there seems to have arisen no fear respecting the exer-
cise of the power in general.
Soon, however, the question of the validity of a congressional
charter under the new Constitution was directly raised by
Hamilton's report urging the establishment of a national bank.
Madison stressed this point in leading the opposition to the
proposal. When the test came, however, the House voted 39
to 20 for the charter, and the Senate too passed it. Randolph
1 Mason's statement and James Iredell's reply may be found conveniently in
Paul Leicester Ford's Pamphlets on the Constitution of the United States, published
during its discussion by the people 1787-1788 (Brooklyn, 1888), 331, 350.
2 William V. Wells, The Life and Public Services of Samuel Adams (Boston,
1865), iii, 261-269; Jonathan Elliott, The Debates on the Adoption of the
Federal Constitution (2d ed., Washington, 1836), i, 323, 326, 330, 337, iv, 246;
H. V. Ames, "The Proposed Amendments to the Constitution in Am. Hist.
Assoc. Report, 1896, ii, 254-255. Such a provision, indeed, was not needed at the
time.
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15
and Jefferson supported the strict constructionist view in
formal opinions to the President, but Hamilton's argument
was more convincing, and the bill was duly signed.¹ In the
next Congress, on a motion to declare the bank charter uncon-
stitutional, the House went again on record as a believer in
the power, though by a narrow margin - this in the face of a
campaign of bitter and effective denunciation of the bank and
the funding system, for which the speculative orgy and panic
had furnished excellent fuel.²
It is strange but significant that the question was not sub-
mitted to the courts during the existence of the first Bank of
the United States. It figured slightly, if at all, in the debates
of 1811-12 on the recharter of the bank, and slightly also in
the debates on chartering the second Bank. It is further
significant that by 1816 the scruples even of Madison had been
overcome, and that as President he signed, in 1816, the charter
for the new bank. Finally, in 1819, Chief Justice Marshall
rendered the famous decision of McCulloch V. Maryland, affirm-
ing the constitutionality of the act.⁸ Even then the argument
of unconstitutionality was not entirely annihilated, and it
played a rôle in the Jacksonian war on the bank. Yet one is
fain to believe that it was by this time largely a talking point
rather than anything regarded as weighty.
The power of Congress under the Constitution to pass acts
of incorporation was therefore established, but the reception
of the bank charter doubtless militated against all but excep-
tional use of that power. Interstate communications of various
sorts, at least, might well have been set afoot under congres-
sional charter, but the fear of sinister influence at Philadelphia,
the jealousy of the dignity of the state legislatures, the wish
1 Clarke and Hall, Bank of the United States, 85-II3. The Senate Proceedings do
not indicate the strength of the opposition.
2 Cf. also the amendment proposed in the Senate in January, 1794, and negatived
by a narrow margin: "Nor shall any person, holding any office or stock in any in-
stitution in the nature of a Bank, for issuing or discounting bills or notes under the
authority of the United States, be a member of either House whilst he holds such
office or stock, but no power to grant any charter of incorporation, or any commer-
cial or other monopoly, shall be hereby implied": Annals of Congress, iv, 31-32.
$ 4 Wheaton 316.
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16 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
to have the ultimate decisions made locally in matters not of
universal scope - these shut off at the outset any tendency
which might have arisen in favor of numerous federal acts of
incorporation. The tendency has never since made its ap-
pearance. Corporate privileges, therefore, have been through-
out our national life and remain to this day almost solely the
gift, directly or indirectly, of state legislatures.¹
A question of jurisdiction was also involved in the case of
corporations in the District of Columbia, of which the Bank
of Columbia and the Bank of Alexandria were the most note-
worthy examples. These had received charters from Mary-
land and Virginia, after the District had been provided for by
federal act. Some anxiety was felt by members of these cor-
porations regarding their legal status. This was dispelled by
a federal act of Feb. 27, 1801, confirming the state charters.
1
During these years incorporation for business purposes was
alinost entirely by special act. In other fields freedom of
incorporation was early extended and general incorporation acts
became more numerous as the years passed. The constitution
of South Carolina, adopted March 19, 1778, virtually assured
freedom of incorporation for religious purposes, so far as "Chris-
tian Protestant" churches were concerned.3 New York passed
a general incorporation act for religious purposes April 6, 1784.4
New Jersey followed suit March 6, 1786,5 and Delaware on
Feb. 3, 1787. On April 6, 1791,6 Pennsylvania passed a similar
1 Legal interest attaches to the decision of the Supreme Court of Pa., in the
case of Respublica V. Cornelius Sweers in April, 1779 (I Dallas 45-48), which hinged
upon the question whether at the time of the defendant's forgery the United
States, the injured party, was "a body corporate known in law." The court held
that "From the moment of their association, the United States necessarily became a
body corporate; for there was no superior from whom that character could other-
wise be derived. In England, the king, lords, and commons, are certainly a body
corporate; and yet there was nothing in charter or statute, by which they were
expressly so created."
2 Bryan, History of the National Capital, i, 431, citing A.B. Woodward, in George-
town Museum, Feb. 4, 1801; U.S. Stats. at Large, ii, 103-108.
8
Poore, Charters and Constitutions, ii, 1626.
4 Session Laws, 23-25.
5 Laws (ed. 1797), ii, 879.
6 Session Laws, 255.
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INTRODUCTORY
17
act granting freedom of incorporation "for any literary, chari-
table, or for any religious purpose."¹ In 1794 New Jersey
provided similarly for "societies for the promotion of learn-
ing."2 In 1796 New York and in 1799 New Jersey extended
the privilege to library companies.3 In 1788 Virginia and in
1798 Kentucky provided likewise for fire companies.4 There
were probably a few other general incorporation acts.⁵
For a business purpose, however, there appears but a single
clear instance of the grant of freedom of incorporation before
the end of the century. By act of Feb. 21, 1799,6 the Massa-
chusetts General Court provided,
"That when any number of persons shall, by writing, associate and become
Proprietors of any Aqueduct, or of any funds raised for making and con-
structing the same, for the purpose of conveying fresh water, by subterra-
neous or other pipes, into any town or place within this Commonwealth,"
the holders of a majority of the shares might apply to a justice
of the peace of the county where the aqueduct was to be located,
stating the name of the association and the objects of the pro-
posed meeting, and this justice was authorized to issue a war-
rant to some proprietor directing him to call the meeting. The
proprietors duly met were to become a corporation, with power
to arrange for future meetings, elect moderator and directors,
etc., as they chose. Voting rights were to be one vote per
share. Fines for breaches of by-laws, not exceeding $30, might
be imposed. Real estate "necessary for the purpose of their in-
stitution," to a maximum of $30,000, might be held. Digging
up streets to lay pipes was to be subject to authorization by
local selectmen, though without inconveniencing passers-by
"with their teams and carriages." A stock book was to be
regularly kept, "to the end that the Proprietors of the shares
in any such corporate property may be known." In case of
dissolution (but not otherwise) proprietors were individually
1 Pa. Stats. at Large, xiv, 50-53.
2 Session Laws, 950.
3 N.J. Session Laws, 644; N. Y. Laws (ed. 1887), iii, 695.
4 Stats. at Large (Hening), xii, 530; Ky. Laws (ed. 1799), 78.
& Cf. Griffith, Annals of Baltimore, 138; Scharf, Chronicles of Baltimore, 264.
6 Mass. Laws (ed. 1801), ii, 843-847.
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18 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
to be liable till all contracts then subsisting were satisfied, until
six years had passed. Malicious injuries to aqueducts were
penalized at $20, half going to the informer, and towns were
to have privileges of drawing water, free, for extinguishment
of fires.
The act was probably utilized, for Massachusetts special
acts incorporating water companies abruptly cease in this year;
but I have been unable to trace the companies so erected. It
was not until 1811 that freedom of incorporation was extended
to any important class of business corporations, and only in the
forties did such acts become common in the United States.
A North Carolina statute passed late in 1795, entitled "An
act to encourage the cutting of Canals by subscription," ap-
proximates a general incorporation act and has been called
one.2 This provides "That when any number of subscribers
shall or may have agreed to cut a canal or canals, and formed
themselves into a company for that purpose," they may exer-
cise the right of eminent domain to accomplish the project,
provided that the canals do not injure "houses or other valu-
able improvements greatly to the injury of the proprietors,"
that bridges over the canals be freely provided for the use of
the proprietors and the public, that landowners may drain their
abutting lands into the canals, and that if any canal should not
be completed within seven years after a court order to appraise
such lands, these should revert to the original owner, his heirs
or assigns. The act, moreover, permits "That the said com-
1 Session Laws, 2-3.
2 Baldwin, Bus. Corps., 467. The preamble recites: "Whereas it has been
demonstrated by the experience of the most improved and well cultivated coun-
tries, that opening communications by cutting canals, has been productive of great
wealth and convenience: And whereas it has been represented to this General As-
sembly, that cutting canals through peninsulas or narrow necks of land, swamps
and marshes, from one part of a river, creek, bay or sound, would greatly facilitate
and encourage merchandize, and consequently contribute to the wealth and reve-
nue of this state, by opening a more easy, safe and short conveyance for the prod-
uce of the greatest part of the country, to sea port towns' and safe harbours; and
also be productive of the most salutary effects, by draining noxious marshes,
swamps and low lands, which will promote health, reclaim immense quantities of
our most fertile lands, and in a peculiar manner tend to the wealth and welfare
of this state, which it is the most ardent desire of this legislature at all times to pro-
mote by every useful undertaking."
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INTRODUCTORY
I9
pany may sue and be sued, plead and be impleaded, under
the denomination of the canal company," and authorizes suits
against delinquent subscribers. No specific grant of a corporate
franchise is made, however, and the companies formed under
it are to be regarded merely as joint stock companies with one
or two privileges (not even limited liability) commonly associated
with corporations. Furthermore, it is doubtful if the companies
were, strictly speaking, organized for profit. Upon comple-
tion of its canals and bridges each company is required to sub-
mit an account of the expense to men appointed by the local
county court, and their report is to be there recorded. There-
upon the canals are to
"be rented out annually, by order of the court, at public vendue, and a toll
shall be fixed yearly, if required by said court, for every kind of boats and
rafts; and the rent as received annually, be paid to the subscribers, in pro-
portion to their several subscriptions, until the several payments shall amount
to the sum recorded in said court or courts, with six per cent. interest thereon;
then the said canal or canals, with all the appurtenances thereunto belonging,
shall be free from all toll, for the good and use of the public; any law, usage
or custom to the contrary notwithstanding."
This in a day when six per cent was a low rate of interest, and
when canal companies were commonly authorized to receive
as high as fifteen or twenty-five per cent, indicates that the
companies were merely agencies for accomplishing a local pub-
lic utility by a semi-private, semi-public method.
The effect of this act is not clear. Certainly in 1796 one
finds a number of canal corporations chartered by the state.
It is to be doubted whether it proved of material importance,
although a number of companies were probably organized under
its authority.
Special acts of incorporation, though recognized by clear
thinkers like James Wilson and Thomas Paine¹ as essentially
different from ordinary legislative acts, ran through much the
same process. The initiative, as in the case of "private acts"
generally, came almost invariably from the private individuals
who were interested in the accomplishment of the objects of
1 See infra, 311-312.
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20 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
the incorporation. The first step was usually for these inter-
ested parties to present a petition asking leave to present a
bill of incorporation, giving reasons, at more or less length,
in favor of the petition. In some instances committees were
appointed, in one or both houses, to consider this preliminary
question; and these committees sometimes took occasion to
consult freely with the friends of the measure. Lobbies were
not uncommon. In some cases it was required - and eventu-
ally this requirement became quite common, for certain classes
of corporations - that the intention to present the bill, with
the purport of the measure, be advertised for some weeks in
the localities affected and the proposition be submitted at the
ensuing legislative sitting. New England towns quite fre-
quently took advantage of this opportunity to express their sen-
timents for or against a proposed highway or water company.
Thereafter the bill went through its three readings, considera-
tion by special committee or committee of the whole and before
the body of each house, and after passage became effective
upon the signature of the governor. Thereupon, if the associa-
tion were already formed, the corporation came at once into
legal existence; if the subscription had yet to be made, the
corporate powers descended upon the body of subscribers when
they formally organized in accordance with the act, or upon the
president and directors when they were duly chosen.¹
In one class of cases corporate privileges were not bestowed
by the act itself, either praestanto or in futuro. Here the legis-
lature prescribed in detail the process and method of organiza-
tion and the provisions to govern the going concern, but left
to the governor the formal investiture with corporate powers.
This method, following the English practice of parliamentary
acts supplemented by crown patents of incorporation, was
employed in the incorporation of all the highway companies
chartered by Pennsylvania and New Jersey up to 1800, and
continued to be the common method for such companies till
1 Both the names of certain corporations and the tenor of their charters indicate
that sometimes the corporation proper consisted not of the stockholders, but of
the executive board.
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INTRODUCTORY
2I
the second decade of the nineteenth century in New Jersey
and till the third in Pennsylvania.¹ It does not appear to have
been used in other states or for other types of companies. The
state of Vermont, however, reverted still more closely to an
English model in chartering her first business corporation. In
November, 1791, the legislature granted the exclusive privilege
of locking the Connecticut River at Bellows Falls to William
Page, Morris K. Lewis, and associates, with power to take tolls;
but instead of directly conferring corporate powers provided
"That it shall be the duty of his excellency the governor, to
issue a charter to the
associates
,
and to incorporate
them into a body politic" by a specified name. The rights
thus secured were the subject of exchange during the next year,
but in October, 1792, evidently at the instance of the capital-
ists, a new act was procured which besides altering the grant
bestowed corporate powers as if they had not been hitherto
granted.²
It will be convenient to discuss the corporations in a few
principal groups, but before entering upon that discussion a
general view of the charters granted will be serviceable. Here
are presented, therefore, a chart and a series of tables based upon
the list of titles of corporations which is given in Appendices
A and B. Since the list must be incomplete the tables are not
wholly accurate, but it is unlikely that sufficient new charters
will come to light to alter materially the situation here disclosed.
In the period concerned no classification of business corpora-
tions had developed. The charters are here classified, there-
fore, on a common sense basis, upon which a few comments are
in point. The banks were entirely joint stock commercial in-
1 Not all companies took the trouble to secure the formal patents, and they seem
to have neglected it with impunity. See Hazard, Register of Pa., ii, 291-300.
2 See Essay II, 277, and infra, 168-169.
$ The writer has been unable to secure access to complete files of the session and
compiled laws of all the states, which are the safest sources of information; but
he believes the list not far from complete and that no title is incorrectly included.
The list may be compared with that in S. E. Baldwin's essay on "Private Corpora-
tions," in Two Centuries' Growth of American Law (Yale Bicentennial Pubs., New
Haven, 1902), 287-301, from which it differs considerably.
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22 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
FIGURE I. EIGHTEENTH CENTURY CHARTERS TO BUSINESS
Sources
Totals
Per cent
Colonial
'8r
'82
'83
'84
'85
'86
'87
'88
'89
'90
United States
2
.6
B
Maine
23
6.9
New Hampshire
32
9.5
Vermont
20
6.0
Massachusetts
60
17.9
D
B
B
b
bb
M
Rhode Island
21
6.0
www
Connecticut
45
13-4
XD
m
M
New York
28
8.4
B
M
New Jersey
13
3.9
Pennsylvania
23
6.9
I
B
I
B
Delaware
3
6
B
Maryland
21
6.3
c
c
I
B
Virginia
22
6.6
cc
c
CCC
c
North Carolina
II
3.3
c
cc
South Carolina
IO
3.0
c
cc
c
Georgia
I
-3
Kentucky
I
.3
Totals
335
100.2
7
I
3
I
3
3
3
7
S
3
4
A Agricultural
B Banking
b Toll-bridge
c Canal, etc.
D Dock
I Insurance
stitutions. Eleven of the thirty-three insurance companies
were mutual, for protection against fire losses; of the stock
companies, a few were specifically chartered for fire or marine
insurance, but the large majority were privileged to write both
kinds of risks, while several charters were broad enough to
include life insurance, of which practically none was written.
The term "highway companies" is used in preference to "trans-
portation companies," since every company here included en-
gaged merely in constructing and maintaining the basis of
communication, not in conducting transportation. No distinc-
tion is made, in the group of charters for the improvement of
inland navigation, between canal companies and others; for the
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1
INTRODUCTORY
23
CORPORATIONS, CLASSIFIED BY SOURCES, YEARS, AND PURPOSES
'or
'92
'93
'94
'95
'96
'97
'98
'99
'oo
Sources
B
United States
c
c
bb
bb
bcc
bbc
bbbb
bD
B
I
Maine
CCW
bbb
abb
bcc
b
bb
bbb
bb
CCT
c
ITT
bbr
bbp
bw
New Hampshire
bb
br
bbc
TTT
c
c
c
T
Vermont
cr
TT
TW
Bb
bbr
brr
bcm
BBI
abw
BII
BIT
bbb
bbc
www
www
Massachusetts
WW
www
TPT
TTM
ccc
WM
WW
BBI
B
bb
bTT
B
c
II
Rhode Island
IIIT
IbT
bTT
CTT
BIC
BBB
BbL
TTT
TTTT
TT
TTT
Connecticut
TTTT
TTW
WW
WW
brM
III
TTTT
TT
B
BCC
B
New York
CTT
TWW
TTT
M
b
bc
c
bc
b
bwx
cw
New Jersey
Bb
c
cr
ITT
b
TT
b
bb
Pennsylvania
CCA
cr
c
B
Delaware
1b
W
B
I
BIID
bcr
IDTT
c
Maryland
ICC
BB
c
I
c
IC
CT
Virginia
CTT
cc
c
c
c
North Carolina
CCC
b
nc
CW
South Carolina
c
Georgia
b
Kentucky
9
31
IS
17
42
32
41
36
33
39
Totals
L Land
M Manufacturing
m Mining
T
Turnpike
W
Water supply
X Commercial
precise means used varied with the locality rather than with
the companies or charters.
Figure I gives a bird's-eye view of all the charters granted,
distinguished by sources,¹ years, and purposes. Table I, in its
three parts, gives a summary view in figures, grouped by sec-
tions, periods, and general purposes. Table II shows the char-
ters classified by purposes and years. Table III shows them
classified by states and purposes. Table IV brings out certain
facts correlating the number of charters with the population
in the several states.
1 Maine charters were, of course, granted by the Massachusetts "General
Court."
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24 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
TABLE I. SUMMARY OF EIGHTEENTH CENTURY CHARTERS TO BUSINESS COR-
PORATIONS IN THE UNITED STATES, GROUPED BY PERIODS, SOURCES OF CHAR-
TERS, AND GENERAL TYPES
Sources of charters
Colonial
1796-
Total
1781-85
1786-90
1791-95
charters
Per cent
1800
United States
I
I
2
.6
New England
6
4
4
69
117 *
200 *
59.7
Middle states
I
2
4
22
38
67
20.0
Southern states
4
14
22
25
65
19.4
Western states
I
I
.3
Total charters
7
II
22
II4
181 *
335
100.0
Per cent
2.1
3.3
6.6
34.0
54.0
100.0
General type
Colonial
1781-85
1786-90
1796-
Total
1791-95
charters
Per cent
1800
Financial
I
s
5
29
27
67
20.0
Highway
5
14
78
122
219
65.4
Local public service
5
4
27 *
36 *
10.7
Business (proper)
I
I
3
3
5
13
3.9
Total charters
7
II
22
114
181
335
100.0
Ancillary,
Local
Highway
public
Business
Total
addi-
Total
Sources of charters
Financial
service
(proper)
charters
tional, or
corpora-
joint
tions
charters
United States
2
2
2
New England
33
130
30 *
8
200 *
8
192
Middle states
16
42
4
5
67
7
60
Southern states
16
47
2
65
3
62
Western states
I
I
I
Total charters
67
219
36 *
13
335
18
317
Ancillary, additional,
or joint charters
5
13
18
Total corporations
62
206
36 *
I3
317
*
Charters to water supply companies issued under the Massachusetts general
incorporation act of Feb. 21, 1799 (Laws, ed. 1801, ii, 843-847), cannot be found
and are not included.
Certain characteristics of the movement are evident from a
glance at Table I. But two per cent of the eighteenth century
charters were granted before the Revolution; eighty-eight per
cent were granted after 1790, and three-fifths of these in the
last five years. The thirty-three charters granted in 1781-90,
moreover, created but twenty-five distinct corporations. The
progress of the movement is further brought out by annual
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INTRODUCTORY
25
averages of charters and new companies for five-year periods,
as follows:
ANNUAL AVERAGES
Period
No. of charters
No. of companies
1781-85
2.2
1.2
1786-90
4.4
3.8
1791-95
22.8
21.6
1796-1800
36.2
35.8
New England strikingly leads in the number of charters,
with sixty per cent of the total; the others are about equally
divided between the middle and southern states, if Maryland
is counted with the latter. In the decade 1781-90, on the other
hand, more charters were granted south of Mason and Dixon's
line than north of it; the south shared but slightly in the boom
in charter granting after 1790 which so markedly affected New
England. One remarks the absence of charters among western
states, except for the lone one granted in 1800 by Kentucky.
The dominant type is clearly the highway companies, which
constituted nearly two-thirds of the total number; the financial
corporations made up twenty per cent, the local public service
companies ten, while the business corporations proper added
less than four. The local public service companies were largely
confined to New England, business corporations proper to the
New England and middle states.
The more detailed tables reveal further facts. The years
1791-92 show a rapid increase in new charters. In the single
year 1792 more corporations were created than in the entire
decade 1781-90. Except Kentucky and Georgia, all of the states
had swung into line by 1792, and only Delaware and South
Carolina failed to grant at least one charter in that year. The
high point of the period is 1795, due chiefly to New Hampshire's
large contribution; but from this year on a high level is main-
tained - from the average of thirty-seven per annum there is
no deviation greater than six. Before 1791 nearly half the
charters and more than half the corporations chartered were
for the improvement of inland navigation. Disregarding spo-
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TABLE II. EIGHTEENTH CENTURY CHARTERS TO BUSINESS CORPORATIONS, CLASSIFIED BY PURPOSES AND YEARS
Colo-
Purposes
nial
1781
1782
1783
1784
1785
1786
1787
1788
1789
1790
1791
1792
1793
1794
1795
1796
1797
1798
1799
1800
Totals
Per cent
Banking
I
3
I
I
I
I
3
8
3
5
2
2
3
34
10.2
Insurance
.....
I
I
I
I
4
5
3
6
5
6
33
9.8
Financial
1
2
4
3
3
6
7
,
67
20.0
....
1
1
3
2
1
8
4
10
2
Inland navigation
I
I
2
I
3
5
I
2
3
II
5
2
9
12
5
5
3
3
74
22.1
Toll-bridge
I
2
I
IO
6
7
14
6
14
7
3
2
73
21.8
Turnpike
I
3
6
6
IO
II
IS
20
72
21.5
Highway
1
1
3
1
5
5
1
2
4
22
11
12
29
24
29
23
21
25
219
65.4
Water supply
3
I
2
4
8
6
...
4
4
32
9-5
Dock
2
I
I
4
1.2
Local public service
5
1
3
4
8
7
4
4
36
10.7
Manufacturing
2
I
I
I
I
I
I
8
2.4
Mining
I
I
3
Agriculture
I
I
.3
Land
I
I
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.3
26 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Commercial
I
I
2
.6
Business (proper)
1
1
2
1
1
1
1
2
1
1
1
13
3.9
Grand total
....
7
I
3
I
3
3
3
7
5
3
4
9
31
I5
17
42
32
41
36
33
39
335
100.0
Per cent
.....
2.1
.3
.9
.3
.9
.9
.9
2.1
1.5
.9
1.2
2.7
9.3
4.5
5.1
12.5
9.6
12.2
10.7
9.8
11.6
100.0
INTRODUCTORY
27
radic or experimental charters, one may date the beginning
of the movements for the various types as follows: 1783, inland
navigation; 1790, banks; 1791, toll-bridge; 1794, insurance;
1794, turnpike; 1795, water supply.
Banking and insurance charters were about equally numer-
TABLE III. EIGHTEENTH CENTURY CHARTERS TO BUSINESS CORPORATIONS,
CLASSIFIED BY STATES AND PURPOSES
FINANCIAL
HIGHWAY
LOCAL PUB-
BUSINESS
LIC SERVICE
(PROPER)
Sources of charters
TOTALS
Bank-
Insur-
Inland
navi-
Toll-
Turn-
Water
Manu-
Mis-
ing
Dock
factur-
ance
gation
bridge
pike
supply
cella-
ing
neous
United States
2
2
Maine
I
I
7
12
I
I
23
New Hampshire
I
I
5
I9
4
I
I
32
Vermont
5
5
9
I
20
Massachusetts
7
5
5
14
9
15
I
4
60
Rhode Island
4
6
I
3
3
3
20
Connecticut
5
2
2
3
23
5
I
I
3
45
New York
4
3
3
I
13
2
2
28
New Jersey
4
5
2
I
I
13
Pennsylvania
3
4
5
5
5
I
23
Delaware
2
I
3
Maryland
3
6
4
4
3
I
21
Virginia
2
3
14
3
22
North Carolina
II
II
South Carolina
2
6
I
I
IO
Georgia
I
I
Kentucky
I
I
Total charters
34
33
74
73
72
32
4
8
5
335
Ancillary, additional, or
joint charters
5
8
4
181
Total corporations
29
33
66
69
72
32
4
8
5
317
1 One bridge and canal company occasions an additional subtraction.
ous, though insurance companies slightly outnumbered the
banks. Highway companies were about equally divided among
the three types - inland navigation, toll-bridge, and turnpike.
Water companies constituted nearly the whole of the local
public service companies and were about as numerous as the
banks or insurance companies. Manufacturing companies, few
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28 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
though they were, constituted sixty per cent of the business
corporations proper.
In order of ubiquity the inland navigation companies come
first; of this type every New England, middle, and southern
state chartered at least one. Toll-bridge companies appear
in twelve states; banking, insurance, and water companies in
TABLE IV. COMPARISON OF STATES WITH RESPECT TO POPULATION, 1800, AND
NUMBER OF EIGHTEENTH CENTURY CHARTERS TO BUSINESS CORPORATIONS
No. of
No. of
charters
Per cent
Per cent
Rank with
Rank with
charters
of total
of total
respect to
Sources of charters
no. of
respect to
per 100,000
charters
granted
population,
population,
charters
population,
1800
granted
1800
granted
1800
United States
2
.6
Maine
23
15.2
6.9
2.8
5-6
14
New Hampshire
32
17.4
9.5
3.5
3
II
Vermont
20
12.3
6.0
2.9
9-10
13
Massachusetts
60
14.2
17.9
7.9
I
5
Rhode Island
20
28.9
6.0
1.3
9-10
I6
Connecticut
45
18.0
13.4
4.7
2
8
New England
200
16.3
59.7
23.2
1
3
New York
28
4.8
8.4
II.I
4
3
New Jersey
13
6.2
3.9
4.0
II
10
Pennsylvania
23
3.8
6.9
II.3
5-6
2
Delaware
3
4.6
is
I.2
14
17
Middle states
67
4.6
20.0
27.6
2
2
Maryland
21
6.1
6.3
6.4.
8
7
Virginia
22
2-4
6.6
16.6
7
I
North Carolina
II
2.3
3.3
9.0
I2
4
South Carolina
10
2.9
3.0
6.5
13
6
Georgia
I
.6
.3
3.1
I5-16
I2
Other southern states
.5
Southern states
65
2.9
19.4
42.0
3
1
Kentucky
I
-4
.3
4.2
15-16
I4
Other western states
3.0
Western states
1
3
.3
7.2
4
4
ten. The leading states in chartering particular types were:
banking, Massachusetts, with 7 out of 34; insurance, Maryland
and Rhode Island, each with 6 out of 33; inland navigation,
Virginia, with I4 out of 74; toll-bridge, New Hampshire, with
I9 out of 73; turnpike, Connecticut, with 23 out of 72; water
supply, Massachusetts, with I5 out of 32; manufacturing,
Massachusetts, with 4 out of 8. North Carolina and Georgia
chartered none but navigation companies, Kentucky only a
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INTRODUCTORY
29
bridge company. The predominating type in Maine and New
Hampshire was the toll-bridge, in Connecticut and New York
the turnpike, in Virginia and South Carolina as well as their
sister southern states (except Maryland) the inland navigation
company.
The leadership of the New England states is emphasized by
the detailed tables. Each ranked higher in number of charters
than in population in 1800, while elsewhere each state ranked
lower. The story is the same if one compares percentage of
charters with percentage of population. Rhode Island, with
I.3 per cent of the population, granted nearly as many charters
as Virginia, with 16.6 per cent of the population; Connecticut,
with 4.7 per cent of the population, granted more charters than
the four states south of Maryland, which contained 35.2 per
cent of the population. For New England as a whole 16.3
charters were granted per 100,000 population (1800), as com-
pared with figures for the middle states of 4.6 and the southern
states of 2.9. In this comparison Rhode Island leads with
28.9 charters per 100,000 population, but backwoods Vermont,
the lowest New England state, shows a figure of 12.3 to contrast
with 6.1 for Maryland. In each section there is an approach
to uniformity in density, although in this respect Maryland
clearly belongs with the middle states.
The New England states also lead in types of charters. All
but one of the various types are represented there, and two
of its types (mining, land) are not elsewhere represented. In
every type but inland navigation companies, in which the south
is ahead, it leads. On the average each New England state
chartered seven types of corporations, each middle state five,
each southern state three. Here Connecticut leads, with eleven
different types represented.
A recapitulation of the corporations with more than one
charter is of interest. The case of the Bank of North America
at its original founding was peculiar, as already noted. Joint
charters, however, were necessary in the cases of bridges which
spanned boundary rivers and in cases of improvements in
navigation which affected such rivers or streams or swamps
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30 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
TABLE V. CORPORATIONS WITH CHARTERS FROM MORE THAN ONE SOURCE
United States
1781
Bank of North America
Massachusetts
1782
New York
1782
Pennsylvania
1782, 1787
Delaware
1786
Maryland
1784
Potomac Company
Virginia
1785
Virginia
1787
Dismal Swamp Canal Company
North Carolina
1790
South Carolina
1787
Catawba and Wateree company
North Carolina
1788
Vermont
1791
Bellows Falls canal company
Vermont
1792
New Hampshire
1792
New Hampshire
1792
White River Falls Bridge company
Vermont
1795
Pennsylvania
1793
Brandywine canal company
Delaware
1793
Vermont
1794
Water Queche Falls canal company
New Hampshire
1796
New Jersey
1795
Easton Delaware Bridge company
Pennsylvania
1795
New Hampshire
1795
Cornish Bridge company
Vermont
1797
Pennsylvania
1798
Trenton Delaware Bridge company
New Jersey
1798
crossing state lines. For charters by different authorities to
the same corporation there was a precedent from colonial days:
in 1769 the royal or proprietary governors of New York, New
Jersey, and Pennsylvania granted simultaneous and equivalent
charters to The corporation for the Relief of Widows and Children
of Clergymen in the Communion of the Church of England in
America.1 Often such charters were granted without serious
delay, but there are several instances of delays of two or three
years, which must have been at least very disconcerting to the
promoters. Moreover, not only the charters but supplementary
acts as well required concurrent action, and numerous instances
1 Essay I, 128.
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INTRODUCTORY
31
of inconvenience appear because of the necessity of getting two
legislatures to come to agreement.¹
In connection with this view of corporate charters a few state-
ments may be hazarded regarding the principal features of the
business cycles of the years 1781-1800. The crests of the waves
of business activity were (I) late in 1784, (2) in 1792, (3) in
1795, and (4) in 1799. The troughs of depression were (I)
1786, (2) 1793, (3) 1797. Immediately at the close of the war
enthusiasm ran riot, and an incautious and thoroughly un-
healthy business boom occurred. The reaction was severe,
intensified by political chaos and economic disorganization.
The expansion of 1787-92 was tremendous, yet not wholly
abnormal, for it was accompanied by notable successes in politi-
cal reconstruction, funding the public debt, and extension of
commercial banking. The stock market panic of the spring
of 1792 was premature. The deeper reaction which began
later in that year was due, even more than to domestic over-
expansion, to a reaction abroad, the developments of the French
Revolution, and the interference with American commerce. The
improvement of 1795 and the severe depression of 1797 were like-
wise intimately linked with foreign conditions. Throughout these
years, however, a gradual economic growth is to be discerned
in spite of fluctuations in the most sensitive economic activities.
The correspondence of the chartering of business corporations
with these general business conditions is revealed graphically
by Figure 5, which shows the number of charters granted in each
year of these two decades. Here one may see reflected the
sharp upward swing of 1789-92, the reaction which followed,
and the recovery of 1795. The slight popularity of the cor-
poration before 1790 and its widespread use after 1795 prevent
closer correspondence in earlier and later years.
A complete, well-rounded discussion of these corporations is
at present impossible. Which were floated, which succeeded and
1 The charter granted in 1800 by Virginia to a turnpike company was to be in-
operative till Maryland granted a similar charter to the same associates. In general
turnpike companies extended their operations only to the state line, and concurrent
charters were unnecessary. Cf. also infra, 136-137, 140-141, 176.
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32 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
which failed after flotation, and what was the degree of success
or extent of failure cannot be ascertained with accuracy or ful-
ness. Nevertheless, for certain companies considerable detail is
accessible. Illuminating though often disappointing histories
have been written of the banks of North America, the United
States, New York, Hartford, and New Haven; the Potomac
navigation, the Santee and Cooper canal, and the Middlesex
canal; the Beverly cotton manufactory; and a few other com-
panies. The preceding essay attempts such a history of the
1780
1785
1790
1795
1800
40
40
30
8
20
20
10
10
0
0
1780
1785
1790
1795
1800
FIG. 5. AMERICAN AcTs OF INCORPORATION FOR BUSINESS CORPORATIONS,
1780-1800
Some charters were probably issued in 1799 and 1800 under the Massachusetts general incorporation
act for aqueduct companies; these are not included here. No deduction is made for joint or succes-
sive charters for a single object, but the White River Falls bridge-canal charter of 1792 and 1795 is
shown as but one charter in each year.
most pretentious manufacturing corporation. For many other
companies there are scattering bits of information. In view
of the general ignorance of these early companies and the com-
parative inaccessibility of the material in print regarding many
of them, it has seemed desirable to present in this essay in sum-
marized form most of the data yielded by a somewhat careful
examination of secondary sources, including local histories, and
of selected collections of manuscripts and contemporary news-
papers and magazines. Amore exhaustive study of such sources
and an examination of certain collections of corporate records
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INTRODUCTORY
33
or local manuscripts would furnish much additional material;
but it is an open question how thoroughly it is at present profit-
able to go into these sources. The chapters which follow re-
flect a compromise between thoroughness and superficiality.
Incidentally there will be mentioned certain lower forms of
organization in nearly every field of business which the cor-
poration entered. There were voluntary associations of neigh-
bors for making mutually satisfactory provision of water,
similar "companies" of neighboring landowners for protecting
or improving their lands by common action, joint stock com-
panies for building roads or toll-bridges, for buying and selling
lands, and for manufacturing and mining purposes. Some of
these did not differ much in practice from the smaller corpo-
rations; in several cases legislative authorization was secured;
and not infrequently a new corporation was merely one of these
associations "erected," as the phrase went, into a "body cor-
porate and politic," with the accompanying privileges of definite
framework, indefinite life, and limited liability. In the main,
however, new corporations were started "from the ground up,"
and these less formal associations constituted generically, but
usually not individually, a transitional forin of organization.
--Of the various groups of corporations the banks - first to
appear, largest in capital, individually most important and
most successful - will be considered first. The highway com-
panies, subdivided into canal and inland navigation companies
on the one hand, and bridge and turnpike companies on the
other, deserve attention next as the most numerous and most
pervasive examples of the corporation in this period. Finally
will be considered the smaller groups of insurance companies,
"aqueduct companies," manufacturing companies, and the few
scattering examples of other types.
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CHAPTER II
BANKING COMPANIES
THE colonies boasted no banks of discount and deposit. So-
called "banks" there were, of course, the term commonly signify-
ing mere batches of "bills of credit" issued by public authority.
At best the colonial "banks" were merely public trustees or
private contractual associations which made loans on collateral,
usually for a considerable term, generally with real estate mort-
gages as security, the currency passed-being merely paper cer-
tificates which expressed on their face a value in terms of hard
money which in exchange they more or less approximated.
Barter and book credit were much used, and under conditions
which made them, despite their inherent clumsiness, far more
tolerable than in our more specialized age. Mercantile needs
were supplied, so far as they were supplied at all, by English
merchants, individual local capitalists, or longer book credits.
Considering the part which commercial banks proper played in
America from their first organization after the Revolution, it is
not easy to explain the lateness of their appearance. A. O.
Eliason, in his study of The Rise of Commercial Banking In-
stitutions in the United States,¹ explains the tardiness of the rise
on the ground of "peculiar conditions of colonial trade of in-
dustry," viz.:
"There were no manufactures requiring extensive capital and banking
facilities; the financial aid necessary to carry on the operations in the agri-
cultural and domestic systems was supplied by individuals in the Colonies;
the retail trade and the coasting and shipping industries were conducted on
English capital; the banking for the merchants was done in England; and
colonial merchants, with the aid of their own capital, and their banking
connections in England, were able to give to individuals and small traders,
the limited banking services and accommodations which they required."
1 Minneapolis, I90I.
34
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BANKING COMPANIES
35
Other retarding factors were unwholesome banking traditions
in the colonies, popular fears of special privileges, prejudices
against moneyed institutions, and the suspicions of the home
government of colonial financial moves.
The narrow-minded policy of the British government in at-
tempting to keep America economically bound in swaddling
clothes after it had outgrown them doubtless led to Robert
Morris's efforts, in 1763 and 1774, tc establish a commercial
bank in America, and the disruption of foreign mercantile rela-
tionships during the war was unquestionably partly responsible
for the conditions which in 1781 imperatively demanded the
establishment of the Bank of North America.¹ Its success, in -
spite of business difficulties and political hostility, was well-nigh
phenomenal; and in the light of this success the floating of the
next banks in Boston and New York is easily understood. The
continued success of all three in the face of trade depression,
coupled with increasing business activity-speculative and other-
wise - which marked the period from 1788 to 1798, sufficiently
explains the noteworthy growth of the banks before 1800. Their
success encourages the belief that the time was really ripe for
them earlier, and that if they could have got a foothold in colo-
nial days they would even then have proved their worth.2
1
In 1779, 1780, and 1781 young Alexander Hamilton repeatedly
pressed upon Robert Morris one plan or another for a bank,⁸
and in June, 1780 (opened for business July I7; the last instal-
ment called in November 15), there was actually established
in Philadelphia an institution which was known as the Penn-
sylvania Bank, with a capital of £300,000 in Pennsylvania cur-
rency furnished by opulent, patriotic Philadelphians. The
sole purpose of this organization, however, was "furnishing
a supply of provisions for the armies of the United States."
There were borrowings and note issues, but no more than were
1 Eliason, op. cit., 19, 54-55; cf. Robert Morris's letter to Congress, July 29,
1782, in Journ. of Cont. Cong., xxii, 432.
2 Eliason (op. cit., pp. 59-61) overemphasizes the significance of the development
of manufactures for the development of the banks. Cf. infra, chap. 5.
3
See esp. Hamilton, Works, i, 116, 162, 223. Cf. Dunbar, Economic Essays,
89-90.
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36 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
necessary to accomplish this purpose. Congress guaranteed
the subscribers reimbursement and necessary aid - in a day
when the word of the Philadelphians was far stronger than
that of the Confederation Congress; but no charter was sought
or bestowed. Quite conceivably this "Bank" might have come
to justify its name by developing into an ordinary commercial
institution, but in fact it was never anything but a temporary,
private agency in support of a pathetically weak government;
and even as such it was soon supplanted, though not before
it had justified its organization.¹
It is probable, however, that the experience with this imper-
fect organization encouraged the promotion of a full-fledged
banking company, and it is certain that subscribers to the old
transferred their interest to the new. Robert Morris, lately
appointed Superintendent of Finance for the federal govern-
ment, presented to the Congress on May 17, 1781, a plan for
a commercial Bank of North America, which should serve at
once both public and private needs and which should attract
private capitalists, by the prospect of direct pecuniary ad-
vantage, to lend most effective aid to the state.² Congress
lent a willing ear and on May 26 voted approval of the plan
for the bank and resolved
"that they will promote and support the same by such ways and means from
time to time as may appear necessary for the institution and consistent
with the public good.
That the subscribers
shall be incorporated
agreeably to the principles and terms of the plan
so soon as the sub-
scription shall be filled, the directors and president chosen, and application
made to Congress for that purpose by the president and directors elected."
1 Hazard, Register of Pa., ii, 258-261 (1828); Journ. of Cong., June 21, 1780;
Madison to Jefferson, June 23, 1780, in Madison, Works, i, 66-67; Lewis, Bank of
North America, 17-23. Lewis cites the Pa. Gazette, Dec. 29, 1784, as authority for
the statement that its affairs were finally wound up in 1784. A graphic account of
the establishment of this "Bank" may be found in Thomas Paine's Dissertations
on Government, the Affairs of the Bank, and Paper Money (published in February,
1786), pp. 17-20. In his letter to James Duane, Sept. 3, 1780, Hamilton expresses
his disappointment that this had not developed into a mercantile bank: Hamil-
ton, Works, i, 164-167.
2 Lewis, Bank of N. A., 27-29; Morris to John Hancock, June 21, 1781, printed
in facsimile in John H. Michener, The Bank of North America, Philadelphia (New
York, 1906); Greene to Morris, Aug. 18, 1781, in Greene, Nathanael Greene, iii,
370.
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TABLE VI. EIGHTEENTH CENTURY CHARTERS TO BANKING CORPORATIONS
Sources
1781
1782
1783
1784
1785
1786
1787
1788
1789
1790
1791
1792
1793
1794
1795
1796
1797
1798
1799
1800
Totals
United States
I
I
2
Maine*
I
I
New Hampshire
I
I
Massachusetts
I
X
I
2
I
I
7
Rhode Island
I
I
2
4
Connecticut
3
I
I
5
New England
1
1
1
5
4
1
2
3
18
New York
I
I
I
I
4
Pennsylvania
I
I
I
3
Delaware
I
I
3
Middle states
2
1
1
1
1
2
1
,
BANKING COMPANIES
Maryland
I
I
I
3
Virginia
2
2
Southern states
1
2
1
1
5
Totals
I
3
I
I
X
I
3
8
3
5
2
2
3
34
Ancillary or additional
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charters
3
I
I
5
No. of different corpora-
tions
I
I
I
3
8
3
.
5
2
2
3
29
* Charters granted by the Massachusetts legislature.
37
38 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Congress at the same time recommended to the states the grant-
ing of a monopoly to this bank during the war and the passage
of laws punishing counterfeiting of the bank's notes, and author-
ized the receipt of the bank's notes for public dues of the United
States.¹
Proposals were promptly published and supplemented by a
public address and private appeals by "the financier," but
up to September or October not more than $70,000 had been
subscribed. Then a frigate arrived in Boston from France
bearing some $470,000 in specie on account of a foreign loan,
and Morris subscribed $254,000 of this to the bank on behalf
of the government, which thus became the principal share-
holder. Private individuals followed suit, and by December
they had paid in some $85,000. In November organization
was effected, although the subscription was not filled, and a
president (Thomas Willing, Morris's partner) and directors
chosen. Congress was approached for the fulfilment of its
promise of a charter and on December 3I passed a brief incor-
porating ordinance. On Jan. 7, 1782, the bank began business.²
In view of the doubtful validity of a congressional charter
the bank sought and secured buttressing acts from the several
states.³ Rhode Island and Connecticut acts, passed in January,
1782, recognized the bank as established. On March 8 Massa-
chusetts passed its "Act in support of the National Bank,"
incorporating it on behalf of that state, according to the terms
of the congressional ordinance. On April I in Pennsylvania,
and on April II in New York, bills to the same effect became
law. North Carolina on May 12, and New Jersey on May 30,
passed acts validating the ordinance, but granting no formal
charter.⁴ All the acts granted the desired monopoly.
The bank promptly loaned heavily to the government. On
1 Journ. of Cong., May 26, quoted in Lewis, Bank of N.A., 29-30.
2 Ibid., 30-40. The congressional ordinance of incorporation is in ibid., 130-
132.
3 Cf. James Wilson, Works, i, 432-435, for Morris's letter of January 8 to the
governors of the states, and the bank's petition to the Pennsylvania assembly.
4 R.I. Session Laws; Pa. Stats. at Large, x, 406; N. Y. Laws (ed. 1886), i, 462;
N. C. Laws (Iredell ed., 1791), 437; N. J. Session Laws, 67. See Lewis, Bank of
N. A., 43-46, for the legislative history of the Pennsylvania charter.
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BANKING COMPANIES
39
April I, 1782, the Treasury owed it $300,000; on July I, $400,-
OOO, which was still outstanding October I. At the request
of the directors that the obligation be reduced, Morris sold
$200,000 of the government stock and discharged with the
proceeds three-fourths of the debt. By July I, 1783, the entire
holdings of the government had been sold, though the loans
continued to stand at or above $100,000. By Jan. I, 1784,
however, the debt was entirely discharged.¹ The government
thereafter did not become again a subscriber.
Before and after this the stock was held largely by Philadel-
phians. The first subscription, completed July 25, 1783, shows
the IOOO shares taken by 145 subscribers, among whom one
notes a few men from outside the capital city.2 Of its 2176
shares ($400 each) outstanding on March 31, 1786, Morris
reported I235 (57 per cent) held in the metropolis, chiefly
by merchants; 285 (13 per cent) held abroad, nine-tenths in
Holland; боб (28 per cent) held by inhabitants of the northern
states and Virginia; and 59 (2 per cent) by Pennsylvanians
outside of the city. The stockholders were then stated to
number about 300, holding thus an average of about $2900.3
Although the bank was seriously beset by difficulties in its
earliest days, it was from the outset financially profitable, as
well as serviceable to continental, state, and city governments
and to commercial interests.⁴ The first half year netted 4½¹₂
per cent and dividends for 1783 and 1784 averaged I4 per cent.
In January, 1784, the expansion of business seemed to warrant
a larger capital, and shareholders were offered I000 new shares
at I20 ($500). They subscribed at once a considerable propor-
tion of the shares, and books were opened February I for public
subscription.5
By this time, however, the monopoly assured the bank during
1 Carey, Debates, 49-50; Lewis, Bank of N. A., 47-48.
2 Lewis (Bank of N.A., 133-135) gives an alphabetical list. Jeremiah Wadsworth
of Hartford, with one hundred and four shares, has the largest single holding.
3 Carey, Debates, 32, 94-98.
4 For these services see Lewis, Bank of N. A., 4I-42, 47-50; James Wilson,
Works, i, 438-439.
5
Lewis, Bank of N. A., 51, 136-139, giving list of shareholders subscribing.
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40 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
the war by the acts of the various states had expired by limita-
tion, and the notable success of the institution as well as the
business boom now under way provoked movements, in nearly
every state, to establish other banks. The bank had never
made material use of its privileges in other states, and hence
was comparatively unaffected by the rise of banking institu-
tions in Boston, New York, and Baltimore. But it was different
with a rival at its own doors, which was proposed early in 1784.
Pierce Butler, popular representative from South Carolina,
wrote to James Iredell, Jan. II, 1784:
"I hope and think we shall restore and establish our credit. I have pro-
posed to the Legislature to negotiate a loan in Europe, and establish a public
bank. I think they will agree to my proposal; if they do, I will risk my repu-
tation on it, that we will discharge our Continental and State debt in less
than ten years, and establish our bank on as good a footing as any on earth.
A few of the adherents of Robert Morris are against the measure, because
they think it will take us more out of his power, and lessen his consequence
here
The footing I propose to put the bank on, is exactly the same as
that of Venice; to keep constantly on hand a large sum in real specie." 1
Butler's proposal was not acted upon, but the agitation for
another bank in Philadelphia found support among "enemies"
of the established institution, who were disgruntled at its lend-
ing policy, envious of its prosperity, or eager to obtain equal
pecuniary gains. On February IO the Pennsylvania assembly
was petitioned for a charter. The directors of the old bank
relished little the prospective infringement of their monopoly
and petitioned to be heard against the request. Robert Morris
said frankly, a little later:
"And very properly they did. If any set of men were to apply to the leg-
islature for a charter, which I thought injurious to my private interest, I
should, if I had arguments of sufficient weight to offer against it, make an
appeal to the representative body
This attempt to establish another
bank, had for its object, the destruction of the bank of North America. The
motives were neither founded in reason nor any desire to promote the public
welfare."²
1 McRee, Life and Correspondence of James Iredell; ii, 88; dated at Sulham near
Reading. On Butler, a signer of the Constitution and federal senator in 1789-96,
see C. A. Beard, Economic Origins of Jeffersonian Democracy, 38-39.
2 Carey, Debates, 40, 62, 85; Lewis, Bank of N. A., 5I-52.
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BANKING COMPANIES
4I
More effective steps to meet the attack were taken at a stock-
holders' meeting March I: it was voted to extend the increase
of capital to four thousand shares at $400 each, subscribers
who had paid $500 to be refunded $100 with interest. In this
month, however, occurred the business reaction, which occa-
sioned excessively large discounts, a run on the bank, and a
fortnight of suspension of discounts.¹ The application for the
rival charter was withdrawn March 16, but the enthusiasm of
the outsiders had cooled, and when the subscription books were
closed June I3 only $430,400 was found subscribed, instead of
the possible $1,600,000. About one hundred and thirty new
subscribers were thus admitted; they had subscribed some six
hundred shares, the rest having been taken by old subscribers
or those who had subscribed prior to March I.2
While thus successful in preserving its monopolistic position
for the time, the Bank of North America had not yet com-
pletely run its gauntlet. The bank was charged with fomenting
the enthusiastic trading expansion which came with the assur-
ance of peace, and it is entirely probable that in their inexperi-
ence and optimism its leaders had contributed to an unhealthy
expansion. When the reaction came its policy was doubtless
overcautious, as banks have been wont to be under such cir-
cumstances, and it undertook to protect itself even at the ex-
pense of its customers. This policy naturally furnished a basis
for serious complaints that it took advantage of its position
to despoil the poor. Tall talk of highly dangerous possibilities
arose: the Pennsylvania charter was in certain respects even less
restrictive than that of Congress, and Mr. Whitehill, in the
debates of March, 1786, voiced the fear that "The bank, for
aught we know, might become a trading company; and, by
stopping discounts, at particular times, might take advan-
tage of the private merchants - Preferential treatment
1 Seton to Hamilton, March 27, 1784, in Domett, Bank of N. Y., II4-II5.
2 Lewis, Bank of N. A., 53, I40-147, listing subscribers; Carey, Debates, II2;
Peletiah Webster, Essays, 448. The total of the second and third subscriptions
appears to be thirteen hundred and twenty-six shares, which, added to the $400,000
earlier subscribed, would make a total of $930,400; but Lewis gives $830,000 as
the capital after this subscription closed.
3 Carey, Debates, I13.
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42 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
of favored customers was freely charged. Would-be borrowers
were irritated by its conservative lending policy. There was a
widespread jealousy of its continued prosperity in the midst of
general depression, and the word "monopoly" was readily
brought into play, with all the sinister significance which
attached to the term in the popular mind. The issuance of
state paper money was deemed a natural remedy for the dis-
tress, and the bank, vigorously opposing this expedient, was
denounced as an enemy to the public welfare.¹
As an outgrowth of these sentiments three petitions were
presented to the state legislature late in March, 1785, from Phila-
delphia, Bucks, and Chester counties. These preferred charges
against the bank and prayed a repeal of the charter, "in order
to restore public confidence and private security." No in-
vestigation was made into the charges, and the bank's peti-
tion to be heard upon them was denied. A committee reported
promptly and favorably, and on April 4 the repealing bill passed
its second reading and was ordered published in the custom-
ary manner, as a preliminary to final passage.² Simulta-
neously a public corporation, The Trustees of the General Loan
Office of the Commonwealth of Pennsylvania, was created to pro-
vide a circulating medium,3 and new issues of paper money
were soon forthcoming. At the new session begun in August
a hearing was given the bank's supporters, represented by James
Wilson, but it terminated in an ineffective wrangle. Despite
the efforts of the bank's partisans, the anti-bank members were
still in the majority, and on September I3 the repealer passed,
to take effect March I, 1786.4
These actions naturally raised a storm of protest. On the
one hand the bank itself struggled for life. Its reputation and
business were injured,⁵ but it refused to wind up, and kept its
1 See petitions and debates cited below; P. Webster, Essays, 448-449; Lewis,
Bank of N. A., 55-58.
3 Ibid., 58-63.
3
Session Laws, 1785, p. 550.
4
Carey, Debates, 2-7; Journ. of Pa. House of Reps., March 21, 23, 28, 1785;
Hazard, Register of Pa., iv, 137; Pa. Stats. at Large, xii, 57-58; Lewis, Bank of N.A.,
63-66.
5
Ibid., 66-67.
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BANKING COMPANIES
43
paper circulating in competition with the state loan office issues.
It threatened appeal to the courts. It prepared its case to submit
to the next legislature, and bent its efforts to get members
elected who would vote to reverse the recent action.¹ As a
precautionary measure it secured a charter from the state of
Delaware (Feb. 2, 1786),2 and over the heads of mildly interested
citizens it held the threat of removal from Philadelphia to Wil-
mington. On the other hand the fundamental issues were raised
regarding the right of a legislature to repeal a corporate charter,
the nature of an act of incorporation, and the validity of a
congressional charter.³ All of these matters were subjects for
oral, newspaper, and pamphlet controversy and were debated
ably and at length in the legislative sessions of 1786. Here
was the first "bank war."
The legal issues were not pressed, though it was tacitly as-
sumed that practically a Pennsylvania charter was requisite
for the safety of a bank operating in that state. Better evidence
was brought to bear on the practical questions as to the utility,
the practices, and the effect of the bank in operation. The
repeal of the repealing act could not be got, but finally on March
17, 1787, a satisfactory compromise was obtained in the form
of a new, somewhat less liberal charter.4 Under this it con-
tinued to act.
The bank was thoroughly successful. Its capital remained
$870,400 till 1806, when arrangements were made for its increase
to $1,000,000. Here it has stood to the present day, except
for a temporary decrease of one-fourth in 1843-45.5 The bank
refused in 1791 to become the national bank - doubtless wisely,
in view of the fate which overtook the Bank of the United
States. It similarly refused inducements in 1793 to become the
1 John Chaloner to J. Wadsworth, Oct. IO, 1785, in Wadsworth Papers (Conn.
Hist. Soc.).
2 Del. Laws (ed. 1797), ii, 838-840. The act declared the bank a corporation of
Delaware, with substantially the charter granted by Congress. Delaware had not
passed such an act earlier. Cf. also Lewis, Bank of N. A., 67-69.
3 See supra, 12-15, and infra, 310-313.
4
Lewis, Bank of N. A., 69-73; Pa. Laws (Dallas), ii, 499.
8
Letter from the bank, April 18, 1916.
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44 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
state bank. The result was the establishment of two large
competitors. Despite them it continued profitable. Up to
January, 1880, it had paid dividends averaging 9.4 per cent
and accumulated a surplus of $1,110,000; and it was then paying
I6 per cent. Since then it has enlarged its surplus to $2,250,000.
It became a national bank in 1864, retaining its original name.¹
The Bank of New York was founded largely as a result of
the satisfaction given by the Bank of North America, alike to
stockholders and customers, but it had to fight its way against
rival projects and against the coldness of the legislature. A
contributor to the New York Packet, Feb. 12, 1784, urged the
establishment of a "Bank of the State of New York," with a
capital of $750,000, in shares of $1000 each, one-third payable
in cash and the balance secured by mortgage on New York or
New Jersey lands appraised at two-thirds value. Chancellor
Livingston and others soon petitioned the legislature for an
exclusive charter for such an institution. Hamilton's brother-
in-law, John B. Church, in conjunction with Jeremiah Wads-
worth of Hartford, had projected a more typical commercial
bank and engaged the legal services of Alexander Hamilton to
develop and launch it. Hamilton saw no good in the land bank
scheme and readily aroused "some of the most intelligent mer-
chants" to take steps to defeat it, pointing out the necessity
"to convince the projectors themselves of the impracticability
of their scheme; and to counteract the impressions they had
made by a direct application to the Legislature." With these
objects in view, but apparently without consulting Hamilton,
the merchants "set on foot a subscription for a money bank,"
with a specie capital of $500,000, in $500 shares. With this
plan Hamilton was persuaded to fall in, though somewhat re-
luctantly on account of Church's scheme, and he drafted the
constitution. The subscription was quickly filled, and on March
I5 president, cashier, and twelve directors (of whom Hamilton
was one) were formally elected. Petition was made for a charter
of incorporation and against any exclusive charter for the land
1 Lewis, Bank of N.A., 148-153 and passim; letter of April 18, 1916, from the
president.
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BANKING COMPANIES
45
bank.¹ Despite the fact that "all the mercantile and moneyed
influence" was arrayed against it, the projectors of the land
bank persevered; but their efforts were checkmated, and they
succeeded merely in preventing the grant of a charter to the
Bank of New York.2
The specie bank, however, did not wait for a charter. Armed
with a letter of introduction from Hamilton, the new cashier
- William Seton, merchant - waited on the officials and
directors of the Bank of North America "to procure materials
and information" in the forms of business. He found Gouver-
neur Morris eager to have the New York institution a branch
of the older one, but turned a deaf ear to him, and after some
delay secured what he had come for. On May I the subscribers
were notified to pay in before June I half the subscriptions;
despite fears by some subscribers on account of the unlimited
liability, capital was secured; on June 9 the bank opened for
deposits, and on June I6 for discounts.³
The bank suffered some criticism. Here as elsewhere cus-
tomers were irritated by the unprecedented insistence on prompt-
ness in meeting obligations. As in Philadelphia, the bank was
blamed for the large importations, the drain of specie, the
economic distresses of 1785-86; and against its influence an
emission of state paper money was made in 1786. Repeated
attempts to secure a charter were unsuccessful till 1791 because
(said Robert Morris) of personal antipathies to its backers.
Despite this the bank paid regular semi-annual dividends of
three per cent till May, 1791. Its capital, at first $51,500, stood
at approximately $75,000 from May, 1785, to May, 1789, except
for a temporary decrease in 1786. From this date to May I,
1791, it was gradually increased to $318,250, when the deposits
were $773,709.67, the notes outstanding $181,254, the discounts
$845,940.20, and it had accumulated a surplus of fifteen per cent.4
1 Domett, Bank of N. Y., 4-7, including extracts from a letter of Hamilton to
Church dated March IO.
2
Hamilton to Fitzsimmons, March 21, 1784, in Ibid., 113.
8
Ibid., II3-II5, quoting letters of Hamilton and Seton, 18-20, 27-28.
4 Ibid., 29-37, 122-130; Carey, Debates, 97; letter from the bank April 19,
1916.
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46 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
On Aug. 2, 1792, in the midst of the speculative boom, the
capital was increased to $900,000, save for three hundred shares
which were temporarily withheld to be offered the new Bank
of the United States; and such was the enthusiasm that the
subscription was filled in five minutes.¹ The stock came
promptly into the security market. It never vied with national
bank "scrip"; nevertheless it was the subject of extensive specu-
lations, particularly in the winter and spring of 1792, when a
"coalition" with the United States bank and the establishment
of new banks in New York were being agitated.
The relations with the state were intimate. Jan. 12, 1792,
the legislature exercised its option to subscribe $50,000 to its
stock. When, not long after, the project of a state bank was
defeated, the legislature authorized the state treasurer to deposit
with the Bank of New York, for safe keeping, the state's hold-
ings of nearly two millions in the national debt, the bank agree-
ing to collect for the state the interest thereon free of charge;
and the state treasurer was promptly elected to the bank's
directorate in conformity with this act. In 1797 the bank
entered into an agreement with the state whereby it gradually
acquired the state's investment in federal securities, undertook
to make loans to the state as needed from time to time, and
became the state depository, as well as secured the privilege of
increasing its indebtedness beyond the original charter limits.
Various loans were made to the state under this agreement.⁸
Like its predecessor, the Bank of North America, the Bank
of New York still continues its prosperous career. In 1853 its
capital was increased to $2,000,000, and in 1859 to $3,000,000.
In 1865 it became a national banking association, and in 1878
reduced its capital again to $2,000,000. At this point the
stock has remained, but surplus and undivided profits now
amount to more than twice as much.⁴
1 N. Y. Journal, August 3: "Thus has the speculating mania taken full posses-
sion of every moneyed soul."
2
See Essay II, chap. 7. In January and February, 1792, prices ranged from 46
to 71 per cent advance, on time. See current quotations in Daily Advertiser (N. Y.).
8
Domett, Bank of N. Y., 44-45, 53-55.
4
Ibid., 91, 96, 102, 107; U.S. Comptroller of the Currency, Report (1915).
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In February, 1784, Boston merchants secured a charter for
the Massachusetts Bank.1 There was no opposition, and in
the light of later criticisms of the bank as too strongly federalist
it is worthy of note that Samuel Adams, as president of the
Senate, and John Hancock, as governor, signed the charter.
Of the proposed capital of $300,000, $255,500 was soon sub-
scribed, in $500 shares, and duly paid in.² Directors were
elected March 18 and by-laws adopted April 2. James Bow-
doin became the first president. Becoming governor in the
middle of 1785, he was succeeded in the presidency early in
1786 by the principal stockholder, William Phillips. The old
Manufactory House was purchased for £1200 and remodelled
for the bank home. Here the institution remained till June,
1792, when it moved to ampler quarters on State Street. The
new "accomptant" was sent to Philadelphia to learn the system
in use there; arrangements were made for printing notes and
regulations respecting discounts and banking practice were
drawn up; and on July 5 business was begun.
The business activity which had given rise to this bank, as
well as the Bank of New York and the enlargement of the Phila-
delphia bank, continued for several months after its opening.
The first $200,000 printing of notes soon proved inadequate,
and late in the year additional notes in small denominations
were struck off. For several weeks in December only the best
promissory notes were discounted, and on those only half the
sums desired were granted. The first six months' business
yielded a dividend of four per cent.
Boston, however, was struck hard by the depression which
followed the boom. Debtors found themselves unable to pay,
and the bank itself was consequently in sore straits. On June
1 The facts regarding this bank are drawn chiefly from the original records, to
which the writer has had access through the courtesy of the officers of the First
National Bank of Boston, into which the Massachusetts Bank was merged some
years since.
2 Before the bank opened, subscribers of two shares or more might secure cer-
tificates by "Lodging good Bills of Exchange payable in London at common Usance,
with a good Indorser," these to be redeemed before the bank opened: Directors'
Records, IO-12, 60.
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48 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
21, 1785, "considering the scarcity of specie," a new form of
notes was ordered printed to the amount of the capital, reading:
"This note shall at all Times be received in discharge of Debts
due to the Bank, and entitle the Possessor to - Dollars in
Specie from the Bank when it shall be divided." 1 In August two
clerks were notified "that as the Business of the Bank has very
much lessened they will not be wanted in the Bank after the
present Quarter shall be up."2 Throughout the summer of 1785
the bank was doing its utmost to reduce its loans.
Called in special meeting October 14, the stockholders voted
to permit withdrawal of shares, fifty per cent to be repaid im-
mediately and the balance as soon as it could be collected.
This was done partly because no profits had been earned in the
preceding six months,3 but chiefly, it appears, to enable stock-
holders who owed the bank to liquidate their obligations by the
aid of an asset which could be marketed only at a heavy sacrifice.
The upshot was the reduction of the stock to two hundred shares
($100,000) and the gradual reduction of loans.4 Moreover, the
board of directors was reduced from twelve to nine and a more
conservative policy was adopted. The new board elected in
January, 1786, published a revised code of regulations and in-
sisted that the rules adopted would "not be deviated from in
the smallest instance, nor oh any pretense whatever." Books
were to be posted daily at all hazards, a second clerk being
provided in case the regular one should become ill. A charge
for deposits was established (10d. per $100).
Thanks to these measures the bank emerged safely from the
crisis, and thanks to the recovery in trade it soon found itself
earning comfortable dividends on its moderate capital; but of
this more anon.⁶
1 Directors' Records, 40. Italics mine.
2 Ibid., 43.
a
In July, 1785, 21 per cent had been paid; the next half year showed a deficit.
4 Directors' Records, 45-49, 57, 60, 64, 67-68; Stockholders' Records, Oct. 14, 28,
Nov. 15, Dec. 13, 1785, Jan. 4, 1786. Cf. Mass. Centinel, Jan. II, 1792 ("A Citi-
zen").
8 Directors' Records, 49-52, 56, 69.
6 From July, 1786, to July, 1789, the semi-annual rates were successively 2, 3,
31, 3, 4, 31 31 per cent: Dividend Book.
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Agitation for a bank in Baltimore began as early as Novem-
ber, 1782, when James McHenry secured the passage of a favor-
ing bill through the Maryland Senate; but the House of Dele-
gates then rejected it. Two years later proposals for a $300,000
specie bank were published, subscriptions were solicited, and
the Bank of North America was cited as illustrating the
gains due to banks. Within ten days $60,000 was subscribed
and directors elected; as much more was soon subscribed. Oppo-
sition arose from agricultural and speculative classes, and it
was pointed out that only seventeen persons appeared to have
subscribed the three hundred shares. A House committee
reported favorably on a petition for a charter,¹ but the resulting
bill was laid over to the next session. Then, probably because
of the trade depression, it was not reconsidered, and the direc-
tors took no action without it. No further move was made till
the great revival in Baltimore trade in the spring of 1790, partly
traceable to the French Revolution.
In November, 1790, The President and Directors of the Bank
of Maryland was quietly chartered, with little opposition, to
establish a bank in Baltimore, the preamble reciting that "the
experience of commercial nations, for several ages, have fully
evinced the utility of well regulated banks." Subscriptions to
the $300,000 capital were opened December IO and two-thirds
subscribed within two weeks. Directors were elected, during
1791 the initial capital was paid in, and the bank entered upon
a prosperous career. Thus the four chief mercantile cities of
the Union were provided with banking facilities.³
As early as March, 1784, proposals had been made for
establishing in Providence a $150,000 bank ($300 shares).
Three prominent citizens - Jabez Bowen, John Jenckes, and
John Brown - were appointed to receive subscriptions. Only
1 A. C. Bryan, History of State Banking in Maryland (Baltimore, 1899), 17-19,
esp. citing Md. Journal and Balto. Advertiser, Nov. 9, 19, Dec. 7, 17, 1784. T.W.
Griffith, in his Annals of Baltimore (Baltimore, 1828), 108, refers to a bank "pro-
posed by the state" in 1780. I have seen no evidence of this.
2 Cf. R. Morris, in Carey's Debates, 93.
3 Bryan, State Banking in Md., 19-20; Md. Laws (Kilty), 1790, c. 5, April, 1792,
C. I; Griffith, Annals of Baltimore, 129.
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50 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
$30,000, however, was subscribed, and the project slumbered for
seven years.¹
Outside of these five centres, no banks seem to have been
seriously considered before the establishment of the new fed-
eral government under the Constitution of 1787-88.
The notion of a thoroughly national bank, to which the Bank
of North America had seemingly aspired, but which it had
never become, gained some currency as the stronger central
government became assured. A New York news item of Aug.
8, 1789, while doubtless exaggerating, shows that the project
was in the air:2
"The establishment of a National Bank appears to be an object of very
general expectation. Such a plan would give a spring to trade and commerce
through the States, by introducing a competent circulating medium - by
enabling Congress and the several States to realize to the public creditors
some part at least of their just demands, and by restoring a confidence in the
national faith - it would unlock the iron repositories of many thousand rusty
dollars, which have long been confined by the wary proprietors, lest they
should on being released, make to themselves wings of paper and fly away.
This plan would also conduce to strengthen the national government, and
remove jealousies respecting particular states accumulating more, while
they pay less than their proportion of the public revenue - For the bills of
the national bank, being unlimited in their circulation through the States,
superior industry alone, will add to the aggregate amount in any particular
State."
Hamilton, the new Secretary of the Treasury, remained a be-
liever in such a national institution, despite his connection with
the Bank of New York. Nevertheless he had been more than
a year in office when, on Dec. 14, 1790, he submitted his report
urging Congress to establish a Bank of the United States. By
this time his first great fiscal measure, the funding of the national
debt and the assumption of the state debts, had been adopted,
and he was enjoying high prestige as yet hardly tarnished by
unpopularity. In his report, after discussing the services banks
render, refuting common objections to them, and pointing out
the need for a bank closely related to the national government,
Hamilton referred to the reasons why the Bank of North America
1 Stokes, Chartered Banking in R. I., 261-262.
2 Boston Gazette, Aug. 17, 1789.
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BANKING COMPANIES
5I
could not be treated as the national bank, viz: its acceptance of
a Pennsylvania charter; the limitation of its charter to fourteen
years and of its capital to $2,000,000; the leaving of the increase
of capital up to this maximum to the discretion of its directors
or stockholders; "the want of a principle of rotation" of direc-
tors; the power of voting purely as the stockholders should
prescribe; and the lack of limitations on indebtedness. He
therefore urged the establishment of a wholly new bank, or-
ganized in accord with principles which he laid down, unless
the Bank of North America should accept a new charter embody-
ing such provisions and thereby become the national bank.
Hamilton's recommendation had to run a severe gauntlet of
opposition. Madison in the House, seconded later by Jefferson
and Randolph in the Cabinet, led the attack on constitutional
grounds. Others stressed the dangers from large moneyed
institutions, particularly when under the patronage of the
federal government. Assertions were made that the bank was
chiefly a diabolical device to raise still higher the prices of
federal securities, which had already appreciated so consider-
ably that many "gambling speculators" had made fortunes.
Yet in a surprisingly brief time the opposition was overborne.
The bill passed the Senate January 20 and the House February
8, and on Feb. 25, 1791, after getting the opinions of the Cabinet
members on the point of constitutionality, President Wash-
ington signed the act¹ chartering The President, Directors and
Company of the Bank of the United States.
By a supplementary act of March 2, July 4 was fixed as the
day, and Philadelphia as the place, for receiving subscriptions.
Then and there $9,600,000, or twenty per cent more than the act
authorized to be raised by private subscription, was subscribed
faster than the receiving commissioners could take it in.2 The
1 Hamilton's report, the debates, and the Cabinet opinions are most accessible
in M. St. Clair Clarke and D. A. Hall, Legislative and Documentary History of the
Bank of the United States
(Washington, 1832). The charter is in U. S. Stats.
at Large, ii, 194. Beard, in his Economic Origins of Jeffersonian Democracy, 152-159,
reviews the legislative contest in the light of the conflicting economic interests.
2 This represented public and private subscriptions made locally in various
parts of the union during the preceding two months. Cf. J. T. Holdsworth, The
First Bank of the United States (Washington, 1910), 22-24.
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52 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
"scrip" - temporary receipts for the initial payment of $25 -
began to issue July 15, and immediately an unprecedented
speculation in them arose.¹ On October I the first board of
directors was elected; within a week they organized, taking
for president Robert Morris's partner, Thomas Willing, presi-
dent of the Bank of North America.² On November 9 the
directors determined on the establishment of branches in Boston,
New York, Baltimore, and Charleston, and then or soon after
they were besieged with applications from various other places
for the same privileges.⁸ About December I2 business was
commenced in Philadelphia, with discounts of over $300,000,
and within a week the specie deposits of private individuals
were reported to exceed half the specie capital of the bank.4
The auspicious establishment of the Bank of the United
States aroused on the one hand aspirations for a completely
unified banking system, and on the other hand a fear lest the
new institution might swallow up the state banks. This fear
had been expressed during the congressional debates, in par-
ticular by Stone of Maryland;5 it might have figured more
largely had not the state banks been few in number and largely
in the hands of the capitalistic Federalist element which ap-
proved the establishment of the national institution.⁶ It is
probable, indeed, that such fears then and later proceeded more
from the classes which had least to do with the state banks,
1 See Essay II, 202-211, 341; also Gasette of the U.S., July 6, 16; Pa. Gazette,
July 6, 20; Federal Gasette, July 6; N. Y. Journal, July 9; Daily Advertiser (N. Y.),
July 22; Madison to Jefferson, July, 1791, in Madison, Works (ed. 1865), i, 538;
Wolcott to Wadsworth, July 5, Platt to Wadsworth, July 7, in Wadsworth Papers;
Jefferson to Monroe, July IO, in Jefferson, Works (Washington ed.), iii, 267-268.
2 The Columbian Centinel of November 2, printing the list of directors with
votes for each, reports the statement that the property of those elected averaged
above £25,000.
$ Branches were later established in Norfolk (1799), Washington (1801),
Savannah (as early as 1802), and New Orleans (1804). Holdsworth, First Bank
of the U. S., 38, 60; Bryan, History of the National Capital, i, 432; Howe,
Financial Institutions of Washington, 26-27. Cf. infra, 61-63, 79.
4
Amer. Museum, X, App. III, I-2, 26, 33, 38.
Feb. 6, 1791: Clarke and Hall, Bank of the U.S., 68.
The Boston and New York banks acted as agents to receive local subscrip-
tions (and deposits thereon) to the federal bank, and the Bank of North America
evinced a lively interest in the welfare of the new institution": Holdsworth,
First Bank of the U. S., 22-24.
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BANKING COMPANIES
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either as stockholders or as mercantile customers, than from
the banks themselves. Certainly for a time after the incor-
poration of the national bank the stockholders of at least one
state institution - that of Massachusetts - were not at all
averse to being "swallowed up."
The most obvious method of securing a unified system was that
of a central institution with branches. Hamilton discussed
this policy in his report, but came to a conclusion opposed to
it, partly because it might interfere with the passage of the
charter, partly because sufficiently good management for the
branches could not be counted upon.
"The situation of the United States," he says, "naturally inspires a wish
that the form of the institution could admit of a plurality of branches.
But various considerations discourage from pursuing this idea. The com-
plexity of such a plan would be apt to inspire doubts, which might deter from
adventuring in it. And the practicability of a safe and orderly administra-
tion, though not to be abandoned as desperate, cannot be made so manifest
in perspective, as to promise the removal of those doubts, or to justify the
Government in adopting the idea as an original experiment. The most
that would seem advisable, on this point, is to insert a provision which may
lead to it hereafter, if experience shall more clearly demonstrate its utility,
and satisfy those who may have the direction, that it may be adopted with
safety. It is certain that it would have some advantages, both peculiar and
important. Besides more general accommodation, it would lessen the danger
of a run upon the bank.
"The argument against it is, that each branch must be under a distinct,
though subordinate direction, to which a considerable latitude of discretion
must of necessity be entrusted. And as the property of the whole institution
would be liable for the engagements of each part, that and its credit would
be at stake, upon the prudence of the directors of every part. The misman-
agement of either branch might hazard serious disorder in the whole."
The result of his recommendation was a modest provision in
the charter (Art. XV, Sect. 7) authorizing the establishment of
offices of discount and deposit anywhere in the United States
at the discretion of the directors.
The board, when it was elected, was presented with three
alternative policies as to branches. It might content itself with
a single office at the seat of government; this policy Hamilton
strongly favored for the present. It might open branches
generally through the country; and the board soon received
applications from a considerable number of places, larger and
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54 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
smaller, for an extension of its facilities to these localities.
Finally, it might establish a small number of branches in the
large centres only. Furthermore, there was the problem of the
new bank's relation to the state banks, if they were not to be
absorbed. Should there be no formal relation, integral or other-
wise? Should the competition be cutthroat, unsympathetic,
or friendly? Should there be formal independence supplemented
by agreements? Should there be intercorporate stockholding
and interlocking directorates?
Several banks considered these matters in advance. In the
Bank of New York a minority in the directorate favored out-
right merger with the national bank.¹ The majority, however,
favored interlocking interests, to be supplemented, probably,
by formal understandings, and hoped by this means to evade
the competition of a branch. When enlarging their stock shortly
after incorporation to $900,000, they reserved one-sixth of this
amount for ownership by the Bank of the United States.2 April
27, 1791, the stockholders of the Massachusetts Bank appointed
Judge Lowell, Jonathan Mason, Jr., and William Tudor a com-
mittee "to enquire into, and receive any communication that
may be made on the subject of a Union with the Bank of the
United States, or any partial connection with the same
"
Probably upon their recommendation the stockholders voted
June 23 that the directors authorize a subscription of two hun-
dred and fifty shares in the national bank, to be paid for out of
the capital stock of the Massachusetts Bank. This subscrip-
tion was duly made, and on August 22 the board appointed
Gore and Mason to represent this stock at the meeting of the
stockholders of the national bank.³ On August 7 Christopher
Gore wrote Rufus King in New York:
"The post of last evening bro't news that the Bank of New York had
completed their number of Shares & that the Directors had reserved three
1 See the intimation of "Plain Truth" in the Daily Advertiser of Jan. 25, 1792:
"a set of men who but the other day, were anxious to surrender their charter in
order to form a coalition with the National Bank or a branch of it."
2 Mass. Magazine, iii, 526 (August, 1791).
3 Stockholders' and Directors' Records, under dates cited.
4 King, Rufus King, i, 400-40I.
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hundred Shares, intending to offer them to the Governor & directors of the
National bank - that, by this measure, they hoped to prevent the estab-
lishment of a branch from the National Bank in your city. One great bene-
fit contemplated, by the establishing a national bank, viz. the annihilation
of all State banks, will fail - if the intentions of New York Bank should be
successful, the Mass. bank will probably follow the example, and it is not
improbable that a connection will, in the ensuing winter, be proposed by the
Legislature to take place between the Government of Mass. and the State
Bank. The State Bank of Mass. is well disposed to receive its death war-
rant at the present time. The stockholders are very largely interested in
the National Bank & wou'd willingly promote the latter to the destruction
of the former. But this I fear will not long continue their disposition.
Some who were shut out from the national bank will be very solicitous of
reaping the profits heretofore experienc'd from the State Bnk. The State
legislatures are all organiz'd bodies & disciplin'd to counteract the operations
of the federal government - it is now a war of words only - we may have
to deprecate a different kind of warfare. We well know the State Legisla-
tures are generally dispos'd to discern & oppose the power & influence of the
nation; but their meanness & parsimony interfere with their views & besides
they are without a military check. Give them a State Bank to recur to and
this great evil will be remov'd. The State Bank will continue for a long time
to afford great profits to the proprietors of their stock. The State Legis-
latures will be proud of imitating the conduct of Congress in having a bank
under their patronage & having a continuance of this badge of Sovereignty,
the emission of money, & the interest of the Commonwealth & the Bank will
be made to combine, that the pride and avarice of these two corporations
may be gratified.
"I have hastily thrown my thoughts on this subject on paper. I wish
you to examine them, & whether this continuance of the State banks will
not be injurious to the growth of national politics. The few hints will lead
to a course of reflections in your own mind - and if the event shall be a con-
viction that there is no danger to be apprehended, I shall be happy to learn
that my fears are groundless; but I think the present the most favorable
time for the dissolution of the State banks, & I fear that politics & interest
will unite to support and prolong their existence."
This was the message of a Federalist big business man, who was
naturally a centralizationist, but perhaps who did not appre-
ciate, as the modern Germans have done, the possibilities of con-
centration by stock control. Fisher Ames, Federalist congress-
man from Massachusetts, had written Hamilton a few days
earlier somewhat in the same vein:¹
"If the bank would do business for five per cent., they would do a great
deal more, and with safer people. They would overpower the State banks
by giving borrowers better terms. I have had my fears that the State
1 Letter of July 31, 1791, in Hamilton, Works, v, 474-475.
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56 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
banks will become unfriendly to that of the United States; causes of hatred
and rivalry will abound, the State banks will narrow the business of the
United States Bank, and may become dangerous instruments in the hands
of State partisans, who may have had points to carry. I will not expatiate.
The occasion is a favorable one. The Bank and the United States Govern-
ment at this moment possess more popularity than any institution or govern-
ment can maintain for a long time. Perhaps no act of power can be done to
destroy the State banks, but if they are willing to become interested indi-
vidually, I mean the State stockholders, and to establish sub-banks, so as
to absorb the funds and contract the business of the local banks, why should
any measures be adopted to support the local banks to the prejudice of my
hypothesis? or why should cold water be thrown upon the plan of sub-
banks? Mr. and the Philadelphians are thought unfriendly to this idea,
perhaps it may be attended with some hazard; but if it must fail, let it not
be charged to local prejudice, but to solid reason.
All the influence of
the moneyed men ought to be wrapped up in the Union, and in one bank.
The State banks may become the favorites of the States. They, the latter,
will be pressed to emulate the example of the Union, and to show their sov-
ereignty by a parade of institutions, like those of the nations.
"
Seth Johnson, a New York merchant, wrote his partner, Andrew
Craigie, from New York August 20: 1
"There seems to be a diversity of opinion respecting the National Bank
ingrafting itself on the established State banks - or of its establishing
branches - to do the latter to any great extent would so divide the capital of
the Bank as to cramp it in its great operations - it is said that if a branch
is established in one place it cannot with propriety be refused wherever it is
demanded - M' Seton informed me that in a Conversation he had with M'
H. the latter observed it was difficult to say what plan the National directors
would pursue - he seemed to approve of this Bank offering the 300 shares
- this in Confidence
Assailed by such cross-currents of opinion,2 the new board of
directors decided in November on the policy of a small number
of branches in the large centres, so selected that all but one of
the existing state banks had a competing branch. In January,
1792, the directors of the branch banks in New York, Boston,
and Charleston were elected, and in February those for Balti-
more; and all four branches were opened in the spring.⁸ Offers
of shares were rejected on the formal ground that such action
1 Craigie Papers, iii, 68.
2 Cf. also infra, 88-89.
$ Holdsworth, First Bank of the U. S., 38, citing Pa. Journal, Jan. 25, Feb. 15,
1792. The New York branch opened April I, the Boston one a few days earlier:
King, Rufus King, i, 406.
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would be ultra vires.1 Beyond this the board did not immedi-
ately announce its policy.
Inasmuch as no steps were at once taken to establish friendly
relations with the local institutions, their future seemed un-
certain. William Seton, cashier of the Bank of New York,
wrote a gloomy letter to his friend Hamilton soon after the
decision as to branches was announced. To this the Secretary
replied sympathetically Nov. 25, 1791:
"I seize the first moment of leisure to answer your letter of the 21st inst.
Strange as it may appear to you, it is not more strange than true, that the
whole affair of Branches was begun, continued, and ended, not only without
my participation, but against my judgment.
"When I say against my judgment, you will not understand that my
opinion was given and over-ruled, for I never was consulted; but, that the
steps taken were contrary to my private opinion of the course which ought to
have been pursued.
"I am sensible of the inconveniences to be apprehended, and I regret them,
but I do not know that it will be in my power to avert them.
"Ultimately, it will be incumbent on me to place the public funds in the
keeping of the Branch; but it may be depended upon, that I shall precipitate
nothing, but shall so conduct the transfer as not to embarrass or distress your
institution. I have not time to say more at present, except that if there are
finally to be two institutions, my regard for you makes me wish you may
feel yourself at liberty to take your fortune with the Branch which must
preponderate."
Clearly Hamilton was far from dominating the directorate of
the federal institution, which was generally accounted his
creation and by many considered his tool.
Hamilton's letter also indicates that he did not at this time
believe the Bank of New York could hold its own or progress
in competition with the branch of the national bank. This
view was shared by Christopher Gore, albeit with more satis-
faction. Writing to King April I, 1792, Gore says:
"I entertain no doubt but the bank of the U.S. will eventually secure all
the good custom. Its advantages are so many, & so exclusively belonging to
that corporation that other institutions of the like kind cannot do business
to a great profit, if the national Bank be sufficient for the property and com-
merce of America. In my mind it is desirable that no other institutions,
1 The "eastern shareholders" were credited with preventing absorption.
2 Hamilton, Works, v, 486.
3 On his further actions with respect to the Bank of New York, see infra, 9I-95.
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58 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
under State patronage, shoud exist - that they shou'd gradually decline
in their profits and find their advantages in surrendering their corporate
rights."¹
Time revealed, however, that there was room for both state
and federal banks. In Philadelphia and Boston, coöperation
was the rule, practically from the outset and it became inti-
mate with the passing of years. In New York, as will be noted,
there was more suspicion and discord, but threatened serious
consequences never materialized and eventually entire harmony
was established.
The decisions by the directors of the federal bank assured
the development of a decentralized system of banking in the
United States. Had the policy of widespread branches been
adopted, or the policy of relating the state banks closely to the
national bank, it is possible that the capital of the central in-
stitution might have been gradually enlarged until its influence
had brought about a high degree of centralization. Politically
either of these policies was impracticable. State pride and
local feeling were so strong, jealousy of the federal power and
suspicions of large corporations were so easily aroused and fo-
mented, that a centralized system even in the mild form which
Hamilton suggested could hardly have withstood a certainly
hostile opinion. It may also be doubted whether the leaders
of the bank were able at the time to sketch out a comprehensive
plan workable from a business standpoint or to provide a staff
of subordinate leaders competent to operate an American "bank-
ing system." The political factor, however, was clearly the
decisive one.
1 King, Rufus King, i, 407. Gore continues: "But be assur'd, my friend, that
while I feel this as a just sentiment, no man wou'd more deprecate a dissolution,
occasion'd by their loss of credit, than myself. The evils consequent on such an
event are too extensive & important to my view to be contemplated without real
distress. If I did not believe that the Bank of the U.S. cou'd, with safety, give a
sufficient medium for all the fair concerns of the country and that within a few
years, we shou'd see the national faith the only representation of property, I ear-
nestly wish for a coalition of banks - in this sentiment I may err; but if in error I
can truly say it is caused by a love of national & a dread of state politics.
Gore resigned March I from the directorate of the Massachusetts Bank, along with
P. R. Dalton, Jonathan Mason, Jr., and Thomas Russell: Directors' Records.
They had been appointed directors of the federal branch.
2 Holdsworth, First Bank of the U.S., 40-42; infra, 9I-95.
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BANKING COMPANIES
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The history of the first Bank of the United States is too
well known to need retelling here. It was intimately related
to the government, though the government stock holdings were
sold between 1797 and 1802. Heavy loans were made to the
Treasury. It became the principal depository of federal funds.
Its notes were accepted for customs duties. It coöperated with
the mint in handing over foreign coins and bullion for recoin-
age, and was the principal source of supply of metal for coin-
age. After 1800 it was utilized to facilitate collection of public
revenues. It aided the Treasury in foreign exchange transac-
tions. Besides this it did a large private business like its
smaller sister banks. It had a profitable, serviceable career for
twenty years, when, for reasons not reflecting upon its charac-
ter, Congress refused it a recharter.¹
The establishment of the Bank of the United States was not
an isolated phenomenon. It was accompanied or slightly pre-
ceded by increases of capital on the part of the existing banks
and the establishment of the Bank of Maryland. It was shortly
followed by the floating of a considerable number of new bank-
ing institutions, the chartering of several, and the establishment
of others without charters. On this point the statistics are
eloquent. Up to 1789 only two banks had been chartered
(though the Bank of North America boasted six different char-
ters) and only one other had been established without a charter.
At the end of 1790 one was incorporated, to supply Baltimore,
the last of the big four commercial centres to acquire a bank.
In 1791 three were chartered, including the established Bank
of New York. In 1792 eight more received charters and at
least three others went into active operation without incorpora-
tion. In 1793 four more (including one established in 1792)
were chartered. Thus within four years the number of banks
had increased from three to twenty.,
In considerable measure this movement was the result of the
rising tide of commercial and speculative activity which marked
the years 1789-92, of which something has been said in a pre-
1 Holdsworth, First Bank of the U.S., 44-66, 72-74, 123-125.
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60 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
ceding essay.¹ This business boom brought pressure for addi-
tional lending power and greatly increased the profitableness of
the established banks. It is also to be noted, however, that
these banks had proved their worth to the business community
and their ability to stand in financial depression. They had
been experiments; now they had passed the experimental stage.
Furthermore, the banks directly afforded fuel for speculative
fires. The immediate oversubscription of the capital of the
national bank in July, 1791; the similar action in the case of
the new stock of the New York bank a month later; 2 and the
violent speculation in scrip and New York bank stock which
promptly followed - these at once reflected and intensified the
enthusiasm over the new outlet for capital. It was also true
that with the increase of prosperity there was occasion for ad-
ditional outlets for investment. Bank stock was already looked
upon as a conservative and liquid investment, in a class with
public securities, and standing far above real estate, trade
capital, and stocks of other new corporations.⁸ Finally, the
policy of the existing banks in several instances helped to arouse
opinion in favor of competitors. They were secretive, partly
of necessity, partly needlessly so. They gave the impression
of being partial in their dealings, sometimes of discriminating
for political reasons. They were strict with delinquents, bend-
ing perhaps less than they could have afforded to do. They
adjusted their rates in such a way as to arouse the belief that
they were securing inordinate profits, and their dividends con-
firmed this belief. With these facts in view, the unprecedented
increase in banks in the early nineties is intelligible.
The Providence Gazette of June 18, 1791, announced that "A
bank is about to be established in this town" and reported that
three-fourths of the proposed two hundred shares (of two hundred
1 Essay II, chaps. 4, 7.
2 Mass. Magazine, iii, 526 (August, 1791).
8 Cf. Edward Shippen of Philadelphia, writing to his daughter, Mrs. Benedict
Arnold, in London, December, 1793, telling of his purchasing for her three shares
in the new Bank of Pennsylvania: "The Ease & Certainty of receiving a handsome
Interest from Bank Stock disposes me to prefer that kind of property to any other
provided Safety is not sacrificed": Pa. Mag. of Hist. and Biog., xxvi, 71 (1902).
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6I
specie dollars each) had been subscribed in two days and but
thirty remained unsubscribed. In a few weeks the vigorous
speculation in scrip of the Bank of the United States began,
and on August I3 this notice appeared in the same paper:
"As the daily Rise of Bank Stock, and Scarcity of Specie as a medium of
Trade and Commerce in this Town, must determine the Necessity of a
Speedy Establishment of a Bank therein, - it is requested, that all those
who wish to promote the public Welfare by such an Institution, would meet
at the Court-house on Monday next, at Three O'Clock, P.M. to consult and
determine on the most eligible Method of obtaining a Branch of the National,
or of establishing an individual State Bank."
Evidently the scheme was somewhat altered by this meeting, for
on September 3 the Gazette reported the plan to be for five hun-
dred shares of $300 each, half payable in specie, half in funded
sixes and threes. "All therefore who wish to partake of simi-
lar advantages [to those experienced in centres where banks
had been in operation] and of the amazing profits on Bank
Scripts" are publicly notified to subscribe and pay in the first
quarter of their subscription, since the bank is "to be put into
immediate operation, to facilitate the fall business." The next
week's issue contained the detailed "plan" of the bank, in which
the capital was fixed at $160,000 in $400 shares, and it was
stated that the bank would open on the first Monday in October.
Again, however, the plan was to be changed. On October I
the Gazette announced:
"As it seems to be the general wish, that the Bank, to be established in this
town on Monday next should be as nearly similar to the national Bank as
possible, as thereby it may be more particularly connected therewith than
otherwise, it could be; and as there can scarcely be a doubt of the whole
amount of said bank being immediately subscribed for,"
an enlargement of the capital to five hundred shares of $400
each, payable two-fifths in specie, with the possibility of later
increase to $500,000 and the reservation of $100,000 for sub-
scription by the national bank, was proposed. A puff for the
subscription is added:
"Any persons who may neglect attending at the Court-House at the hour
appointed,
by themselves or friends, to give in their names, with the
number of shares, written on a piece of paper, for which they wish to sub-
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62 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
scribe,
will do well to remember, that they can blame none but them-
selves for their inattention to the business: and are particularly desired to
remember, when the script of this Bank may be selling from fifty to one hun-
dred per cent. profit, in lieu of five hundred to twelve hundred per cent. ad-
vance, as the late National Bank scripts sold, that they will have none to
blame but themselves; for all may be assured, that it is the general wish of all
the promoters of this Bank, that the subscribers to it may be as numerous as
can be expected from the extent or wealth of the State, from which a charter
is expected."
It was at length decided that 50 shares also should be reserved
for state subscription and I25 for subscription by the United
States or the national bank. The 450 shares were greatly over-
subscribed, 1324 being asked for within an hour. The Gazette
explained this as "occasioned by a large subscription from
Philadelphia, New-York, Massachusetts, and various parts of
this State." This explanation was plausible; yet an examina-
tion of the list of original subscribers 1 shows but a small number
of names of outsiders and a distinct predominance of the Provi-
dence element.
On October 4 directors were elected as follows: John Brown,
who became president; Moses and Nicholas Brown; Welcome
Arnold, Jabez Bowen, Samuel Butler, John Innes Clark, Andrew
Dexter, and Thomas Lloyd Halsey. Nearly all of these were
merchants in the town. Arnold was in the General Assembly,
Butler in the Town Council, and John Brown later went to
Congress. On October 8 twenty-five scrips were advertised
for at $45 cash and a week later they were quoted at $50, $25
having been paid down at the time of subscription. The bank
opened October 17. On November 5 the legislature granted
a satisfactory charter, but it did not avail itself of its oppor-
tunity to subscribe to the bank's stock.
Despite the coldness of the directors of the Bank of the United
States toward the advances of the local bank,2 the local gazette
was able proudly to announce November 26: "It is with peculiar
Satisfaction the Friends of the proposed Bank can assure the
Public, that the Institution is pleasing to the Secretary of the
1 List in The Centennial of the Providence National Bank, Oct. 3, 1891, pp. 4I-43.
2 See supra, 52-57. John Brown is reported to have been sent to Philadelphia
to endeavor to have the bank made a branch of the national bank.
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BANKING COMPANIES
63
Treasury of the United States, that therefore every reasonable
Encouragement from him may be expected." Tangible proof
was at once given in the direction to the collector of customs
to deposit moneys with the bank.
As an independent private institution the bank prospered.
It continued with $180,000 capital till February, 1799, when
an increase was made to the maximum of $400,000. The first
dividend, paid in April, 1792, was 4 per cent - a large one in
view of the fact that the capital was only gradually paid in.
The second, in October, was but 31 per cent, doubtless due to
the speculative reaction of April to June. Thereafter the semi-
annual rate was 3½ per cent for two years, 4 per cent for four
years, and 5 per cent toward the end of the century, with 51
per cent in October, 1799. No surplus of any significant
amount was kept. The bank was nationalized in 1865 and
to-day has deposits of over $2,000,000 and capital, surplus, and
undivided profits of nearly $1,500,000.¹
Early in January, 1792, the New Hampshire Bank at Ports-
mouth was chartered, in March it was organized with Hon.
John T. Gilman as president, and on June II it commenced
discounting. Its authorized capital was $160,000. Of its early
operations little is known, but the state subscribed $10,400 to
its stock in December, 1792, and it continued in operation at
least until 1815.2
As early as November, 1791, stimulated by the soundings
of Peleg Sanford, Jeremiah Wadsworth's confidential clerk, there
was talk among Hartford merchants of the desirability of a
bank in that town. As in Providence a branch of the national
institution was thought of. This failing on account of the de-
cision of the national directors, a combination bank and manu-
facturing society was suggested, but met with slight favor.
1 The facts stated in this paragraph have been kindly furnished the writer by
Mr. Earl G. Batty, present cashier of the bank, from the bank's records.
3 N. H. Gasette, January II, March 14; Columbian Centinel, June 13, 1792;
Adams, Annals of Portsmouth, 327; Charles W. Brewster, Rambles about Ports-
mouth (Portsmouth, 1859), 149; N. H. State Papers, xxii, 385, 394, 446, 475, 621,
663, 667, 682, 741. Cf. the unanimous vote of the town meeting of "Goffes
Town" Aug. 21, 1786, "to have a Bank of Paper Currency made": N. H.
Town Papers, ix, 313.
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64 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
By February, 1792, a plan had crystallized for a simple local
bank, and on February 27 a definite scheme was drawn up.
On May 3 books were opened for subscriptions of $100,000.
On May I4 the subscribers, through their agents, John Trumbull,
Chauncey Goodrich, and Noah Webster, Jr., petitioned the
legislature for a charter. This was granted forthwith. In June
organization was effected, Jeremiah Wadsworth declining the
presidency. On August 8 the bank opened for business. The
capital remained $100,000 till 1796, when an increase of $60,000
was authorized. The legislature, at the request of the board, then
removed the limitation upon the number of shares that might
be held by any one person and the restrictions on the voting
privileges of the larger owners. The new capital, however, was
only gradually taken up, and in 1798 the total stood at $138,400;
at this point it remained till in 1802 it was increased to $207,600.¹
In 1915 the bank merged into the Hartford-Aetna National.
In February, 1792, articles had been drawn up for a bank in
the southern part of Connecticut, and three hundred and fifty
shares reserved for New London were subscribed in a few hours.
Efforts were made to secure the adhesion of Norwich capitalists
to the same institution, but without avail, for those gentlemen
wished a separate bank. The two sets of applicants sought
charters at the May sitting at which the Hartford Bank was
incorporated. They were persuaded, however, to join forces,
and received a single charter as The President, Directors and
Company of the Union Bank in New London. A board of
directors, with Gen. Jedediah Huntington president, had been
elected March 5. After incorporation, however, the directors
were divided equally between the two towns.2
Next October a similar institution was incorporated for New
Haven, with an authorized capital of $100,000 (in $200 shares).
The requisite capital ($100,000) could not be raised at once, but
1 P. H. Woodward, One Hundred Years of the Hartford Bank
(Hartford,
1892), passim; The Memorial History of Hartford County, Conn., 1633-1884, ed. by
J. Hammond Trumbull (2 vols., Boston, 1886), i, 330-332; Conn. Courant, Nov. 7,
1791 ("An Indifferent Person"); ibid., Jan. 23, 1792 ("Patriot").
2 N. Y. Magazine, iii, 124 (February, 1792); Conn. Courant, March 12, 1792;
Private Laws (ed. 1837), i, 157-159; Caulkins, History of Norwich, 646.
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BANKING COMPANIES
65
three years later, when a supplementary act reduced the mini-
mum capital to $50,000 (increasable to $400,000) and gave each
share one vote, an adequate capital ($80,000) was subscribed
and the bank opened. Only half of the sums subscribed were
then called in, but upon this the bank did a profitable
business.¹ Today it has a capital of $1,200,000.
In Massachusetts there was likewise a scramble for bank
charters. When the improvement in business conditions be-
came pronounced and the speculative tide of 1788-92 came
rolling in, the Massachusetts Bank was in a position to profit
greatly. It made a practice of lending heavily on deposits of
public stock.2 For the last six months of 1789 it divided
five per cent, for the next half year 41 per cent. Late in 1790
two hundred of the shares that had been retired were sold at a
good price, and early in January, 1791, the stockholders received
not only a dividend of 61 per cent on the banking profits of
the preceding six months, but also an extra dividend of II per
cent, "the full amount of the dividend of Profits arising on
the purchase of the withdrawn shares, the bal* of Old Profit
& Loss account, & the balance of Profit remaining undivided
at the last dividend." The dividends of July, 1791, and Janu-
ary, 1792, were 9 per cent and IO per cent. To handle the in-
creased business, arrangements were made in January, 1792,
for doubling the then capital (to $400,000), and this was ac-
1 Theodore S. Woolsey, "The Old New Haven Bank," in New Haven Colony
Hist. Soc. Papers, viii, 310-328 (New Haven, 1914); Timothy Dwight, A Statis-
tical Account of the City of New Haven (New Haven, 1811), 78; Private Laws (ed.
1837), i, 125-127.
2 J. Warren to Andrew Craigie, Dec. 19, 1791, in Craigie Papers, ii, 46. Cf.
Directors' Records, for prices at which securities were accepted as collateral. In
February, 1790, state and continental notes were accepted at 5s., in August at 6s.
The funded national debt was accepted at the following rates:
Oct. 25, 1790
Jan. 17, 1791
Nov. 28, 1791
Aug. 13, 1792
Six per cents
50
60
&
100
Three per cents
25
30
45
50
Deferred
12}
30
45
50
8 Dividend Book, dividends Nos. 12, 13; Directors' Records, 135-136; Stockholders'
Records, Jan. 6, 1791.
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66 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
complished during the year. Yet upon the five hundred and
ninety-seven shares held in July, 1792, a total of $19,803.26
was paid as the profits of six months,¹ and 4 per cent was paid
on the eight hundred shares in the next half year.
With dividends totalling 40 per cent paid within two years
(1790-91) and no end in sight, it is small wonder that the bank's
prosperity aroused covetousness and criticism. James Sullivan
of Boston, republican attorney-general of the state and an en-
trepreneur capitalist of no mean repute, attacked it anony-
mously in his pamphlet, The Path to Riches, which appeared
in the early spring of 1792.⁸ Its charter "was an indulgence
to a few men in the state, who happened to ask the legislature
to grant it to them without the proffer of any kind of reward."
Unlimited as to note issues, without individual liability of the
proprietors, "The corporation of the Massachusetts Bank
amounts to nothing more than an authority delegated to a few
men to make as much paper money as they shall please to issue,
and to draw an interest upon it at six per cent." Not only
have they improved this opportunity and circulated as much
paper as they could, even to nearly a million dollars at one
time when not more than one-fifth of this sum was in their
vaults in specie,⁴ so that the "company has taken six per cent.
upon nearly all the commerce in and about Boston," with the result
that it has had the power to make exorbitant profits, and the
accumulation of wealth by its proprietors and those of "the
American Bank' [the Bank of North America] has "intoxicated
a great part of the community." But more extraordinary still,
"they have had it in their power to swell and lessen the medium
of the country when they please, and consequently, to raise or
fall the price of articles of commerce as they saw fit." This
power they have abused.
1 Not distributed equally, but proportioned to the time the paid-in capital had
been used.
3 See infra, 69, 171, 193, 237, 25I.
8
Ed. 1809, esp. 27-33. Quoted in Mass. Magazine, iv, 449-450 (July, 1792).
4 The Directors' Records seldom give any indication as to cash on hand on notes
outstanding, though a careful study of the financial books would substantiate or
disprove this charge. On Jan. 6, 1785, there was about $141,250 in the vaults and
$95,340 notes in circulation, but this was very early: Directors' Records, 33-34.
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"By emitting large sums they have raised the price of public securities, and
of other articles in the market; and by refusing again to loan, have brought
on an artificial scarcity of money, and sunk the price of the same articles;
this has given them all the advantages which could be gathered from the
most enormous monopolies. Trade has been perplexed by a capricious and
unsteady medium; great quantities of property, more especially public se-
curities, have been sacrificed to a punctuality, to a corporation which never
had it in its power to be punctual itself if there had been a run upon it."
In the main this was probably an extreme criticism. Certainly
its author underrated other influences upon security prices and
showed an inadequate conception of banking business when he
twitted the bank on its inability at any time to withstand a run.
He harps upon the ever-popular phrases "monopoly" and the
"taxing" of trade. Yet the powers of the bank were indeed but
slightly restricted, and there undeniably existed several rankling
sources of hostility.
Prominent among these, in Boston as elsewhere,¹ was the in-
sistence on punctual payment of notes and the enforcement
of such obligations by recourse to legal process. For its own
protection the bank was bound to do this. Loose practice in
this respect seems to have endangered its soundness in the
early days. The policy was good for the business community,
but it was bitter medicine; it involved jerking up unpleasantly
the standard of business habits, and it marked the substitution
of the "soulless corporation" for the potentially merciful in-
dividual lender. Accordingly it furnished fuel for anti-bank,
anti-corporation fires.
Furthermore, the bank was a fairly close corporation. Its
original subscribers had numbered hardly more than a hundred.
When the stock was reduced the holders fell to about fifty, and
the increase of the stock from $100,000 to $400,000 did no more
than bring the number back to about a hundred. Since
several members of the same family were often stockholders,
the number of families represented was considerably less than
the number of shareholders - this in a city of twenty-five thou-
sand. At each extension of the capital, shareholders were given
1 Cf. for other banks, Lewis, Bank of N.A., 58-59; Bryan, State Banking in
Md., 35; Woodward, Hartford Bank, 76.
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68 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
liberal preferences and probably absorbed most of the increase,
thus perpetuating their "monopoly." The mere fact that the
par was $500 sufficed to limit membership to the well-to-do.
The social, official, and business prominence of its stockholders
and directors gave critics good opportunity to dub it an aristo-
cratic institution. Such rules as those of July 19, 1790, and
Jan. IO, 1791, which set the minimum discount at $100 and
provided that no check for less should be paid except to balance
an account, must have been irritating to small customers.
Charges of discrimination in granting discounts¹ were not
lacking, though not strongly pressed. No proof of this is likely
to be found. Yet the rules of the bank afforded ample oppor-
tunity for partiality: two black-balls (originally a single one),
without reasons, from directors attending the weekly meeting
were sufficient to prevent a would-be borrower from securing
his loan.
The fact that the bank sold at a considerable advance in
March, 1792, the shares it had subscribed in the national bank
and part of the funded debt it had bought earlier, and declared
an extra dividend of sixteen per cent to the holders of the four
hundred shares as the profits realized on these transactions
(July, 1792), laid it open to charges of speculation in securities."
The hostility thus engendered led to attempts (1) to tax
the bank, (2) to modify its charter, and (3) to establish a state
bank either in place of it or as a rival to it.
Of the first of these moves little is known. It is clear, however,
that a tax bill was rendered the bank on Sept. 20, 1791, which
the stockholders on Jan. 4, 1792, ordered the directors not to
pay "unless oblig'd by law." Fourteen hundred dollars was
reserved from profits to pay it, and in 1792 this was divided
to the holders of the four hundred shares as the tax bill had
1 For such charges elsewhere, see Bryan, State Banking in Md., 36-37; M. L.
Davis, Aaron Burr, i, 413; Columbian Centinel, April II, 1795 ("A Federal Stock-
holder"); Seth Johnson to Craigie, Aug. 20, 1791, in Craigie Papers, iii, 68.
2 Stockholders' Records, March 27, April 4, 1792; Directors' Records, June 23,
Aug. 22, 1791, March 19, 1792. For criticisms and comments, see Mass. Centinel,
March 27, Aug. 4, 25, 1784, Jan. II, 1786, Jan. 6, Dec. 29, 1787, March 31, Nov. 24,
Dec. 15, 1790, Jan. II, March 3, 1792.
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BANKING COMPANIES
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been "since determined by the supreme judicial Court, to be
illegal."
1
On March 9 the legislature passed an act whose preamble re-
cited, "WHEREAS it is necessary to provide for a more secure
administration of the affairs of the Massachusetts Bank, in order
that the purposes for which the same was established may be
answered." This act (I) fixed a minimum denomination of $5
on notes issued; (2) made directors personally liable for pay-
ment of notes in case notes plus loans exceeded "double the
amount of their capital stock in gold and silver, actually de-
posited in the Bank, and held to answer the demands against
the same;" (3) required directors to furnish statements to the
governor and council semi-annually, or oftener upon request,
of the amount of capital, debts, deposits, circulation, and cash
on hand; (4) forbade dealings in merchandise or bank stock
on penalty of forfeiture of double the value, half to go to the
informer; and (5) limited the votes per stockholder to ten.
The legislature had reserved no right to modify or repeal the
charter, but the act was not contested on constitutional grounds.
In special meeting April 19, the stockholders appointed a com-
mittee to pray a repeal of such parts of the act "as they
may judge most likely to prove injurious to the Interest of
said Bank," representing very respectfully "the difficulties &
embarrassments the carrying it into execution necessarily im-
plies."³ The request was not heeded, but the bank seems not
to have suffered because of the act.
The source of the proposal for a state bank is not evident, but
a weighty backer was James Sullivan, prominent politically and
in business, who was soon to be actively identified with the West
Boston Bridge, the Middlesex Canal, the Boston Aqueduct Cor-
poration, and the Massachusetts Mutual Insurance Company.4
In his anonymous pamphlet, The Path to Riches, he sketched a
plan for a state institution intended to supplant the old bank
and have exclusive banking privileges within the state.⁵ This
1 Stockholders' Records, Jan. 4, April 4, 1792; Dividend Book, dividend No. 19.
2 Priv. and Spec. Stats., ii, 544-546.
8 Stockholders' Records. Cf. infra, 310-315.
4 See infra, 171, 193, 237, 251, 314-315.
6 Ed. 1809, pp. 36-38.
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70 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
scheme the legislature considered, but on March 7 postponed it
to the next session.¹ Then a newly risen enterprise absorbed
the forces working toward a state bank.
The new enterprise had been promoted in September and
October, 1791, as The Boston Tontine Association. The tontine
was a semi-speculative device which in these years vied with
lotteries, public securities, and corporate scrip and stocks in
appealing to the gambling instinct while preserving a respectable
face. It was, in substance, a plan to provide an annual income
during life to subscribers or their nominees, and an old age
endowment to those who lived long, at the expense of those
who died early. A fund would be contributed in small shares,
at prices varying with the ages of beneficiaries, and somehow
invested for their benefit. Profits would be annually divided
among surviving beneficiaries as originally nominated, in pro-
portion to their shares, and at a distant year determined in ad-
vance the principal would be divided among the then survivors.
The Boston association³ called for the issue of one hundred thou-
sand shares. At the outset $I was to be paid in on each share,
and ten cents for expenses. Late subscribers were to pay an
additional ten cents for each month beginning December I,
in order thus to stimulate early subscriptions. The full prices
of shares, varying with the ages of beneficiaries, were as follows:
Age
Price
Age
Price
Under 5
$16.00
45-50
$9.10
5-ro
15.20
50-55
8.20
10-15
14.60
55-60
7.50
15-20
14.00
60-65
6.40
20-25
13.10
65-70
5.10
25-30
12.00
70-75
3.90
30-35
11.30
75-80
2.80
35-40
10.80
80-85
2.00
40-45
10.00
1 Boston Gasette, March 12, 1792.
2 For other tontine schemes, see report of committee on the Treasury to Con-
gress, April, 1779; Hamilton's Report on Public Credit, January, 1790; Bacon-
Foster, Patomac Route, 41; and infra, 80, 239, 248, 285.
3 For the account of this institution and the bank into which it developed the
writer has relied in large part on the original records, to which he has had access
through the courtesy of the officers of the National Union Bank of Boston.
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The balance was to be paid upon the shares by Sept. I, 1792,
on pain of forfeiture. Meanwhile they were to be freely trans-
ferable by endorsement. There were to be annual dividends
of the profits from the invested funds, and in September, 1850,
the capital was to be divided among the surviving members.
At the outset the mode of investment was not entirely de-
cided, but it is probable that a bank was even then counted
upon.
The association had actively behind it several respected men,
among them Stephen Higginson, merchant, who had been an
incorporator of the Massachusetts Bank; Capt. Nathaniel
Fellowes, Judges Oliver Wendell and William Tudor, Dr. William
Scollay, Rev. Dr. Parker, and Samuel Blodget, Jr., who will
be further mentioned below. The first meeting was held in the
Bunch of Grapes September 6, and by September 26 the long
constitution had been agreed upon and a preliminary set of
officers, agents, and standing committee chosen. The shares
were subscribed with avidity by all ranks of citizens, fifty-two
thousand of them by New Yorkers, if current report was correct.
In a half-puffing notice of October 26, headed "Tontine -
Now or Never," it is stated that "Many of those who so sorely
regretted their inattention, to adventure in Bank Scrip, now
eagerly embrace the opportunity to retrieve their imaginary
losses, by purchasing Shares in the Tontine," and points out that
the scheme "completely guards against that worst of human ills
Poverty in Old Age - and promises the advantage of a constant
accumulation of interest." Before the end of October the books
were closed, full.¹
On January I3 following, application was made for a charter,
and the project was discussed at length by the General Court
as well as on the street.2 It appeared that eventually a million
dollars was expected to be contributed, and that it was con-
1 Columbian Centinel, Oct. 26, Nov. I9 ("ZY"), 1791, Jan. II, 1792 ("Citizen");
Boston Argus, Nov. II, 22; Amer. Museum, x, App. III, 24, 30 (1791); Boston Ga-
sette, Sept. 26, Oct. 24, 1791.
2 See Columbian Centinel, Jan. 12, 21, 28, Feb. II, I5, 18, 22, 25, 29; Boston
Gazette, Jan. 16, 23, 30, Feb. 20, 1792. The proposed charter, published as a broad-
side, is reprinted in Amer. Antiq. Soc. Proc., New Series, xi, 512 (April, 1897).
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72 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
templated this would be loaned out. The debate was hot and
exciting. Among the arguments against the bill were:¹
"the promotion of speculation, the great proportion of subscribers who
dwell without the State, and who consequently will draw off the profits;
the nominal increase of wealth, without any real acquisition of property by
the extending of credit beyond the real capital, the promotion of a wish
among the subscribers, to see each other fall a sacrifice, and the gaining of
riches by the survivors without labor.
"To these arguments were opposed, the security which would be afforded
to subscribers against ruin and distress, from accidents to which property will
always be liable, without some such fund of insurance. The advantage re-
sulting to the Commonwealth from foreign subscribers, by drawing a propor-
tion of this large capital from other States. The suitableness of the plan for
promoting the credit and value of real estates, and the high probability of
another State incorporating the subscribers, if they should be refused in
this."
Meanwhile the scrip, $1.10 paid, fluctuated violently, touching
$6 on February 8. Finally the House passed the charter by a
vote of 87 to 5I, but the Senate, on the second reading, de-
feated it by a vote of I3 to 17.2
Thereupon the promoters abandoned the tontine scheme,
which had been the principal object of opposition, and at the
June session succeeded in procuring a charter as The President
and Directors of the Union Bank.
The Massachusetts Bank people had taken steps to prevent
this action. On March I they elected as director William Tudor,
who was pushing the tontine charter. The committee ap-
pointed April I9 was also to offer the General Court a right to
subscribe to the newly issuing stock, so that it might hold the
same proportion as that held by the federal government in the
Bank of the United States.4 Probably other measures were
taken.⁵ Despite these efforts the new bank secured not only
its charter, but an intimation of state participation and favor.
On July 2 the Tontine Association met at Concert Hall on a call
1 American Apollo, Jan. 27, 1792, p. 43.
2 Charges were made that members of the House were bribed by the offer of
shares to vote for the bill: Boston Gasette, February 20, 27.
8 Priv. and Spec. Stats., ii, 547-552. Cf. Columbian Centinel, March 7, June 16,
23, 27, 30, Aug. 18, 1792.
4 Cf. Gore's letter of Aug. 7, 1791, foreshadowing this, quoted supra, 54-55-
5 Cf. Columbian Centinel, June 27, 1792.
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BANKING COMPANIES
73
to elect trustees for the ensuing year, in accordance with its con-
stitution. There it heard the report of its agents,
"that they have used every exertion in their power to obtain an act of Cor-
poration, upon principles conformable to the intention of the Stockholders in
their original Institution; and that, finding it impracticable, they have pur-
sued the best interest of the Associators in making application for a Bank,
independent of the Tontine principles, and the right of survivorship."
The associates agreed to accept the bank charter, appropriated
their funds to the uses of the Union Bank, and voted to dissolve,
holders of scrip who were unwilling to become shareholders in
the bank being entitled to secure a refund of their payments
and accrued benefits less their share of expenses.¹ What actually
happened was that practically all of the tontine shareholders
exchanged their "scrip" for scrip of the bank and were credited
with their original payments of $1.10 per share toward the full
payment of the bank's capital, and that the association turned
over to the bank at its organization its assets as well as its
records.2 On July 19 the stockholders of the bank met to elect
directors and attend to other preliminary matters; decided
that the capital should be the maximum authorized ($800,000),
in $8 shares; and voted that the remaining amount should be
paid in by instalments of $2.30 each, semi-annually, beginning
Sept. 2, 1792.
The election of directors seems to have excited considerable
interest. At all events slates were advertised in the news-
papers in wholly unprecedented fashion,4 and the number of
votes cast far exceeded the number at any later election.⁵ The
1 Advertisement in Columbian Centinel, July 18, 1792.
2 See esp. Directors' Records, Aug. 25, 1792, March 13, 1793.
3 Stockholders' Records, July 19, 1792.
4 Columbian Centinel, June 30, July 4, 7, 18; Boston Gazette, June 25, July 2,
1792.
5 The votes cast at the various elections to 1800 numbered as follows:
1792
1435
1796
678
Supplementary,
July 26
1036
1797
376
Supplementary,
July 3I
1213
1798
872
1793
579
1799
920
1794
752
1800
804
1795
442
Stockholders' Records, passim. Part of the decline may possibly be attributed to
increased concentration of ownership.
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74 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
directors finally chosen included Lieutenant Governor Moses
Gill, President of the Senate Samuel Phillips, Samuel Sewall,
and Samuel Blodget, Jr., who was soon to make a name for
himself in Philadelphia and Washington. Phillips promptly
resigned, and his place was filled by the election of Judge Oliver
Wendell. Moses Gill was elected president and retained this
position till his death in the spring of 1800, when Judge Wendell
succeeded him.¹ Despite- the low par value of the shares and
the avowedly democratic character of the enterprise, the direc-
tors were in the main solid men of business, Gill in particular
being a large security holder.
The process of facilitating payment of the first instalment
on shares is of interest. The stockholders were already credited
with a cash deposit, paid in on the shares of the Tontine Associa-
tion. The directors voted, before the first $2.30 per share was
due, that holders of fifty shares or more might at that time
borrow to the amount of $1.15 per share on paying an equal
amount in specie and lodging in the bank their evidences of the
initial deposit "as a Collateral Security, with their personal
note, payable in Sixty Days at least to the amount borrowed,"
with interest. No part of such loan was to be drawn from the
bank in money till the new deposit should be made, nor would
share certificates be obtainable till the notes were paid in full.2
In other words, credit of sixty days was to be given for payment
of shares. The practice of the bank toward delinquent sub-
scribers was distinctly lenient, and one is inclined to read be-
tween the lines that some shareholders were not afraid to defer
making payments till the bank promised well.3
Efforts were made to associate the bank closely with the
state. The act of incorporation had reserved to the state the
right to subscribe from $200,000 to $400,000 additional stock.
In January, 1793, Governor Hancock urged the desirability of
exercising this right. The legislature on March 8 directed a
1 Stockholders' Records, July 19, 26, 31, 1792, Sept. I, 1800. On Blodget, who
was active till about the time the bank opened and was absent thereafter, see
infra, 97, 239.
2 Directors' Records, 15-17. An earlier vote was even more lenient.
3 Ibid., March 3, June 4 (John R. Livingston et al.), Oct. 8, 1793.
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BANKING COMPANIES
75
subscription of $200,000, payable one-half at the time of sub-
scription, one-fourth June I, 1794, and the balance June I, 1795.
A further subscription of $200,000 was directed in 1795 and
completed in December, 1796.1 Thus the state soon held one-
third of the entire capital stock. The state treasurer was ex-
officio a director, though he does not seem to have attended
directors' meetings. The state reserved, but did not exercise,
the right to appoint directors in number proportionate to its
holdings - a fact which speaks well for the board elected by
the stockholders.
The capital subscribed by the state was not to be loaned on
mortgage, and the directors were required to furnish the state
"with a statement of their proceedings whenever, and as often
as required thereto. " The state's funds, however, were
to be deposited in the Union Bank. By the original charter the
state had the right to borrow $100,000 on demand at five per
cent, repayable in five annual instalments or in less time. At
various times loans were made.3 The semi-official character
of the bank is further evinced by the appointment of its presi-
dent to act with the president of the Senate and speaker of the
House as a sinking fund committee under the funding act of
Feb. I, 1794.
The business of the bank was confined largely to discounting
on personal security. For this purpose the directors met weekly.
The first week the discounts were $69,370.84. On March 26,
1793, they reached a high water mark of $272,376.52. On
Jan. 14, 1794, they first ran over $300,000. At the close of the
1 Priv. and Spec. Stats., ii, 562-563; Columbian Centinel, Feb. 9, 16, March 9,
1793; Directors' Records, on dividends of April I, Oct. I, 1796.
2 The by-laws drawn up by the directors at the outset incorporated the princi-
ple of rotation, to the extent of requiring two new members on the board each year.
Frequently no more than this minimum were supplanted, and in no year up to
1800 were more than four new directors elected. Twenty-six different men served
on the first nine boards of twelve each. This insured stability of policy Directors'
Records, passim.
3 The funding act of Feb. 1, 1794, authorized a loan of as much as £30,000 when-
ever it should be necessary to meet interest on the refunding bonds then issued.
The Directors' Records show loans to the state treasurer of $30,000, April 30, 1793,
$15,000, May 28, 1793.
4 Priv. and Spec. Stats., ii, 603-605.
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76 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
century they sometimes amounted to over $500,000. Discount
rates were six per cent. At the outset sixty-day paper was
accepted, but before long it was provided that thirty days
should be the maximum. This was probably merely to secure
a slightly higher rate of interest, for renewals were very common.¹
Decision on discounts was by secret ballot. In case of one
negative vote the question was opened for discussion, and after
that two negative votes on another ballot would "check" the
discount.² Such a practice clearly facilitated discrimination for
personal or political reasons. Two names were ordinarily re-
quired except where collateral was given; Governor Hancock,
however, succeeded in January, 1793, in getting a loan of $1500
without collateral or endorsement.3 After the first month's
business $100 was set as the minimum for discount,4 - the rule
in the Massachusetts Bank.
The charter had required that not more than one-fifth of the
$800,000 capital should be loaned outside of Boston, to citizens
of Massachusetts, with preference to farmers; and for such
loans real estate was admissible as security. It is probable that
this provision was a prominent factor in the passage of the
charter, for banks were reputed to be of advantage only to the
mercantile classes. Applications for these loans were acted on
once a month. They were to run for one year and could be
(and were commonly) renewed. In the middle of 1794 it was
announced that this entire amount had been loaned and that
further applications would be in vain till some of the loans
were paid. It is clear that the bank did no more of this busi-
ness than its charter stipulated, and it probably retired these
loans as opportunity offered.5
One of the by-laws adopted at the outset provided
That the Bank shall take charge of the Cash of all those who choose to place
it there (free of expence) and shall keep it subject to their order, payable at
1 Directors' Records, passim. Cf. esp. the reply to Alexander Hamilton's request
for a loan for the Treasury, 1795.
2 Ibid., 9, 16.
3 Ibid., 9, 29. The governor had asked, in November, for $4000. The loan of
$1500 was granted January I. A few days later he sent in his public message
urging the state subscription.
4 Ibid., 29.
5 Ibid., 73 (June 24, 1794).
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BANKING COMPANIES
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sight, & shall receive Deposits of Ingots of Gold, Barrs of Silver, wrought
plate, or other valuable articles of small Bulk, in the same manner, and return
them on Demand of the Depositor."
In short, the bank furnished a safe deposit vault and made no
charge for deposit accounts.¹
Relations with the other banks were fairly amicable. In
January, 1794, the cashier was directed on request to inform
the cashier of either of the other banks how many of its notes
he held, on express condition that the favor be reciprocated.
In May a committee of the directors was appointed to confer
with the boards of the other banks on the subject of exchange
of bills. In August the cashier was directed to deposit with
the branch bank such of its bills as remained after the exchange
of that week. In July the Massachusetts Bank offered the
Union Bank the use of its hall for the annual stockholders'
meeting.³ Several instances of later coöperation, on more or
less important matters, are recorded in the minutes of the two
banks.
The charter gave the right to establish branches. At the
first meeting of the board a committee was authorized to make
Enquiry whether it be convenient and eligible to establish a
Branch Bank at Salem."⁴ It was doubtless deemed possible
that the Essex Bank capitalists, whose request for a charter had
lately been refused, might accede to an offer of consolidation.
The charter of the Nantucket Bank, 1795, authorized it to be-
come a branch of the Union Bank. In neither case was the
plan pressed; both outlying institutions became independent,
and the Union Bank remained branchless.
The Union Bank prospered, its dividends averaging 4.47 per
cent per half year up to 1800, and its stock generally sold above
1 Directors' Records, 6. Cf. ibid., 25 (Oct. 9, 1790), directing the cashier to pay
no demand over $20 in silver.
2 A correspondent had prophesied the inevitable failure of the new institution
because the existing banks had not bought into its stock: Columbian Centinel,
Sept. 8, 1792.
3 Directors' Records, 60, 70, 75, 76, and ibid., 24, 25 (Oct. 4, 9, 1792), for earlier
relations. Cf. also Columbian Centinel, Feb. 23, 1793, for "Jacob's" criticism of
the banks for lack of system, saying that certainty of renewals was no greater with
three than with one.
4 Directors' Records, I (July 26, 1792).
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78 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
par.¹ In 1863 it was incorporated as the National Union Bank
and continues to-day, with $1,000,000 capital, doing business on
the State Street site it first occupied. It has paid semi-annual
dividends without a break. The extraordinary prosperity of
the Massachusetts Bank ceased in 1792. Yet despite the open-
ing of the branch of the federal bank in April, 1792, with a large
capital, and the successful competition of the large Union Bank
beginning with that fall, the Massachusetts Bank continued
to pay dividends of four to five per cent semi-annually on its
enlarged capital.2 Here is testimony of the clearest kind, not
only respecting the business boom of 1789-92, but no less re-
specting the development of business on to a higher normal
level from 1784 to 1794. In the earlier year, in a time of busi-
ness activity, one bank in Boston could earn four per cent semi-
annually on $255,000 capital. In 1794 and after, in a time of
no special business activity, three banks could earn four per
cent or more on nearly nine times this capital.
Early in February, 1792, a subscription of $50,000 was rapidly
filled for a bank in Salem, then the sixth city of the country.
A charter was applied for and passed by the lower house early
in March, but the upper held it up, as it did that of the Tontine
Association about the same time. Despite this the Essex Bank,
as it was called, went into operation July 2 without a charter,
with a capital of about $300,000. Advances of the Union Bank
were rejected. Incorporation was secured finally in 1799, with
authority to employ a capital of $400,000, and the bank con-
tinued actively till 1819.3
Down in Virginia, as well as in the commercial towns of the
north, there were stirrings of interest in banking. In November,
1791, Hamilton's "kind assistance" was solicited "in favor of
1 See dividend table, infra, 104, and quotations of security prices in Mass. Maga-
sine, 1792-94.
2 See table of dividends, infra, 104. How much capital the branch bank em-
ployed during this period cannot be ascertained; but see infra, 103 n. In 1798 the
stockholders of the Massachusetts Bank considered an enlargement of the capital,
but decided adversely: Stockholders' Records, Jan. 3, 17, June 13, 1798.
3 Providence Gazette, February II; Columbian Centinel, March 3; Boston Gazette,
March 5; General Advertiser, June 21, 1792; Osgood and Batchelder, Salem, 235;
Diary of William Bentley (Salem, 1905), i, 345.
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BANKING COMPANIES
79
establishing a Branch of the National Bank" in Alexandria.¹
Early in December, 1791, a meeting of merchants at Petersburg
resolved,
"That it be recommended to the citizens of this commonwealth, and to the
mercantile towns in particular, that they meet by their representatives in
the city of Richmond, on the first day of May next, to consider the pro-
priety of an application to the general assembly, for the establishment of a
state bank."
Late this same month petitions were signed in Alexandria,
Norfolk, and Richmond calling for the establishment in those
towns of branches of the new national bank;³ but these, like
many others of the same tenor, were not granted, though eventu-
ally, in 1799, a branch was established at Norfolk.4 Failing
here, the Virginia legislature was approached, and in October,
1792, it chartered banks for both Alexandria and Richmond.5
The Bank of Richmond was not organized, doubtless because
of lack of subscriptions. The Alexandria institution, however,
was promptly established and had a long, successful career.
Subscriptions were filled in two hours on December 7, many
would-be subscribers going away sorrowful. Directors were
elected in January; the final payment on the $150,000 capital
was called in March; and on April 9, 1793, the bank opened.6
In 1795 the need of larger capital was submitted to the legisla-
ture and the limit raised to $500,000.⁷ About half the ad-
ditional amount was paid in during 1796, and a little more in
1797, so that from 1797 to 1800 the capital stood at $338,200.
Dividends were regular and appear to have been liberal, averag-
ing above four per cent semi-annually, and a large and increas-
ing business was done.⁸
1 John Fitzgerald to Hamilton, November 21, in Hamilton, Works, v, 485.
3
American Museum, X, App. III, 38 (1791).
3 Va. Mag. of Hist. and Biog., viii, 288-295 (1902), quoting the petitions.
4 Holdsworth, First Bank of the U.S., 38.
5 Stats. at Large (Hening), xiii, 592, 599.
6 Va. Gasette, Dec. 13, 1792, March 14, 1793. The best account is in Charles E.
Howe, "Financial Institutions of Washington City in its Early Days," in Columbia
Hist. Soc. Recs., viii, 3-9 (Washington, 1907).
7 Va. Stats. at Large (ed. 1835), i, 374.
8
Cf. annual statements to the state, in Va. Calendar of State Papers, vii, 6, 325,
419, viii, 330, 410, 460, ix, 71. The following data appear on these statements:
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80 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
In March, 1792, a plan for a bank in Charleston, S. C., with
the capital to be raised on a tontine plan, met with support,
and early in May the bank went into operation as The Bank
of South Carolina, with a capital reported to be $200,000,¹ in
$40 shares. This considerable capital was increased in 1793
to $300,000, and in March, 1796, to $525,000, the additional
shares going at $45. The bank was highly prosperous, divid-
ing nine per cent in each of its first two years, and fifteen
per cent in the next three, besides accumulating a surplus of
$60,000. Efforts to secure a charter were in vain till 1801,2
when this bank and a state bank were simultaneously incor-
porated.⁸ In 1805 it was reported to have a capital of $675,000,4
and this much may have been employed before its incorporation.
It was in New York, however, that the banking boom of this
time made the most stir. On February 3, when affairs were mov-
ing rapidly in New York City, a meeting of Albany gentlemen was
called and a bank decided upon. The plan devised called for a
capital of $75,000 in $150 shares, $15 to be paid down at the out-
set and the balance in three instalments. Subscriptions were
received February 17 and "overrun" in less than three hours.
At once the scrip rose ten per cent and the next day sold at one
hundred per cent advance. Application was made for a charter,
and while it hung in the balance the scrip fluctuated violently, at
one time selling for $100 ($15 paid). Late in March the charter
Semi-annual
Date
Amount
Stock
Rate
Profit & loss
dividend no.
per cent
balance
Jan. 1795
3
$5,985.00
$150,000
4
$2,113.39
1796
5
9,163.00
150,000
6
471.32
1797
7
7,200.78
327,200
?
2,021.19
1798
9
13,400.00
338,200
4
3,204.22
1800
13
15,219.00
338,200
4½
6,874.48
Cf. also Niles' Register, ix, suppl., 156 (1815-16). Howe, Early Financial Institutions,
7, notes that in February, 1801, prominent merchants of Alexandria gave "an
elaborate dinner
to those members of the Legislature by whose exertions
and votes an extension of the charter
was obtained": quoting Times, Feb.
9, 1801.
1 Daily Advertiser, March 26; Columbian Centinel, May 5, 10, 1792.
2 Cf. esp. La Rochefoucault Liancourt, Travels, i, 573-574.
3 S. C. Stats. at Large, viii, I.
4 Blodget, Economica, 159.
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passed, on June I2 directors were elected, and on July I6 and I7
business of deposit and discount was begun.¹ The full $240,000
authorized by the charter (in $400 shares) was paid up before, in
February, 1797, the state decided to exercise its right to subscribe
$20,000.2 The bank paid its first dividend May 14, 1793, and
was sufficiently prosperous to have its stock sell thirty to fifty
per cent above par in 1795 and 1797.⁸
Toward the end of March a Bank of Columbia was forming in
Hudson, N. Y., and apparently little but lack of time prevented
the passage of its charter at the same session, for the next year
it was promptly incorporated.4
In the city of New York the rush for banking privileges burst
into what was called, with reason, a "bancomania." On the
morning of January I6 proposals were published for "The Mil-
lion Bank of the State of New York," with a capital of a million
dollars in $500 shares. Reasons for its promotion were set forth
in some detail, including the tendency of a bank to advance the
city's commerce and the agriculture and manufactures of the
state, and the insufficiency of banking capital, even with the
addition of the $500,000 of the new branch, whence the stock of
the old bank was selling high "without just cause." It was pro-
posed to include in the charter a clause permitting its direction
to accede to a coalition with the Bank of New York within nine
months, "on such terms as they may deem equitable." 5 An
assemblage of interested citizens met at Corre's Hotel at IO A.M.,
appointed Alexander Macomb, Brockholst Livingston, Abraham
Duryea, Moses Rogers, and John M'Vickar to receive subscrip-
tions,⁶ and by noon over twenty thousand shares (i.e., over
$10,000,000) had been subscribed! Quotations immediately arose.
The Daily Advertiser for January 17 remarks: "Scrips in the Mil-
1 Joel Munsell, The Annals of Albany, i, 31-32 (1851); N. Y. Journal, Feb. 29,
1792; Elkanah Watson, Memoirs, 332; S.B. Webb, Correspondence, iii, 178.
2 Laws (ed. 1887), iv, 31.
3
Munsell, Annals of Albany, iii, 157, 167, 173, 177, 186.
4
Providence Gazette, March 31, 1792; Webb, Correspondence, iii, 179; Laws
(ed. 1887), iii, 429-432.
5 Daily Advertiser, Jan. 17, 1792. Cf. N. Y. Journal, January 18, and Johnson
to Craigie, January 16, enclosing plan of the bank, in Craigie Papers, iii, 69.
.
According to Seth Johnson, John Pintard was also there.
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82 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
lion bank, to be delivered as soon as can be procured [!] 230 dols."
"Rights in the Million bank for cash 92 dolls."
Next day a subscription was opened for the Tammany Bank,"
four thousand shares of $500 each,¹ and these were soon sub-
scribed. That evening the subscribers to the "Million met
at Corre's, with Robert Troup in the chair. The list of sub-
scribers to the 21,740 shares was read, and it was agreed to re-
duce the subscriptions heavily, those subscribing thirty and over
to receive three, those subscribing twenty to twenty-nine, two,
and the others one each. A committee, composed of Troup,
Livingston, Melancthon Smith, C.J. Bogart, and R. Lenox, was
appointed to report alterations in the proposed charter. The
first payment of $200 per share was to have been made January
19, but this was postponed till the modification of the charter
draft. It was agreed that provision should be made for the
disappointed subscribers, and the newspapers of January 19 dis-
played the advertisement: "This day at ten o'clock A.M., will
be opened at CORRE'S HOTEL, a subscription to a NEW BANK, and
will continue until one o'clock in the afternoon, and so from day
to day until the whole capital stock shall be subscribed." This
meeting too was duly held, with Isaac Clason in the chair. It
was tentatively decided to organize the "Merchants' Bank," with
a capital of one million dollars in $400 shares, one hundred being
reserved for state subscription; and a meeting of merchants and
traders was called for Saturday the twenty-first to decide finally.
At a meeting of the "Million" subscribers Friday evening Brock-
holst Livingston reported that a third group had formed a scheme
for a "State Bank' (probably the renamed Tammany) and had
already that day presented a petition for a charter. This group
was headed, ostensibly at least, by Walter Livingston and
Richard Platt. These were not unfriendly to the "Million"
crowd and were indeed anxious for a coalition with them. And
the meeting accepted the recommendation of its committee to
reopen subscriptions under a common committee and make com-
mon cause in the appeal for a charter.² The "Merchants" crowd
1 Johnson to Craigie, January 17, in Craigie Papers, iii, 70.
2 Daily Advertiser, Jan. 18, 19, 21, 23, and N. Y. Journal, Jan. 28, Feb. 22,
1792.
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soon came in too. On January 30 Walter Rutherfurd wrote his
brother John: "The Bank mania subsides a little, the three dif-
ferent subscriptions have consolidated to make but one with a
capital of 1,800,000 ds. and they are now endeavouring to get a
charter." The banks were eager to secure the surplus funds of
the state, which were reported to amount to over £80,000,2 for
investment. The Bank of New York offered early in February to
pay six per cent interest on these funds and to repay them on
three months' notice. The state bank promoters offered seven
per cent, giving United States stock as collateral, "unless the
state would prefer investing the money in the new bank which is
to be established, or lending it in small sums upon mortgages of
real estate.' 3 Such was the confidence in the new scheme that
one Wilkes, when offered £800 and a house by the federal bank
and £1000 by the new state bank, to serve as cashier, accepted the
latter offer.¹ The plan even grew bigger. Not only was the new
bank to receive state subscriptions, but to it were to be given
powers to push the canals New York was held to need. Early
in February a legislative committee reported favorably on such
a plan, and on February 5 a bill with this purport passed its
second reading.4 On February 13 the Daily Advertiser printed
in full the bill to incorporate, then under consideration in the
Committee of the Whole, and on the fifteenth "Gracchus" writes,
in urging certain amendments, "As all opposition to the measure
has subsided, and the only wish of every party is to make the
bill as perfect as possible
The debate on the subject, re-
garded as highly important, continued through the month.
These movements did not escape opposition and vigorous criti-
1 Rutherfurd, Family Records and Events, 148. Cf. Daily Advertiser, Jan. 24,
1792, and Schuyler to Hamilton, January 29, in Hamilton, Works, v, 492-493: "The
bank mania has somewhat subsided; but as in the first paroxysm the leaders in-
duced many to subscribe a petition to the legislature for an incorporation, the pride
of some and the interested views of others will not permit them to relinquish the
object. What fate will attend the application in the House of Assembly is problem-
atical - but I am almost certain that in the Senate it will not meet with counte-
nance. It is, however, prudent to be prepared with every objection, and I wish
you to state those that have occurred to you."
2 Mass. Magazine, iv, 141 (February, 1792).
$ Domett, Bank of N. Y., 44.
4 N. Y. Journal, Feb. 22, 25, 1792.
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84 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
cism. The Bank of New York refused all overtures. It also re-
jected all new notes and all "paper of the great advocates" of the
new banks. It refused even to accept the notes of the national
bank, some $400,000 of which had "poured in from Philadelphia,
and endangered its specie reserve." 1 Seth Johnson, merchant
and conservative speculator, and a keen observer in close touch
with the situation, wrote his partner Craigie that "The origin of
the Million bank was not from anti-federalism, but from specula-
tion," and that "the Judicious are generally opposed to them,
the designing, or disappointed, are the promoters."¹ On January
I9 "A Merchant" wrote for the Daily Advertiser,2 charging that
the Million Bank "originated & was ultimately intended to an-
swer the purposes of a sett of designing characters, whose inten-
tions, as far as the business has been canvassed, was certainly not
consistent with the public good
He warns "all Merchants
and others who subscribed from proper principles
as they
value their reputation & property not to embark in an affair the
origin of which is not founded on a permanent basis." He finds
that "a few principle Speculators have assembled in the most
private manner & brought forth this child of iniquity;" that the
shares were taken up "principally by the promoters and abet-
tors of this horrid scheme;" and remarks further
"that if the principles of this Bank be ever so well modified, and the sub-
scription list stand as it does at present, even then their plan will succeed
[only] in consequence of the numerous subscribers under fictitious names,
and the Directors made up of creatures like themselves."
"A Citizen" wrote the same day advising caution.3 With "Mer-
chant" he doubts the need of a third bank and its profitableness,
1 Johnson to Craigie, Jan. 16, 17, 22, 1792, in Craigie Papers, iii, 69-71.
2 Jan. 20, 1792.
3 Daily Advertiser, Jan. 20, 1792. Cf. Johnson to Craigie, January 22: "From
the best information I can obtain, Mr M°Comb & Robt Stewart were among the pro-
moters of the million Bank they, & their associates no doubt intended to hold
most of the shares - but such was the rage, for subscribing that they were disap-
pointed in their views - M°Comb it [is] said withdrew himself perhaps from a sense
of the impropriety of the business." Macomb was a well-to-do business man of
high repute, who had lately been elected a director of the New York branch bank.
See Essay II and Essay III, esp. 279-280, 396.
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"and the citizens should think deliberately about a business of so great im-
portance before they begin: The mode in which the Million Bank has been
conducted, I hope will be a lesson to the citizens how to set about an-
other with more mature deliberation, that the fabric may stand and prove
useful."
"Banco" wrote on January 25 casting more direct aspersions on
the promoters and their motives: 1
"More banks may certainly assist gambling, and enable adventurers the
longer to swim on the fluctuating waves of speculation. The real specie of
America is inadequate to circulate the immense debt of the union above par,
and its artificial rise can only be preserved by the artificial
medium of
bank paper. Banks originated in all commercial countries, for substantial
commercial purposes, and nowhere have they been considered as engines of
stock jobing. The merchant and traders' note is always preferred at the
bank of England to those that dabble adventurously in the funds." 2
The two schemes are "bastards," born of anger and disappointed
ambition.
"The lawyer and eminent broker [?] who have intrigued with the mother,
had artfully framed a deed of coalition of their estates founded on the pre-
carious footing of insidious subscriptions. The motives of projectors should
be analised.
If this new bank is established, which they or their connec-
tions will probably direct, they will effect monopolies of particular kinds of
the debt,' and even articles of merchandize and subsistence. Small dealers
will be ruined by the artificial and arbitrary fluctuations of Stock, and the
expenses of all classes, will be augmented by the monopolies of the few who
combine extensive capitals, with still more extensive credit
These
strong-handed combinations may on one day lower the public debt, and the
next day raise it, and the climate of the alley will undergo more variations
than one of our spring days. Those sudden and great variations will drive
honest and prudent people out of the market, and the monied man will not
trust his property in such versatile funds. Those people with the pride and
honesty will feel indignant sentiments against combinations which may prob-
ably unite with extensive capitals and credits the resources of unlimited
avarice, of unprincipled and disappointed ambition, of family influence, of the
easy integrity of the alley, and the meretricious abilities of the bar."
"A Speculator" writes February 7 with assumed frankness but
slightly veiled irony relative to the slow progress of the object: 4
1 Daily Advertiser, January 26.
2 Evidently New York banks thus early gained their modern reputation for
promoting speculation.
3 Cf. Essay II, chap. 7, esp. 279-286, 307.
4
Daily Advertiser, February 7.
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86 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
"An immediate determination may be highly prejudicial to those who
have contracted to receive the whole of the New-York Bank Stock in May
next.¹ I am one of this number, and trust that the state will do nothing
hastily to prejudice any gentlemen, who, by contracting to receive a greater
number of shares than the capital consists of, contemplated the ruin of only a
few of their fellow citizens, the business may surely be procrastinated at least
until these very benevolent views are accomplished."
"Aristides," a petitioner for the charter, writes February 2
urging postponement till the next session, saying that since sign-
ing he had "seen so much of a double manner of dealing in those
who pretended to be the promoters of the institution" that he
had more than once wished he could withdraw.
"Indubitably if we should go to work helter skelter in granting charters
to speculating men without much deliberation, we shall have the whole
United States kept in continual turmoil and confusion, by the intrigues of
these men."
Even "A Fair Dealer," who took the "Merchant" to task for his.
vituperative language and who defended the undertaking, ac-
knowledged that "few of the intelligent subscribers to the Mil-
lion Bank are so bigoted as to justify the manner in which it was
brought forward: they are ready to acknowledge that it was
exceptionable." On the other hand he submits that
"When it was announced to the public that a subscription would be
opened
, men of all classes flocked to share the advantages which were
held up to view; and tho' on the one hand it is certain many entered into this
business from mere motives of speculation, and without the probable means
of fulfilling the engagements they laid themselves under, still on the other
hand it would be absurd to say there are not a great number who possess tal-
ents, integrity, and property equal to the undertaking."
And he represents the scheme as essentially a natural develop-
ment, asserting that a second bank had
"long been had in contemplation by some of the most wealthy and worthy
of our citizens. The increasing wealth of our country naturally suggested
1 Cf. Johnson to Craigie, January 22: "I cannot think Colo D interested in this
business, as he is interested in the contracts for almost the whole of the stock of the
present Bank, & at a high price. A new Bank to be carried into effect might be his
ruin." The Livingstons, "bears" at this time, Johnson reports "warm" for the
new bank. Cf. Essay II, 279-286, 295.
2 Daily Advertiser, February 3. Cf. also "Plain Truth," in ibid., January 25.
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such a measure, and the pride and partiality of the existing bank convinced
them of its necessity." 1
He reveals part of the animus behind the new scheme in charg-
ing the Bank of New York with being a monopoly, established by
a party and partial in its dealings, as well as unduly cautious.
"This, is by some ascribed to the directors as a virtue, and the bank is
pointed as the guardian of the public good, by damping the ardor of specula-
tions in withholding its sinews;" whereas the only point they can or ought
to take into consideration is, the responsibility of the party - the individual
is the best judge of the application of his property; and should the bank with-
hold this aid, instead of discouraging speculation, they may cramp trade."
Immediately upon hearing of the first project Alexander Ham-
ilton wrote from Philadelphia to his friend Seton, cashier of the
Bank of New York: 2
I have learnt with infinite pain the circumstance of a new bank having
started up in your city. Its effects cannot but be in every way pernicious.
These extravagant sallies of speculation do injury to the government, and
to the whole system of public credit, by disgusting all sober citizens, and
giving a wild air to every thing. "T is impossible but that three great banks
in one city must raise such a mass of artificial credit, as must endanger every
one of them, and do harm in every view.
"I sincerely hope that the Bank of New-York will listen to no coalition
with this newly engendered monster; a better alliance, I am strongly per-
suaded, will be brought about for it; and the joint force of two solid insti-
tutions, will, without effort or violence, remove the excrescence which has
just appeared, and which I consider as a dangerous tumor in your political
and commercial economy.
"I express myself in these strong terms to you confidentially, not that I
have any objection to my opinion being known, as to the nature and ten-
dency of the thing."
The "better alliance," of course, was that proposed between
the Bank of New York and the branch of the federal bank.
A few days later (January 24), when he learned that the advances
of the new institution had been spurned, Hamilton wrote again
in the same vein:³
1 Daily Advertiser, Jan. 21, 1792.
2 Letter of Jan. 18, 1792, in Hamilton, Works, v, 463; ibid. (Lodge ed.), viii, 220.
Both editors date the letter 1791, which is obviously an error.
3 Works, v, 49I-492; ibid. (Lodge ed.), viii, 239.
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88 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
"I feel great satisfaction in knowing from yourself that your institution
rejects the idea of a coalition with the new project, or rather hydra of
projects.
"I shall labor to give what has taken place a turn favorable to another
union, the propriety of which is, as you say, clearly illustrated by the present
state of things. It is my wish that the Bank of New-York may, by all means,
continue to receive deposits from the Collector, in the paper of the Bank of
the United States, and that they may also receive payment for the Dutch
bills in the same paper. This paper may either be remitted to the Treasurer
or remain in the bank, as itself shall deem most expedient. I have explicitly
directed the Treasurer to forbear drawing on the Bank of New York, with-
out special direction from me. And my intention is to leave you in posses-
sion of all the money you have or may receive till I am assured that the
present storm is effectually weathered.
"Everybody here sees the propriety of your having refused the paper
of the Bank of the United States in such a crisis of your affairs. Be confi-
dential with me; if you are pressed, whatever support may be in my power
shall be afforded. I consider the public interest as materially involved in
aiding a valuable institution like yours to withstand the attacks of a confed-
erate host of frantic, and, I fear, in too many instances, unprincipled
gamblers.
"Adieu. Heaven take care of good men and good views!"
In passing it must be noted that these events subjected the
federal administration, and Hamilton in particular, to an irritat-
ing cross-fire. On the one hand the speculative orgy out of which
the "bancomania" developed was ascribed to those diabolical
schemes of a cunning traitor to the public weal - the funding
system, the national bank, the national manufacturing society.
On the other the Secretary's opposition to the new enterprise was
denounced as an effort to maintain a monopolistic, partisan tool of
a closely-knit moneyed aristocracy. Fisher Ames wrote from Phil-
adelphia January 23:1 "The mad bank schemes of New York pro-
duce ill effects. Sober people are justly scared and disgusted to
see the wild castle builders at work. It gives them an handle to
attack the government." "Decius," in the course of a three-
column contribution dated February 13,2 includes prominently in
the arguments for the expediency of the project, "The necessity
of some establishment which may check the encreasing influence
of the general government, and its encroachments upon that of
1 Ames, Works, i, III.
2 N. Y. Journal, February 15; Daily Advertiser, February 17.
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the state. He quotes appreciatively from "Brutus" in the same
journal for January 21:
"The weighty influence derived to the general government from the
funding system, has already thrown an undue balance in that scale. The
assumption of the state debts, which would, in their hands, have created a
dependence upon them by a certain class of creditors, has diminished the
importance of the state, and added to that of the general government. The
manufactures are about to look up to the same source for their support, and
temptations are held out to smaller states [New Jersey, for example], which
may ultimately bias them in favor of one part; rather than the whole of the
constitution.
The [national] bank is under a small direction, whose
prime movement is the secretary of the treasury, and is going to branch out
to every trading city in the union;¹ the directors of these branches are ap-
pointed by the general directors, placed at the seat of government, and
under its immediate influence.
yet, not content with this, a scheme is
set on foot, for consolidating the different state banks with this general
bank, and thus to concentrate the whole monied interest of the community
in a few hands."
"Decius" continues:
"Those who have attended to what has happened since a new bank was
talked of, will feel the force of the preceding remarks - The question was
scarcely raised, when the secretary of the treasury took a decided part in
the opposition. Letters upon letters, it is said, were written to dissuade his
friends [such were Troup, B. Livingston, Platt, Duer, and possibly Ma-
comb] from persisting in the measure."
He points out the ramifications of government influence: two
members of the state legislature are in the "direction" of the
federal bank; the federal district attorney (Harrison) and Mar-
shal (Clarkson) are among the directors of its New York branch;
while another of the central directors (Low) "is also a director of
the New York Bank. Instead of modestly resigning this office, he
has since his promotion to the national direction, neglected no
means to bring about a consolidation of the two banks," which
the New York directors, who "had long tasted the sweets of the
secretary's money," were ready for, and which only the opposi-
tion of the eastern shareholders prevented.2 Clearly the move-
ment contributed to the rising unpopularity of the Treasury.
1 Both these assertions, of course, were false. The Secretary was far from domi-
nating the board of the new bank.
2 See supra, 52-57.
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90 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
The promotion of these new banks, it seems fair to conclude,
was in the main a speculative device. The move offered several
fascinating possibilities. There was a hope of being bought off
by the established banks. If the new institutions, one or more,
should be successfully floated, there was good chance, in the
midst of the current enthusiasm over banks, of unloading the
scrip at an advance; or of securing an institution more sympa-
thetic with stock speculations than the existing banking estab-
lishments; or of securing state funds to aid in these delightful
operations. Meanwhile bank stocks, particularly those of the
Bank of New York, could be effectually manipulated by influ-
ential pressure brought to bear on the new projects. The preju-
dices against the old bank, general and particular; the profitable-
ness of existing banks; the need of more banking capital; the
jealousy between state and nation - these and others made good
talking points with which to appeal to diverse individuals, and
by means of them the support of a non-speculating contingent
was secured. But the rise, the conduct, the decline, and the whole
atmosphere of this boom of the new banks indicate the domi-
nance of speculators and speculative motives.
Essentially for this reason the fine projects fell to the ground,
though the skepticism of the judicious, the pressure of the Bank
of New York, and Hamilton's influence also must have counted
materially against them. During February and early March the
distrust of the speculators grew. Early in March came Duer's
suspension. Then for five weeks the disorder increased in in-
tensity till a veritable panic reigned. Leaders in petitions for the
new banks, and in petitions for the use of the state's funds, were
seen to be caught inextricably in the meshes of their own net.
In disgust with the whole "outfit" the legislature tabled the
bank bill, passed "An Act to prevent the pernicious practice
of stock-jobbing," 1 and established a state loan office to lend
the surplus funds of the state to the productive citizens of the
country districts.² For several years no new banks were per-
1 See Essay II, 288-309.
2 Act of March 14, 1792, Laws (ed. 1887), iii, 287-300: "An act for loaning
monies belonging to the state" through loan offices to be incorporated in each
county. Cf. the Pennsylvania Loan Office Act of 1785 noted supra, 42.
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mitted to arise in New York City, and the next one entered by
stealth.¹
Before leaving this group of banks and would-be banks it' is
worth while to turn aside to note the relations which Hamilton, as
Secretary of the Treasury, continued to sustain with the Bank of
New York. Doubtless as a result of his efforts a committee of
the New York branch directors was appointed on March 20, 1792,
before the branch opened, to confer with the directors of the
Bank of New York; and the conference duly held "resulted in a
formal correspondence, expressing a desire and willingness on the
part of each institution to co-operate in any measure calculated
to inspire mutual confidence or public accommodation." But
neither alliance, coalition, nor consolidation, by contract, stock
ownership, or otherwise, was effected between the two New York
institutions. Yet Hamilton's promise of support went beyond
this and beyond the assurance of consideration in the withdrawal
of public funds - a policy which he took occasion to defend in his
letters to Congress Feb. 19, 1793.⁸ "Be confidential with me,"
he wrote on January 24,4 "if you are pressed, whatever support
may be in my power shall be afforded." The support given by
the Treasury during the stock panics of 1791 and 1792, by pur-
chases for the sinking fund made through Seton and largely at his
discretion, was undoubtedly of incidental value to the Bank of
New York 5 and constituted a new source of gratitude toward the
Secretary. In May and June, as I have pointed out in the preced-
ing essay,⁶ Hamilton requested the bank to loan considerable
sums to the New Jersey manufacturing society, at the low rate
of five per cent, and gave confidential assurance "that the Bank
of New-York shall suffer no diminution of its pecuniary facilities
from any accommodation" it might afford to this society.⁷ The
bank responded with alacrity and later correspondence makes
abundantly clear that they took his assurances at their face
value. On July 23, 1792, Seton wrote:
1 See infra, IOI-102.
2 Domett, Bank of N. Y., 42.
3 Works, iii, 413 ff.
4 Works, v, 492.
5 See Essay II, 205-207, 310-3II.
6 Essay III, 419-421.
7 Works, v, 508-509, 512.
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"With respect to ourselves & the Branch we go on in perfect Harmony,
& there does not appear any disposition on their part to do otherwise
...
we receive & pay their Notes indiscriminately with our own, & I believe they
do the same - we make large interchanges now & then - I feel very grate-
full for the strength of your expressions on this head, & should any circum-
stance occur that augurs hostilities, I shall address myself freely to you -
but I trust there will not
This harmony was not lasting, however, and on August 6 Seton
wrote:¹
"You will observe by the annexed Return that the Collector has begun to
comply with your kind orders - & it will be a very pleasant circumstance
that he continues to Do so - for the Branch is certainly now getting on very
fast, & I think (in confidence) their Direction rather wish to take every
advantage in Draining us of our Specie - they make pretty frequent &
heavy Drafts, & rather I think unnecessarily so- because whenever the
interchange of Notes leaves a balance in their favour, a Dft for Specie soon
follows - I would not wish to complain just now, but if I find they persist
in Draining us, I must implore the aid of your all powerful hand to convince
them we are not Destitute of aid in the hour of need."
Hamilton was fortunately able to explain these appearances of
an "unkind disposition" on the ground of the necessity of send-
ing to Philadelphia a considerable sum of specie for various pur-
poses which he enumerated at length.² He added to his reply:
"The tide is now changing, and must speedily reverse the bal-
ance, and I mention it in confidence, because I wish, by explain-
ing, to cherish confidence between the two institutions at New-
York, so necessary to their mutual interest." This word Seton
gratefully acknowledged on August 30: 1
"I thank you much for the explanation of the late conduct of the Branch,
- I must confess I was rather apprehensive it proceeded from other Mo-
tives - It is alarming to see how Banks are multiplying all over the States
- should any failure happen, a general discredit will fall upon all Bank
Paper."
But in December again Seton wrote in great anxiety:
"I often recollect your expression, that the Branch must ultimately prepon-
derate - I find this to be the case every day, and indeed it has now such an
1 Hamilton Papers (Library of Congress).
2 Letter of Aug. 17, 1792, in Hamilton, Works, v, 520-521.
8 Letter of December 20, Hamilton Papers.
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advantage in its operations over us, that if pusht too far, might be attended
with fatal consequences; - their Circulation is so great and the reception of
their paper so universal, that no one has occasion to drain them of Specie -
our Circulation is so limitted, confined merely to the City to pay Duties &
discharge notes in the Bank, the whole almost seems in their hands, & upon
every exchange of Bank Notes which we make three times a week, the bal-
ance is eternally very large in their favour; we have therefore been obliged
to pay them immense Sums in specie, which, and the other great drains we
have had for India &c - has reduced us from upwards of Six hundred thou-
sand Dollars in actual Coin, now down to only Two Hundred thousand; -
this of course obliges us to cramp our operations, to the very great distress of
our Dealers, and in one month to call in near Two hundred thousand Dol-
lars of our discounts - in the same space of time our circulation of Bank
Notes has lessened Seventy thousand; all the Paper we have now out is but
a little more than three hundred thousand Dollars, not one third of our Capi-
tal; - the balance of our Bills Discounted is One Million Seven hundred &
Ninety thousand, not twice our Capital, & we reduce every week - yet
notwithstanding all this caution, the drain of Specie is so great and we are
so much in the power of the Branch (whose direction certainly bear no good
will) that I really at times feel very uneasy - we owe them now Seventy
thousand Dollars, the balance of your Treasury account is nearly the same
amount, and should these two Sums be suddenly called for, you may easily see
from the above detail how distressing & how dangerous it would be to us. Sen-
sible, my Dear Sir of your attachment to this Institution and desire to serve
it, I think it my duty to give you this private and confidential Account of
our real Situation, and to beg you will at all events prevent our being drawn
upon for the Treasurers balance just now, & to save us from the depreda-
tions of the Branch if possible. By the 1st of February I hope our balance
of Bills Discounted will be reduced to One Million & an half - if with our
Capital we cannot go that length with perfect safety, we might almost as
well wind up; - however there must be a certain period or extent of busi-
ness that would infallibly put us upon a par with the other Bank, but what
that extent is, must be found out by experience, & when found out it may
perhaps be too small an object to be worth an operation.
"When your occupations will allow you one moment's leisure, it will be
My dear Sir a great comfort to me, to have your sentiments on these points,
for I must freely confess to you, that I think the Institution is in danger."
By this time, however, Hamilton was stimulated to unusual
discretion by the Reynolds charge of speculation with public
funds,¹ for which the sinking fund operations supplied part of the
basis, and already in October he had found it advisable to ask
Seton to send him copies of all letters relating to purchases of
the public debt; 2 and this rather remarkable letter of Seton's is
1 Cf. Essay II, 312-313.
2 Referred to in Seton's letter of October 26, in Hamilton Papers.
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endorsed, apparently in Hamilton's hand, "No Answer." How-
ever, the " fatal consequences" were averted, and despite an-
other rapid drain of specie in March, 1793, relations between the
two banks again became "tolerably smooth." 1
In June, 1794, Seton resigned and went to Europe,2 and
further correspondence through him naturally ceased. By this
time it appears that the bank was well able to hold its own in
competition with the branch and was able also to return Ham-
ilton's favors. On Oct. 6, 1794, a loan of $200,000 was made
to the Treasury at five per cent for four months, and before
maturity this was extended eight months. On Dec. 9, 1794,
a one-year loan of $100,000 was negotiated at five per cent
with the privilege of annual renewals for five years.⁸ Hamilton
freely acknowledged his appreciation. Writing upon learning
of the bank's reception of this last proposition, he said: 4 "It
gives me pleasure to have this fresh opportunity of bearing
testimony to the liberal and patriotic zeal for the service of
the United States which the Bank of New York has on every
occasion evinced." And on leaving office he wrote: 5
"I cannot let slip this opportunity of thanking, for the last time, the
Directors of the Bank of New York for that decided, prompt support of
my administration which they have upon every occasion given. It has
made a lasting impression on my heart."
The relationships did not finally end even here, for in Decem-
ber, 1796, the president of the bank called on Hamilton, mani-
festing anxiety regarding its situation, and Hamilton responded
by writing earnestly on its behalf to his friend and former sub-
ordinate, Oliver Wolcott, now his successor in the Treasury
Department.
Hamilton, in short, as Secretary of the Treasury, exchanged
favors with the Bank of New York, which he had helped found.
1 Seton's letters of March 5, May 3, June 25, 1793, in Hamilton Papers.
2 Seton to Hamilton, June 16, 1794, in ibid.
3
Domett, Bank of N. Y., 50-5I. The terms given to Hamilton's successor, in
August, 1795, were notably higher.
4 Ibid., 5I.
5
Letter of Jan. 25, 1795, in ibid., 131; Holdsworth, First Bank of the U. S., 42.
6
Hamilton, Works (Const. ed.), x, 213-214, and cf. ibid., 218-220, 224 - all
letters of December, 1796.
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BANKING COMPANIES
95
In part, clearly, his actions sprang from eagerness to avoid
any maladjustment of existing credit machinery, of the delicacy
of which he was keenly aware. In his report to Congress answer-
ing an inquiry intended to lay bare undue preference to the
national bank, he made a point of his coöperation with the state
banks, but asserted that none of the establishments had "re-
ceived any accommodations which were not in perfect coinci-
dence with the public interest, and in the due and proper course
of events." 1 Yet it seems fair to say that he was overzealous
and not wholly impartial in his efforts to "protect" his friends in
the older bank, and that at least in asking the favor for the
manufacturing society he put himself under obligations which
he found it necessary to fulfil as Secretary of the Treasury.
On the other hand there appears no shred of evidence that he
stood personally to gain. At its incorporation in 1791 Hamilton
owned but $750 of its stock. In May, 1792, he directed Seton
to sell this for .him, in deference to a federal act passed this
month, and while Seton held off a while in the hope of better
prices, the stock was disposed of early in August.2
In Pennsylvania conditions were not far different from those
in New York, but the pressure of a considerable Treasury sur-
plus arising from the sales of public lands figured as an espe-
cially large factor. The promoters of canals and inland naviga-
tion within the state itched to secure substantial support from
this source, but with unusual foresight the state legislature
undertook to invest in bank stock instead.3 Overtures were
made to the Bank of North America, without avail.4 Other
capitalists were less backward, and on March 20, 1793, the Bank
of Pennsylvania was chartered with an authorized capital of
$3,000,000, to which the state subscribed one million.5 The
1 Works, iii, 417.
2
Domett, Bank of N. Y., 131; Seton to Hamilton, May 28, Aug. 6, 1792, in
Hamilton Papers; Hamilton to Seton, June 26, 1792, in Works, v, 513.
3
Henry Adams, Life of Gallatin, i, 85-86. Cf. infra, 156-157.
4 Lewis, Bank of N. A., 81; Pa. Stats. at Large, xiv, 312.
5
Pa. Stats. at Large, xiv, 365. Seven hundred and fifty thousand dollars was
promptly turned in - $374,271.06 in specie, the rest in United States stocks -
and the balance paid up by a loan from the bank: message of Governor Mifflin,
Aug. 29, 1793, in Hazard, Register of Pa., viii, 23I (1831).
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96 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
act authorized the Bank of North America to relinquish its
charter and become absorbed in the new bank, but the oppor-
tunity was neglected. Though the competition of the new
bank was felt, the old prospered with it,¹ and in 1799 found no
difficulty in securing a renewal of its charter.
The Bank of Pennsylvania was required by its charter to loan
to the state $500,000, beyond a sum necessary to complete pay-
ments on its subscription, at not more than six per cent (sects.
12, 14) for the establishment of a loan office, an act for which
was passed two weeks later (April II, 1793). A year later the
loan office was abolished, having been "found inexpedient and
not to answer the purposes intended by the legislature." This
was probably quite to the satisfaction of the bank.2 Further,
the state favored the bank by requiring the state's funds, the
funds and securities of the insurance companies of North Amer-
ica and Pennsylvania, and other funds over which the state
had control, to be deposited with it.³ The better to justify
its title, the bank was authorized
"to establish offices at Lancaster, York or Reading, or wheresoever else they
shall think fit, within the state, for the purposes of discount and deposit only,
and upon the same terms, and in the same manner as shall be practiced at
the bank."
Such offices were not to be opened "in any town or borough
without the previous consent of the corporation of such town or
borough" and might be "annulled" "if found injurious to the
real interest of the incorporation." (Sect. 7, Art. 15.) Before
1810 several such offices had been opened and discontinued,⁴
but the details I have been unable to learn.
The Bank of Pennsylvania came increasingly into the control
of the state, held most of the state loans negotiated, made
advances for carrying on the state works, and defrayed the state
expenses out of its dividends.⁵ It is noteworthy as the only im-
1 Cf. Pa. Mag. of Hist. and Biog., xxvi, 71, 75, 229, 232, 233, 235.
2 Pa. Stats. at Large, xiv, 379-380, 481-490, xv, 78-80.
3 Ibid., XV, 43, 71, 456, 460.
4 Dewey, State Banking before the Civil War, 137.
5
Adams, Life of Gallatin, i, 85-86; Hazard, Register of Pa., iii, I9I. In 1811 a
committee of the Pennsylvania legislature reported the bank to have "Bills Dis-
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BANKING COMPANIES
97
portant state bank of this century. It is true that Massa-
chusetts held a large interest in the Union Bank of Boston
and that other states had considerable sums invested in bank
stock. Nowhere else, however, was the control so great, the
relationship so close, or the returns so large.
New banks were established here and there after the climax
of the movement was reached in 1792. In 1793 there were two
besides the Bank of Pennsylvania. The Bank of Columbia at
Hudson, N. Y., secured the charter it had sought vainly the
year before and continued to do business on a modest scale, in
1811 having a paid-in capital of $160,000.¹ Another Bank of
Columbia was chartered by Maryland December 28 to be
established in, the new federal district. The bank was "organ-
ized for the special purpose of handling the paper of the com-
missioners as well as of the lot buyers." The city commissioners
were authorized to subscribe for one-fifth of the ten thousand
shares ($100 par) and did subscribe ten hundred and fifty-three
shares; and Samuel Blodget Jr., lately supervisor of the city,
was first president.² The southern bank stock, par $40, was
selling at $33 in February, 1797, and there was talk of failure,
doubtless owing to the disasters affecting the Washington capi-
talists; but it survived until 1827 and was for some years used
both as a public depository and as an agency for public pay-
ments. In 1814, $859,560 was reported as its paid-in capital.
No new banks were established in 1794, a year of general busi-
ness depression. In December of this year, however, James
McHenry introduced a bill to establish a new bank in Baltimore,
as he had done twelve years before. The city was doing a
large and growing export trade and increasing as well in domestic
business. For the moment no action was taken, but in 1795,
counted of over five millions, and cash over one million": Niles' Register, i, 399
(Feb. I, 1812). Cf. Pa. Stats. at Large, xv, 348, for act of April, 1799, authorizing
a loan of $100,000 to the state.
1 Laws (ed. 1887), iii, 429-432 (March 6, 1793); Assembly Minutes, 1811.
2 Bryan, History of the National Capital, i, 223, 329-330, 431.
3 George Washington to Henry Lee, April 2, 1797, in Pa. Mag. of Hist. and Biog.,
XXXV, 108-110; Howe, Early Financial Institutions, IO-15; Bryan, National Capi-
tal, i, 223, 535-536, 538, and passim.
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98 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
when the Bank of Maryland unsuccessfully attempted to get
permission to double its $300,000 capital, the new project was
warmly pressed. It was argued that the $800,000 capital em-
ployed by the two existing banks was utterly inadequate to the
city's needs, and an attempt was made to set a present limit
of $3,000,000 to the capital of the new institution, with provision
for its ultimate increase to $9,000,000. These extreme requests
were denied, but the charter was granted with a generous limit
of $1,200,000.¹ The bank was floated with some difficulty,
owing to opposition from the Potomac Company and from
Annapolis, which always feared and opposed Baltimore as a
trade rival; 2 but the bank soon got under way and contributed
its share to the flood of notes which compelled the attention of
foreign visitors to the city.⁸
Except for the Bank of Baltimore the new charters from 1794
to I800 were not of great importance, and all but one were
confined to three New England states. Five of these were
granted by the Massachusetts legislature. The Essex Bank,
established in Salem in 1792, secured its charter quietly in 1799.
A small institution, with power to raise from $40,000 to $100,000,
was incorporated for Nantucket in February, 1795. Provision
was made (sect. 8) that if the subscribers applied to the Union
Bank by May I, 1795, and the latter's directors agreed, the
Nantucket institution might become a local branch of the Boston
one, and the latter's capital increased accordingly. Apparently
no steps were taken in this direction. The bank had the mis-
fortune to be robbed of over $20,000 of its small funds, in July,
1795, about the time of beginning business. This interrupted
the business, but on March I, 1797, the legislature authorized
it to operate on a capital of $20,000, and this seems to have
been done. The bank, however, did not have a long career.4
1 McHenry, Life and Correspondence, 154, 162; Bryan, State Banking in Md., 20-
21; N. Y. Magazine, vi, 767 (December, 1795); Md. Laws (Kilty), 1795, c. 27.
2 Key to McHenry, Dec. 13, 1796, in McHenry, Life and Correspondence, 207.
Cf. also infra, II5, 122.
8
Isaac Weld, Travels through North America, 1785-1787 (London, 1799), 20.
4 Mass. Laws (ed. 1801), ii, 664, 760, 884; Providence Gazette, July 7, 1795, June
27, 1797.
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BANKING COMPANIES
99
Also in February, 1795, the Merrimack Bank at Newburyport
was chartered with a capital of $70,000 to $150,000. This suc-
ceeded well enough to petition in February, 1800, successfully,
for the right to increase its capital to $250,000.¹ In June, 1799,
the Portland Bank - the first in Maine - was chartered with
$100,000 capital. It did business successfully till 1808 and was
wound up at a loss in 1815.2 In January, 1800, the Gloucester
Bank was incorporated with $40,000 capital, which was in-
creased in the following June to $100,000.³
Rhode Island added three. The largest was the Bank of
Rhode Island, with an authorized capital of $400,000. A
subscription was opened Oct. I2, 1795, and nearly eight times
the proposed capital was subscribed. Directors were chosen
next day.4 The president, Christopher Champlin, was a promi-
nent merchant and member of Congress. Other important
merchants on the board were George Champlin, George Gibbs,
Caleb Gardner, Walter Channing, Simeon Martin, and Peleg
Clarke, the last of whom was also in the Governor's Council
and in 1799 succeeded Jabez Bowen as Grand Master of the
State Lodge of Free and Accepted Masons. A charter was
granted October 28. The bank went promptly into operation
and prospered greatly, gradually increasing its dividend till it
reached five per cent semi-annually. It continued under its
state charter until it was nationalized in 1865; and in I902 be-
came the Newport branch of the Industrial Trust Company
of Providence.⁵
In June, 1800, two small banks were chartered for Bristol
and Westerly. Of the former little is recorded, but it continued
in business till 1865. The Washington Bank, at Westerly, was
1 Laws (ed. 1801), ii, 692, 697, 89r.
2 Ibid., ii, 858; Willis, Hist. of Portland, ii, 660; Newport Mercury, April 3, 1799;
W. E. Gould, "Portland Banks," in Me. Hist. Soc. Colls. and Proc., 2d Series, iv,
90-91.
3 Laws (ed. 1801), ii, 885, 936.
4 Newport Mercury, Oct. 13, 20, 1795, Jan. 3, 1797, Jan. 8, 1798. The other di-
rectors were James Robinson and Thomas Dennis. For several years the same board
was reēlected without change.
5 See dividend table, infra, 104. Letter from Mr. Thomas Peckham, April II,
1916.
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100 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
organized especially for farmers and mechanics and was modelled
somewhat after the Union Bank in New London (1792). A
capital of $50,000 was raised at the outset, fifteen directors
elected, and the bank opened for business Aug. 22, 1800. A
dividend was declared Feb. 22, 1801, and for a number of years
the bank was highly prosperous. Although competition in time
reduced its dividends, it survived all ups and downs, and
eventually increased its capital to $150,000, besides accumu-
lating a surplus. In 1865 it became the Washington National
Bank, and since 1902 it has operated as the Washington Trus!
Company.1
Connecticut increased her already large quota by others at
Middletown in 1795, which was not organized till 1801, and at
Norwich in 1796.2 The only one south or west of Connecticut
was the $100,000 Bank of Delaware at Wilmington, chartered
February 9, organized June 5, and opened Aug. 17, 1795.⁸ The
Duke de la Rochefoucault Liancourt, who travelled in the coun-
try in 1795-97, commented acridly on this Wilmington bank as
needless, adding:
"It will, however, have the same effects as all the small banks established
on the continent; it will increase the means of speculating stock-jobbers and
adventurers; and will sooner or later, like most others, prove pernicious to
the cause of morality, and destructive to those whose speculations are at
present aided by its discounts and the paper money which it issues." 4
All three of these, now nationalized, still exist.
Mention remains to be made of another bank established
under an act containing no banking provisions. In the spring
of 1799 Aaron Burr manœuvred through the New York legisla-
ture a perpetual charter for the Manhattan Company, whose
ostensible purpose was the furnishing of a supply of pure water
for the city of New York, but whose more important underlying
1 Session Laws; Stokes, Chartered Banking in R. I., 13; Frederick Denison,
Westerly (Rhode Island) and its Witnesses
1626-1876 (Providence, 1878), 259-
264; "Historical Table of Banking Institutions
in Third Annual Report of
the Bank Commissioner [Rhode Island], I9IO, p. 263.
2 Caulkins, Norwich, Conn., 366-367.
8 H. C. Conrad, History of Delaware.
(Wilmington, 1908), i, 342-343.
4
Travels in North America, ii, 266.
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BANKING COMPANIES
IOI
purpose was the establishment of a bank under influences more
cordial to the democratic party than were the older institu-
tions. A maximum capital of $2,000,000, in $50 shares, was
authorized, and while the charter was to be forfeited if the com-
pany should fail to provide a satisfactory supply of water within
ten years, a clause was inserted authorizing the use of any
surplus for any purpose not prohibited by constitution or laws
of the state or the nation. In the select committee of the Senate,
to which he had secured the commitinent, a motion was made
to strike out this clause. Upon inquiry "Burr avowed the design
of using the surplus capital to establish a Bank or an East
India Company, or any thing else the directors might choose,
since the furnishing a city of fifty thousand inhabitants with
water would not remunerate the shareholders." Later, when
the bill was referred to the chief justice by the Council of
Revision, he reported adversely, since the result of the clause in
question could not be foretold, and it was contrary to the policy
hitherto pursued "that the powers of corporations relative to
their money operations should be of limited instead of perpetual
duration." Nevertheless, thanks to Burr's political power and
skill, the committee, the Council of Revision, and the Federalist
legislature all passed the bill, and Jay, the Federalist governor,
signed it, despite the decided opposition of the "most respect-
able mercantile and monied interests." The act passed early
in April; early in June the intention to set up a bank was
announced, and banking operations were actually begun in
September.¹ As the "Manhattan Bank" the institution has
lived and prospered.
Probably there were some other attempts to establish banks
which came to naught. In New Jersey, for example, there was
an effort to establish a bank in September, 1795. Advertise-
ments were published over the state for subscriptions to a
million dollars in $10 shares for a bank in Trenton adapted to
local needs. "The plan of this Bank," ran the advertisement,
1 Parton, Life of Burr, 237-239; M. L. Davis, Memoirs of Aaron Burr, i, 413-
417; letters of Robert Troup in King, Rufus King, ii, 597-598, iii, 34, 43; Domett,
Bank of N. Y., 57-58. For the water operations, see infra, 252.
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IO2 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
"admits Farmers to borrow money on twelve months credit,
they giving landed security." But the public did not respond,
and the enterprise did not reach the stage of application for
corporate powers.¹ It is doubtful, however, whether any serious
attempts in such directions secured capitalist support sufficient
to justify seeking charters. The fact is that by 1795 the com-
mercial centres were fairly well furnished with banking facilities,
and that the latter years of the century were not marked by such
business expansion as called for considerable increases in these
facilities. The sporadic instances of incorporation of small
local banks attest merely the initiative of certain groups of
citizens and the absence of abuses of banking privileges which
would have made legislatures cautious in granting charters.
An examination of the census report for 1800 makes clear the
degree to which the bank was naturalized in New England.
Its seventeen institutions (not to count the federal branch) were
scattered through sixteen towns. Except Marblehead (suf-
ficiently near Salem) and Bridgewater, Mass., and Norwalk,
Conn., every New England town of over 5000 population had
its bank (these three towns had hardly more than 5000); while
all the bank towns had over 5000 population except Portland
(3704), Me., Bristol (1678) and Westerly (2329), R. I., and
Norwich (3476), Conn. To the southward, on the other hand,
banks were almost wholly confined to the larger centres, Hud-
son, N. Y., and Wilmington, Del., being the clearest exceptions.
It is further to be noted that, in the main, the functions of
discount, deposit, and issue were exercised almost solely by
these incorporated institutions. There were of course local
capitalists who accommodated their neighbors, but did not
make a business of money lending. There were also numerous
examples of "ticket currency," or small notes for change, issued
(especially before 1796) by individuals or corporations for the
accommodation of their workmen or customers. But apparently
only New Hampshire and Massachusetts found need, before
1 New Brunswick Advertiser, Sept. 14, 1795, and other contemporary local
gazettes.
2 Wansey, Journal of an Excursion, 227; Essay III, 497, and infra, 275.
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BANKING COMPANIES
103
the end of the century, to prohibit unincorporated establish-
ments from performing banking functions.¹ The only con-
spicuous instances of unincorporated banks are those of the
Bank of New York (1784-91), the Essex Bank (1792-99), and
the Bank of South Carolina (1792-1800).
Reliable statistics of capital and operations cannot be secured.
It is clear, however, that nearly all of the banks went success-
fully into operation. The Richmond and Middletown institu-
tions did not open during the century. The Nantucket and New
Haven banks were delayed. All of the others were in success-
ful operation in 1800. In size the Bank of the United States was
by far the largest, though its $10,000,000 capital was divided
among the Philadelphia parent office and the branches at Boston,
New York, Baltimore, Norfolk (after 1799), and Charleston.
Next to it stood the Bank of Pennsylvania, with $2,000,000,
and the Manhattan, with a total of the same, followed by a
group consisting of the Union of Boston, the New York, the
North America, the Baltimore, and the Columbia at Wash-
ington, with capitals of a million or a little more or less. No
other at this time had more than $500,000, except possibly the
unincorporated Charleston bank. The little institutions, with
less than $100,000, were at Gloucester, Bristol, Westerly,
and New Haven. In all the paid-in banking capital was
probably between twenty-two and twenty-four millions in 1800.
Of the profitableness of the banks there is no question. The
accompanying table shows the dividend rates for the period
1782-1800 for a number of the institutions here discussed.⁴ It
1 N. H. MS. Laws, xii, I64 (Index, 33); Mass. Laws (ed. 1801), ii, 883-884.
2 The table given in Blodget's Economica, 159, upon which is based that in
Knox's History of Banking, 307, is unreliable, and Knox has used it incorrectly.
3 The distribution of capital between the bank and its branches was not
generally known. The state in 1810 is given in American State Papers, Finance,
ii, 479. Rochefoucault Liancourt, in his Travels, ii, 161, said the capital of the
Boston branch about 1796 was thought to be $500,000. Cf. also supra, 98.
4 Figures are based on the following sources: letters, April, 1916, from officers of
the banks or their successors (North America, New York, Providence, New Haven,
Rhode Island); personal inspection of records (Massachusetts and Union banks,
Boston); Holdsworth, First Bank of the U.S., 137; Bryan, State Banking in Md.,
20; Woodward, Hartford Bank, 162; Woolsey, New Haven Bank, 314-316; Roche-
foucault Liancourt, Travels, i, 573-574. Dividends declared in January are, in the
case of the Bank of the United States and the Union Bank, included in the figure for
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TABLE VII. DIVIDENDS ON BANK STOCK, 1782-1800
Bank
1782
1783
1784
1785
1786
1787
1788
1789
1790
1791
1792
1793
1794
1795
1796
1797
1798
1799
1800
Averages
North America
8½
14½
13½
6
6
6
6½
7
7.
13½
12½
12
12
12
12
12
12
II
10
10.23
New York
6
6
6
6
6½
7
7
101/2
8½
9
13½
9
9
13½
9
9
13½
8.84
Massachusetts
..
:
41
2½
5
6½
73/2
8½
22½
19
273/32
8
8
101/2
8½
9
9
9
9
10.59
Maryland
....
:
:
:.
12
IS
13
12
12
12
12
12
12
12
12.00
United States
:
:.
:
:.
:
:
:.
8
73/3
8
8
8
9
8
8
10
8.28
Providence
73/8
8
8
8
8
:.
..
:
:.
:
7
7
10½
10
8.18
South Carolina
:
:
:
9
9
IS
IS
73/31
?
?
?
?
?
Hartford
:
:
3½
3
o
o
3
3½
4?
4?
2.63
Union (Boston)
:
8
8
:
8½
10
10
9
9
9
8.94
New Haven
:
..
:.
:
:.
o
8
8½
6
6
5.05
Pennsylvania
8
:
8
:
:.
:.
:
: .
:.
:.
:.
:
:
10
93/2
9½
0.00
Rhode Island
:.
:
:
: .
:.
:
: .
: .
:
:.
: .
:
: .
:.
5½
8
8
10
10
8.30
Averages
....
8.75
14.5
9-4
4.83
5.67
6.17
6.85
7.5
12.25
13.75
8
:.
:.
:.
:
:.
: .
:
: .
:
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104 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
1 For six months.
2 Including extra dividends, reduced to percentages of the capital upon which they were declared.
3 Averages are not given after 1791 because the later statistics are incomplete.
BANKING COMPANIES
105
indicates that typical dividends were eight to ten per cent per
annum, usually paid semi-annually. The table shows the in-
fluence of the different phases of the business cycles, but makes
clear that the banks generally were able to pay good dividends
even in dull times. As a result of the steadiness and fair size of
these dividends, bank stocks had become, by the end of the
period, recognized as standard investments and generally sold
above par.¹
The charters differed in different states, but after the first
ones they tended to follow somewhat the same form in any one
state. The charter of the Massachusetts Bank (1784) was very
loose. No term of franchise, no capital, no par value of stock,
no creditors were mentioned. Voting privileges were made one
vote per share. The legislature might appoint a person to
examine the books and records of the bank at any time. None
of the corporation's funds were to be employed in trade. These
were virtually the sole restrictions. Property held might be as
much as £500,000. Thereafter, in Massachusetts, the capital
was specified, varying in each case. Par value was $100 except
in the Essex Bank ($500) and the Union Bank ($4-$8). Direc-
tors numbered twelve (Union, Nantucket) or seven (later).
These were required to be stockholders, citizens, and residents
of the state and (except in case of the Nantucket Bank) might
not be directors in any other bank. One-fourth at least were
ineligible for reëlection. Voting privileges were one vote per
$100 in stock, one vote for each $200 additional, up to a maxi-
mum of ten votes. Inspection by a committee of the legislature
was provided for, and if such investigation showed violation of
the charter, the governor might forthwith declare it void.
Beginning with the Nantucket Bank the directors were required
to make a statement semi-annually (Portland and Essex an-
nually), or oftener if requested, to the governor and council, of
the capital, debts, deposits, notes, and cash on hand. Debts
the year preceding. Cf. also Washington's memoranda in his will, regarding his
shares in the banks of Columbia and Alexandria: "the stock usually divided from
eight to ten per cent per annum": Works (Ford ed.), xiv, 307; and supra, 80 n.
1 Cf., e.g., Mass. Magazine, 1792-94; Holdsworth, First Bank of the U.S., 136;
Munsell, Annals of Albany, iii, 157, 167, 173, 186; and supra, 6on.
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I06 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
might not exceed twice the capital stock, "in addition to the
simple amount of all monies actually deposited in said Bank for
safe keeping," the directors being personally liable for any
excess. Only in the case of the Union Bank were provisions
inserted permitting branches, reserving to the state rights of
subscription or privileges of loans, or requiring loans to agri-
cultural interests. This charter also contains the peculiar proviso
that loans to a foreign prince or state may not be made unless
authorized by law. These provisions, while not to be regarded
as describing charters in other states, sufficiently indicate the
form of common regulations.
Besides the Massachusetts Bank and the Bank of North
America by its earlier charters, the Bank of Maryland (1790),
the Union Bank of Boston (1792), and the Rhode Island and
Connecticut banks had no time limits fixed in their charters;
but the Connecticut charters in 1795 and after reserved to the
state the right to alter or repeal. In other cases a twenty-year
period, such as the Bank of the United States had, was most
common, though the Bank of North America (1787) had four-
teen years set, and several Massachusetts banks had ten years.
Cases of extended liability of stockholders were rare. In
the case of the Bank of Alexandria, Va. (1792), stockholders
were to be liable after the directors, in proportion to their
holdings, if debts were allowed to exceed four times the capital.
Besides the Bank of the United States the Union Bank of
Boston (1792), the Bank of Richmond (1792), and the Bank of
Pennsylvania (1793) were authorized to establish branches
within the state which chartered them. The Richmond charter
further provided
'that any town holding three hundred shares, shall have a right to an agent,
who shall at the risk and expence of the bank forward bills offered for dis-
count to the directors, and if approved make the advance, and when due
collect the money. Provided, that no office established in any town as afore-
said, shall be discontinued, unless there shall be for the space of three
months a deficiency in the number of shares required by this act to entitle
such town to an office of discount. And that no office of discount estab-
lished by virtue of this act, shall be compelled to pay in specie any other
notes than such as shall or may be issued by such office."
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BANKING COMPANIES
I07
None of these seems actually to have set up any branch office
of discount and deposit before 1800; the Bank of Richmond
never got under way, and the others were sufficiently prosperous
without risking this extension.
State participation in banking was not carried far until the
nineteenth century, although the reservation of a certain num-
ber of shares for state subscription was inserted in many charters,
beginning with that of the Bank of the United States in 1791.
The noteworthy examples were the $254,000 subscription of the
Confederation government under Robert Morris to the Bank
of North America in 1782;1 the $2,000,000 subscription of the
federal government to the Bank of the United States in 1791,
supplemented by smaller subscriptions by several states;2 the
$1,000,000 subscription of the state of Pennsylvania to the
Bank of Pennsylvania in 1793; and the Massachusetts subscrip-
tion of $400,000 to the Union Bank in 1793 and 1795. Except
in these instances the reservations usually constituted quite a
small fraction of the total stock, and usually the option was
not exercised. However, New York in January, 1792, author-
ized subscription to one hundred shares ($50,000) in the Bank
of New York, and in 1797 $20,000 to the Bank of Albany;
and in December, 1792, the New Hampshire legislature voted
to subscribe twenty-six shares ($10,400) to the New Hampshire
Bank, subject to repayment in three years with six per cent
interest if the legislature should so request.4 These are the
outstanding if not the only instances of such stock ownership
prior to 1800. The options reserved in the Manhattan Company
(1799) and Bank of Columbia (1793) were exercised some time
after 1800 to the extent of $50,000 and $20,000 respectively.⁵
Only in 1803 did Connecticut subscribe to the Hartford Bank
(1792) and Maryland to the Bank of Baltimore (1795).⁶
1 Lewis, Bank of N. A., 41.
2
New York owned one hundred and fifty-two shares ($60,800) in 1811: Assembly
Minutes, 1811, p. 85.
3
N. Y. Laws (ed. 1887), iii, 261-262; Assembly Minutes, 1811, p. 85.
4
N. H. State Papers, xxii, 621, 682-683. Cf. ibid., 385, 446, 475-476, for defeat
a year earlier.
5 Assembly Minutes, 1811, pp. 79-80, 85.
6 Bryan, State Banking in Md., 28, 30. Two hundred and twenty shares
($66,000) out of six hundred reserved were paid up.
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108 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
State participation in profits without stock ownership was
mooted when the Boston Tontine Association sought its charter
in 1792,1 and again in 1795 when the Bank of Baltimore was
getting its act.2 In no case was it adopted.
Altogether there can be no question that the banks were the
most important and the most successful of the eighteenth cen-
tury business corporations. Somewhat belated in appearing,
they established themselves on a solid footing in a surprisingly
short time. Despite violent criticism, arising largely from
prejudice or misconceptions, but in some measure from un-
wholesome secrecy and practices, they gained and held a de-
servedly high place in the business world and were respected by
the mass of the town population. It is reasonable to infer that
their experience tended definitely to promote experiments with
the corporate form in other fields, and that the availability of
banking resources indirectly aided such extension.
1 Columbian Centinel, Feb. 29, 1792: a proposal of one per cent on capital if
profits should exceed six per cent - like such a provision in certain canal charters
of Pennsylvania, where, however, the profit limit was much higher before partici-
pation should occur.
2 Bryan, State Banking in Md., 31: the proposal was that half the profits beyond
ten per cent should go to the state.
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CHAPTER III
CORPORATIONS FOR IMPROVING INLAND NAVIGATION
THE development of transportation facilities is always of
large importance in a young country. This is especially the
case after the first stage of infancy has passed and the stage
of adolescence has been reached: for by selection of sites and
utilization of unimproved natural highways serious difficulties
may often be evaded in the earliest years; but when the popu-
lation has increased and extended beyond the first choices,
when a measure of intensity of cultivation, of economic speciali-
zation has arisen, there appears the imperative necessity for
artificial highways or artificial improvements of natural high-
ways. Such a need had of course appeared in the American
colonies before 1776, and numerous efforts had been made to
bridge streams, build roads, provide regular ferries, etc., though
invariably on a small scale and usually as merely local enter-
prises. The Revolution directed attention to this need, partly
by reason of the military requirements, but quite as much by
the intellectual awakening to economic needs which sprang from
the intercourse of the country's ablest men and their concentra-
tion on national conditions and opportunities as contrasted with
those merely local.
Between 1760 and 1775 - after the Revolution in the broader
sense had begun, but some years yet before resort was had to
arms - several moves were made in the direction of improving
communication by water.¹ On March 4, 1761, the Pennsylvania
legislature appointed commissioners to make the Schuylkill
1 For English attention to river improvements and canals, see esp. Edwin A.
Pratt, A History of Inland Transport and Communication in England (New York,
1915), chaps. 14, 15. The first statutes appear in the fifteenth century. After
the middle of the eighteenth century numerous canal ventures were authorized,
most of them in corporate form.
109
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IIO EIGHTEENTH CENTURY BUSINESS CORPORATIONS
navigable, collecting for and applying to this purpose the sums
which individuals already had raised and others which should
be voluntarily subscribed; and to this object a £1500 appro-
priation from the provincial Treasury was made.¹ "Phila-
delphus," writing in the Pennsylvania Chronicle for 1768, urged
the construction of sixteen £6000 dams to improve the naviga-
tion of the Schuylkill and Susquehanna, and proposed an in-
corporated company as the instrument of its accomplishment.*
In 1769 the American Philosophical Society was induced to
order a survey for a canal to connect the Delaware and Chesa-
peake bays; and its committee, "William Smith, D.D., the
Provost of the college of Philadelphia, John Lukens, Esquire,
Surveyor General of the province
,
and John Sellers,
Esquire," favorably reported both on this and on a canal be-
tween the Quitapahilla and Tulpehocken to unite the Schuylkill
and Susquehanna. This latter route, reported the company
which later undertook the work in 1795,
"was afterwards examined and levelled, under legislative sanction, by sun-
dry skilful persons, and among others by the celebrated philosopher and
mechanic David Rittenhouse, Esquire, LL.D. his brother Benjamin Ritten-
house, Timothy Matlack, John Adlum, Esquires, and others, all agreeing in
the results of their work."
There were commissioners appointed under the act of Feb.
26, 1773, for making the Schuylkill navigable.⁸ Several broad-
sides favoring canals in these two quarters were published in
Philadelphia between 1768 and 1772.4
1 Pa. Stats. at Large, vi, 93-100, I17. Cf. "T. G.," in the American Daily Ad-
vertiser, Jan. 2, 1792: "A water communication between Susquehanna and Schuyl-
kill was thirty years ago, talked of as a kind of possible possibility." I do not find
evidence to support the statement of C. F. Carter (When Railroads were New, New
York, I910, p. 5) that Pennsylvania citizens applied for a charter for this purpose in
1762. The statement has been made that William Penn suggested this canal, but
his language does not clearly warrant this construction: Hazard, Register of Pa.,
i, 400 (1828).
2 Quoted in Hazard, Register of Pa., viii, 99-100 (1831).
3 See An Historical Account of the Rise, Progress, and Present State of the Canal
Navigation in Pennsylvania (Philadelphia, 1795), 67; George W. Smith, quoted in
Hazard, Register of Pa., i, 409-410 (1828); William Barton, Memoirs of the Life of
David Rittenhouse
(Philadelphia, 1813), 236; Pa. Stats. at Large, viii, 327-
330.
4 Titles in Evans, American Bibliography, iv, 124, 299, 337 (Nos. 10854, 12246,
12580).
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IMPROVING INLAND NAVIGATION
III
In Maryland and Virginia, as well as in Pennsylvania, there
was activity in this field before the war. About 1767-68 Thomas
Gilpin made surveys and estimates for a canal to connect the
Chesapeake at Duck Creek with the Delaware at Chester.¹
Interest was chiefly centered, however, upon projects for im-
proving the navigation of the Potomac. These were discussed
throughout the sixties, if not earlier. Members of the Ohio
Company2 were especially interested in such an enterprise, as
well as landowners and merchants on the lower Potomac.
In the first definite project the initiative seems to have been
taken by Thomas Johnson (later governor) and his brother of
Frederick, Md., who were large landowners. George Wash-
ington, however, was consulted at the start and may have
made the original suggestion.⁸ At a meeting held in Frederick,
probably in May, 1770, six Virginians and eleven Marylanders
were chosen managers and two treasurers appointed to raise
funds by voluntary subscription and with these to undertake the
opening of the navigation. Among the managers were George
Mason, treasurer of the Ohio Company, and Thomas Cresap, a
leading member, while George Mercer, son of its secretary, was
a treasurer. Neither incorporation nor authority to take toll
seems to have been contemplated; as in most of the colonial
schemes for local improvements, the promoters looked for
financial support to those whose private interests would be
advanced by the proposed work and others who possessed means
and a generous public spirit. On this score Washington criticised
the plan, upon being acquainted with what had been done.
He doubted if there were many disinterested persons "that
will contribute anything worth while to the work;" he was not
sanguine of getting the provinces to undertake it at public
expense; and he urged the advantage of getting legislative
authority for vesting the navigation in the subscribers and
securing reimbursement for "their first advances with a high
interest thereon, by a certain easy toll on all craft in proportion
1 J. Thomas Scharf, History of Maryland
(Baltimore, 1879), ii, 523.
2
On this company, formed in 1749, see Essay I, 96-97.
3
Jonathan Boucher, in his letter of April 2, 1770, quoted below, refers to the
scheme as "your proposed Improvem.
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II2 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
to their respective burthens, in the manner I am told works
of this sort are effected in the inland parts of England, or upon
the plan of turnpike roads."¹ By this means, he said,
"you would add thereby a third class of men, to the two I have mentioned,
and gain considerable strength by it. I mean the monied gentry, who
tempted by lucrative views would advance largely on account of the high
interest. This, I am inclined to think, is the only method by which this
desirable work will ever be accomplished in the manner it ought to be
Washington further recommended that the plan be made more
comprehensive, the better to appeal to the imagination of the
public. For the moment this advice was unheeded; some
capital was raised by the less promising method,3 but the plan
came to naught.
Early in 1772 Washington became the prime mover of a bill
in the Virginia House of Burgesses (of which he was a member)
for
"empowering Trustees (to be chosen by ye Subscribers to the Scheme) to
raise money by way of Subscriptions & Lottery, for the purpose of opening &
extending the Navigation of Potowmack from the Tide water, to Fort Cum-
berland; & for perpetuating the Tolls arising from vessels to the Adventurers
in the Scheme.
This soon passed. It is not an act of incorporation, but is in-
teresting as closely approaching such an act. Provision is made
for organization when a majority of the subscribers think a
sufficient sum subscribed, by electing from the subscribers a
president and eleven trustees or directors. This body is author-
1 This word may have come through Rev. Jonathan Boucher, who on April 2,
1770, wrote Washington that the Maryland assembly "wd not easily be per-
suaded to advance any Cash towards the Scheme," and proposed that funds be
secured by having commissioners empowered to borrow at not more than ten per
cent, interest and principal to be sunk by a tax on vessels using the improved navi-
gation. He added: "Are not some of the Canals in Engld, & y. Turnpike on this
System? &, if I mistake not, the very grand Canal now carrying on in Scotland is
so too": S. M. Hamilton, Letters to Washington
(Boston, 1901), iv, IO.
2 Washington to Johnson, July 20, 1770, quoted by Mrs. Corra Bacon-Foster, in
her Early Chapters in the Development of the Patomac Route to the West (Washing-
ton, 1912), 18-21. Cf. also George Mason's letter of 1775, quoted infra, 115n.
3 Boucher wrote Washington August 18: "They are still going on wth th! Sub-
scriptⁿ for clear. ye. Potomac, &, as I am told, with Spirit. Four hundred pounds are
subscribed in this City [Annapolis]; nor have They yet got all They expect":
Hamilton, Letters to Washington, iv, 30.
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IMPROVING INLAND NAVIGATION
113
ized to contract for constructing the works and to call on sub-
scribers for their payments. The property to be acquired is to
be vested in the proprietors as tenants in common forever;
suits for tolls, which are fixed by the act, and for subscriptions
are authorized to be made in the name of the "president, treas-
urers, and directors appointed for opening the falls of Potomack
river.". Annual meetings for hearing financial reports are pro-
vided for, but elections of trustees, apparently, are contemplated
only when vacancies should occur. Transfer of shares is spe-
cifically recognized, the trustees to have a preference of purchase
at each transfer. Adequate rights of eminent domain are be-
stowed, and in addition the privilege of raising by lottery
£10,000.¹
At the same session at which this act was passed, the Vir-
ginia assembly passed similar acts to provide for opening James
River through the falls from Westham to tidewater and for
cutting canals from the James to the York.2 Washington later
remarked to Jefferson that to get this main business "in motion"
he "was obliged
to comprehend James River, in order to
remove the jealousies, which arose from the attempt to extend
the navigation of the Potomac." At this juncture John
Ballendine, who owned iron works at Colchester and the Falls
of James River, secured a subscription from prominent Vir-
ginians to enable him to go to England to gain knowledge
respecting canals, for application on the Potomac and James.
In London the next year he circulated proposals for opening
both rivers and sought subscriptions. He met with some success,
and on his return in August, 1774, he brought "a number of
artificers and engineers" for work on the Potomac at and above
the Lower Falls. At his call a meeting of "his principal sub-
1 Stats. at Large (Hening), viii, 573-579. Cf. Bacon-Foster, Patomac Route,
17-24; John Pickell, An Early Chapter in the Early Life of Washington, in Connec-
tion with the Narrative History of the Potomac Company (New York, 1856), 19; H.B.
Adams, "Washington's Interest in the Potomac Company," in Johns Hopkins Univ.
Studies in Hist. and Pol. Sci., iii, No. I (Baltimore, 1885), 81; K. M. Rowland,
Charles Carroll of Carrollton, i, 94-95; ibid., Life of George Mason, i, 189; Scharf,
Hist. of Md., ii, 518.
2 Stats. at Large (Hening), viii, 556-570.
3 Letter of March 29, 1784, in Works (Ford ed.), X, 376.
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114 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
scribers and others interested" was held at Georgetown October
IO. It was agreed to raise a minimum of £30,000 Pennsylvania
currency. Of this about £8,000 was subscribed at once, Wash-
ington writing £500 Virginia currency, Charles Carroll of Carroll-
ton $1000 at 76/. Sixteen Virginians (including Washington
and George Mason) and twenty-one Marylanders (including
Thomas Johnson and Thomas Cresap) were appointed trustees,
and these were to choose a small executive committee. Ballen-
dine began at once with what hands he had, and in December
a number of trustees directed him to hire fifty slaves for the
work "on the credit and at the risk" of the assenting trustees.
Meanwhile efforts were made to secure the coöperation of the
Maryland assembly, which was essential because the Potomac
was a boundary river. Thomas Johnson was an influential and
indefatigable worker for the requisite bill, and George Mason and
John Ballendine went over to help. But there were several
snags in the way. Johnson wrote Washington May IO, 1772:
"I fear our Governor is still under an Impression that a Concurrence by
our Assembly in a scheme with yours for clearing Potowmack may weaken
the proprietary claim to exclusive Jurisdiction over that River and con-
sequently that he is not at Liberty to assent to such Bill tho' I believe in his
own Judgment clearing the River is an Object which deserves immediate
Attention and that he wishes to see it effected."
He therefore suggests
that a strong Representation should be sent to England, to be made use of
in case it should be necessary, to procure an Intimation from there that a Bill
ought to pass here: If Instructions ought at all to be sent to Governors as
the Rule of their Conduct I have no Idea but that propry Instructions might
properly be superseded by Instructions from the King in Council and if so
I cannot apprehend there would be the least difficulty in obtaining an
Order for the passage of a Bill in which the Trade and Subjects are so much
interested."
It is possible that Ballendine went to England with some such
job as part of his task. Petty intercolonial jealousies were
another obstacle. Mason wrote Washington Feb. 17, 1775,
after going over a draft of a bill with Johnson:
"What he mentions of some kind of jealousy least the Virginians should
have some advantage, and that there should be some equality between the
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IMPROVING INLAND NAVIGATION
II5
Maryland and Virginia subscriptions, I can have no idea of. What matter is
it whether the majority of subscribers are Marylanders or Virginians, if their
property is put upon an equal footing, and the work is of general advan-
tage to both provinces?"
There were, furthermore, some even pettier local jealousies and
some direct clashes of local economic interests. Mason wrote
Washington March 9, 1775:
"by what I can understand, there will be so strong an Opposition from Balti-
more, & the Head of the Bay, as will go near to prevent its [the bill's] pas-
sage thro' the Maryland Assembly, in any Shape it can be offered."
Washington later accounted the principal difficulty
"the opposition which was given
by the Baltimore merchants, who
were alarmed, and perhaps not without cause, at the consequence of water.
transportation to Georgetown of the produce which usually came to their
market by land." 1
Difficulties that delayed as well as annoyed were encountered
in drafting the Maryland act, for the petitioners wanted liberal
terms as to tolls and Treasury aid besides. Johnson said in a
letter of Jan. 24, 1775:
"despairing of ever seeing Pot. made navigable on the plan I most wished
it you may depend on my best Endeavours to get a Bill passed here similar
to yours whether upon giving ffee Simple in fiat & invariable Tolls or having
the Tolls ascertained anew from Time to Time with only to a limitted profit
per Cent in the Cost and Repairs of the Work or giving a Term only with a
still higher profit."
1 Letter to Jefferson, March 29, 1784, in Washington, Works (Ford ed.), X, 376-
377.
2 Regarding this Mason wrote Washington Feb. 17, 1775: "nor can I think his
notion of proportioning the tolls to the average profits can well be reduced to prac-
tice. A sufficient sum can't be raised by those only who are locally interested; men
who are not will not advance their money upon so great a risk, but with views of
great and increasing profit, not to depend upon future alterations. The tolls, to be
sure, must be moderate, such as the commodities will bear, with advantage to the
makers. It is probable for some years they will yield very little profit to the
undertakers, perhaps none; they must run the risk of this, as well as of the utter
failure of the undertaking, and surely if they succeed, they have a just right to the
increased profits, though in process of time they may become very great. If I am
not misinformed, this is the principle upon which everything of this nature has
been successfully executed in other countries." From such letters as this and Wash-
ington's to Johnson in 1770 one must realize that part of the community was ripe
for the public service corporation.
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I16 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Mason said to Washington in his letter of March 9:
"This Affair has taken Me five times as long as I expected; and I do as-
sure You I never engaged in any thing which puzzled Me more; there were
such a Number of Contingencys to provide for, & drawing up Laws a thing
so much out of my way - I shall be well pleased if the pains we have be-
stowed upon the Subject prove of any Service to so great an Undertaking."
Tightness of money too was a consideration not to be overlooked.
Johnson wrote in his January letter:
"Unless our Assembly will so far assist us as to emit a Sum of money for
Loan to the Subscribers I do assure you I do not think that those on our
Side who would most willingly subscribe will be able to do any Thing clever
I myself am in such a Situation that I cannot raise any Sum of Money with-
out selling a part of the very Estate to be benefited by the Scheme on very low
Terms at Present and many with whom I have spoke on the Subject are
circumstanced as myself I should think nothing of risking a good deal and
might prudently do it all chances considered but in these Times many want to
borrow and but few to lend Money I do not know where £500 could be got
on a Secty of 5000."¹
The upshot was that no bill could be got. When Washington
set out to take command of the American army in Cambridge,
the scheme
was in a tolerable good train;" but in
October, 1775, Ballendine announced that for lack of a Mary-
land act he had abandoned the Potomac work. "The war,
afterwards," as Washington wrote, "called men's attention to
different objects, and all the money they could or would raise,
was applied to other purposes." The energetic Ballendine
undertook to go ahead with the James River improvements
at his own expense and advertised to hire one hundred slaves,
but this scheme too was soon abandoned.²
The years of the war, naturally enough, were barren of activi-
ties in these directions. As soon as peace came, however, ante-
bellum projects were revived, and within a few years numerous
others were proposed, several undertaken, and a few carried
through to completion. Several of these were large enterprises
calling for capitals of upwards of $100,000 and promising to
1 See these letters in Hamilton, Letters to Washington, iv, IO, 30, v, 85, 122, 133,
135; Rowland, George Mason, i, 187.
2 Ibid., i, 189; Pickell, Potomac Company, 30; Bacon-Foster, Patomac Route,
29; Washington, Works, X, 376-377.
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IMPROVING INLAND NAVIGATION
117
be of large, even nation-wide importance. Such, for example,
were the Susquehanna canal of Maryland, the Potomac navi-
gation of Virginia and Maryland, the Dismal Swamp canal of
Virginia and North Carolina, the Santee and Cooper navigation
of South Carolina, the Catawba and Wateree of South Carolina
and North Carolina, the Schuylkill and Susquehanna navi-
gation in Pennsylvania, the Delaware and Chesapeake of
Pennsylvania and Maryland, the New York northern and
western canals, and the Middlesex canal of Massachusetts.
Others, though varying in size, were small and merely of local
consequence. Regarding the larger enterprises considerable
information is extant, and this it has seemed worth while to
summarize. The smaller companies must be more quickly
passed over, both because of their minor importance and because
much less information concerning them is obtainable. Inciden-
tally reference will be made to certain less highly developed
forms of organization, peculiarly numerous in this field, which
preceded and accompanied the corporation.
The accompanying table indicates how completely the southern
states took the lead in chartering canal companies in the decade
1781-90, and how widespread was the movement in the next
few years. It also reveals the high points of enthusiasm in 1792
and 1795-96.
On Dec. 26, 1783, the Maryland assembly granted the first
full and complete canal charter, to The Proprietors of the Sus-
quehanna Canal.¹ The act recites a long list of men, including
Charles Carroll of Carrollton and Henry' Lee, Jr., who,
"actuated by very laudable motives, have undertaken to render the river
Susquehanna navigable from the line of this state [Love Island] to tide
water, and have subscribed the sum of eighteen thousand five hundred
pounds current money of Maryland, and obliged themselves to raise by
subscription the further sum of one thousand five hundred pounds
to
be applied to that purpose; and this general assembly being strongly im-
pressed with the general utility of the said undertaking, and the beneficial
1 Md. Laws (Kilty), 1783, c. 23. Thomas W. Griffith says, in his Annals of Bal-
timore (Baltimore, 1824, p. 101), that the company was chiefly composed of citizens
of Baltimore.
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TABLE VIII. EIGHTEENTH CENTURY CHARTERS TO CORPORATIONS FOR IMPROVING INLAND NAVIGATION
Sources
1783
1784.
1785
1786
1787
1788
1789
1790
1791
1792
1793
1794
1795
1796
1797
1798
1799
1800
Totals
Maine1
: .
: .
:.
..
..
..
:.
I
I
..
: .
2
I
2
:.
: .
:
7
New Hampshire
:.
: .
: .
:
:.
..
: .
:.
: .
2
:.
:
: .
2
: .
I
:
:
5
Vermont
:.
:.
:
:
: .
:.
:.
..
I
I
:.
I
I
I
: .
:.
:
5
Massachusetts
..
: .
: .
..
: .
:
:.
: -
3
I
I
:.
:
:
: .
:.
5
Rhode Island
: .
..
: .
:
: .
:.
:.
:.
:
: .
I
: .
: .
:.
:
I
Connecticut
: .
: .
:.
:.
: .
I
:
: .
I
2
New England
:
: .
: .
2
7
1
2
4
4
3
1
: .
1
25
New York
:.
: .
:.
:.
: .
: .
2
:.
I
: .
3
New Jersey
:.
: .
:
: .
: .
: .
: .
:.
I
I
I
:
I
4
Pennsylvania
:.
..
:
:.
:.
I
I
2
:
I
5
Delaware
: .
:.
:.
..
:.
:.
I
: .
..
:.
I
Middle states
:.
:.
:.
:
: .
:.
:
1
3
3
:
1
1
1
2
: .
1
13
Maryland
I
I
..
:.
: .
I
:.
:
I
:
4
Virginia
2
I
3
I
: .
:.
I
: .
3
I
:.
I
I
14
North Carolina
I
2
I
I
5
I
:
II
South Carolina
I
2
I
I
I
:
6
118 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
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Georgia
:
I
:
I
Southern states
1
1
2
1
3
5
1
2
1
1
4
7
1
2
3
1
36
Totals
I
I
2
I
3
5
I
2
3
II
5
2
9
12
5
5
3
3
74
1 Charters granted by the Massachusetts legislature for companies to operate in the district of Maine.
IMPROVING INLAND NAVIGATION
II9
consequences that will be derived from the accomplishment thereof to the
inhabitants of this state, by extending the trade thereof, and being willing to
give the said undertakers every proper encouragement and support
Within the next six years several thousand pounds were ex-
pended in this enterprise. The preamble of an act of November,
1784, which granted a desired amendment regarding the tolls,
notes that "the said corporation have already made a con-
siderable progress in the said undertaking, and are prosecuting
the same with great avidity." Madison wrote Jefferson April
27, 1785, reporting "the undertaking on the Susquehannah by
Maryland goes on with great spirit & expectations," and again
Aug. 12, 1786, that it was "in such forwardness as to leave no
doubt of its success." Negotiations were had with Pennsyl-
vania looking toward permission to open the river within that
state, for, as Madison remarked, "Unless this is permitted the
opening undertaken within the limits of Maryland will be of
little account." In July, 1787, a New Yorker wrote to a Balti-
more friend of a tour he had lately made to view the canal
making around the falls of the Susquehanna, which, contrary
to expectations, he "found in a fair way to be completed; as
far as Maryland extends." He continues:
"No doubt the heretofore narrow partial views of Pennsylvania will be
soon at an end, as the counties contiguous to the River are increasing fast,
who will all find it to their advantage to direct their trade down the Susque-
hannah, which might be made navigable, at a small expense, as far as Penn-
sylvania extends." 4
But Pennsylvania was backward about granting this permission
until Maryland should accede to the northern proposal of a
canal between the Delaware and Chesapeake bays; and in
1789, in speaking on the site of the new federal capital, the best
1 At the outset there were to be twenty shares, and no person might subscribe
more than one or less than one-fifth of a share. In 1790 the number was increased
to thirty and in 1797 to forty: Laws, 1790, c. 36, 1797, c. 99.
2 Md. Laws (Kilty), 1784, c. 66, adding: "it is necessary to ascertain with preci-
sion the tolls to be received
and to adjust them in such manner as that they
may be proportional to the comparative value of the commodities which shall be
transported through the said canal." Cf. supra, II5, and infra, 122.
3 Madison, Works, ii, 137, 258.
4 Quoted in Mass. Centinel, Aug. 8, 1787.
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I20 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
a Pennsylvania senator could say on the subject was that
Pennsylvania was not disposed to obstruct the Susquehanna
navigation.¹ Twice Maryland extended the time for completion
of these works - in 1790 to 1798, in 1797 to 1805; and in 1790,
1797, and 1799 she authorized the raising of additional capital.2
In the summer of 1795 a committee of the company arranged
a meeting in Harrisburg of citizens of several river counties of
Pennsylvania and Maryland, and the meeting resolved unani-
mously to open subscriptions, payable half September II, half
Aug. I, 1796, for improving the navigation from Wright's Ferry
to the Maryland line; committees were appointed to solicit
subscriptions in the several counties; commissioners were ap-
pointed to superintend the work; and "a spirited address" to
all interested was published.⁸ The efforts seem to have been
largely in vain, and the enterprise was still in a sad state of in-
completeness when the century closed.
Meanwhile the Potomac project had been revived.4 On May
31, 1783, the Maryland legislature appointed a committee to
examine the river and to estimate the expense of making it
navigable and the time this work would take. Report was made
in November that an outlay of $92,000 and two years' time
would be sufficient for opening the navigation from Fort Cum-
berland to the Great Falls. No action was taken, but the
subject came to be considerably discussed.5
In September, 1784, Washington, once more a private citizen,
made a journey west to inspect his lands beyond the Alleghanies.
On his return he submitted to the governor of Virginia a trans-
cript of his journal and a letter urging the importance and prac-
1 King, Rufus King, i, 371-372. This was Maclay; Robert Morris spoke with
pride of the bargaining policy. Cf. infra, 136-137.
2 Md. Laws (Kilty), 1790, c. 36; 1797, C. 99; 1799, C. 17. The earlier act author-
izes "foreigners" to hold stock as well as citizens, probably to attract Dutch
capital.
3 G. H. Morgan, Annals
of Harrisburg
(Harrisburg, 1858), II4-II5.
4 The fullest account is that of Mrs. Corra Bacon-Foster, Early Chapters in the
Development of the Patomac Route to the West (Washington, 1912). She reprints most
of the relevant documents. John Pickell's account is also fairly extensive.
5 Scharf, Hist. of Md., ii, 518-519.
6
Cf. Herbert B. Adams, "Washington's Interest in Western Lands," in Johns
Hopkins Univ. Studies in Hist. and Pol. Sci., iii, No. I (Baltimore, 1885), 55-57.
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IMPROVING INLAND NAVIGATION
I2I
ticability of opening up the Potomac route to the Ohio country.
Governor Harrison laid the letter before the assembly, with his
cordial approval.¹ Washington believed in having the work
undertaken by the government, but realized that this method
stood no immediate chance of adoption. He therefore threw his
influence in favor of launching a corporation in which the states
would become stockholders. A petition for a charter was soon
submitted, with a bill, perhaps drafted by the General himself.
To Thomas Johnson, then a member of the Maryland assembly,
Washington wrote October 15, enclosing a duplicate of the
Potomac Company petition and commending to him the task
of pushing the plan through his legislature.⁸ On November 15
a mass meeting was held at Alexandria, the town likely to
benefit most by the proposed navigation, "to deliberate and
consult on the vast great political and commercial object,"
and "every possible effort" was pledged to accomplish it.4
On December 4 the House of Delegates heard a memorial from
sundry inhabitants of Maryland and Virginia "setting forth,
that they conceive it would greatly contribute to the exten-
sion of commerce, and the improvement of agriculture, if the
river Potomac .were made navigable from the falls, and a com-
munication opened by that means with the western country,"
and asking a corporate charter. Three days later the Committee
of the Whole reported favorably and appointed a committee to
bring in a bill. On December 13 it was voted that inasmuch
as "acts passed without communication between the two States,
may be dissimilar and productive of much delay," General
Washington, General Gates, and Col. Thomas Blackburn be
sent as commissioners from Virginia to confer with persons
similarly appointed in Maryland, on the matter in general and
on specific points.6 The conference took place December 22.
1 Washington's letter and Harrison's reply are printed in Bacon-Foster, Patomac
Route, 154-162.
2 See his letters, quoted in ibid., 45, 159.
$ Letter printed in ibid., 44.
4 Ibid., 45, printing the account from the Va. Gazette.
5 Journal of House of Delegates, 58, 61, 68. Blackburn did not attend, and
Gates's illness threw the entire burden on to Washington.
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I22 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
From it a highly favorable report issued. Regarding the prin-
cipal subject of controversy Washington wrote Madison Decem-
ber 28:1
"We have reduced most of the Tolls from what they were in the first
Bill, and have added something to a few others - upon the whole we have
made them as low as we conceived from the best information before us, and
such estimates as we had means to calculate upon as they can be fixed with-
out hazarding the plan altogether. - We made the value of the Commodity
the governing principle in the establishment of the Tolls; - but having had
an eye to some bulky articles of produce, & to the encouragement of the
growth and manufacture of some others, as much as to prevent a tedious
enumeration of the different species of all, we departed from the general rule
in many instances. - The rates of the tollage as now fixed, may still appear
high to some of the Southern gentlemen when they compare them with those
on James River, but as there is no comparison in the expense & risk of the
two undertakings, so neither ought there to be in the Tolls."
The conference recommended the establishment, by identical
charters, "of a company for opening the river Potomac," and
the subscription of fifty shares to this company by each state, on
the ground
"that such subscription would evince to the public the opinion of the legis-
latures of the practicability and great utility of the plan, and that the ex-
ample would encourage individuals to embark in the measure, give vigor and
security to so important an undertaking, and be a substantial proof to our
brethren of the Western Territory, of our disposition to connect ourselves
with them by the strongest bonds of friendship and mutual interest."
They also recommended that the two states appoint skilled
persons to survey the Potomac and a road to connect the
eastern and the western waters, and the clearing of this road at
the joint expense of both states, as well as another road from
Fort Cumberland to the navigable part of the Youghiogheny,
with the consent of Pennsylvania.
The hostility of Baltimore had again been feared, but its
merchants seem to have concluded that the project was chimeri-
cal and to have relaxed their traditional opposition.2 At all
events the Maryland legislature passed the charter within a
1 Bacon-Foster, 49-5I. The text of the conference report is in ibid., 45-48.
2 See ibid., 68, and Madison to Jefferson, April 25, 1784, in Madison, Works,
ii, 48.
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IMPROVING INLAND NAVIGATION
I23
few days, virtually as the conference had approved it. As
Washington wrote from Annapolis to Madison in the Virginia
House, on December 28: "The Bill passed this Assembly with
only nine dissenting votes and got thro' both Houses in a day -
so earnest were the members of getting it to you in time." 1
The Virginia assembly passed an identical act Jan. 5, 1785.2
More than this, the legislatures directed state subscriptions of
fifty shares each ($22,222.22), making one-fifth of the total
stock proposed; and Virginia further directed fifty shares (and
a hundred in the James River company) to be subscribed and
paid for on behalf of General Washington, as a testimonial of
their sense of his "unexampled merits
towards his country"
"and
their wish in particular that those great works for its improve-
ment, which, both as springing from the liberty which he has been so in-
strumental in establishing, and as encouraged by his patronage, will be
durable monuments of his glory, may be made monuments also of the grati-
tude of his country."
The way for the operation of the Potomac Company was
further smoothed so far as the states could do it. The river
had been a constant source of irritation between the inhabitants
of the two states, because of restrictive regulations and conflicts
of jurisdiction. Commissioners were appointed by the two
states in 1784, before the Potomac Company was promoted,
to draw up a mutually advantageous set of "liberal and equit-
able arrangements concerning the said river." On December
28, when progress had been made in the incorporation meas-
ures, the Virginia legislature instructed these commissioners to
unite with those of Maryland in presenting their plan to Penn-
sylvania and asking her coöperation, by freedom of the use of
1 Bacon-Foster, 50.
2 Since the session laws were printed by sessions, without giving specific dates
for each act, the charters are commonly misdated October (Virginia) and Novem-
ber (Maryland), 1784. The charter is easily accessible in ibid., 210-225.
3 See the account of the passage of the act in Madison's letter to Jefferson, Jan-
uary, 1785, in ibid., 53-56, and Governor Henry to R. H. Lee, Jan. 9, 1785,
in W.W. Henry, Patrick Henry
(New York, 1891), iii, 266-267. Washington
modestly declined the donation, but agreed that the shares should be set aside for
such "objects of a public nature" as he should select. This was done, and he be-
queathed the shares to a national university: Bacon-Foster, 168, 225.
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I24 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
the Ohio waters, exemption from duties, etc., in carrying out
the plan of the navigation and a road from the head of it to the
head waters of the Ohio. The Maryland commissioners were
given even more extensive powers. The commissioners of the
two states (Madison, Randolph, and Thomas Johnson absent)
met at Alexandria in March, adjourned to Mount Vernon on
Washington's invitation, and there, on March 28, signed a
representation to the state of Pennsylvania and memoranda for
the legislatures they represented regarding the navigation and
jurisdiction of the Potomac and Pokomoke and part of Chesa-
peake Bay.¹ In due course these were ratified by the assem-
blies.2 Pennsylvania too, after some delay, coöperated. Madison
wrote Edmund Randolph, July 26, 1785, commenting on Penn-
sylvania's inattention and remarking that Washington must
feel chagrin, since he had suggested the appeal. But on Aug. 12,
1786, Madison could write Jefferson
"that Pen® has complied with the joint request of Virg* and Maryland for a
road between the head of Potowmac and the waters of the Ohio and the se-
cure & free use of the latter through her jurisdiction. These fruits of the
Revolution do great honour to it."
This conference, be it noted parenthetically, bore the germs
of larger things. For at Washington's suggestion the commis-
sioners considered certain other matters of common interest to
Maryland and Virginia - uniform currency, duties, and com-
mercial regulations - and sent them also to the legislatures;
and when, late in 1785, these were under discussion in the
Virginia legislature James Madison proposed a similar meeting
of commissioners from all the states to discuss such affairs, and
from this suggestion came the call for the Annapolis convention
which was the direct forerunner of the Constitutional Conven-
tion of 1787.4
1 Rowland, "The Mount Vernon Convention," in Pa. Mag. of Hist. and Biog., xi,
413-422 (1887). "The most amicable spirit," Madison wrote Jefferson April 27,
"is said to have governed the negociation": Madison, Works, ii, 137. Cf. ibid., ii,
IOI, and Bacon-Foster, 5I-53.
2 Virginia act of October, 1785, in Stats. at Large (Hening), xii, 50-55; Mary-
land acts of March 12, 1786, in Md. Laws (Kilty), 1785, c. I, 3.
8 Madison, Works, ii, 153, 258.
4 Fiske, Critical Period, 253-255; Rowland, Mount Vernon Convention, 424-425.
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IMPROVING INLAND NAVIGATION
125
Books for subscriptions to the Potomac Company were opened
from February 8 to May IO, 1785, and £40,300 sterling, of the
£50,000 ($222,222) proposed to be raised, was subscribed in
£100 shares as follows: 1
Richmond, IOO
Virginia
Alexandria, 135
Maryland
Winchester, 31
{
Annapolis, 73
Georgetown, 42
Frederick, 22
266
137
On May 17 the subscribers met at Alexandria and elected
Washington president, and four other directors besides -
Thomas Johnson, Thomas Sim Lee, John Fitzgerald, and
George Gilpin.2 Thenceforward until he assumed the presi-
dency of that larger corporation, the United States of America,
the General devoted himself assiduously to the affairs of the
Potomac navigation. Two weeks later the board organized at
Alexandria. William Hartshorne, merchant and underwriter
of that town, was made treasurer, with an emolument of three
per cent on his disbursements, and bonded in the sum of £10,000
with two acceptable securities; and John Potts, Jr., clerk, with
a guinea a day for attendance on the board and reasonable
expenses when attending sessions out of Alexandria.⁴ The
board advertised widely for skilful and competent applicants
for the principal positions in the direction of the work; and
finally on July 14, after an interview by Director Gilpin, a
"principal manager" was chosen in the person of James Rumsey,
who had lately secured from the Maryland and Virginia legisla-
tures a ten-year patent on boats of his invention designed for
1 Bacon-Foster, 55-57, quoting the advertisement in the Maryland Gazette.
These include the one hundred shares subscribed by Virginia and the fifty by Mary-
land, thus explaining the Richmond subscription and most of that at Annapolis.
Alexandria subscriptions were thus more than half the private subscriptions.
2 Pickell, Potomac Co., 65-67; Bacon-Foster, 57-60. The minutes show that
fifty-seven subscribers were "present in proper person" and thirty-four by proxy.
3 See esp. letters in ibid., 66-71, 126-168, and Pickell, 136-156; his diary
as given in the Pa. Mag. of Hist. and Biog., xix, 412, 418; Madison to Jeffer-
son, Nov. 3, 1785, in Madison, Works, ii, 182; Elkanah Watson, Memoirs, 244, 246.
One of the reasons assigned in his circular letter of April, 1787, declining reëlection
to the presidency of the Cincinnati was "the arduousness of the task, in which I
have been as it were unavoidably engaged, of superintending the opening of the nav-
igation of the great rivers in this state": quoted in Mass. Centinel, May 5, 1787.
4 Pickell, Polomac Co., 68; Bacon-Foster, 60-62.
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126 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
"working boats by mechanism, and small manual assistance,
against rapid currents," 1 and who was familiar with the Po-
tomac.2 Rumsey was a skilled mechanician and something of
an inventive genius, but it was with some hesitation that he
was hired as manager. To his discretion the directors felt it
necessary to trust a great deal, although they did make early
in August, most of the way with him, a tour of inspection of the
river from Georgetown to Harpers Ferry and the Shenandoah
Falls. Madison wrote Jefferson from Philadelphia October 3,
concerning a September trip:4
"On my journey I called at Mount Vernon & had the pleasure of find-
ing the Gen! in perfect health. He had just returned from a trip up the
Potowmac. He grows more & more sanguine as he examines further into the
practicability of opening its navigation. The subscriptions are completed
within a few shares, and the work is already begun at some of the lesser
obstructions."
Three forms of unexpected difficulties, however, soon appeared
to dampen the enthusiasm of the projectors - difficulties of
labor, of management, of finance. These were not peculiar to
this enterprise; rather they deserve emphasis chiefly because
of their prevalence and prominence, in not greatly varying form,
in a great deal of the corporate enterprise of the period prior
to 1800, particularly in connection with canals and manufactures.
The board began by hiring such free whites as applied. It
adopted what it considered a liberal wage policy, adding to the
money wages "good and substantial provisions
and a
reasonable quantity of spirits" and offering larger wages to those
who proved most expert in boring and blowing rocks - con-
cessions deemed necessary because of the "toilsome character
of the work." The plan was to work the hands in gangs of fifty,
1 In September, 1784, Washington had been induced to inspect this, and there-
upon gave Rumsey a certificate of his opinion, in part "that the discovery is of vast
importance, and may be of the greatest usefulness in our inland navigation."
Statement and certificate in Mass. Centinel, Oct. 9, 1784.
2 Pickell, Potomac Co., 71-76; W. Baker, Washington after the Revolution
(Philadelphia, 1898), II-12; Md. Laws (Kilty), 1784, C. 20; Va. Stats. at Large
(Hening), xi, 562.
3 Bacon-Foster, 62-65.
4 Madison, Works, ii, 182. Cf. letters quoted in Bacon-Foster.
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IMPROVING INLAND NAVIGATION
I27
each under an assistant manager and three overseers or foremen.
Hardly had the work begun when
"a turbulent and insubordinate spirit was manifested among the hands, and
to a degree as to require immediate and signal correction. Irregularity,
misconduct, and insolent behavior placed the authority of the conductor
and his subordinates at defiance. The work that was directed to be done
was either entirely omitted or but partially performed, and it was evident
to the conductor that not much progress could be made in improving the
navigation, unless at least one-half of the laborers then on the line were dis-
charged and the number replaced by others more orderly and obedient."
These facts being reported to Washington, the board met twice
in September to consider the problem, and at the second meet-
ing ordered the secretary to write to Stewart & Plunket of
Baltimore and J. M. Nesbit of Philadelphia, asking them
"to purchase for the use of the company sixty servants, and to request of
each of them, that as soon as there may be an arrival at either place, out of
which the number can probably be procured, immediately to send an ex-
press at the expense of the company, with information of it, that they may
avail themselves of the first opportunity of getting them out, and also to
prevent a purchase being made at both places."
Meanwhile Rumsey was to keep in the service of the company,
on the best terms he could, such of the hands as deserved en-
couragement. Evidently the company had met its match in
bargaining power. On October I8 the board met at the Great
Falls, in special meeting, and passed two significant votes:
"That the monthly wages of the men should remain as heretofore, but
without making a deduction for the time the weather would not admit of
their working.
"That one hundred good and able working negroes should be hired for
the use of the company, for each of whom there should be an allowance of
twenty pounds, Virginia currency [equal to £15 sterling], also clothing, and
to pay their levies and furnish them with rations, viz: I lb. salt pork, It lb.
salt beef, or If lb. fresh beef or mutton, and a sufficiency of bread each day,
and also a reasonable quantity of spirits, when necessary.
"That the negroes are to come well clothed, or to be supplied with what
may be deficient, which is to be stopped out of the next year's clothing." 1
The working force was soon enlarged by the servants and
the slaves. Henceforth the three classes of laborers were utilized,
1 Pickell, Potomac Co., 70, 73, 76-80. Cf. Johnson's letter to Washington in
September, quoted in Bacon-Foster, 70-71.
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128 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
but the labor troubles were not ended. Clashes developed
between the groups. The servants ran away. The men took
no care in the handling of blasting powder and stole a consider-
able quantity. "Depredations" were committed upon the
neighboring inhabitants, and persons "whom business or curi-
osity had induced to visit the works" were maltreated. It was
even asserted that "one of the contractors to feed the people
cannot get wagoners or stock drivers to convey the provisions
to the work, unless he will send one of his sons to protect them."
The directors had to make the sad admission, in October, 1786:
"The Board have taken every means in their power to employ laborers
and workmen who they expected would be the most easily governed, but
their endeavors have been ineffectual. They have been reduced to the ne-
cessity either to let the work stand, or of purchasing servants and hiring
such as have offered, among whom many have proved to be of very bad
morals and turbulent dispositions. And this Board are of opinion that the
fears of the country people have originated in the ill conduct of the people
necessarily employed in the works, and have been widened by exaggeration."1
While in later years the records reveal less of such difficulties,
the labor problem was never satisfactorily solved.
The problem of management was not fully appreciated and
was serious from the standpoints both of engineering and super-
intendence. The engineering problem was not intricate. There
were four obstructions to navigation: the Little Falls, three
miles above tidewater, with a thirty-six foot fall in three miles;
the Great Falls, six miles higher, with a seventy-six foot fall
in a mile and a quarter; the Seneca Falls, another six miles
up, a short, irregular rapids with a fall of ten feet; and the
Shenandoah Falls, sixty miles beyond, with a thirty foot fall
in three miles. Thence up to Fort Cumberland, one hundred
and twenty miles, there was little obstruction. It was consid-
ered that locks would be needed only at the Great Falls and
possibly the Little Falls; elsewhere merely blasting the rocks
and dredging seemed to promise an adequate opening.2 Yet
the science of overcoming even such minor obstructions had
1 Pickell, 96-99; Bacon-Foster, 70-74.
2 J. Phillips, History of Inland Navigation, 353, and quoted in N. Y. Magazine,
iv, I5I-I52 (March, 1793).
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IMPROVING INLAND NAVIGATION
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not been worked out in America, and especially little was
known here of the principles of lock construction.
Benjamin Franklin, writing from London to Mayor Rhoads
of Philadelphia as early as Aug. 22, 1772, urged the economy of
engaging "by a handsome Salary an Engineer from here who
have been accustomed to such Business
a single Mistake
thro' Inexperience in such important Works, may cost much
more than the Expense of Salary to an ingenious young Man
already well acquainted with both Principles and Practice."
He also adverted to the advantages of canals over the locking
of rivers: "Rivers are ungovernable things, especially in
Hilly Countries. Canals are quiet and very manageable."1
Washington frequently put before his colleagues the "pro-
priety of employing a professional man;" and in March, 1786,
when a Mr. Brindley came to Virginia to look over its canals,
the General tried to persuade the other directors to engage
him, at least temporarily.2 This, however, seems not to have
been done. In 1795 William Weston, the expert of the Penn-
sylvania canals, was procured to visit the works and give an
opinion. At last in January, 1796, one Captain Myers, who
presented himself with ample testimonials, was employed as
engineer. He proved costly, disagreeable, and not especially
competent, and was discharged in May, 1797.4 The result was
that the company's works were directed throughout without
due technical skill.
The directors gave liberally of their time to overseeing the
work,5 but superintendents constantly on the ground were
necessary. Besides Rumsey, Richardson Stewart and James
Smith were employed as assistant managers. They disagreed.
In midsummer, 1786, Rumsey resigned, preferring charges of
"incompetence, ignorance, and want of truth," among others,
against Stewart. But the board, upon investigation, accepted
1 Quoted by A. B. Hulbert, Historic Highways, xiii, 25-27 (Cleveland, 1904).
2 Washington to Randolph, Sept. 16, 1785, and to Gilpin and Fitzgerald, March
31, 1786, in Bacon-Foster, 69, 77-78.
3 Ibid., 88-go.
4 Ibid., 90-95.
5 Ibid., 70, 76.
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130 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Rumsey's resignation and elevated Stewart to his place. Stewart
was removed June 3, 1788, and Smith became manager for the
whole line.¹ Between the lines of the reports of complaints,
charges, resignations, and removals one cannot help reading a
story of fundamental inefficiency and most injurious dishar-
mony. It is a testimonial to dissatisfaction with these methods
of management that we find in Charles Carroll's letter to Wash-
ington Aug. 5, 1799: 2
"I entirely coincide with your opinion, that what remains to be done to
perfect the navigation of the Potomac, should be done by contract, under the
inspection of the directors, or of one or two confidential and intelligent per-
sons to be by them appointed to superintend the contractor."
The problem of management in a corporation had yet to be
solved, as the New Jersey manufacturing society learned to
its cost about the same time.³
Probably the fundamental difficulty was that of finance.
Had ample funds been available, perhaps first-class engineering
and managerial talent would have been secured and the labor
problems solved. The subscription, as we have noted, was
liberal. Including the state subscriptions, £40,300 was sub-
scribed at the outset. By August, 1786, forty-nine more shares
had been taken and perhaps two more were subscribed before
1790, a total of some £45,400.4 Calls for "dividends" were made
to the amount of 271 per cent the first year, due as follows:
July 15, £5; October I, £21; April IO, £10; June 15, £10.
Even the states were slow to meet the "calls," and there
were many private subscribers equally delinquent. On March
I and 2, 1785, the board directed the treasurer to appeal to the
delinquents by messengers and letters. Yet the report to the
stockholders Aug. 7, 1786, showed that of £12,430 sterling due,
less than half, only £5940, had been paid in.⁵ Repeated calls
1 Bacon-Foster, 63, 71, 74, 79-81.
2 Quoted in Rowland, Charles Carroll, 229-230, a reply to Washington's letter of
July 21, 1799.
3 See Essay III, chaps. 6, 7.
4 Cf. Bacon-Foster, 57, 74; and Virginia and Maryland acts of 1790, which
imply forty-six shares were then subscribed. I do not find other facts consistent
with Mrs. Bacon-Foster's statement on p. 62 regarding sales to Hollanders.
5
Pickell, Potomac Co., 84-87; Bacon-Foster, 74.
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IMPROVING INLAND NAVIGATION
131
by the treasurer availed little, and on Jan. 3, 1787, the board
met, with a treasury nearly exhausted, to adopt measures to
enforce payments. Delinquents were notified that unless the
payments should be made by March I, April I, and May I
(7½, IO, and IO per cent respectively) the shares would be
sold and suit entered, "by action of debtor on the case," for
the balance of sums due and incidental charges. On April 3
notice was published of forthcoming sales of forty-six forfeited
shares at Alexandria May I4 and nine at Georgetown May 21.
On the day appointed numerous persons attended, but none
were willing to bid, such was the decline in the faith in the pro-
ject! The sales were twice further postponed, to June 26 and
August 6 in turn. Some defaulters paid their arrearages; others
gave assurances of paying soon; and the board had the courage
to call for another instalment of six per cent to be paid by Aug.
15, 1787. But so small was the attendance of proprietors at the
annual meeting of August 6 (Washington was attending the
federal constitutional convention) that all business was post-
poned to a special meeting called for October 22.
The strenuous efforts of the board, coupled probably with
improved business conditions, had then resulted in a measure
of success; yet of the £15,142 due, £4413 was still in arrears.
At the stockholders' request the board applied to the legisla-
tures and secured "a more speedy remedy against delinquent
subscribers." 1 The board tried both persuasion and law, but
at the next meeting, in August, 1788, the president had to re-
port "the good Effects of them [the acts] have not been as yet
very productive," and £4360, or nearly forty per cent of the
sums due (£61 had been called in since the previous meeting),
was in arrears, and only £169 IOS. 6d. Virginia currency was in
the treasury.2 In August, 1792, after £25 per share more had
been called, delinquent subscriptions amounted to £6543, and
the cash in the hands of the treasurer to £4775, Virginia cur-
rency.³ Late in 1790 the legislatures came again to the aid of
the company by providing that interest on overdue subscrip-
1 Va. Stats. at Large (Hening), xii, 508.
2 Bacon-Foster, 83-86; Pickell, IIO-III.
8 The Virginia pound was equal to three-fourths of a pound sterling.
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132 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
tions should be recoverable by the same process as the princi-
pal.¹ Yet the printed forms of notices to delinquents continued
to be in constant use.2
It is possible, though not easy, to follow roughly the progress
made in construction during these weary years, amid discourage-
ments of these various kinds. Work was begun Aug. 8, 1785,
at the Shenandoah Falls, Harpers Ferry, and continued at the
lesser obstructions there and at the Seneca Falls. Here some
seventy hands were employed in September. "After the water
rose too high, the hands were removed to the Great Falls."
There, on account of a very wet season, they remained till late
in the summer of 1786, when some two hundred hands were
employed.⁸ The next fourteen months, despite wet weather
and consequent high water, saw progress on the difficult work
at the Shenandoah, some work done at the Seneca, a difficult
pass opened between the Great Falls and the Seneca and a tow-
path made, and the canal nearly completed (except for the
locks) at the Great Falls.4 In August, 1788, report was made
to the stockholders that
"The unusual height of the Waters this Spring & Summer have greatly
retarded our Operations on the River but should the Weather become more
favorable we have reason to believe that a partial though not a perfect
Navigation may be effected this fall & winter from Fort Cumberland to the
Great Falls - at which the Canal is [still!] nearly completed. Our princi-
pal force has been applied to the Shenandoah & Seneca Falls, which consid-
ering the number of hands and the unfavorable Season are in as great for-
wardness as we could expect."
In February, 1789, Washington wrote Jefferson:
'The passage would have been opened from Fort Cumberland to the Great
Falls
before this time,
had it not been for the unfavourableness
of the season. In spite of that untoward circumstance,
two or three
boats have actually arrived at the last named place."
1 Md. Laws (Kilty), 1790, C. 35; Va. Stats. at Large (Hening), xiii, 187-188.
2 See notice to Horatio Gates, New York, dated Alexandria, Sept. 6, 1793, in
Emmet Collection (New York Public Library), No. 14939. Gates then owed £74 133.
and interest.
8 Baker, Washington after the Revolution, 34-36; Bacon-Foster, 64-65, 70, 74-
75, 78-79.
4 Second Annual Report, in ibid., 81.
5 Third Annual Report, in ibid., 83-84. Cf. Washington to Jefferson, Aug. 31,
1788, in ibid., 166-167.
6 Ibid., 167-168.
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IMPROVING INLAND NAVIGATION
133
A Georgetown letter of April 2, 1790, announced that
"within three weeks past, we have had arrivals of at least 30 boats at the
mouth of Watt's branch, 14 miles from this, loaded with flour, wheat and
tobacco, many of them from the headwaters of Potowmac. I have seen
several of the boatmen, and they are very much pleased with the navigation.
The Potowmac company's hands are now at work on the rock at the great
falls
1
One writing from Berlin, Md., June I4 informed his Alexandria
correspondent that five boats, some of considerable burden,
were daily employed from Fort Cumberland and other places
up river, carrying tobacco, flour, etc., to the Great Falls; that
new ones were constantly arriving, and others were in the stocks.
"The navigation is already very easy and extremely useful"
and promised to be more so.2 By a modification of the charter,
passed late in 1790, the company was permitted to profit by
this traffic by taking partial tolls before the whole navigation
was complete. The same acts gave a further extension of three
years for completion; and since an exploring party in June had
found the Shenandoah also worth improving, the company
was authorized to apply capital and tolls to extend the im-
provements to the branches of the Potomac above the Seneca
Falls.
These favors are typical of the attitude of the legislatures.
Hardly a request of the company was ignored. Extensions of
time for completion were repeatedly granted. The size of the
proposed canal and locks was modified. Restrictions on the
movements of slaves were suspended on their behalf. Foreign-
ers were empowered to become stockholders. Maryland added
to her subscription a hundred shares in 1794-95. And while
further appeals to the states for loans or new subscriptions were
mostly in vain,³ it is clear that the delays were in spite of the
utmost the assemblies could do.
Despite the incompleteness of the principal work, sugges-
tions for extending the undertaking received consideration. In
the spring of 1792 it was suggested that the Potomac Company
1 Quoted in Boston Gasette, June 14, 1790.
2 Quoted in Virginia Gazette, June 24, 1790.
3 Bacon-Foster, 88, 90, 96-98.
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134 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
continue its canal from the Little Falls, two miles from George-
town, into the city. The President was eager to have the practi-
cability of the suggestion examined. In a private letter in April,
he said: "There is such an intimate connection in political
and pecuniary conditions between the federal district and the
inland navigation of the Potomac that no exertions, in my
opinion, should be dispensed with to accomplish the latter." 1
This seems not to have been attempted, but the federal build-
ings commissioners joined the company in petitioning the legis-
latures in this year for freedom to move certain hired slaves
from state to state.
Early in 1795 books were opened for one hundred new shares
to carry on work on the Shenandoah. Maryland subscribed
sixty, individuals forty, but nothing was done. In August, 1797,
the company voted to relinquish its exclusive rights to improve
the Shenandoah, "in favor of any local company that would
be formed within nine months and render that river navigable
to boats carrying fifty barrels of flour within three years."
Accordingly the next year a Shenandoah company secured a
charter from Virginia. No similar charter from Maryland was
secured, however, and within a few years the Potomac Company
again set to work in this field, with results of which Elkanah
Watson wrote in 1808: "The navigation of the Shenandoah
has been opened at an expense of nearly half a million dollars." 3
Washington resumed his active, stimulating interest upon
retiring from the federal office,4 but the work hung on and on.
In 1798, when loans or new subscriptions could be secured
neither from individuals nor states, the directors borrowed on
their own notes $6000 from the banks of Columbia and Alex-
andria, and obtained loans of public stock from Daniel Carroll
and General Washington to serve as collateral for cash loans;
1 Bryan, History of the National Capital, i, I9I.
2 Cf. Md. Session Laws, Dec. 23, 1792, c. 75. Slaves were the main reliance in
these later years, although the contract method was tried in a few instances in 1791-
93: Bacon-Foster, 85, 86, 92.
3 Ibid., 90, 95, 103-109; Va. Stats. at Large (ed. 1835), ii, 99; Watson, Me-
moirs, 246 n.
4 Cf. Pickell, Potomac Co., III-II3, and Washington's diary, passim.
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IMPROVING INLAND NAVIGATION
135
some stock in the company itself may have been similarly
loaned by shareholders. By this time tolls yielded at the Great
Falls proved a material aid, amounting to $2000 in a few months
prior to August, 1798.1
Finally, in July, 1799, the directors issued a circular calling
for $60,000 additional capital, which would certainly complete
the navigation, saying that less than $40,000 would accomplish
little or nothing.2 Charles Carroll wrote Washington soberly:⁸
"I have, Sir, an Opinion equally sanguine with yours, of the eventual
productiveness to the stockholders, and utility to the public, of this great
undertaking, but fear it will not be completed for some years, from the want
of funds, and the inability of the stockholders to furnish them to the extent
estimated and required. This State, to judge from the transactions of the
last session of its legislature, will advance no more money towards that ob-
ject, and similar causes may produce the same effects in the Legislature of
Virginia."
By dint of persistent lobbying a favorable response was secured
from the Maryland legislature in July, 1799, when a subscrip-
tion of £13,900, in six per cent stock of the United States, was
subscribed to new shares on condition that security be given
to complete the lock at the Great Falls. Later in the year
loans were directed to be made to this and the Susquehanna
company.4 In December, 1801, these locks were at last com-
pleted, and two months later they were opened for business.
As reported in 1815, some three hundred and thirty-eight miles
of water navigation had been opened at a cost of about half a
million dollars. Maryland and Virginia had furnished more
than half the capital, and, except for a lone dividend of $5.50
per share in 1802, the toll revenues had been used up in main-
tenance and operating expenses and in fruitless efforts to com-
plete the navigation as originally planned.⁵
A large undertaking, enthusiastically begun, beset by difficul-
1 Bacon-Foster, 95-98. Cf. also Washington to Mrs. Sarah Fairfax, May, 1798,
in Works (Ford ed.), xiii, 499.
2 Bacon-Foster, 169-171.
Rowland, Charles Carroll, ii, 229-230.
4
Bacon-Foster, 99, quoting the resolve. Cf. William Hindman to James
McHenry, Nov. 29, Dec. 9, 1799, in Md. Hist. Mag., X, 156-157 (May, 1906).
5 Report of committee to Virginia House of Delegates, Dec. 27, 1816, in Niles'
Register, ix, suppl., I50-151 (1816). Cf. Bacon-Foster, 100-152, 172-209.
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136 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
ties of labor, engineering, management, finance, continued in
faith foredoomed to disappointment, yielding insignificant
results to the expenditure of large sums and much energy,
several times almost abandoned, - the Potomac Company ex-
perience, described more at length because information is avail-
able, was in considerable measure the experience of many of
the companies which in this period sought to improve the in-
land navigation of the United States. Not lack of capital,
not lack of labor, not lack of state encouragement or private
interest, but lack of essential technical and business knowledge
applicable in this difficult field of enterprise was the funda-
mental cause of these repeated failures. Till this knowledge
should accumulate, strenuous efforts were almost utterly in vain.
The Chesapeake and Delaware Bay project bobbed up again
and again. Soon after the peace there were published "Observa-
tions on the advantages of the proposed canal from the Chesa-
peake to the Delaware." 1 The writer, who had published a
map of "the intermediate country," urges the advantages of
the scheme, recites the beginning of friendly measures by Penn-
sylvania and Maryland, and indicates Delaware as the obstacle.
More important, however, was the doubt of its financial practi-
cability, for he remarks:
"The cutting a canal
has for a considerable time, by a number,
been thought practicable; but it is by others judged to be an undertaking too
great for the present circumstances of the country, under an apprehension,
that she is not ripe in years."
On Aug. 12, 1786, Madison wrote Jefferson: 2
"a negotiation is set on foot between Pen®, Maryᵈ, & Delaware, for a canal
from the head of Chesapeak to the Delaware. Maryᵈ has I understand here-
tofore opposed the undertaking, and Penᵃ means now to make her consent
to it a condition on which the opening of the Susquehannah within the
limits of Penᵃ will depend. Unless this is permitted the opening undertaken
within the limits of Maryland will be of little account.3 It is luck that both
parties are so dependent on each other as to be thus mutually forced into
measures of public utility.
1 American Museum, xi, 30-33 (January, 1792), reprinting from an unmentioned
source.
2 Madison, Works, ii, 258.
3 Referring here to the Susquehanna company's undertaking: supra, II9-120.
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IMPROVING INLAND NAVIGATION
I37
The negotiations dragged on slowly, however. In the debate
on the federal capital in September, 1789, Senator Maclay
said "the business of opening the canal has languished," and
Charles Carroll reported that commissioners had been appointed
by Maryland to confer with those of Pennsylvania, and that
Maryland was likely to interpose no obstacles.¹ Late in the
summer of 1793 committees from Pennsylvania and Maryland
met and agreed upon the undertaking, and newspaper reports
went so far as to say that the canal promised most of all the
important public works of the United States.2 But it was not
until 1799 that Maryland passed an act of incorporation, and
since those of Pennsylvania and Delaware did not follow till
1801, nothing was accomplished on this work before the end
of the century.4
With the revival of the Potomac project in 1784-85 came also
the incorporation by Virginia of a new James River Company.5
The plan was to raise $100,000 in $200 shares by subscriptions
opened in Richmond, Norfolk, Lewisburg, and Albemarle from
February I to August IO; if half this total should be subscribed,
to effect an organization August 20; then to dig a canal around
the Great Falls beginning at Westham, navigable in dryest
season by vessels drawing one foot of water, with locks eighty
by sixteen feet; and further to open a four-foot navigation
twenty-five feet wide thence to tidewater. John Ballendine
was authorized to receive shares in the new company in exchange
for the right to the canal he had earlier begun. The state
treasurer was authorized to subscribe one hundred shares
($20,000) on behalf of the state. A later act directed the
1 King, Rufus King, i, 371-372.
2 N. Y. Magazine, iv, 575 (September, 1793). Phillips, in his History of Inland
Navigation (1792), 350, refers to "The canals now cutting to the Delaware and
Chesapeak."
3 Laws (Kilty), Dec. 7, 1799.
4 In 1799 Benjamin Latrobe was employed to make a survey, and he made a
favorable report on the practicability of the project: Latrobe, Journal, xxi-xxii.
Cf. also George W. Smith, "Notes on the Internal Improvement of Pa.," in Hazard,
Register of Pa., i, 410 (1828); Preliminary Report of the Inland Waterways Commis-
sion (1908), 276-278; Scharf, Hist. of Md., ii, 524.
5
Stats. at Large (Hening), xi, 450-462. The bill was introduced December 18:
Journal of the House of Delegates, 25, IIO.
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138 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
purchase of one hundred more shares to be vested in General
Washington.¹
As before the Revolution, this enterprise attracted much less
interest than the larger enterprise of the Potomac. Madison
wrote Jefferson April 27, 1785:2
"The private subscriptions for Potowmac I hear amount to £10,000
Sterling. I cannot discover that those for James River deserve mention, or
that the undertaking is pushed with any spirit. If those who are most in-
terested in it let slip the present opportunity, their folly will probably be
severely punished for the want of another."
Nevertheless nearly the whole sum was soon subscribed, and
on August 20 the company organized at Richmond, choosing
Washington president.⁸ Washington declined the presidency,
and Edmund Randolph acted pro tem. until he became attorney-
general in the first cabinet, when Dr. William Foushee succeeded
him, to remain in office till 1818.4
In October the charter was amended, presumably at the
company's request, chiefly to authorize (I) the extension of
subscriptions by one hundred shares ($20,000) beyond those
already subscribed, (2) borrowing at six per cent, and (3) pro-
portioning of the depth of the canal to the depth of the river
in the dry season, in the discretion of the company.5
Work was begun and carried on amid much the same obstacles
which the Potomac Company encountered, though somewhat
more easily. The capital was gradually called in. By the middle
of I790 the state had paid five-sixths on its £12,000 subscription,
and the other subscribers seem to have done as well.⁶ The work
was done partly by contract, and partly by negroes purchased
by the company.⁷
1 Stats. at Large (Hening), xi, 525.
2 Works, ii, 137.
3
Washington to Edmund Randolph, July 30, 1785, empowering Randolph to
vote his shares, in Pickell, Potomac Co., 140.
4
[Samuel Mordecai], Richmond in By-Gone Days (Richmond, 1856), 233-238;
Washington to Randolph, Sept. 16, 1785, in Bacon-Foster, 68-70.
5 Stats. at Large (Hening), xii, 116-117.
6 The state was by no means always prompt. Cf. Calendar of Va. State Papers, v,
142, 164, 273, 411, and esp. 538-539, showing full statement of account with the
state, May 8, 1792.
7 Mordecai, Richmond in By-Gone Days, 234-235; Calendar of Va. State Papers,
v, 273.
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IMPROVING INLAND NAVIGATION
139
Late in December, 1789, the canal was opened from Westham
to Broad Rock, a short distance above the city, and the legisla-
ture took a trip through it and the locks.. Of works then com-
pleted Washington wrote in his diary April 12, 1790, of a visit
to the works that day, in company with the governor, directors,
manager, and others:
"I viewed the Canal, Sluces, Locks, & other works between the City of
Richmond & Westham. - These together have brought the navigation
within a mile and half, or mile and 8/4 of the proposed Bason; from which
the Boats by means of Locks are to communicate with the tide water navi-
gation below. - The Canal is of sufficient depth every where - but in places
not brought to its proper width
The locks at the head of these works
are simple - altogether of hewn stone, except the gates & cills - and very
easy and convenient to work, - there are two of them, each calculated to
raise and lower 6 feet - they cost according to the Manager's, Mr. Harris
acct. about £3000 but I could see nothing in them to require such a sum to
erect them. - To complete the Canal from the point to which it is
now opened, and the Locks at the foot of them, Mr. Harris thinks will re-
quire 3 years." 1
In December, 1790, upon representation that the initial capi-
tal was nearly expended, the state authorized an extension of
the capital by two hundred shares; by authority of the same
act the state before long subscribed one hundred of these, the
rest being taken by individuals, and more promptly exercised
its option to take over fifty delinquent shares at par.2 The pros-
pects of early success evidently stimulated both private and
public investors. By 1795 the canal reached the city, and in
November, 1800, the water was first let into the basin.³ Even-
tually a seven-mile waterway was finished around the falls, and
the river bed improved by sluices as high as Buchanan, a distance
of some forty-five miles. In December, 1816, the Committee
on Roads and Internal Navigation of the Virginia House of
Delegates stated that the company had opened a navigation of
three hundred miles, at a cost of about $1200 per mile. The
company was then earning good dividends and its stock was
selling at an advance of eighty per cent, though its dividends
1 Lossing, Diary of Washington, 165-166.
2 Stats. at Large (Hening), xiii, 163-165; Calendar of Va. State Papers, v, 259,
539. For later calls on these shares, see ibid., viii, 645.
3 Mordecai, Richmond in By-Gone Days, 234-236.
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140 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
would not have netted six per cent on the outlays.¹ The com-
pany continued in control until in February, 1820, the state
took over its interest.² This enterprise, in short, must be called
moderately successful.
The second most important Virginia project was for a canal
to cut and drain Dismal Swamp, which extended through to
North Carolina. Before the war a joint stock Great Dismal
Swamp Company - or perhaps two, one in Virginia and one in
North Carolina - acquired most of the swamp and lands
adjoining, with the object of utilizing the tract for rice culture
and the manufacture of staves, and till the burning of Norfolk
(1776) put an end to their operations a large gang of slaves
was employed on this job.⁸ Of this company Washington was
a large shareholder and a manager, and here too he had early
conceived the notion of a canal.4 In October, 1783, the Vir-
ginia assembly authorized the formation of a voluntary associa-
tion, with trustees, to open a communication between Elizabeth
River and North River and take tolls not to exceed ten per cent
of the amount expended; but nothing seems to have been
attempted under this authorization. The same Virginia assem-
bly that passed the James River and Potomac charters authorized
the appointment of commissioners to investigate the course of
such a canal.⁶ These reported favorably proposing a route,
and a bill to incorporate a company to undertake the work was
soon well on its way.⁷ The dilatoriness of the commissioner
particularly in charge caused some delay. The necessity of
North Carolina's coöperation caused more, for opposition was
1 Niles' Register, ix, suppl., 150-151 (1815-16).
2 Report of Chief Engineer Lorraine to the president of the James River and
Kanawha Company, June, 1868, in The Central Water-Line
(Richmond, 1869).
Cf. also Preliminary Report of the Inland Waterways Commission (1908), 208.
$ Phillips, Hist. of Inland Nav., 356; Schoepf, Travels in the Confederation, ii,
100; Isaac Weld, Travels in North America, 103-104; Latrobe, Journal, 37, 55-56,
107.
4 Washington to Patrick Henry, Nov. 30, 1785, in Henry, Works, iii, 338. Cf.
Pa. Mag. of Hist. and Biog., xviii, 412.
5 Stats. at Large (Hening), xi, 332-334. For similar provisions for unincorpo-
rated companies, see infra, 180.
6 Washington to R. H. Lee, Feb. 8, 1785, in Pickell, 137.
7 Letters between Washington and Henry, June 10, 24, Oct. 29, Nov. II, 30,
1785, Jan. I, 1786, in Henry, Works, iii, 301, 304, 333-335, 337-339, 343.
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IMPROVING INLAND NAVIGATION
141
made, as Patrick Henry wrote Washington,¹ "under the Guise
of public Spirit, taking alarm at a measure which will place the
trade of that Country in a situation of Dependence upon the
Will & pleasure of this." Henry adds:
"To obviate such Cavils I have recomended to some Friends of the
Scheme to preface the Act proposed to be passed on the subject with a Dec-
laration, in the clearest terms, that the benefits resulting shall be reciprocal
to both States, & that a Conference be offer'd to hear & refute objections."
He thinks a line from Washington might have a good effect in
stimulating the somewhat inattentive "men of Business in the
House." In 1786 commissioners representing the two states
signed at Fayetteville a compact to serve as a basis for the
charters. On Dec. I, 1787, the Virginia act was passed, and at
length, three years later, it became effective by the passage of
a similar North Carolina act.⁸
Books were opened at various points in the two states from
May to September, 1791, for the subscription of $500,000 in
shares of $250. At the end of this time a considerable sum had
been subscribed, and the company organized. Norfolk sub-
scribed forty-nine shares, and the state soon added fifty more,
with twenty additional later before 1800.4 In the winter the
board advertised for bids, receivable till April 9, for a canal
sixteen miles long, thirty-two feet wide, and eight feet deep.5
Work soon began. The problem was perhaps simpler than that
of the Potomac Company, for only a fairly straight, level canal
had to be dug. But the same difficulties hindered as had beset
the other companies, and there were exasperating delays and dis-
appointments. Part of the canal was dug by contract, at $4000
a mile; the rest, better and more cheaply it is said, by negro
labor working under overseers.⁶ As early as I794 some use
1 Letter of Nov. II, 1785, in Henry, Works, iii, 334-335.
2 See reference in North Carolina act.
3 Stats. at Large (Hening), xii, 478-494, xiii, 145-146; N. C. Laws (Iredell ed.,
1804), i, 494-500. For the slow course of it in North Carolina, see N. C. Records,
xviii, 350-351, 506-507, XX, 550, xxi, II, 93, 107, 109, 331, 755.
4 Winterbotham, View of the U. S. A., ii, 198; Stats. at Large (Hening), xiii, 264
(Nov. 25, 1791); Preliminary Report of Inland Waterways Commission, 291.
5
National Gasette, March 12, 1792.
6
Weaver, Internal Improvements of N. C., 71.
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I42 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
was made of the waterway.¹ It was still far from completion,
however, when in 1799 the time allowed by law for completion
had expired; but the legislatures extended the time for com-
pletion to Sept. 19, 1806,2 and further authorized the taking
of partial tolls before completion of the canal. Up to 1807 it
was asserted that $100,000 had been expended, of which Virginia
had contributed $17,500; but it was estimated that $25,000
more would be needed to pay off debts and secure the objects
in view.⁸ In 1816 a Virginia legislative committee broadly
asserted that "in its present use, and remote consequences, [it]
is not inferior in importance, to any public work within the
Commonwealth."⁴ Yet it found it necessary to give the com-
pany the privilege of raising $50,000 by lottery, and the next
year to subscribe $46,500 toward its completion. Further sub-
scriptions were made by the public, by the federal government
six hundred shares in I826 and two hundred in 1829, and five
hundred and four by Virginia in 1837, before the works had
been put into a satisfactory condition. Although mortgages on
the property have been three times foreclosed, the canal is still
operated, by a successor to the original corporation.5
South Carolina too had her early projects. In November,
1785, a meeting was called in Charleston to consider a "proposed
plan of opening a communication by locks between Cooper
and Santee rivers," by means of which a considerable portion
of the interior might be made more easily tributary to the
southern metropolis. A plan to raise £100,000 sterling in £100
shares was agreed upon. Subscriptions were opened at once
under a committee of this meeting, and one gentleman alone
was reported to have subscribed three hundred shares. Early
in February, 1786, when the legislature had convened, a meeting
of the "Subscribers and persons interested" was held, and on
1 Ringwalt, Transp. Systems in U. S., 41.
2 N. C. Laws (Iredell ed., 1804), ii, 142; Va. Stats. at Large (ed. 1835), ii, 255.
3
Weaver, Internal Improvements of N. C., 71. Cf. also Calendar of Va. State
Papers, ix, 6, 17.
4 Niles' Register, ix, suppl., 150 (1816).
5 Preliminary Report of Inland Waterways Commission, 291-293, q.v. for later
history.
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IMPROVING INLAND NAVIGATION
143
February 7 Chancellor Rutledge, as chairman of the meeting,
presented to the House a petition for a charter. Within a few
weeks an act was passed incorporating The Company for the
Inland Navigation, from Santee to Cooper River, and on March 23
Governor Moultrie was elected president, Chancellor Rutledge
vice-president, and other officers and the board of directors
were chosen.¹ The legislature gave encouragement by exempt-
ing shares from taxation; vesting in the company ungranted
lands within seven miles of the canal; authorizing the taking
of tolls not to exceed twenty-five per cent per annum "on
the money which they shall have expended in making and
keeping in repair the said canal and locks;" and permitting
them to hold negroes as well as lands, and to import not more
than three hundred for work on the enterprise with credit for
the "duty" on these negroes for five years from the date of
importation. Col. John Senf, state engineer, was put in charge
of the undertaking.
Dissensions, however, arose in planning the route, and the
work languished for several years.2 The project was revived
amid the speculative boom in March, 1792, and the advantages
of a twenty-one mile canal, to cost £55,620 sterling, with tolls
to yield twenty-five per cent of the investment, were dilated
upon in newspapers north and south. On May I books were
opened in Charleston for additional subscriptions, and two
thousand shares promptly subscribed.³ A rule was adopted
that £5 per share should be paid semi-annually, beginning in
January, 1793, till the canal should be completed, and extra
assessments of the same amount levied at the discretion of the
board of directors; no fixed par had been established. As
1 The charter is in Session Laws, 1786, pp. 33-36. The best accounts of the canal
are in Phillips, Transportation in the Eastern Cotton Belt, 36-43; F. A. Porcher,
The History of the Santee Canal (Columbia, 1903, written 1875), with appendix
quoting contemporary local newspapers; and John Drayton, A View of South Caro-
lina (Charleston, 1802), 155-158, showing a map of the canal.
2 Letter of Senf to Thomas Sumter, Jan. 3, 1790, cited by Phillips. Elkanah
Watson, visiting Camden in August, 1787, found the leading men still busy in
"projecting" the canal: History of the Western Canals, 9-10.
3 Mass. Magazine, iv, 212 (March, 1792); General Advertiser, May I, 1792
("Reflector"); National Gasette, May 14, 1792.
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144 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
the plantation profits were small in 1792, slaves were readily
hired, and digging began at both ends of the canal early in 1793.
Colonel Senf planned and laid out the course of the canal, de-
ferring somewhat, it is asserted, to the wishes of an influential
director who owned a large body of land through which he
wished to have the canal pass. He also planned the construc-
tion and method of work. Fearing that negroes would not work
skilfully under ordinary overseers, that overseers would put
the interests of landowners ahead of those of the canal, and
that serious disputes would arise over payments, he did not
employ the contract system; and he undertook himself the
immediate oversight of the laborers as well as the general super-
vision. Capital was invested in fresh negroes, and others were
hired from planters. By July, 1793, one hundred and fifty were
at work; in December one thousand, in I794 eight hundred,
in 1795 seven hundred, and in 1796 six hundred are said to
have been employed.
The construction of the canal encountered its peculiar dif-
ficulties. Freshets on the Santee became more frequent and
destructive about this time - that of 1796 long "held the rec-
ord": this, however, had its favorable aspects, for it released
for canal labor a large number of negroes held on plantations
which were greatly injured by freshets. The country was
unhealthful, and twenty-four whites (besides negroes not
counted) "died at the canal of fever" during the seven years of
construction. Perhaps even more than in Pennsylvania and
New York the people who resided along the route of the canal
opposed it. Compensation for injuries done, as well as for the
"trespassing" of the canal upon lands, was called for to a large
extent. In consequence of the increase in cotton growing,
wages rose considerably. " At first the canal paid from £15
to £16 per head, two-thirds of which were men. By the year
1800 the price of labor had risen to £24 per annum for men
and £20 for women, and the hirers [slave-owners] insisted on
their employing an equal number of women with men."
Adequate engineering skill was well-nigh impossible to secure.
Colonel Senf himself, though a Swede, had much in common
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IMPROVING INLAND NAVIGATION
145
with the Frenchman Major L'Enfant - artistic talent, in-
ordinate vanity, carelessness of cost, instead of unvarnished
technical skill and ability in superintendence.¹ There were
difficulties in securing funds. It early became clear that the
cost would exceed the estimate, and during 1795`and 1796
several lotteries were set on foot to raise considerable sums in
support of the enterprise. These were partially successful.
In 1796 and 1797 delinquencies of stockholders increased so
largely that forfeiture and sale of defaulting shares became
poor policy, and at a stockholders' meeting of Feb. I, 1798,
those in arrears were authorized to consolidate their shares into
whole ones paid up at £71 each, if the £10 assessment due
January, 1798, should be paid within sixty days.
These obstacles delayed but did not prevent progress in the
enterprise. In July, 1794, the canal was reported "so fast
advancing, that in the opinion of Colonel Senf, and Captain
Palmer, one half of the whole will be finished in the course of
the present year. By the end of 1795 five miles of excavation
were completed at each end and several locks were under con-
struction. In his message of Nov. 29, 1796, Governor Vander-
horst commented on the great progress made, prophesied com-
pletion in the ensuing year, and pointed to the expediency of
similar works elsewhere in the state.⁴ This was over-optimistic,
but finally in July, 1800, the first boat passed entirely through
the canal.
Completed the canal was twenty-two miles long, thirty-five
feet wide on top, twenty feet at bottom, five and one-half feet
deep with four feet of water, with two double and eight single
locks of brick and stone, sixty feet by ten, and eight aqueducts.
It was "said to be at least equal to any work of the kind, in
these United States." Certainly it was the largest of the
larger canal enterprises to be carried to completion before the
1 See Essay III, 458-464.
2 Cf. S. C. State Gasette, May 28, June 25, Oct. 15, 1795, for notices of drawings
of Santee Canal Lotteries No. 2 and No. 4, to raise $3360 and $3594.57 respectively.
3 N. Y. Magazine, v, 447 (July, 1794). Cf. mention of the "forwardness of the
Santee Canal" in advertisement of AEra & Atna Iron Works, dated April 29, 1795,
in Columbian Centinel, June 3, 1795.
4 S. C. State Gasette, Dec. 8, 1796.
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146 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
end of the century. Its cost has been stated at figures varying
from $660,000 to $750,000, nearly three times as great as the
estimates of sanguine 1792. The entire sum seems to have been
raised from stockholders, who paid up seven hundred and twenty-
seven shares.
The canal remained in operation till 1858. For some years
dividends of several thousand dollars were annually distributed.
About 1822 dividends as high as $45 per share were paid, and
shares sold as high as $300. The most prosperous period was
about 1830, when from October to June some seven hundred
and twenty boats came through it, and for the summer months
the company was authorized to import and keep three hundred
slaves to clean and make ready the canal. But there were years
of drought to offset these fat years with lean ones. With the
large development of cotton growing, whose product would
bear the cost of land transportation, and the coming of the rail-
road, the canal greatly declined in importance and eventually
its charter was surrendered. Altogether, while less of a failure
than most similar enterprises, it never adequately justified,
from a pecuniary standpoint, the outlay of its proprietors.
Two other projects soon followed that of the Santee and
Cooper in South Carolina. In 1787 were incorporated The
company for improving the navigation of Edisto and Ashley rivers;
and making a communication by a canal, and locks, from one to
the other of the said rivers, above Dorchester on the Ashley; and
The company for opening the navigation of the Catawba and Wateree
rivers.¹ Many of the incorporators were identical with those
of the earlier company; indeed all but one (John Gaillard) of
those named in the last charter were named in that of the Santee
and Cooper. An interested member of the Catawba company
was William Hill, proprietor of Hill's, or the AEra & AEtna Iron
Works, of North Carolina. August, 1787, saw a "number of
hands" employed on these improvements. In December, 1788,
the Catawba group secured a charter from North Carolina to
1 Drayton, View of S. C., 155-158. In June, 1785, planters on the Edisto had
secured legislative authorization for the appointment of commissioners to receive
private subscriptions for clearing its channel: S. C. Gasette, June 2, 1785, cited by
Phillips, Transp. in the Eastern Cotton Belt, 28.
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IMPROVING INLAND NAVIGATION
I47
enable opening the Catawba "80 miles higher in that State." 1
Neither company, however, pushed its project at this time, and
the Edisto-Ashley improvement seems never to have been
seriously undertaken. After years of delay the Catawba-
Wateree company made some show of beginning operations
in 1795, and on December I2 an act of South Carolina was
procured giving assent to certain stipulations in the North
Carolina act of 1788. In the following year, however, the in-
habitants of the North Carolina counties of Burke, Lincoln,
Mecklenberg, and Iredell petitioned the assembly against the
corporation. They represented themselves as
"much interested in the navigation of the Catawba river and South Fork,
that the said act is injurious to them,
that the said company in-
stead of opening the said navigation for the distance of one hundred miles
of the main river and fifty miles of the South Fork in this State, for the bene-
fit of the said inhabitants, sooner than they might themselves have opened
the same,
have for many years altogether failed;
that the said
act has operated to obstruct and prevent the inhabitants from opening the
said navigations themselves; and that the said act has met the general dis-
approbation, and produced great vexation in the minds of the people."
They further represented
"that the inhabitants who live within five miles, are able to remove the
obstructions, and open the said rivers sufficiently for boat navigation, with-
out aid from the public, or assistance from incorporated companies;
that the value of the produce of the land in that part of the State is greatly
diminished for want of a conveyance easier and cheaper than land carriage;
that the said inhabitants are desirous to accomplish the same in the
speediest manner by their exertions, and therefore by their representa-
tives
prayed this General Assembly to repeal the said act and restore
the free navigation of the said rivers, to be enjoyed as a very valuable right
and franchise very dear to the people, and that the same may forever remain
to themselves and their posterity, as free as the light and the air they
breathe."
The charter was thereupon repealed, and the company's opera-
tions were confined to South Carolina.2
Nevertheless progress continued to be made. At Rocky
Mount, S. C., the channel of the river was cleared for some
1 Columbian Centinel, June 3, 1795; Mass. Centinel, Sept. I, 1797; N. C. Laws
(Iredell-Martin), i, 450.
2 Ibid., ii, IOI, C. 32.
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148 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
distance and a stone lock nearly completed, but this was then
abandoned for lack of adequate funds.¹ Late in 1798 it was so
confidently expected that the Catawba and Wateree would be
effectually joined that Rocky Mount, on the Wateree, was
selected for one of three principal federal magazines for mili-
tary supplies.2 In 1803 the company again prepared to recom-
mence operations, planning a three and one-half mile canal
from Rocky Creek to the Catawba. In 1805 it was stated that
"The navigation is expected to be completed in three years up to the
North Carolina line; and as the improvements in North Carolina are
carrying on with equal spirit, it is expected that about the same period the
inland navigation will be free from the source of the Wateree branch of the
Catawba to the tide water at Charleston."⁴
The fact is that physical conditions were not highly suitable
for canal construction and operation - abundant rock, porous
soil, irregular rainfall, frequent freshets.⁵ Coupled with en-
gineering and economic obstacles, these factors could not be
overcome, and unaided by vigorous support from Charleston,
the struggling enterprise came to little.
In Pennsylvania the movement for important improvements
of navigation had first appeared in the colonies. After the war
Pennsylvania did not lag far behind her southern neighbors
in pushing ahead with such improvements. By act of March
15, 1784, three men (including Benjamin Rittenhouse) were
appointed managers and directors of a lottery to raise $42,000,
one-half to be expended on improving the navigation of the
Schuylkill and the other half on improvements upon roads west
from Philadelphia.⁶ Nothing significant was accomplished under
this act, and the depression and uncertainty of the next few
years delayed adoption of more effective measures.
1
Drayton, View of S. C., 156-157.
2
Washington to McHenry, Dec. 13, 1798, in Hamilton, Works, v, 165.
Drayton, View of S. C., 157.
4
"A Friend to National Industry" [William Blodget], Facts and Argument re-
specting the Great Utility of an Extensive Plan of Inland Navigation in America (Phil-
adelphia, 1805), 8.
5
Phillips, Transp. in Eastern Cotton Belt, II-12.
6
Pa. Stats. at Large, xi, 251; Barton, David Rittenhouse, 236.
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IMPROVING INLAND NAVIGATION
149
In 1789 was formed The Society for promoting the improve-
ment of Roads and Inland Navigation, composed eventually of
more than one hundred members "residing in various parts
of the state, with a view to contribute their best endeavors
to promote the internal trade, manufactures and population
of their country, by facilitating every possible communication
between the different parts of the state." In this year, and
probably under the auspices of this society, Benjamin Ritten-
house and John Adlum made estimates of the expense of clear-
ing the Schuylkill from the falls to Reading, the Tulpehocken
from mouth to head, and the Delaware to Stockport, and of
opening a communication all the way from Philadelphia to
Presque Isle on Lake Erie. Robert Morris was president of
the society, Alexander J. Dallas secretary. On Feb. 7, 1791,
it submitted a memorial to the General Assembly, which then
had "under their consideration the important subject of roads
and inland navigation," and therein presented the information
collected and the society's views, both general and specific, as to
measures deserving adoption.¹ Already on January 5 a com-
mittee of the lower house had reported on the same subject.2
The outcome was the blocking out of a rather comprehensive
scheme of internal improvements and the taking of steps to
execute its various parts.
As "the ground work of the plan" the society's memorial
offered two principles:³
"First, The method of turnpike roads and toll navigation must be adopted.
"Secondly, The work, both of roads and navigation must be undertaken
and carried into execution, by separate companies and associations of men;
upon some uniform and consistent plan, aided and directed by the Legisla-
ture; as neither the state alone, nor any number of companies without
public regulations and assistance, can be adequate to the great work in all
its parts; and, therefore, the assistance of the state should be apportioned
to different parts of the work, with a liberal and equal hand, in respect both
to roads and navigation, as it may be most necessary, and where the small-
ness of the tolls, the distance from the market and other circumstances may
1 See An Historical Account of the Rise, Progress, and Present State of the Canal
Navigation in Pennsylvania, published in Philadelphia in 1795 by the two principal
canal companies, pp. xvi, I-IO, 14-16.
2 Reprinted in Hazard, Register of Pa., ii, 129-132 (1828).
8 Historical Account, 17-18.
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150 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
yield the least probability of an adequate encouragement or speedy reim-
bursement to the adventurers." 1
The "Heads of a Plan" based on these principles were then
offered.2 An unpaid "Board of Commissioners for the im-
provement of roads and inland navigation, within the state of
Pennsylvania, "was to be appointed by the legislature, the gov-
ernor to be president, a vice-president to be annually elected.
This board was to meet weekly, or as often as needful, at times
and places announced in the newspapers. It was to have offices
in Philadelphia and liberal allowances for expenses. It was to
investigate and determine on proper lines for roads and canals,
distinguishing between those to "be undertaken solely at the
public expense" and those which could "be best performed by
contractors entitled to tolls, &c. The latter to be preferred
wherever the situation, and the nature of the improvements
will admit of it." With regard to the latter the board was to
advertise for propositions and "enter into contracts with in-
dividuals, companies, or corporations" for constructing and
maintaining the improvements "in such manner, and upon
such principles, as have, in other countries, been found upon
experience to be best." The board should fix tolls, lend public
money to the contractors, or subscribe state funds to shares
under any contract. Such contractors as would "submit their
operations to the controul of a superintendent" appointed by
the board were to have a virtual guarantee, with a corresponding
limitation, of profits of six per cent. Furthermore, "The several
Boards of Contractors shall be declared, by law, to be corpora-
1 The experience of England was recited and followed up by this opinion: "The
present circumstances of Pennsylvania, in respect to the increase of commerce,
wheel carriages, &c. and the unimproved state of our roads and inland navigable
waters, being so similar to those of England in the time of Charles II. the fore-
going reasoning will justify the conclusion which we mean to draw from it, namely
- That the putting or keeping the great roads in repair, either in the counties
near the capital city of Philadelphia, or, indeed, in distant counties but thinly
inhabited, would be a burthen not only intolerable to the inhabitants of the par-
ticular townships, through which the roads pass, but, likewise, unequal in itself,
and ought neither to be borne by the state at large, nor yet by the particular
townships and counties; but, for the greater part, 'by the identical wearers-out
of the roads,' according to the use they make of them. - And the like reasoning
applies to the improvement of rivers and opening of canals for water carriage."
2 Historical Account, 18-22.
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IMPROVING INLAND NAVIGATION
I5I
tions or bodies politic, for carrying into effect the purposes of
their contracts, for and during the terms thereof." The
natural inference is that the society was here suggesting the
desirability of granting a general extension of corporate privileges
to such as should become contractors; in short, a general incor-
poration act for this class of corporations. Several provisions
of such authorization are set forth "specifically.
"The foregoing memorial, with the estimates and proposed plan of ex-
ecution, having been referred by the Legislature to committees of their
respective Houses, to confer with the committee of the Society of roads and
navigation, and to report thereon; the result of the whole, after mature
deliberation, was the adoption of the following general principles - -
"That the Legislature, although animated with the warmest zeal for the
improvement of their country, by means of roads and inland navigation,
yet could not subject the finances of the state (even if adequate) to the
burden of the whole; yet they would make liberal appropriations of public
money for the improvement of such roads and navigable waters, as lying
too remote from the more populous parts of the country, and the inhabit-
ants but thinly settled, rendered it impracticable for them either to improve
their own roads and waters by subscriptions or the usual county taxes;
and the profits of the tolls would yet be too small, to induce companies to
undertake the work at their own expense; but that in the more settled parts
of the country, especially near the metropolis, they would be ready to
incorporate companies, for the gradual and progressive improvement of
roads and waters, where the tolls would be sufficient to recompence the
subscribers or stockholders, and the charge would fall according to justice
upon those who were to be benefited, in proportion to the use they might
make of such roads and waters."¹
In accordance with this policy an act was passed "to provide
for opening and improving sundry navigable waters and roads
within this commonwealth." Under this act advertisement
was made on April 14, 1791, of the state's desire for proposals
for executing eleven separate navigation projects and six large
and twenty minor road projects; and on April 22 a further
advertisement relating to canals on the Tulpehocken and Quita-
pahilla creeks between the Susquehanna and Schuylkill, to
clearing the Susquehanna from Wright's Ferry to the Mary-
land line, and to building a turnpike road from Philadelphia to
1 Quoted from the Historical Account, 22. For legislative appropriations
made in fulfilment of this promise, see ibid., 73-77.
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152 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Lancaster.¹ Also in accordance with this act Governor Mifflin
appointed on May IO three joint "Agents of Information" -
Benjamin Rittenhouse, William Smith, and William Findlay -
to advise in the execution of these improvements. Early in
July two advantageous contracts were reported formed, for
improving the navigation of the Delaware and Schuylkill. On
August 23 the governor reported these, together with others
affecting the Lehigh and Lackawaxen navigations and for open-
ing various roads, and announced the arrangement of a state
loan of £60,000 for effecting these improvements.⁴
On Sept. 29, 1791, an act of incorporation was obtained which
provided for securing subscriptions for the principal enter-
prise and the issuance, after organization of the subscribers, of
letters patent by the governor to The President, Managers and
company for the Schuylkill and Susquehanna Navigation. Decem-
ber I books were opened, and by one o'clock more than the
five hundred shares ($200,000) required as a minimum were
subscribed, and when the books had been open the required
fifteen days no less than forty-six thousand shares were found
to be subscribed. This was acclaimed "another instance of
the public spirit of the inhabitants of this state," though in
reality it testifies chiefly to the speculative spirit then running
riot. The subscriptions were reduced by lottery to one thou-
sand shares, and canal scrip was soon selling at an advance.⁵
On January 9 organization was effected and Robert Morris
elected president.⁶
Meanwhile a committee of the legislature was appointed to
inquire into the feasibility of a canal to unite the Schuylkill
and Delaware, north of their confluence, and on April IO, 1792,
a charter for this purpose was granted. Despite the late stock
market panic, the stock for this too was soon floated, and Robert
1 Pa. Mercury, June 21, 28, July 16, 26, 28, 1791.
2
Barton, David Rittenhouse, 359.
3
Pa. Mercury, July 5.
4
Amer. Museum, x, App. III, II (1791).
5
Pa. Stats. at Large, xiv, 150-163 (reprinted also in Historical Account, 23-32);
National Gasette, December 5, 29; N. Y. Journal, Dec. 7, 1791; Mass. Magazine,
iii, 781 (December, 1791).
6
National Gazette, Jan. 9, 1792. The meeting was held in the Senate chamber.
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IMPROVING INLAND NAVIGATION
153
Morris became president also of this company. In March,
furthermore, the society of which he was president sought
charters for two other companies, one to open the navigation
of the Schuylkill from the lower falls to the heads of its branches,
and the other to open a permanent navigation of the Delaware
from Trenton Falls to the northern boundary of the state.¹
These were not forthcoming, but on July 3, 1792, the governor
contracted with a third Morris company for cutting a canal
at Conewago Falls and improving the Susquehanna navigation
between Wright's Ferry and the mouth of the Swatara; and
on April IO, 1793, these contractors were given corporate
powers.2 It is no wonder that critical minds, many of whom
feared Morris, growled about his "canal junto" and compared
it with the bank petitioners of New York!
For all three "navigations" surveys were made in the spring
and early summer of 1792, under the supervision of committees
which included the celebrated David Rittenhouse and Provost
Smith, Timothy Matlack, and Samuel Powel. The routes of
the necessary canals were staked out by August, and in the
fall work was under way at selected points on the three canals,
under the superintendence of John Bull, Jonathan Robeson,
and James Brindley. The company sought "one of the ablest
engineers that could be procured from England, to superintend
and direct their works," and in January, 1793, this gentleman,
William Weston, arrived from London.4 Inspecting the works
in February, he found "more than six hundred men at work, viz.
upwards of two hundred at Norristown, and about four hundred
at the summit or middle ground, between Lebanon and Myers-
1 American Museum, xi, App. III, 22 (1792). It was suggested that New
Jersey and New York might coöperate in the latter.
2 Historical Account, 44-47; Barton, David Rittenhouse, 402.
3 Historical Account, 67-68; N. Y. Magazine, iii, 318, 382 (May, June, 1792);
American Museum, xii, App. III, 14 (1792); National Gasette, Aug. 18, Sept. 5, Nov.
3, 1792; Providence Gasette, Nov. 17, 1792. The two later companies apparently
did not take the trouble to secure from the governor the letters patent by which
the corporate powers were to be formally vested in the subscribers according
to the charter: report of a legislative committee in 1821, in Hazard, Register of
Pa., ii, 296 (1828).
4 He was expected much earlier, "certainly
...
by August or September,"
Morris wrote Elkanah Watson in June, 1792: Watson, Memoirs, 319-320.
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I54 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
town." Weston immediately took charge, and during the next
two years confirmed the confidence of the directors in his
abilities and energy and showed not a little progress on the
various canals.¹ In September, 1794, the militia marching west
to quell the Whiskey Insurrection reported six hundred hands
still at work, the canal already ten miles long, five locks erected
in masterly manner, and numerous arched bridges built over
the canal to accommodate the farmers.2
Like the southern companies, these too found serious dif-
ficulties in their way. In the first place labor was difficult to
secure. From January, 1793, advertisements were inserted in
the newspapers far and wide, calling for able-bodied, sober
laborers to be in Philadelphia about March IO. Cash wages of
$6 a month from June to October and $5 a month from Novem-
ber to May were offered, provisions and lodging found, "the
laborer providing his own blanket," and $5 was to be allowed
each person for expenses to Philadelphia. Persons obtaining
twenty-five men were to receive for this service $I down for
each man-an early example of the padrone system-and super-
intendents of twenty-five were to get $7 a month "and found
in provisions." Laborers were assured of "lucrative employ-
ment" for a length of time, and it was announced that "Persons
of enterprizing character, who have yet to provide themselves
farms, may readily combine that object with the one in ques-
tion." Assurance was also given "that every measure will be
taken by the Companies for which they respectively engage,
to make them comfortable." It was not easy to keep those
laborers who were employed. In March, 1793, a force of two
hundred employed on the Susquehanna works quit en masse
and brought the work to a standstill.4 Others certainly drifted
away as opportunity called to farms or other employments.
Furthermore, local opposition was encountered. The in-
1 Historical Account, 48-65, 68-71.
2 Captain Ford's journal, Sept. 24, 1794, in N. J. Hist. Soc. Proceedings, IST
series, viii, 8I (1856).
3 Columbian Centinel (Boston), Jan. 5, 1793, and after; National Gasette,
March 30, 1793. These were signed by "I. Roberdeau, Agent."
4 National Gazette, March 30, 1793.
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IMPROVING INLAND NAVIGATION
155
dependent farmers, especially the Pennsylvania Germans,
strenuously objected to the exercise of the powers of eminent
domain.¹ Their expressions of hostility may have stimulated
the disgust of the laborers, though it is also highly prob-
able that the conduct of the laborers, as in Virginia, did not
excite the most friendly feelings on the part of the neighboring
proprietors. In one respect the companies were at the mercy of
these inhabitants, and in a memorial of 1795 complaint was
made of the "exorbitant prices allowed by juries for some of
the lands and waters necessary to the work," which had "con-
siderably enhanced the expense." 2
These obstacles, however, were clearly surmountable; and,
thanks largely to the presence of the English engineer, these
companies seem to have been less affected by technical and
managerial difficulties. The chief problem, however, was that
of finance. It is highly probable that many of the subscrip-
tions came from those who were severely injured by the crash
of this very first spring of 1792. Certainly many were specula-
tive subscriptions, and a show of profitableness was too slow in
maturing to bring about the early rise in shares upon the promise
of which so many subscribers had become interested. Regard-
less of ultimate achievements, the impossibility of prompt
completion of the undertakings to the point of paying dividends
was sufficient to disappoint the expectations of momentarily
enthusiastic subscribers and accordingly to cut off the principal
source of funds. Furthermore, the engineer, with an instinct
for thoroughness and perhaps an inadequate appreciation of
the difference in economic conditions between America and
England with respect to the amount of original capital outlay
warranted, urged eventually the abandonment of the plan to
utilize the beds of the rivers, which figured in all these early
projects, and favored "a Canal Navigation along the margin." 8
This promised to treble the estimate of expense of the Schuyl-
kill and Susquehanna navigation alone, but the company was
1 National Gasette, Dec. 12, 1792, March 30, 1793.
2 Historical Account, 48. This was not an uncommon complaint.
3 Ibid., 48-65, 68-71.
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156 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
persuaded of its clear advantages. A deficiency of £308,000
was calculated, and early in 1795 the company petitioned the
assembly
"For an aid in money to the amount of the said deficiency, or as much
thereof as the Legislature may think proper to grant, either by lending the
same to the company on interest, at the rate of six per centum per annum
(the principal of the loan to be advanced, by the state, to the company, in
monthly instalments of ten thousand dollars each;) or by the state taking
an interest in the work, for the speedy accomplishment of the same, to the
amount of the deficient capital, or such part thereof, as, in regard to the
public emolument, they may think meet; and that, in case the loan shall
be granted as aforesaid, the corporation engage to pay the same with in-
terest, by instalments of not less than fifty thousand dollars annually; the
first instalment to be paid at the end of twelve months after the work shall
be finished, and the commencement of tolls thereon."
Request was furthermore made for more liberal terms as to
tolls on the Schuylkill and Susquehanna navigation, before
the entire work should be completed. It was pointed out that
"by reason of the large sums of money already invested in the various
stocks of this state and of the United States, such as banks, insurance com-
panies, roads, canal and other companies, and the growing demands of
capital for our increased domestic and foreign trade among our monied
citizens; there appears but little prospect either of obtaining a loan or an
increase of shares to any considerable amount among individual capitalists
in this country, nor a prompt payment of a considerable number of the shares
already subscribed according to law.
"And although it might be possible, and perhaps probable, in the present
fluctuating state of property among capitalists in Europe, to obtain a foreign
loan, upon the ample prospects, which the magnitude of this undertaking
holds forth, of a speedy and secure return, either of the capital, or liberal
profits on the footing of stockholders; yet the length of time, and expense
attending the negociation, would give a damp to the work, and occasion
such a stop or suspension of it, as would be dishonorable to the state and
fatal in the issue; considered not only as a check to our western population,
and a grievous prolongation of the time in which the present stockholders
might expect some returns for their money advanced, not to mention the
bad policy of vesting such a large proportion as two thirds of the stock and
profits of so great an undertaking, in the hands of foreigners; although one
third might be prudently vested in this way, while the state might hold the
other third.
"This distribution of the capital into three parts, the commonwealth and
original stockholders being invested with two, would undoubtedly secure
the raising of the other third part, upon an advantageous loan, or new sub-
scriptions for shares, either at home or abroad, and thereby likewise ensure
the speedy and compleat success of the work.
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IMPROVING INLAND NAVIGATION
I57
"The finances of the state are in a flourishing condition; and it is sub-
mitted to the wisdom and feelings of an enlightened Legislature, to what
nobler purposes they can be applied (in part at least) than to the improve-
ment of our country, and the encouragement of arts and manufactures,
even if no monied return were to be expected, on the capital to be expended;
for, can an interest of 8 or IO per cent. on the monied capital of a great com-
monwealth be considered as an equivalent for suffering the improvements
of a happy and fertile country to languish and decay? But when it is con-
sidered that even in a monied view, the stock to be vested in the shares of
this canal will produce a larger and more growing interest or dividend than
can be contemplated on any other species of stock, besides the additional
interest, in point of revenue, from an increase of population and of the wealth
of our citizens, it is hoped the Legislature 'who have already put their
hands to the plough
will not look back,' nor suffer their former liberal-
ity to be lost to the public, by any abatement of their protection and
encouragement."1
To the appeal for additional investinents by the state the
legislature turned a deaf ear. By act of Feb. 12, 1795, ample
authority was given for raising by loan or the issue of new
shares such additional capital as the work should require, and
the modification as to tolls was made in accordance with the
request. Furthermore, in April following, authority was given
to raise by lottery the sum of $400,000, two-thirds of which
was to be applied to the Schuylkill and Susquehanna and one-
third to the Delaware and Schuylkill. Alone these expedients
proved disappointing, as the company had feared. Necessarily,
therefore, work was soon abandoned on all of the undertakings.
The partially completed works soon fell into decay. The exist-
ence of the corporations was maintained by the persistence
of a few members, until, a quarter of a century later, a new
burst of enthusiasm for internal improvements led to a revival
of interest and activity - and further disappointing investments
of funds and energy.
New York, too, had some large projects. Late in November,
1784, Christopher Colles, an Irish engineer, presented to the
1 Historical Account, 48-50, 72-73. Appended is a list of the "Grants of public
money for the improvement of roads and waters by the Legislature of Pennsyl-
vania."
2 Reprinted in ibid., 66.
3 Stats. at Large, xv, 33I-333. See advertisement, dated June 2, 1795, for the
scheme - fifty thousand tickets at $10, deducting fifteen per cent: Columbian
Centinel, Aug. I, 1795.
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158 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
New York legislature a plan for removing obstructions to navi-
gation in the Mohawk River. The House voted it inexpedient
to undertake the work at public expense, but virtually promised
"that if Mr. Colles, with a number of adventurers (as by him
proposed) should undertake it, they ought to be encouraged
by a law," which would be virtually an act of incorporation.
Colles renewed his appeal the following spring, and on April 5
$125 was voted "for the purpose of enabling him to make an
essay towards removing certain obstructions in the Mohawk
river, and to exhibit a plan thereof to the legislature at their
next meeting." He made a survey and issued a pamphlet
proposing the establishment of a company with a capital of
£13,000 to improve the navigation between Albany and Oswego,
especially at the Cohoes (41/2 mile canal), Little Falls (I mile),
and Fort Schuyler (11 miles); the company to be allowed toll,
and a grant of two hundred and fifty thousand acres of western
lands if the works should be completed within five years. Ap-
plication to the legislature was repeated in February, 1786,
with a report on the practicability of his plans, and a bill evi-
dently designed to meet his ideas passed a second reading.
Here, however, it rested, and the lack of interest on the part of
capitalists left it virtually dead.¹
The first New York canal companies to be actually chartered
were largely the outgrowth of an agitation by Elkanah Watson,
a Providence man who settled in Albany in 1789. He had
travelled extensively in Europe and America during and after
the Revolution: abroad he was favorably impressed with the
utility of artificial navigation; in this country he was equally
impressed with the need and opportunity for it; and on a visit
to Mount Vernon in January, 1785, when the General was push-
ing vigorously the Virginia navigation enterprises, Watson was
infected with the "canal mania."2 About to settle in New
York, he made a journey along the Mohawk in the fall of 1788,
1 On early New York canals, see esp. N. E. Whitford, History of the Canal System
of the State of New York (Albany, 1906), chap. I. Whitford gives quite a complete
bibliography (pp. 1188-1191). Joel Munsell, Annals of Albany, i, 304, quotes Joel
Barlow's "Vision of Columbus" (1787) and "Columbiad" (1807) on this early
canal.
2 Watson, Memoirs, 244-246, and passim.
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IMPROVING INLAND NAVIGATION
159
and began in 1789 the publication of newspaper contributions
intended "to impress the public mind favorably on this im-
portant subject." 1 In this self-appointed task he continued
laboring "incessantly by night and by day" until the com-
panies were floated. Perhaps partly as a result of his efforts,
Governor Clinton urged upon the legislature, in his message of
Jan. 5, 1791, the facilitation of communication with the west;
and a joint committee after investigation proposed that the
commissioners of the land office should let contracts to per-
sons or associations to open water communication between
the Mohawk and Wood Creek and between Fort Edward and
Lake Champlain, and remove obstacles between Rensselaer-
wyck and Fort Edward.2 The upshot was the passage, on
March 24, 1791, of an act directing the commissioners of the
land office to cause a survey to be made of the ground for canals
between the Mohawk at Fort Stanwix and Wood Creek,
Herkimer County, and between the Hudson and Wood Creek,
Washington County, and to estimate the expense of these canals.
In September, 1791, Maj. Abram Hardenberg made such a
survey and found the route easier than had been anticipated.
In consequence the commissioners submitted a report early in
January, 1792, asserting the practicability of financing the
canals out of current income. Governor Clinton lent his support,
and after consideration by a joint committee a bill was brought
in on February 7, in accordance with the recommendations of
the commissioners, for joining the Mohawk and Wood Creek.
Meanwhile, in September and October, 1791, Elkanah Watson
undertook a new journey of more careful inspection. Following
Washington's example (1783) he kept a journal, and on his re-
turn submitted it to his fellow-townsman, Gen. Philip Schuyler,
and published its substance anonymously in the New-York
Journal.4 Schuyler already had developed an interest in internal
1 Watson, History of the Western Canals, 11-18, 85.
2 Whitford, N. Y. Canal System, 28-30.
3 Reports dated Albany, Sept. 5, Oct. 7, 1791, and Philadelphia, Jan. II, 1792,
in American Museum, X, App. III, 17, 30 (1791), xi, App. III, 2 (1792); Whitford,
N. Y. Canal System, 30-32; Troup, Vindication, 20-23, App., 4-5.
4 Watson, History, 19-21, 25-62; Troup, Vindication, 26-27, App., I4-27.
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160 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
improvements of this nature; furthermore, he was wealthy and
influential. He took up the enterprise warmly and carried out his
assurances of earnest support.¹
The recommendation of state construction was apparently
not seriously considered. For a time it seemed as if the state
bank promoted by New York City speculators would get the
authority to build the proposed canals.2 Thanks, however, to
the open efforts of Schuyler (a member of the state Senate),
effective lobbying by Watson, and the natural demise of the
bank scheme, the commissioners' bill yielded to one drawn
by Schuyler on more extensive lines; and this was pushed
through much as the promoters desired.3 On March 30, 1792,
by "An Act for establishing and opening lock navigations
within this State," corporate powers were bestowed upon
two companies, respectively, "The president, directors and
company" of the northern and western lock navigations
"in the State of New York."⁴ The northern company was
to open the navigation from the Hudson at Troy to Lake
Champlain, the western from the Hudson at Schenectady to
Lake Ontario. Books were to be opened during May for sub-
scribing one thousand shares, of no specified par, in each
company.
April, 1792, was a very dark month in New York City, and
May, though brighter, was far from being a good month in
which to procure subscriptions.⁵ A New York newspaper an-
nounced May 2:6
"Yesterday the books for the northern and western inland lock naviga-
tion were opened at the Coffee House, by Commissioners appointed by law
for that purpose. From the respectability of the characters who have al-
ready subscribed, we have reason to congratulate our fellow-citizens in the
prospect of the respective subscriptions being speedily and substantially
filled."
1
Lossing, Philip Schuyler, ii, 104, 467-471; Essay III, 421.
2
See supra, 83.
Troup, Vindication, II-12, 19, App., 30; Schuyler to Watson, March 4,
in Watson, Memoirs, 317-318. Cf. also Schuyler to Watson, May 20, in ibid.,
319, indicating that he was not entirely satisfied with the charter.
4
N. Y. Laws (ed. 1887), iii, 326-329.
5
See Essay II, chap. 7.
N. Y. Journal, May 2, 1792; N. Y. Magazine, iii, 317-318 (May, 1792).
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IMPROVING INLAND NAVIGATION
161
An anonymous correspondent (perhaps Elkanah Watson) was
reported as saying that the "property of the first payment"
would be enhanced fifty per cent, since the state would add
$12,500, and that beyond the first instalment of $25 no further
demand was likely to be made on the stockholders for two
years. These were typical puffs. The true state of affairs was
at first quite different. Elkanah Watson, returning from a
trip to Philadelphia "in pursuit of Albany bank paper" (scrip),
was present at the opening of the books, and records that in
the first three days not a share was subscribed. Almost in
despair, he set to work and induced his friend James Watson
to subscribe twenty shares. After this subscriptions rolled in.
Arrived in Albany soon after, he found the books had been
open several days and no one had subscribed more than two
shares. He at once subscribed seven shares in each company
himself, and a little later, securing Schuyler's permission, sub-
scribed for that gentleman ten shares in each. From this time
the books here were better filled.¹ Robert Morris was also
importuned for aid, and in June, notwithstanding his large in-
terest in and activity on behalf of similar Pennsylvania pro-
jects, he generously offered "to open and push" the subscrip-
tion in Philadelphia, besides subscribing himself.2 Early in
June the newspapers reported twelve hundred shares subscribed
in New York City and two hundred and twenty-five elsewhere,
making a total of more than the minimum (five hundred in each
company) required before organization. Later in the month,
when business confidence had again revived, the books were
reopened for a few days.
On July 27 organization of the western company was effected
in Albany and Schuyler elected president.⁴ It was announced
that the work would be commenced immediately and completed
"by spirited, active operations" within three or four years in-
1 Watson, History of the Western Canals, 85-86, quoting Schuyler's letter
of May 20.
2 Morris to Watson, June II, 1792, in Watson, Memoirs, 319-320.
3 Gazette of the U. S., June 13, National Gazette, June 14, 1792, citing Albany
paper, June 4; N. Y. Journal, May 26, June 16, 1792.
4 National Gazette, July 25, Gazette of the U.S., July 25, Aug. 22, 1792; N. Y.
Magazine, iii, 446 (July, 1792).
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I62 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
stead of in the two years earlier contemplated. Watson, elected
a director in the western company, was appointed August I4
on a committee with Schuyler and Goldsbrow Banyer to examine
the Mohawk River from Schenectady to Fort Schuyler. A
Scotch engineer, Archibald Nesbit, had arrived in July and
was called into consultation, as well as Moses De Witt, a sur-
veyor, and one Lightall, a carpenter.¹ On September I a report
was submitted to the directors, in which special attention was
given to the serious problems in view.2 The cost was estimated
at £39,500 from Schenectady to Wood Creek. A saner view
was urged upon those who, since the act of incorporation limited
the dividends to fifteen per cent of expenditures, believed that
'the higher the expense, the greater will be the profit to the
stockholders; and that, therefore, the improvements should be
made in the completest manner, that is, on the most expensive
scale." It was asserted that experience would show such a
policy contrary to both the interest and the reputation of the
company, and that the existing traffic going by land would
pay no more than legal interest on the sums required for the
complete improvements; and alterations in the charter per-
mitting the completion of only part of the enterprise at first
were suggested. Strict economy was regarded as essential, even
to the necessity for building wooden locks instead of more sub-
stantial ones.
The problem of direction was recognized as fundamental,
and the committee recommended
that the executive of the business should be committed to a single direct-
ing head, to a man of known and acknowledged abilities, of a mind so com-
prehensive, as to combine and form all the arrangements, with a minute
detail of each part; capable of foreseeing what will be wanting in future,
that the supplies may be prepared, without incurring that extra expence
1 Watson, History of the Western Canals, 22; Munsell, Annals of Albany, iii,
154; Comfort Sands to Schuyler, July 20, 1792, in Schuyler Papers (Calendar,
ii, 54); Boudinot to Hamilton, Aug. 16, 1792, in Hamilton, Works, v, 520.
2 The report was published in Albany in pamphlet form and is reprinted in
Doc. Hist. of N. Y., iii, 1086-1103; an inadequate summary is in Watson, History
of the Western Canals, 92. Watson had estimated in 1791 that it would cost
$200,000 to open lock navigation from the Hudson to Seneca Lake: ibid, 92.
Cf. ibid., 22, where Watson mentions differences of opinion between himself and
Schuyler, Watson being against the policy of wooden locks.
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IMPROVING INLAND NAVIGATION
163
which ever attends collections made on the spur of the occasion; In short, a
man, who if he has not had practical experience, has activity, ingenuity and
judgment sufficient to compensate in a degree for that defect - so capable
of profiting by experiment, that the artists, whom he superintends, may
not injuriously impose on the company."
The committee realized that such a treasure would be hard to
secure; they pointed out that "A person who has had practical
experience in making Canals and locks, would be a valuable
acquisition, but such person may not be attainable in this
country." Unlike their Pennsylvania contemporaries, they did
not urge securing one from abroad and looked forward to secur-
ing a "good all-round American." They believed, however, that
such a general superintendent could pick two or three ingenious,
intelligent, and well-informed carpenters to inspect "with a
critical and close attention" the Pennsylvania and Virginia
canals and locks already built. As a result the company wor-
ried along until May, 1795, without any capable engineer,
and Schuyler, untrained as an engineer, attempted to super-
intend the entire operations of both the western and northern
companies.¹
The stockholders met September II, agreed upon plans for
construction, decided as well that the books should be reopened
during November and December to secure the full one thousand
shares, and in view of the small attendance at this meeting
voted henceforth to allow proxies. Under date of September
17 advertisements were inserted in the newspapers for forty
carpenters in four companies, ten masons in one company,
five miners, one blacksmith, two lime burners, and two hundred
able-bodied laborers in eight companies, on terms stated.2 The
legislature, by acts of Dec. 22, 1792, and March 9, 1793, made
modifications in the charter at the request of the company,
easing the terms as to depth of water and size of locks, and
empowering the companies to use surplus water for manu-
facturing and irrigation purposes,⁸ passing the act over the
1 Cf. "Tacitus," The Canal Policy of the State of N. Y. (Albany, 1821), 17.
2 Daily Advertiser (N. Y.), Oct. 2, 1792; Conn. Courant, October 22. See also
Doc. Hist. of N. Y., iii, 1101; Munsell, Annals of Albany, iii, 195.
8 N. Y. Laws (ed. 1887), iv, 394, 453.
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164 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
objections of the Council of Revision, which thought it too
liberal - "inconsistent with the spirit of the Constitution and
the public good.' 1 Work was begun in April, 1793, at Little
Falls with nearly three hundred laborers; in the summer Wood
Creek was cleared of fallen timber, straightened, and shortened
by seven miles; 2 and an additional instalment of $25 was called
for from stockholders.
Difficulties appeared without delay. Many of the stockholders
neglected to pay the requisition (and later ones as well), "either
because they had not the means to supply such advances, or
from an apprehension of the impracticability of succeeding in
the operation." Forfeiture of shares was an ineffective resource.
Landowners made high demands for damages, and the local
juries impanelled generally allowed them, to the financial injury
of the company. Opposition of the residents, shortsighted
though it was, was annoying and worse. Some opposition also
arose from persons who feared reputations would be gained by
those prosecuting the improvement! The method of operation
through superintendents opened opportunities for fraud, of
which advantage was liberally taken.³
These difficulties led to the stoppage of the work in September,
1793, and permitted it to be recommenced but feebly in January,
1794. The legislature was appealed to for aid, given an expense
estimate of $126,925, and informed that of the 743 shares sub-
scribed in the western company and 676 in the northern, about
240 in each had been forfeited for non-payment of calls.4 The
assembly responded nobly and on March 31, 1795, directed a
subscription of 200 shares on account of the state. A donation
of $12,500 was added.
In May, 1795, work was recommenced, and William Weston,
the English engineer whom Robert Morris had secured for the
1 Street, The Council of Revision, 30I-302.
2 Whitford, N. Y. Canal System, 37.
3 "Tacitus," Canal Policy, 17; Report of Directors to the Legislature, Feb.
16, 1798, p. 4; Schuyler Papers, esp. Letters on Canals, 1793-94; and blank
petition and memorandum in Ford Collection (New York Public Library). The
Schuyler Papers contain material which has not been fully utilized by historians of
the canals.
4 Whitford, N. Y. Canal System, 37-38; Munsell, Annals of Albany, iii, 163.
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IMPROVING INLAND NAVIGATION
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Pennsylvania improvements (which now released him), was
employed to superintend the work at the Little Falls and to
examine the whole line. Delays were encountered in securing
workmen and blamed on "the very high price of agricultural
produce creating a most extensive demand for labor," but on
Nov. 17, 1795, boats were afforded passage through a canal
4752 feet long and three feet deep, and five locks, at Little
Falls. In the spring of 1796 operations were begun at Fort
Schuyler. The legislature, by acts of April II, 1796, and March
17, 1797, loaned to the company £15,000 and a ton and a half
of powder and authorized it to borrow $250,000 more. Thus
aided, a canal one and three-fourths miles long, forty-seven and
a half feet wide, with two locks, was opened Oct. 3, 1797, per-
mitting the passage of boats from the Mohawk to Wood Creek.
Work in clearing Wood Creek to the Mohawk, cutting a canal
at German-Flatts, building the guard locks and a dam were
continued till the end of 1799, when they were regarded as
complete.
By 1798 £60 had been assessed on each share and $39,950
had been borrowed (mostly from the state). Up to 1804 the
company had received from private stockholders $140,000, be-
sides $25,494 from sales of forfeited shares; from the state
$92,000 on account of its shares and the $12,500 donation.¹ The
entire revenue from 1799 to 1813 was absorbed by repairs and
improvements. A dividend of three per cent was paid in May,
1799, and from 1813 to 1818 dividends averaging 41/2 per cent
were paid. Then the company succumbed to the competition
of the newly opened eastern section of the Erie Canal.¹
The northern company attracted less interest. Because of
the paucity of shares represented, stockholders' meetings were
postponed from July to August, from August to September,
from September to October.2 In October, however, a committee
laid out the northern route, and advertisements for contracts were
1 Whitford, N. Y. Canal System, 37-39. 1798 Report, 4-7, 9-28; Ibid.,
"Tacitus," Canal Policy, 16; N. Y. Laws (ed. 1887), iii, 719, iv, 45;
Munsell, Annals of Albany, iii. 178, iv, 309-313; Watson, History of the Western
Canals, 92-94.
2 Daily Advertiser (N. Y.), Sept. 25, 1792.
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166 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
published.¹ Work was begun in 1793, at Whitehall and between
Waterford and Stillwater, and a contract made for opening
the navigation of northern Wood Creek to Lake Champlain.
Only six hundred and seventy-two shares had been subscribed,
however, and as the expense was estimated at $225,000, stock-
holders held back from paying the second instalment of $25,
conceiving that $335 per share would bankrupt them. Their
hopes were revived by plans for appealing to the state legisla-
tures of New York and Vermont for donations or subscriptions,
and many paid up. These appeals were duly made in the fall
of 1793.⁸ The Vermont legislature was interested, but laid the
matter over till the next session; by that time the work had
been suspended and the appeal seems not to have been renewed.
The petition of the company to the New York legislature
was answered by the favorable act of March 31, 1795, which
directed a subscription of two hundred shares in this as in
the other company. The act of April I, 1796, furthermore,
directed the company to employ an able engineer to report
on the opening of navigation from Albany to the mouth of
Meadow Creek (north of Troy), and authorized a donation
of £3000 for the work, if it would not cost more than £4000
and £1000 were raised by voluntary subscription. A similar
provision was made for improving the river from Meadow
Creek to Mill Creek, where the company was to begin. The
company accordingly made strenuous efforts to prosecute its
work. In October, 1796, Schuyler appealed anew to Vermont
for help, reporting the determination of the directors "to re-
commence their operations in the ensuing year, and to prosecute,
with all possible celerity, the improvements in the internal
navigation," now estimated to cost $300,000, - a sum inconsider-
able compared with the advantages in prospect, but "neverthe-
less, so extensive, as not to be raised, without much embarrass-
ment to many of the original subscribers
He
requested
1 N. Y. Journal, Oct. 20, 1792.
2 Whitford, N. Y. Canal System, 37; "Tacitus," Canal Policy, 16. Whitford
says this was partially cleared in 1794.
3 Schuyler to Governor Chittenden of Vermont, Oct. 17, 1793, in Records
of the Governor and Council of Vt., iv, 448-450.
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IMPROVING INLAND NAVIGATION
167
the subscription by the state of fifty of the remaining one
hundred and twenty-eight unsubscribed shares and the pay-
ment of $50 on each, with the assurance that the further calls
would probably not amount to more than $250 per share. A
committee reported favorably; the legislature was again in-
terested, but it was cautious; and the utmost it would do was
"to enable such towns as, from a spirit of liberality and
enterprise, shall have a wish to become stockholders in said
company, to tax themselves for the purpose." 1 Failing here,
and despite New York's hearty support, the enterprise was
soon abandoned, some $100,000 having been sunk in vain.2
In New York, therefore, as in Pennsylvania, the principal
efforts at improving navigation came to little. The projects
were premature, poorly planned, inadequately financed, ill-man-
aged, - foredoomed to failure.
Among the important New England projects the improve-
ment of the navigation of the Connecticut ranked high. Unlike
the southern predecessors, the New Englanders did not attempt
to accomplish the whole task by a single company. In all some
seven companies were incorporated by the end of I800 for re-
moving obstacles, deepening the channel, or building short
lock canals at various points on the river.
The first company to begin and complete its project was
incorporated in February, 1792, by Massachusetts, as the
Proprietors of the Locks and Canals on Connecticut River, to over-
come the principal obstructions to navigation in Massachusetts.
The company was composed largely of leading men in the Con-
necticut valley, including John Worthington and Jonathan
Dwight of Springfield, John Williams of Deerfield, and Ben-
jamin Prescott, a Northampton engineer. Christopher Colles
of New York was secured to make the preliminary surveys,
in 1792, at South Hadley and at Montague. With the as-
sistance of Stephen Higginson of Boston, about one-fourth of
the stock was sold to four Amsterdam firms in 1793, and some
1 Vt. Council Recs., iv, 450-452, quoting Schuyler's letter of Oct. 10, 1796,
committee report, and act.
2 Watson, Western Canal, 94.
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168 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
five hundred and four shares were subscribed. The necessary
lands were purchased in this year, and on April 20, 1793, con-
struction was begun at South Hadley under Prescott's direction.
The work here was dedicated in the autumn of I794 and opened
for traffic the following spring. In 1795 over $3000 was col-
lected in tolls. Nearly $200,000 was expended.
Work was begun on the canal on the upper river, at Mon-
tague Falls, in 1793. In February, 1794, however, this work
was handed over to a separate company comprising most of
the earlier shareholders except the Dutch capitalists, who may
have insisted on the division. The Montague section of the
canal was completed in 1794, and the section at Millers Falls,
after considerable delay, in 1800. Four hundred and forty-one
shares were issued, and at least $90,000 seems to have been
spent here, perhaps as much as $150,000. The first year's tolls
amounted to nearly $3800.
The early years of these canals were not highly profitable.
Expenses had been greater than anticipated, while receipts
proved smaller. Litigation following the erection of the first dam
and its reconstruction for sanitary reasons was disconcerting.
The Dutch investors, after paying in $153 in assessments, refused
to pay more, and their stock was sold at auction for $80 per share
(the last in 1804). Other stockholders also sold out. Even-
tually, however, the tolls returned the patient stockholders
gratifying dividends. The upper company dividends in 1806-20
averaged 41/2 per cent. In 1820 its stock sold at $200, and that
of the lower at $280.1
Late in 1791 Col. Enoch Hale, who in 1785 had built the
first bridge over the Connecticut, at Bellows Falls, Vt., planned
and began work on a canal to carry boats around these falls.²
He may have been acting for a group of associates headed by
1 W. De Loss Love, "The Navigation of the Conn. River," in Am. Antiq.
Soc. Proc., New Series, xv, 406-412; Edwin M. Bacon, The Connecticut River
and the Valley of the Connecticut
(New York, 1906), 311-314; Thompson,
History of Greenfield, i, 293, 518; Mason A. Green, Springfield, 1636-1886 (Spring-
field, 1888), 351-352; Boston Gazette, Feb. 6, 1792; Columbian Centinel, Oct. I5,
1796; Pitkin, Statistical View (1835), 563; Report of Inland Waterways Com.,
205; Dwight, Travels, i, 321-324, ii, 352-353.
2 Mass. Magazine, iii, 783 (December, 1791).
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Gen. Lewis R. Morris of Springfield, Vt., and Dr. William Page
of Charlestown, N. H., who had on October 3I secured an act
from Vermont providing for their incorporation as the company
for rendering Connecticut river navigable by Bellows falls, at
Rockingham, with a perpetual exclusive privilege. New York
capitalists also were interested in this venture.¹ Nothing ma-
terial was accomplished, however, and late in 1792 a new charter
was granted the associates in Vermont, and the equivalent of
one was secured from New Hampshire as well.2 The earlier act
had required completion within four years, or forfeiture unless
every exertion was being used to complete it; the second act
called for completion by Nov. I, 1803. Only eighteen shares
were issued, and most of the capital actually employed was
furnished by a wealthy Londoner, Hodgson Atkinson. Progress
was slow, partly because of the rock formation, though the
engineering problem was not great. Expenses proved greater
than the original estimate, and the legislature granted requests
for increases in tolls in October, 1795, and November, 1798.
The total cost came to over $100,000. The canal, less than half
a mile in length, with seven or eight locks, was probably opened
in 1798 and was in full operation in the fall of 1802. In 1826
the property was valued at $70,000. It continued to be used till
1865, but as a business venture proved a disappointment.
In June, 1792, the proprietors of the White River Falls Bridge
were chartered by New Hampshire with authority to lock the
falls and cut canals to improve the navigation of the Connec-
ticut "between the Mouth of Mink brook in Hanover and the
Eddy below the lower bar of White River falls in Lebanon."
Vermont's tardy assent was given Oct. 2, 1795. The bridge
was built; nothing, however, was done on locks and falls until
after 1810, and then by a new company.4
1 See Essay II, 277, 326.
2 Vt. Council Recs., iv, 448; N. H. State Papers, xxii, 622, 683.
3
Bacon, Connecticut River, 311, 314; Thompson, History of Greenfield, i, 518;
Vt. Laws (ed. 1798), 80-86; Vt. Session Laws, Nov. 7, 1798, pp. 116-117; Love,
Conn. River Nav., 413; Report of Inland Waterways Com. (1908), 59; Dwight,
Travels, ii, 94-95.
4 N. H. MSS. Laws, vi, 541 (Index, 580); Vt. Session Laws, Oct. 2, 1795;
Lord, Dartmouth College, 631-632, 654-655; Love, Conn. River Nav., 414.
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170 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
The Company for rendering Connecticut River navigable by
Water Queche Falls secured charters from Vermont in October,
1794, and from New Hampshire nearly two years later. Eventu-
ally some $60,000 was expended here, and a short, narrow canal
put in operation. In 1826 the works were valued at $26,000
and were not regarded as being in satisfactory condition.¹
The Union Company was incorporated in October, 1800, to
make a six-foot channel between Hartford and Middletown,
Conn., where sandbars interfered materially with trade. The work
was sufficiently completed by March, 1806, to justify the com-
pany in taking tolls. By this time, however, the competition
of the turnpike roads was causing a diminution of the river
traffic, which reached its high point in 1805; and while its
works were somewhat used, the company did not prosper. Up
to 1835 it had expended $45,000. It died quietly at the ex-
piration of its charter in 1866.2
In May, 1792, an association was formed in Newburyport
to render the Merrimac River navigable to the New Hampshire
line,⁸ and on June 25 the legislature chartered The proprietors
of the Locks and Canals on Merrimack River for this purpose.
The company was duly organized, but without great financial
strength. In October, 1794, they issued "To the Inhabitants
of the Towns bordering on or near the River Merrimack" a
broadside calling for voluntary subscriptions to build the works.5
The newspapers of 1793 to 1796 indicate the levy of several
assessments of $4, $5, $8, and $9 on the proprietors, and there
were doubtless others amounting in all to about $100 on each
of the five hundred shares.⁶ The most that was accomplished
was the opening of a short channel Oct. 18, 1796, to let lumber
1 Vt. Session Laws, 26-33; N. H. MS. Laws, x, 213 (Index, 570); Love,
Conn. River Nav., 413-414; Preliminary Report of Inland Waterways Com., 205.
2 Love, Conn. River Nav., 398-400. Timothy Dwight (Travels, i, 236) reports
it as having a capital of $80,000. The company's manuscript records are in the
Connecticut Historical Society library.
3 Mass. Magasine, iv, 342 (May, 1792).
4 Priv. and Spec. Stats., i, 382; Columbian Centinel, June 23, 1792.
5 Amer. Antiq. Soc. Proc., New Series, xi, 514 (April, 1897).
6 Columbian Centinel, June 19, 1793, Aug. 23, 1794, May 27, Sept. 19, 1795,
Oct. 8, Dec. 3, 21, 1796.
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and firewood come around Pawtucket Falls, leading into the
Concord River, thence into the Merrimac at Lowell, at a cost
of perhaps $50,000. On this construction, despite the Middlesex
Canal competition, dividends averaging around 3½ per cent were
secured up to 1820. Thereafter the canal was relied upon to
furnish water power for the rising manufacturers of the town,
and as such it has continued in existence.¹
The Middlesex Canal was an important project born of the
speculative year 1792.2 The object of this enterprise was to
tap the timber lands of New Hampshire, to furnish an outlet
for the agricultural products of much of Massachusetts as well
as New Hampshire and Vermont, and to make possible the
economic utilization of the water powers of those states. Pre-
liminary surveys were made by Samuel Thompson in the summer
of 1792, which, though they proved later to be exceedingly
inaccurate on a vital matter of levels, convinced the projectors
of the practicability of a canal to connect the Merrimac River
at Chelmsford (now Lowell) with the Mystic at Medford. A
meeting was held early in 1793, attended chiefly by residents
of Medford, but also by a few other men who became of more
importance to the enterprise. Such were Loammi Baldwin of
Woburn, sheriff of Middlesex County, and James Sullivan of
Boston, who later built the Boston aqueduct and was now
prominent in the West Boston Bridge Company and attorney-
general of the state. A committee appointed by this meeting
had little difficulty in securing a charter from the General Court,
approved June 22, 1793.
The first board of thirteen was designated in the charter, and
from it Sullivan was soon elected president and Baldwin vice-
president. These two supplied the initiative, influence, and
persistence requisite for the arduous task of building the canal.
1 Columbian Centinel, Oct. 8, 1796; Ringwalt, Amer. Transp. Systems, 41;
Drake, Hist. of Middlesex County, i, 190, 376, ii, 54; Hurd, Hist. of Middlesex
County, ii, 5; Lyford, Hist. of Concord, ii, 834. The Report of the Inland Water-
ways Commission says the canal was abandoned in 1850.
2 For this account the writer is largely indebted to one of his students, Mr. W.R.
Harper, A. B. (Harvard), 1916, who has examined a large part of the manuscript
and pamphlet material relating to the canal.
3 Priv. and Spec. Stats., i, 465-470.
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172 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
The services of William Weston, the English engineer whom
Robert Morris had imported for the Pennsylvania canals, were
secured temporarily in the spring and summer of I794 and his
plan for a route was adopted. Most of the necessary land was
acquired without the exercise of the right of eminent domain,
and even where this right was utilized the company seems to
have escaped the local hostility which dogged its Pennsylvania
contemporaries.¹ Work was begun Sept. IO, 1794. The eight
hundred shares seem to have been subscribed with considerable
promptness. Shareholders were called upon for a total of
$580,000 in one hundred different assessments, of $2.50 to
$10 each (most commonly $5), beginning January, 1794, and
continuing with frequency till February, 1805, and infrequently
thereafter.² By this means a total of $170,000 had been raised
up to January, 1800,3 and $55 per share was called in during this
year. At this time an increase of toll rates was requested and
quickly secured, in view of the "great discouragements and
embarrassments" which had arisen, and in order to retain the
confidence of "persons of property." Doubtless for the same
end charges for lockage were authorized by act of March, 1803.4
The courage of the investors is quite exceptional for the period
and implies no mean tribute to the leading figures in the com-
pany. Shares were indeed occasionally forfeited, but here the
policy of selling forfeited shares succeeded as had not been the
case elsewhere.
The construction eventually involved a length of over twenty-
seven miles, with twenty locks, seven aqueducts (the longest
one hundred and thirty-seven feet), and forty-six bridges.
Contracts were awarded for short stretches, and the contractors
1 Caleb Eddy, last agent of the corporation, states in a memorandum attached
to the book of deeds that one hundred and one of the one hundred and forty-two
pieces of land acquired were by "warranty deed" and only sixteen under the
special authority of the charter. Prices ranged from $25 to $150 per acre.
2 The newspapers print the "calls," but an entire list, with dates and amounts,
is given in Caleb Eddy's Historical Sketch of the Middlesex Canal (Boston, 1843),
22-23.
3 As stated in petition for increase of toll in Mass. Archives, c. 35 (1799).
4 Acts of Jan. 25, 1800, and March 2, 1803; Priv. and Spec. Stats., ii, 342,
iii, I3I.
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IMPROVING INLAND NAVIGATION
173
worked under the general supervision of Loammi Baldwin, who
for a number of years devoted himself largely to the enterprise.
Certain "unanticipated difficulties" were encountered, as usual,
and the company made the mistake of the Potomac company
in building locks of wood which had to be replaced at heavy
expense; but taken as a whole the cost and difficulty of the
work did not greatly exceed the expectations of the promoters
- a most unusual event. Without appreciable intermission the
work was continued till in the spring of 1802 water was admitted
between the Merrimac and Woburn and a raft of lumber floated
down. Independence Day of this year was celebrated by a
pleasure voyage along the canal. Before the end of the year
the canal was completed to Medford, and in 1803 an additional
stretch connected the Mystic with the Charles.
The distinction of the Middlesex Canal lies in the facts that its
proprietors persisted in their efforts over a period of several years,
its shareholders paid their assessments, it was actually completed
and for a number of years was successfully operated. Eventually,
however, the coming of the railroad threw the entire canal in-
vestment on to the scrap heap, and it is doubtful whether the
financial return justified the outlay of the capitalists interested.
The enterprises above described include all of the principal
canal undertakings which were floated prior to 1801. In nearly
every instance the difficulties, the time, and the cost of con-
struction proved materially greater than had been anticipated.
Practically all of the companies encountered delays. Several
abandoned their projects after sinking more or less capital.
Only two or three attained their objects before the century
closed. Most of the others had opened a small part of their
projected works, and were struggling to complete them. Only
a very small number could be called financially profitable, even
after the lapse of another decade or two; a much smaller num-
ber yielded profits sufficient on the whole and in the long run
to warrant the investment; and it is gravely to be doubted
whether incidental benefits from the construction contributed
materially to outweigh capitalist losses.
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174 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Looking back on the experiences of these companies, one
sees how wide of the mark were the able and enthusiastic ad-
vocates of these improvements. Patrick Henry wrote Wash-
ington in November, 1785, apropos of the Dismal Swamp and
other Virginia projects then beginning: "nothing more is neces-
sary in this canal business, than giving a proper Direction to
the Efforts which seem ready for Exertion." Washington
responded in the same vein: "These measures only require a
beginning to show the practicability, ease and advantage with
which they may be effected." 1 Even such cool and able men
as these - and there were many others who felt similarly -
were exceedingly poor prophets on the subject of canals. The
fact was that, as repeatedly in later years, canals exerted a fatal
fascination. Almost invariably expenses were underestimated,
obstacles minimized or overlooked, prospective income ex-
aggerated. Labor difficulties no doubt were removable, given
time; poor management might have been replaced as experience
developed able men; technical skill could have been imported or
developed; but utterly inexact notions of the problems involved
led to premature enthusiasm, disappointment, and waste.
A few other major canal projects, for some of which charters
were secured but upon which no work was done, may be men-
tioned somewhat more briefly.
As early as the summer of 1776 a committee of the Massa-
chusetts General Court, headed by James Bowdoin, had the
isthmus between Barnstable Bay and Buzzards Bay surveyed
by an experienced English engineer, Mr. Machin, and reported
that a navigable canal cutting this isthmus was practicable and
would be of great advantage. Because of the large expense,
estimated at £32,148 IS. 8d., they recommended the project to
the Continental Congress.2 The scheme was revived with vigor
early in 1791, and a lottery was urged to provide funds for it.³
Objections were raised on the score of expense - now cal-
1 Henry, Patrick Henry, iii, 335, 338.
2 Report of committee reprinted in Mass. Magazine, iii, 26-27 (January, 1791).
Cf. Frederick Freeman, History of Cape Cod
(Boston, 1860), i, 333, for men-
tion of a committee appointed to view a route, in 1697.
3 Columbian Centinel, Feb. 9, 1791.
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IMPROVING INLAND NAVIGATION
175
culated as £20,000 to £30,000, - the difference in the tides in
the two bays, necessitating a double lock at each end, and
the likelihood of its being closed in the winter.¹ Respectable
merchants and others petitioned the General Court for a new
examination of its feasibility, and a legislative committee
reported in February, 1792. The outcome was a resolve of the
legislature, March 8, to the effect that the legislature was willing
to grant toll to any who would undertake to build it, and this
fact, together with the report of the committee, was advertised.⁸
Private capital, however, was unwilling to venture, and the
project at once lapsed.4
On Feb. 17, 1792, the General Court received "a petition of
Henry Knox and others, praying for the privilege of opening a
navigable canal from Connecticut River, to the waters surround-
ing the town of Boston," and four days later a bill to incorporate
Knox, John Coffin Jones, David Cobb, Benjamin Hichborn, and
Henry Jackson, Esquires, and such others as might associate
with them for this purpose, passed its first reading. On
March IO the bill was approved incorporating The Proprietors
of the Massachusetts Canal.5 Worcester citizens were especially
interested. Surveys were made in the summer of 1792 and a
favorable route discovered.⁶ But again capital was wary and
the company was not floated.⁷
In 1792 a subscription was opened in Portsmouth, N. H., for
connecting "Winnepesscoke pond" with the Cocheco River. It
was probably the same scheme for which a charter was secured
in 1795 to the Proprietors of Winnepesaukee and Merrimack
Canal. For neither could the requisite capital be raised.⁸
1 "P. Q.," writing from Boston, Jan. 18, 1791, in Mass. Magasine, iii, 25-26
(January, 1791).
3 Columbian Centinel, Feb. 16, March 12, 1791.
3
Independent Chronicle, March 15, 1792.
4
Cf. Columbian Centinel, Feb. 28, 1798, for references to literature then extant
on the subject.
5
Ibid., Feb. 22, March 14, 1792.
6
Daily Advertiser (N. Y.), July 21, 1792.
7 A large number of letters and other documents relating to this project are
in the Knox Papers, Massachusetts Historical Society.
Mass. Magazine, iv, 47° (July, 1792); N. H. MS. Laws, ix, 265 (Index, 588).
Dwight (Travels, i, 406) says that the shares of the latter were subscribed in 1796.
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176 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
As early as 1784 a canal was projected by Ira Allen of Vermont
to connect Lake Champlain and the St. Lawrence, and at his
instance, in 1785, the Governor of Canada had a survey made,
from which the expense of a canal was estimated at £27,000
sterling. Several times between 1789 and 1798 efforts were
made to get capital for this undertaking, but the project proved
too audacious to be attractive, and no very earnest efforts to
secure a charter were made.¹
Early in 1796 John Brown, merchant, congressman, and
bank president of Providence, pushed a scheme for a canal to
connect Providence and Worcester. The Rhode Island legisla-
ture granted a charter in February for The Proprietors of the
Providence Plantations Canal, and in April, 1796, before much
progress had been made on the Middlesex Canal, subscriptions
were opened in Providence. John Brown alone was reported to
have subscribed $40,000. Application was made to the Massa-
chusetts General Court for a similar act. This was refused,
probably due to the influence of Middlesex Canal interests, and
the project was not again taken up until 1823.2
In 1796 surveys were made by Benjamin Prescott, lately
engineer for locks on the Connecticut, for a canal to open the
navigation between Lake Erie and Lake Ontario, at Niagara,
and the expense was estimated at $623,000. A company for
the purpose was incorporated April 5, 1798, through the efforts
of Prescott, Elkanah Watson, Charles Williamson (agent of Sir
William Pulteney in the Genesee country), and Thomas Morris,
and the company organized in January, 1799. On closer exami-
nation it was decided that immediate construction was economi-
cally inadvisable, on account of the smallness of the traffic
available. Benjamin Latrobe was engaged to resurvey the route,
but his work did not change the opinion earlier formed, and the
enterprise died in infancy.
Cf. also Lyford, History of Concord, ii, 834; N. H. Town Papers, xii, 559-560; and
J. Q. Bittenger, History of Haverhill, N. H. (1888), 192-193, for other schemes,
larger and smaller, which were not very seriously considered before 1800.
1 Ira Allen's History of Vermont (1798), reprinted in Vt. Hist. Soc. Collections,
i, 333, 472, 477-480; Vt. Council Recs., iii, 407-420.
2 Staples, Annals of Providence, 366-367; Columbian Centinel, April 9, 1796.
8
Troup, Vindication, supplement, 5-6; Watson, History of the Western Canals,
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In April, 1793, Pennsylvania chartered a company to open
a canal and lock navigation in the Brandywine creek, up the
east and west branches from their junction to points where
the Philadelphia and Lancaster turnpike crossed them and
beyond. Delaware passed a similar act in June. A capital of
$300,000 was authorized. Commissioners, appointed to make
a survey and a plan of the canals, made report to the legislature
early in 1795, and the assembly approved the route selected.
But capital was not forthcoming, and letters patent were never
taken out.¹
Finally, it will be recalled that the New Jersey manufactur-
ing society, incorporated in 1791, had embodied in its charter
the equivalent of a canal charter, under which it might legally
even have connected New York and Philadelphia by waterway,
to give outlet to its products. An extensive canal of general
importance never figured largely, however, in the Society's plans,
and difficulties in securing capital, coupled with disappoint-
ments in manufacturing operations, effectually checked any
possibility of developments in the canal field.2
Besides these enterprises of considerable magnitude and im-
portance there were a great number of smaller ones of purely
local significance. Some of these secured charters, and in the
regulations respecting the others one sees a number of varying
pre-corporate forms.
The state which shows the greatest number of acts relating
to internal navigation at this time and the greatest variety of
forms of organization for this purpose is North Carolina. Its
only canal enterprises of larger size and importance were the
Dismal Swamp and Catawba-Wateree enterprises, in each of
which another state was equally or even more concerned. In-
ternal problems of communication were serious, and for many
years water communication received special attention. Acts
99-100. The company's charter allowed the issue of negotiable promissory notes,
specifying "the particular service or article for which they are given," to an
amount not more than double the paid-in capital.
1 Pa. Stats. at Large, xiv, 412-426, xv, 19-20, 222-224; Del. Laws (ed. 1797),
360; Hazard, Register of Pa., ii, 296.
2 See Essay III, esp. 385.
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178 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
"for cutting a canal," "for opening the navigation," "to facili-
tate the navigation," and the like were very numerous. Dif-
ferent types of corporations, as well as various subcorporate
organizations, were made use of. A few instances will make this
reasonably clear.¹
In 1789 commissioners were appointed to receive voluntary
subscriptions and to make contracts for opening a canal from
Juniper Bay to Mattamuskeet Lake, in Hyde County, in order
to drain the neighboring lands; but no corporate powers and
no rights of eminent domain were accorded.2 In 1791, upon
receiving representations that the navigation of New River was
obstructed by small sandy shoals at the mouth, which could
be readily removed, and that the local inhabitants had made
subscriptions for that purpose, certain persons were incorporated
as Commissioners of the New River navigation, with power to
receive and apply subscriptions to the purpose in view, return-
ing any "overplus" to the subscribers, subject to accounting
to the county court "for the money and other articles by them
received." Other companies which were similarly incorporated
but given no right to take tolls, and which cannot be classed
as business corporations, were: The Cape-Fear Company, 1792;4
The Yadkin Company, 1793; The Yadkin Company, 1796;6
The Yadkin Pedee Company, 1796;7 The Hico Company, 1796;8
The Cataba Company, 1797.9 In the same year, 1791, other
commissioners were appointed, but not incorporated, "for over-
seeing, designing, and laying out" a navigable canal from
Adams's Creek to North-river, receiving and collecting subscrip-
tions and employing powers of eminent domain as needed in the
execution of their plans; the canal to be forever for public use
free of toll. 10 Other commissioners were appointed to collect a
1 See esp. Laws (Iredell-Martin ed.), ii, 102, for 1796 titles.
2 Session Laws, 31, C. 513. Replaced by act of 1792, in ibid., 16-17, C. 27.
3 Ibid., 22, c. 40.
4 Ibid., I4-I5, C. 22. Cf. Mass. Magazine, iv, 59 (January, 1792).
5
Session Laws, 16, C. 33. Repealed as disagreeable in 1794: ibid., 19, C. 39.
6 Ibid., 37-38.
7 Ibid., 32-33, C. 33.
8 Ibid., 39-40.
9 Ibid., 7-8, c. 20.
10 Ibid., 25, C. 49. Cf. Commissioners of the Swan River Canal: ibid., 1795,
p. 23.
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IMPROVING INLAND NAVIGATION
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"tax" on specified articles conveyed down the northwest branch
of Cape Fear River and to apply the sums thus received to the
improvement of its navigation.¹ Trustees were appointed, in
1792, to clear the Roanoke and Dan rivers, with power to compel
labor, the persons so working to be exempt from military duty.
In some instances such trustees were given the right to collect
tolls as well.3
There were also several small canal companies which were
truly business corporations. Thus the Fayetteville Canal Com-
pany ($10,000) was chartered in 1790 by "an act to make Cross
Creek navigable," a purpose had in view by earlier acts which
created no corporation.4 The Clubfoot and Harlow's creek canal
company was chartered in 1795, for a purpose for which one act
had been passed as early as 1783 and another in 1792.5 In 1796
there were The Roanoke Navigation Company ($80,000), the Roa-
noke and Pungo Canal Company ($60,000), The Deep and Haw
River Company ($8000), The Yadkin Canal Company ($80,000),
and The Tar river Navigation Company ($15,000).⁶ Doubtless
the demand for corporate privileges for these purposes and for
other acts for the same ends which did not grant corporate
powers, also especially numerous in 1796, was responsible for
the act of this year providing for the creation of local companies
for such purposes without appealing directly to the legislature.⁷
As noted above, the writer believes this is not be to regarded as
granting freedom of incorporation, and the companies formed
under it were probably not corporations proper. For many
purposes it was doubtless the equivalent. How much use was
made of the act does not appear. Certainly during the next few
years there are fewer special acts on the subject, and apparently
only one other, the Union Canal Company (1798, $60,000),
was chartered on the model of those of 1796.⁸
1 Session Laws, 30, c. 68. Repealed, in 1794 (p. 23, c. 52) when "found a
grievance."
2 Ibid., 16, c. 26.
3 Ibid., 1794, p. 37; 1795, p. 28.
4
Ibid., 2I-22, C. 32. Cf. ibid., 1793, p. 17, c. 35, and 1799, p. 20, c. 44, extend-
ing the time for completion.
5 Ibid., 1795, pp. 15-17, C. 23; N. C. Laws (Iredell-Martin ed.), ii, 340-341;
Session Laws, 1792, p. 16, c. 25. Cf. the act of 1797, C. 5.
6 Session Laws, I0-34.
7 See supra, 18-19.
8 Session Laws, 22-23, C. 40.
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180 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Virginia's activities, except with the large companies already
mentioned, were quite similar to those of North Carolina. Here
in October, 1783, trustees were appointed to receive subscrip-
tions in money, hemp, tobacco, or flour, to contract with persons
for clearing the James River between certain points, and to
collect specified tolls on tobacco, hemp, and flour, to be applied
toward repaying principal and interest of the subscriptions.¹
A similar act three years later made similar provision relating
to the Chickahominy, and another of Dec. IO, 1787, for Willis's
River in Cumberland County. An act of Dec. 17, 1787, de-
clared the subscribers for extending the navigation of the
Appomattox River to be tenants in common of the canal, etc.,
and for their benefit vested the works in self-perpetuating
trustees. A later act required the trustees to lay their accounts
before the county courts. Acts of May, 1783, October, 1784,
and December, 1790, appointed Roanoke River Trustees with
similar duties.4 In December, 1791, the Banister River Trustees
were provided for.5 Just such groups of trustees for sub-
scribers as tenants in common were sometimes incorporated.
Such were The Mattapony Trustees (1788) 6 and The Pamunkey
Trustees (1789).7 The Appamatiox Company, on the other hand,
was incorporated late in 1788, with president and four directors,
a capital of two hundred shares of £50 each, etc., much like
the Potomac and James River companies. Rechartered in 1800
with a capital of £6000, this company eventually opened a
navigation of a hundred miles.⁸ The several later companies
in Virginia were mainly of one or another of these two classes.
Generally similar conditions with respect to improvements,
chiefly without resort to business corporations, obtained in
1 Stats. at Large (Hening), xi, 341-342.
2
Ibid., xii, 382-384, 583-587.
3 Ibid., xii, 59I-595, xiii, 153, 568-570.
4 Ibid., xi, 250-252, 508, xiii, 193-194.
5 Ibid., xiii, 278-279.
6 Ibid., xii, 698-700; cf. also acts of 1784 and 1791, in ibid., xi, 530-532, xiii,
286-288.
7 Ibid., xiii, 73-76.
8 Ibid., xii, 792-795, xiii, 568; ibid. (ed. 1835), ii, 218; Latrobe, Journal, i,
i5-22; Niles' Register, ix, suppl. 150 (1815-16).
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IMPROVING INLAND NAVIGATION
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Maryland,¹ South Carolina, Georgia,³ and Kentucky.4 Essen-
tially in the same class with North Carolina's small corporations
belong Maryland's Pocomoke Company of 1796 ($10,000);5
South Carolina's Company for opening the Navigation of the
Broad and Pacolet rivers, chartered early in 1788; the Pine-
tree Navigation Company, chartered late in 1797; the Company
for opening a Canal from Back River to Chapel Bridge, of 1798;
and Georgia's Savannah Navigation Company ($40,000), char-
tered in 1799.9
Quite similar were four small New Jersey companies, con-
cerned with improving the navigation of the Rancocus ($4000),
Assanpink ($3000), and Great Timber (£1000) creeks, and
with the cutting of a canal to shorten the navigation of Salem
Creek, for which $100,000 was deemed necessary. None was.
at once successful. It is not certain that the Great Timber
Creek company ever secured the £500 subscriptions which
were a condition precedent to incorporation. The other com-
panies organized and began construction, but soon lapsed into
dormancy. The Rancocus and Salem Creek projects were
later revived, and the latter at least was eventually completed. 10.
1 Griffith, in his Annals of Baltimore, 108, says that in 1784 "A company was.
incorporated to cut a canal from the basin at Forrest street to the cove in Ridgely's
addition, and which could have been effected by the brick makers of. the vicinity,
free from expence to the public as was believed, if not opposed by some of the
proprietors of the ground through which the canal would pass." I find no evidence
of a charter and no other mention of the company.
2 Cf. Phillips, Transportation in the Eastern Cotton Belt, 28; S. C. Session
Laws, March 26, 1784, March 24, 1785, March 22, 1786.
8 Ga. Laws (Marbury & Crawford ed.), 366-377; Digest of Laws of Ga. (Marbury
&
Crawford ed.), 49-52.
4 Ky. Laws (ed. 1799), 497-498, acts of November, 1793, 1794.
5 Session Laws, C. 33.
6 Session Laws, 29-30. Cf. ibid., 1800, p. 98.
7 Laws (ed. 1808), ii, 163-167. This was intended to improve the navigation
up to Camden and had been begun under acts of 1794 and 1796; some prog-
ress had been made, but expenses for completion far exceeded the calculations
and means of the earliest undertakers.
8 Ibid., ii, 308-311.
Laws (Marbury & Crawford ed.), 371-374; Phillips, Transportation in the
Eastern Cotton Belt, 64-65. No work was done.
10 Session Laws, March 16, 1795, p. 1041; March 15, 1796, pp. 40, 57; Feb. 10,
1797, p. 157; Nov. 17, 1800, p. 18; Feb. 18, 1813, p. 105; Dec. 3, 1825, p. 48;
and N. J. State Gasette, March 29, May 17, July 19, 1796.
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182 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
A number of small companies were promoted also in New Eng-
land, with varying success. Several of these were in Maine.
As early as May, 1789, a committee of investigation, chosen
by several towns, reported favorably on a scheme for a canal
to unite Sebago Pond with Presumpscot River at Saccarappa
and estimated the cost as £3000 (£1800 for digging and £1200
for damages). Interest was again aroused in the summer of
1791. In 1795, on the initiative of Woodbury Storer, charters
were secured from the General Court for this, "the Cumberland
Canal," and for "the Falmouth Canal" to connect the Pre-
sumpscot above Saccarappa with the Fore River; but capital
could be secured for neither.¹
In June, 1791, The Proprietors of the New Meadow Canal
were chartered to open a canal from the New-Meadow River
to the Kennebec, below Merry Meeting Bay. Within two years
it appeared that the canal had been opened "at considerable
expense" to the proprietors. But it "did not answer the expec-
tations of the public nor compensate the labors of the proprie-
tors," and soon went to ruin.²
In June, 1792, The Proprietors of Mousom Harbour in Wells
were incorporated to open a navigation in York County. At
a meeting October I the proprietors "took up" all the unsub-
scribed shares, elected three directors, a treasurer, and a clerk,
and contracted with one Richard Gilpatrick to complete the
canal in one year for £1000, payable in instalments. In March,
1797, a company was incorporated to cut a canal "by the Ten
Mile Falls in Pejepscot or Androscoggin River, lying between
Durham and Little River Plantation."⁴ Probably neither of
these was completed.
In the same category with the canals belong the sluiceways.
In 1796 were incorporated The Proprietors of the Sluice-Way on
Saco River, and in 1797 a similar company to build sluiceways
1
1 Columbian Centinel, Sept. 3, 1791; Willis, History of Portland, 724-725;
Priv. and Spec. Stats., Mass., ii, 42, 46; S. T. Dole, "The Cumberland and Oxford
Canal," in Me. Hist. Soc. Colls., 2d Series, ix, 264-271 (1898).
2 Priv. and Spec. Stats., Mass., ii, 309, 432; Joseph Sewall, "History of Bath,"
in Me. Hist. Soc. Colls. (Portland, 1847), ii, 220. Sewall erroneously dates it 1779.
3 Priv. and Spec. Stats., Mass., i, 378; Columbian Centinel, Oct. 13, 1792.
4 Priv. and Spec. Stats., Mass., ii, 158-161.
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IMPROVING INLAND NAVIGATION
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"in the Plantation of Little Falls, from Buxton Mill-Dam to
Cook's Eddy." 1 Probably numerous unincorporated companies
existed for the same purpose.
The Amoskeag Falls on the Merrimac, at Manchester, nat-
urally early aroused hope of improvement. Samuel Blodget
settled at Goffstown in 1769, purchased extensive timber lands
above the Falls, and only the Revolution prevented his making
an effort at that time to open a canal around the Falls. Like
many another man of enterprise, he served in the war on the
commissary side, and returned from the struggle not worse
off in a pecuniary way.2 After wasting some years in rather
unsuccessful operation of an invention for raising sunken
vessels, he settled at Manchester (then Derryfield) in 1793.
Securing permission from the legislature, he set vigorously to
work on his favorite project, the canal, upon which he con-
centrated both his capital and his energy. In October, 1796,
it was opened.⁸ Thanks to the proprietor's undue faith in his
own ingenuity, a full $20,000 was wasted when first the natural
pressure of water let into the lock, and then a June freshet,
destroyed the work of years. After having spent $30,000 with-
out attaining his object, he secured a charter in December,
1798, giving up the hope of accomplishing his end solely by
his own means. Colonel Baldwin, the active superintendent
of the Middlesex Canal, made at his request a survey of a new
route, estimated the cost of completion at $9000, but urged
"that it would not do to depart much from established prin-
ciples nor presume much on new theories, or to introduce works
of speculation in canaling." This report was published, and
within three years $7000 of stock was sold, and $5000 more
raised by lottery out of a grant of $9000 made by the legisla-
ture in December, 1799.4 The canal was unfinished when the
new century dawned and was eventually completed only in the
hands of the Middlesex Canal proprietors.5
1 Priv. and Spec. Stats., Mass., ii, 82, 158.
2 On Blodget see G. N. Browne, in Manchester Hist. Assoc. Colls., i, 120-176
(1897).
3 N. H. Town Papers, xii, 557-559; Columbian Centinel, Oct. 15, 1796.
4
N. H. Town Papers, xii, 560-565.
5
Potter, History of Manchester, 525-537.
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184 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
In January, 1794, two men, McGregor and Duncan, petitioned
the New Hampshire legislature for the exclusive privilege of
cutting a canal on the Merrimac at Isle-a-hooksett Falls, with
toll privileges. This was granted, and in 1797 extended, but
no corporate powers were sought or bestowed. There were
probably other authorizations of this type for works higher up
the Merrimac.¹ Massachusetts made a similar grant, in 1793,
to Charles Barret, for a canal from Barretts Town, in Lincoln
County, Me., down George's River to the sea.2
In June, 1791, one or two hundred men were employed in
digging a 11 mile canal through the marshes between New-
buryport, Mass., and Hampton, N. H., to unite two small
streams and furnish an eight-mile navigation between these
two towns. This seems not to have had legislative sanction,
but it was completed within a short time.³
Connecticut chartered one small company besides the Union,
to clear the channel of the Ousatonic River, October, 1795.4
The success of most of these little companies cannot be ascer-
tained. It is to be inferred that some advantage was derived
from their efforts to improve navigation; else the acts would have
ceased much earlier. Yet such success as they may have had
was too insignificant to tempt capital largely into this field or
to create enough stir for historians to notice.5
Viewing as a whole the efforts to improve navigation, it is
clear that this branch of enterprise called forth more corporate
charters, more other legislative acts, and more state support
1 N.H. Town Papers, xii, 254-255, 562; G. Stark, "Frederick G. Stark and the
Merrimack Canals," in Granite Monthly, ix, 5-6 (Concord, 1886).
2 Priv. and Spec. Stats., i, 412-414.
8 Columbian Centinel, July 6, 1791; Winterbotham, North America, ii, 80;
Merrill, Amesbury, 396.
4 Private Laws (ed. 1837), i, 517.
5 Cf. Governor Martin of North Carolina, urging upon the legislature in
1791 the necessity of improving river and land communication: "Our sister
states are emulous with each other in opening their rivers and cutting canals,
while attempts of this kind are but feebly aided among us. Though laws are
passed for this purpose, they are not properly executed." - J. A. Morgan, in
The North Carolina Booklet, X, 123-124 (1911), quoting also Martin's message
of 1784.
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IMPROVING INLAND NAVIGATION
185
and encouragement than any other branch. The results were
entirely disproportionate to the efforts. The Americans found
the making of a canal far from the "simple and easy" task
which Adam Smith described, and the corporate form, while
necessary here, proved unequal to the task.
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CHAPTER IV
TOLL-BRIDGE AND TURNPIKE COMPANIES
THE most successful of the early corporations, after the
financial ones, were the toll-bridge companies. They required
only a limited capital for construction and a minimum of
working capital. Their problem of construction was not ex-
ceedingly difficult. Their returns were fairly sure. Once the
structure was built the problem of management was simple in
the extreme, and there were no problems of finance to worry
about, except to provide for repairs due to ice or freshets, and
rebuilding when such hostile agents caused total destruction.
Here one finds numerous forerunners of the business corpora-
tion, in colonial days and afterwards. The smallest bridges
were treated as part of the highways and constructed and kept
in repair by local officials. Even in colonial days, however, toll-
bridges were known, and in these cases they were usually .con-
structed by individuals who received from the state the right
to take toll upon condition of building and keeping the bridge
in repair, much as ferry privileges were granted by "charter"
or license from the state. Sometimes such a privilege was
granted to an unincorporated association. More often commis-
sioners were appointed by the state to arrange for the building
of a bridge, and these contracted with individuals or groups to
build the bridge for specified tolls. Sometimes the state made a
grant of funds for the building of the bridge, conditioned on the
raising of subscriptions from private individuals; or grants of
lottery privileges were made, the managers of which were to
build the bridge as well as to collect the funds. An unusual
type appears at least once, in Massachusetts. By act of Nov.
29, 1785, provision was made for building a toll-bridge over
Parker River in Newbury. In February, 1798, a trustee was
I86
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TOLL-BRIDGE CORPORATIONS
187
appointed to have charge of this bridge, its maintenance, and
the collection of tolls therefor, reporting to the county Court
of General Sessions. He alone was incorporated with the cor-
porate name of The Trustee of Parker River Bridge in Newbury,
in the county of Essex.¹ A few of the unincorporated associa-
tions will be mentioned in connection with specific bridges; but
since nearly all of the ventures of any note were undertaken or
soon controlled by corporations, most of the permanently un-
incorporated associations call for no further mention.
The first incorporated toll-bridge company was The Pro-
prietors of the Charles-River Bridge. For fifty or sixty years a
permanent structure connecting Boston and Charlestown had
been talked of, but deemed impracticable. In the winter of
1784-85 Maj. Samuel Sewall of York was employed to investi-
gate the possibility of a bridge.2 Early in 1785 Thomas Russell
petitioned the legislature for the right to erect a bridge from
the ferryways in Boston to those of Charlestown, and by effec-
tive address secured a vote of Boston, Feb. IO, 1785, favoring
that petition.³ There were some who questioned the desirabil-
ity of the bridge, and serious clashes of opinion arose as to the
site; in particular Lechmere Point was urged as preferable, and
for this a group of subscribers presented a rival petition. Pub-
lished discussions indicate that expectations of improvements
in local business and in land values played a large part in the
promotion, besides the prospects of revenue from tolls. On
February 26 the joint committee of the legislature reported in
favor of the ferryways site, and on March 8 the act of incor-
poration was passed. On March 29 the subscription paper was
filled - one hundred and seventy-six shares. On May 3 the
first assessment was called in, and in all nine (of £10 each) were
collected before the bridge was opened, and in July, 1786, £5
further was assessed "to come out of the toll."⁴
1 Priv. and Spec. Stats., ii, 195-197.
2 See Timothy Dwight, Travels, i, 495-497, for the story of how it came to be
built.
3 Cf. Boston Town Records, 1784-96, pp. 5I-52.
4 Mass. Centinel, Feb. 13, 16, 26, March 12, May 3, 1785. The relevant docu-
ments and additional information are given in the report of the decision of The
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188 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
On May 3I, 1786, the last pier was laid. On June 17, the
anniversary of the battle of Bunker Hill, the bridge was opened
with great éclat, in accordance with plans approved by the
stockholders in special meeting May 22- fitting to celebrate
"the greatest effect of private enterprise in the United States"
and "a most pleasing proof of how certainly objects of magni-
tude may be attained by spirited exertions." Cannons were
TABLE IX. EIGHTEENTH CENTURY CHARTERS TO TOLL-BRIDGE CORPORATIONS
1785
1787
1791
1792
1793
1794
1795
1796
1797
1798
1799
1800
Totals
Maine
2
2
I
2
4
I
I2
New Hampshire
3
I
2
8
3
2
19
Vermont
2
2
I
5
Massachusetts
I
2
4
2
I
2
I
I
I4
Rhode Island
2
I
3
Connecticut
I
I
I
3
New England
1
2
,
5
6
11
5
11
3
1
2
56
New York
I
I
New Jersey
I
I
I
I
I
$
Pennsylvania
I
I
I
2
5
Middle states
1
1
2
3
3
1
11
Maryland
I
I
I
I
4
South Carolina
I
E
Southern states
1
1
1
1
1
5
Kentucky
I
E
Western states
1
1
Totals
I
2
I
10
6
7
14
6
14
7
3
2
73
discharged on Copp's Hill and Bunker's Hill and Christ Church
bells pealed. A procession was formed, led by the Charlestown
Artillery Company, the bridge builders with their tools, and the
directors and proprietors of the bridge; in its ranks were the
dignitaries of state, nation, college, and the two cities, "officers
of the late Continental Army," "the President and Directors of
the Massachusetts Bank," and "A great number of private
Gentlemen, Foreigners and Citizens." These crossed the bridge,
Proprietors of Charles River Bridge, In Equity V. The Proprietors of the Warren
Bridge (1829), esp. 98, 102-103.
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TOLL-BRIDGE CORPORATIONS
189
watched by twenty thousand spectators, sat down on Bunker's
Hill at a genial board accommodating eight hundred, and amid
salvos of cannon drank toasts in honor of the "bold and suc-
cessful effort of ingenuity and enterprise."¹
From the outset the bridge was a success financially as well
as commercially. The original cost was later stated to have been
£11,297 8s. 11d., or $51,000, and in the next five years some
$18,000 more was said by the company to have been "added for
its support." In January, 1792, in response to a rumor that it
was extraordinarily profitable, the proprietors asserted "that
after deducting 21 per cent. for sinking the Capital in 40 years
[when the franchise would expire], the neat proceeds have not
exceeded 101 per cent. on the original stock, to the present
time." And in spite of competition, against which the com-
pany vainly remonstrated, the profitableness continued.
The bridge was of far more than local significance. Its en-
gineering success paved the way for other ventures, larger and
smaller, many of them on its model. Its clear promise of finan-
cial success, justified by the dividends of its early years, drew
attention to the profits awaiting claimants in similar fields. It
led directly to a rapid extension of toll-bridges constructed and
controlled by business corporations.
The next winter a second Boston bridge, over the Mystic at
"Penny Ferry," was proposed, and after some opposition a
charter was granted to The Proprietors of Malden Bridge on
March I, 1787. One hundred and twenty shares were soon
subscribed; construction began in April under the supervision
of Lemuel Cox (who had ably assisted Maj. Samuel Sewall in
the construction of the Charles River Bridge) and Jonathan
1 Mass. Centinel, May 13, 31, June 21, 1786; The Bostonian Society Publica-
tions, v, 67-74 (1908). See also, for description of the bridge with engraving, N. Y.
Magazine, vi, 513-514 (September, 1795). "A.B." writing in the Massachusetts
Magazine for March, 1790 (ii, 143), calls its chief engineer, "Major Samuel Sewall,
of Old York, the original projector of Bridges built upon this construction. In the
year 1761 there was a Wooden Bridge, of a particular construction, and the first
of the kind built in America, built over York River under Major Sewall's direc-
tion. The cheapness, usefulness and conveniency of which, for more than twenty
years, gave rise to the proposal of erecting Charles River Bridge."
2 "Viator," in Columbian Centinel, Jan. 14, 1792; remonstrance quoted in
Charles River Bridge V. Warren Bridge, 25; and ibid., 99.
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I90 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Tompson; and on September 29 the bridge was officially opened.
This bridge was twenty hundred and five feet long, "exclusive of
the abutments," thirty-two feet wide, and had one hundred piers;
it cost about £5300.1 It became a public highway in 1859.2
In October, 1787, George Cabot, merchant, shipowner, and
lately successful privateer of Beverly, preferred with some two
hundred others a petition to the General Court for leave to bring
in a bill to incorporate them to build a bridge over the Charles
at Beverly ferry, connecting with Salem. The town, however,
was about evenly divided in regard to the choice of locations,
and a hot controversy raged. After hearing representatives of
both groups, the General Court sent a committee to investigate.
Town meetings were called to get the sense of the town on the
matter. When finally the legislative committee reported in
favor of the bridge at Beverly ferry, the opponents worked
against any bridge at all. The Senate passed the bill, but the
House "not concurred by a majority of 20." Cabot, however,
by "great address" secured a rehearing, and on November 17
the charter was granted to The Proprietors of Essex Bridge.³
Subscriptions for two hundred shares were soon secured. The
corporation organized at Salem on December 13, and Cabot
was elected president. Proposals "for undertaking the whole
or any part of the business of building the bridge, or supplying
the materials therefor" were sought from "Any person desirous
of making a good bargain for ready money." Cabot himself
superintended operations. Work was begun May I, and within
five months (on Sept. 24, 1788) the bridge was opened - four-
teen hundred and eighty-four feet long, with ninety-three piers
- with a festive meeting at Beech's tavern "and a liberal en-
tertainment for the refreshment of the workmen." It had cost
about $16,000.4 Like the other companies this too prospered,
1 See Mass. Centinel, Feb. 24, 28, Aug. 8, Oct. 6, 13, Dec. 15, 1787, and de-
scription with engraving in Mass. Magazine, ii, 514-516 (September, 1790).
2 Shurtleff, Topog. and Hist. Description of Boston, 429.
8 Mass. Centinel, Nov. 3, 14, 17, 1787; Priv. and Spec. Stats., i, 175. For
statement of differences as to location, see Diary of William Bentley (Salem, 1905),
i, 69-70, 79-80.
4 Mass. Centinel, Dec. I, 1787, Sept. 10, 24, 1788; Lodge, George Cabot, II-14,
30; Stone, History of Beverly, IIO; Dwight, Travels, i, 406.
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TOLL-BRIDGE CORPORATIONS
I9I
and "for several years previous to 1830" its stock "sold for
about five times the original par value."1
After a lapse of four years, four new charters were granted in
the enthusiastic year 1792, and still others were sought. Of
these four bridges, the Newburyport bridge over the Merrimac
was projected in the spring of 1791, to connect the "Pines in
Newbury" with Deer Island and Salisbury. In May and June
subscriptions were set on foot for two hundred shares of £25
each, and a petition for incorporation was drafted, submitted,
and advertised. The town of Newbury voted in November to
oppose the incorporation, then after a reconsideration renewed
its opposition, and in January, 1792, sent the General Court
a vigorous remonstrance against such obstruction of navigation.
In the legislature the bill encountered strenuous opposition
principally from Messrs. Blodgett, Carr, Sargent, and Emery,
"who opposed the Bill in its every stage, from a sense as they
supposed of the extreme injury that would arise to the towns of
Amesbury, Salisbury, Bradford and Haverhill." But it passed
the House February I2 and was signed February 24 with the
amendment that after thirty years the legislature should regu-
late the toll, while an amendment of June 22 modified somewhat
the restrictions of the first act.3 Begun in April, the bridge
was planned by Timothy Palmer, a native mechanic; built
under the direction of William Coombs; and opened Nov. 26,
1792. Unlike the earlier bridges this was built with solid ma-
sonry piers and with two arches of what then seemed con-
siderable size, the largest on the continent.⁴ The expense turned
out to be nearly twice as great as the estimate, £10,919 7s. 5d.
($36,397.90), and the proprietors memorialized the legislature
of 1793 for a liberalizing of the charter, to the extent of allowing
1 Stone, History of Beverly, IIO.
2 Mass. Spy, June 16; Essex Journal, Sept. 21, 1791. The subscription paper,
dated May 30 and signed by several subscribers, is printed in John J. Currier's
Ould Newbury
(Boston, 1896), 593-594.
3 Columbian Centinel, Feb. II, 18, 25, 1792; Currier, Ould Newbury, 594-595;
Coffin, History of Newbury, 265.
4 See description and engraving in Mass. Magazine, v, 258-259 (May, 1793),
and cf. ibid., iv, 759 (December, 1792); reprinted in Currier, Ould Newbury,
596-598.
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I92 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
them fifty years without regulation of tolls; and upon compliance
with this request some further improvements were made.¹ There
were two hundred shares held, at the time of the first dividend
in February, 1793, by forty-three persons, Timothy Dexter
holding the largest number, thirty, Thomas Dickerson twenty,
Nathaniel Carter fifteen, and Samuel Eliot and Tristram Coffin
each fourteen. The first dividend was 22S. (about two per cent).
Since the average gross receipts for the next ten or fifteen years
were more than $4000 per annum, it may be presumed that
good dividends were paid. Gradually Timothy Dexter increased
his holdings till before his death in 1806 he had a controlling
interest.2
The most important of this 1792 group was the West Boston
Bridge company. As already noted, a project for a bridge from
West Boston to Cambridge competed in 1785 with the Charles-
town project for the favor of the General Court. The success
of the Charles River Bridge company and similar undertakings
stimulated a renewal of interest in the West Boston scheme.
On Saturday, Jan. 7, 1792, in the period so full of flotations,
the Boston papers displayed an announcement that,
"as all citizens of the United States have an equal right to propose a measure
that may be beneficial to the publick and advantageous to themselves, and
as no body of men have an exclusive right to take to themselves such a privi-
lege, a number of gentlemen have proposed to open a new subscription, for
the purpose of building a BRIDGE, from West-Boston to Cambridge - at
such place as the General Court may be pleased to direct."
Without delaying for a charter, subscriptions of two hundred
shares were secured in three hours. The subscribers met Mon-
day evening, January 9, to adopt measures to carry the plan
into execution. A rival group, evidently more retiring, had
already made a survey of a route, and two petitions were ac-
cordingly presented to the legislature and committed to the
same joint committee.³ The matter attracted general attention.
1 Mass. Magazine, v, 259 (May, 1793); Columbian Centinel, Feb. 9, 16, May
4, June 12, 1793.
2 Currier, Ould Newbury, 598-599, giving list of shareholders.
8 Columbian Centinel, January II, 14; A. Craigie to B. Foster, Dec. II, 1791,
in Craigie Papers, i, I24. Cf. Mass. Magazine, iii, 719 (November, 1791), an-
nouncing the forthcoming petition.
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TOLL-BRIDGE CORPORATIONS
193
The importance of another "avenue from the Country to the
Capital," the lessening of distance on the western post road,
the inconvenience to travellers over Charles River Bridge due
to the narrow streets in the North End, and the high profits of
that bridge's proprietors were all urged as arguments for a new
one. There were also complaints of certain practices of the old
bridge company 1 and a general outcry against it as a menopoly.
On the other hand it was urged that the building of the bridge
would increase the temptations and expenses of the Harvard
College students.² Some voices were raised against granting
the exclusive privileges requested, except under strict conditions;
and the possibilities of state and town construction, and award-
ing the contract upon bids received on regulations previously
drawn up, were suggested. Numerous petitions pro and con
were heard, including remonstrances from the Charles River
Bridge proprietors.⁴ Late in February a joint committee reported
in favor of granting the charter to the democratic group of
subscribers, quieting the Charles River crowd by a thirty-year
extension in their "proprietorship," and allowing the university
at Cambridge a certain revenue from the tolls of the new bridge
in lieu of their ferry rights. Thereupon the House voted 87-45
to grant leave to bring in a bill, which was then rushed through
and signed March 9. The proprietors met March 2I and 22,
elected directors, a clerk, and a treasurer, and a committee of
the board soon issued advertisements for bids on the work.5
Work was begun on the causeway July I5, 1792, and on
the woodwork Feb. 8, 1793. James Sullivan directed the con-
struction with his customary efficiency; delinquent shares were
promptly posted for forfeiture and sale; by October, 1793, the
thirty-five hundred foot span was passable, and the next month
it was fully opened.⁶ The cost probably considerably exceeded
1 Columbian Centinel, Jan. 14, 1792 ("Viator" and "Propriety").
2 Ibid., January 21 ("Mentor").
3 Ibid., January 21 ("Fair Play").
4 Boston Gasette, Jan. 23, 30, 1792.
5 Columbian Centinel, Feb. 25, 29, March 3, 6, 14, 24, April II, 1792.
6 Shurtleff, Topog. and Hist. Description of Boston, 419-421; State Gasette of
S. C., Nov. 2, 1793; Columbian Centinel, Nov. 27, 1793. Cf. ibid., June 12, July
3, 1793, Feb. I, Oct. II, 1794.
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I94 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
the estimate of £20,000; according to Timothy Dwight it was
$76,000.¹ The bridge was not unsuccessful, but in its later
years sustained severe competition and in 1846 sold out to a
competing company.
The other companies of this year were The Proprietors of the
Middlesex Merrimack River Bridge and a company for bridging
the Connecticut at the Great Falls between Montague and
Greenfield. The former opened in November its $8000 wooden
structure, extending from Chelmsford Neck (Lowell) to Dracut
at the head of Pawtucket Falls, whence it came to be known as
the Pawtucket Bridge. The bridge was replaced by a new one
with stone abutments, at a cost of $14,500, in 1805. The com-
pany prospered greatly, earning dividends averaging more than
twenty-four per cent in one thirty-year period. In 1861, at the
expiration of the franchise, the bridge was sold for $12,000 and
made free.2 The Connecticut River company made no progress,
and probably little more under a new charter granted in 1796.3
In February, 1793, petitions were presented to the General
Court for four more bridges over the Merrimac - at Methuen,
Haverhill, Amesbury, and Dracut.⁴ The upshot was the pas-
sage, in March, of acts incorporating the proprietors of An-
dover Bridge and Haverhill Bridge.⁵ For the Andover, organiza-
tion was soon effected, the second assessment ($10) called in
July 22, and the bridge early completed, on a site now lying
within the city of Lawrence. The bridge was steadily in use
till it was injured by ice in the spring of 1799, and then the pro-
prietors were assessed $8 per share to repair the damage. How
profitable it was in these earliest years does not appear, though
the historians of the county report that after 1807 it did a large
business.⁶
1 Travels, i, 497.
2 Priv. and Spec. Stats., i, 317; Bentley's Diary, ii, 138-139; Hurd, Hist. of
Middlesex County, ii, 5-6; Dwight, Travels, i, 406.
8 Priv. and Spec. Stats., i, 345, ii, 94, and see infra, 196.
4 Bentley's Diary, ii, 4.
5 Priv. and Spec. Stats., i, 425, 435.
6 Standard History of Essex County, 33; Columbian Centinel, July 3, 1793,
May 2, 1795, May 8, June 26, 1799; Bentley's Diary, ii, II4; Dwight, Travels,
406.
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The Haverhill Bridge was not begun till 1794, until the pro-
prietors had secured alterations in their charter to suit them.
Some difficulty, perhaps not in unusual amount, was encoun-
tered in securing prompt payment of subscriptions; but on Nov.
18, 1794, the bridge was opened with great ceremony. The
structure was built on the plan of Timothy Palmer, was eight
hundred and sixty-three feet long, with three arches (one one
hundred and eighty-two feet long), stone piers forty feet square,
and abutments, and was thirty-four feet wide. Said the news-
papers: "The strength, elegance, workmanship, and situation
of this bridge is not equalled in America, and perhaps not ex-
celled in the world." 1 The first quarterly dividend was de-
clared Feb. 18, 1795, a second May 18, and there seems no
reason to doubt the profitableness of the bridge.²
On the heels of these came a petition early in 1794 from Enoch
Sawyer and others for power to bridge the Merrimac at Sweets
Ferry in Haverhill, connecting with West Newbury. These
were incorporated as the Proprietors of Merrimack Bridge. In
1795 assessments were called in thick and fast: $15 each May I,
July I, August 5, September 18; $10 due November I and
December IO; and $20 was called for Jan. 13, 1796.4 On Nov.
26, 1795, the bridge was opened with appropriate ceremonies,
the largest on the river by some hundreds of feet, "and in ele-
gance, workmanship and convenience not inferior to any."
There were four long arches, one long straight "arch" on piles,
and five large piers. The bridge, however, was not finished.
Some dissension having arisen, the board of directors resigned,
and in the spring of 1796 a new board was elected, after some
delay, to clean up the finances and complete the structure.⁵
1 Columbian Centinel, Jan. 22, July 21, Oct. 10, Nov. 12, 1794; N. Y. Maga-
sine, v, 776 (December, 1794); Bentley's Diary, ii, II3-II4; Dwight, Travels, i,
403-406. Dwight found it, in 1796, more handsome than any he had seen except
that over the Piscataqua.
2 Columbian Centinel, Aug. 22, 1795. Cf., however, Standard History of Essex
County, 33.
3 Priv. and Spec. Stats., i, 523; Columbian Centinel, Jan. 25, 1794.
4 Ibid., April 29, June 27, July 18, Aug. 26, Oct. 28, Nov. 25, 1795, Jan. 13,
1796. Two assessments had been called in earlier.
5
Ibid., Dec. 5, 1795, April 30, June I, 1796; Dwight, Travels, i, 406.
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196 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Dividends were declared in 1797, but the competition of other
routes and the costliness of this large structure prevented the
bridge from becoming profitable, and after a time it was allowed
to go out of repair. "It was swept away by the ice, in 1818." 1
Charters were fewer after 1795. In 1796 a new charter was
granted to The proprietors of Connecticut River Bridge, for a
bridge near Deerfield. But this, like the charter of 1792, did
not become operative, primarily because capital was not
attracted.²
In the same year The proprietors of the New-Bedford Bridge
were incorporated to bridge the Acushnet River to connect New
Bedford with Fairhaven and Oxford. The bridge was completed
only in 1799 or 1800, at a cost of about $30,000. It was some
four thousand feet long, including the abutments and the two
islands crossed. It aroused opposition on account of obstruc-
tion to the channel, and in 1807 many were doubtless pleased
when a flood washed it away.⁸
As early as 1794 John Williams of Deerfield asked the legisla-
ture for a license to build a toll bridge over Deerfield River at
Rocky Mountain. The town of Deerfield protested vigorously
and effectively, objecting both to the toll and to the proposed
site. A supposedly disinterested committee investigated and
reported in favor of Williams, but despite this it was the second
petition that was finally granted in 1797. The next year the
bridge was built at a cost of $5040. It was poorly built and had
to be replaced in I806 by a better structure. The contractors
were forced to pay $1364 for slighting the work, and during its
seven years the bridge paid $4700 in seven dividends. In short,
it earned something above a normal replacement fund.
To summarize, fifteen charters for toll-bridge companies were
granted for the construction of bridges in Massachusetts proper.
Eleven were to be in eastern Massachusetts; all these were built,
and several were notably successful. In July, 1788, after his
1 Columbian Centinel, Dec. 23, 1797; Standard History of Essex County, 33;
Coffin, History of Newbury, 269.
2 Sheldon, History of Deerfield, ii, 916.
3 Daniel Ricketson, The History of New Bedford
(New Bedford, 1858),
2, 79, 365-366.
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TOLL-BRIDGE CORPORATIONS
I97
visit to Boston, the French traveller Brissot de Warville could
write:¹ "The three greatest monuments of the industry of this
state, are the three bridges of Charles, Malden, and Essex."
While in July, 1795, the Columbian Centinel boasted:
"Few parts of America exhibit more specimens of improvement, since
the war, than Boston and the environs. The several bridges of Charles-
town, Salem and Merrimack rivers, form a length of almost 3 miles, and
all of them are remarkable for beauty as well as magnitude."
Of the four western bridges, but one was completed, that a small
one; it was moderately successful. The others were apparently
not even floated.
During these years Maine was merely a district of Massachu-
setts, and of course had her charters from the hands of the
Massachusetts General Court. Its policy was quite as liberal
here. The first charter, however, did not come till March, 1793,
when a New Meadows River bridge company was incorporated
to build a bridge near Bath. No use was made of the act, and
a new company was chartered for the same purpose in February,
1802.8 In June, 1793, The Proprietors of Sheepscott River Bridge
were chartered to build a bridge between Pownaboro and New-
castle; but it also seems not to have accomplished its pur-
pose.4 In February, 1794, companies for building two bridges
near Portland were chartered - the Proprietors of the Portland
Bridge, for a bridge across Fore River from Bramhall's Point,
and the Proprietors of the Back-Cove Bridge, for one between
Seacomb's and Sandy points. The first of these structures
was completed in 1800, twenty-six hundred feet long, and the
corporation itself renamed in honor of the promoter and chief
stockholder, Vaughan. The second, thanks to the aid of a lottery,
was passable as early as September, 1796. These two became
the chief avenues for western and eastern travel.⁵ In 1795 was
1 New Travels, 82.
2 July 21, 1795.
3 Priv. and Spec. Stats., i, p. xiii; ii, 476.
4 Ibid., i, 464; D. J. Cushman, The History of Ancient Sheepscot and New-
castle (Bath, 1882), 223-224.
5 Priv. and Spec. Stats., i, 502, 514; Willis, History of Portland, 727. Cf.
Columbian Centinel, Dec. 13, 1797, March 10, 1798.
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198 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
incorporated The Damarascotta Bridge Company, which, like the
New Meadows company, did not carry out its project. A new
charter was granted March IO, 1797, and the new company in
time succeeded in erecting a bridge near the falls at the head
of the navigation of the Damariscotta.¹
In February, 1796, The Proprietors of the Kennebeck Bridge
and The Proprietors of Androscoggin Bridge were chartered.
The first of these was an Augusta project for bridging the
Kennebec at Fort Western in Hallowell. Nearly half the capital
was subscribed by Massachusetts proprietors of lands on the
Kennebec- - such men as Bowdoin, Loring, and Winthrop -
and most of the rest was taken by Augustans. Fifteen thou-
sand dollars was subscribed in $100 shares by May 5, when
work was begun, and eventually one hundred and ninety shares
were subscribed. The bridge was completed Nov. 21, 1797,
at an expense of $27,000, which left the company so much in
debt that dividends were paid only after eight years, despite
an authorization in 1799 for an increase of toll.2 The Andros-
coggin Bridge was built at Brunswick in the summer of 1796,
the cost presumably coming within the $4000 limit of capital
($8 shares) imposed by the supplementary act of March, 1796.3
Charters were granted in 1797 for a bridge across the Androscog-
gin at Lewiston, and in 1798 for the Proprietors of York Bridge;4
but the results of these charters is not apparent.
New Hampshire was the leading state in incorporating bridge
companies, in absolute numbers as well as in proportion to
its size. Beginning in 1792, not less than nineteen companies
were chartered before the end of the century - more than
one-fourth of the number chartered in the entire United States.
1 Priv. and Spec. Stats., i, p. xiv; Cushman, Ancient Sheepscot and Newcastle,
230-231.
2 Priv. and Spec. Stats., ii, 54-56, 263; James W. North, The History of Au-
gusta
(Augusta, 1870), 269-271, 311-314 (illustration on p. 312); Craigie
Papers, Ledger A, p. 41; Columbian Centinel, March 12, 1796, April 22, May 20,
July I, Aug. 5, 1797.
8 G. A. and H. W. Wheeler, History of Brunswick, Topskam, and Harpswell,
Maine
(Boston, 1878), 549.
4 Priv. and Spec. Stats., ii, 173-175, 199-200.
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TOLL-BRIDGE CORPORATIONS
I99
The beginning was made in June, 1792, when three were
chartered at a single session. Proprietors of the Amoskeag
Bridge were incorporated to build a bridge over the Merrimac
connecting Goffstown and Derryfield (later Manchester); and
through the energy of Robert McGregor, who resided near by
and was put in charge, the bridge, five hundred and fifty-six
feet long, was passable on September 20. It cost $6000, "almost
double the sum at first computed." The bridge was allowed
to go to decay about 1812-15, presumably because of unprofit-
ableness.¹ The proprietors of the Newmarket and Stratham
Bridge were incorporated for repairing and maintaining a bridge
over the Exeter River which had been built by lotteries and
maintained by voluntary subscription - a mode which now
was failing.2 Ebenezer Brewster and others were incorporated
at the same time "for locking falls, cutting canals and building
a Bridge over Connecticut River, between the mouth of Mink
brook in Hanover and the eddy below the lower bar of White
River Falls in Lebanon." For this project Vermont's assent
was necessary. After a delay of several years this was eventu-
ally obtained on Oct. 2, 1795; and the White River Falls Bridge
was completed during 1796.3
In December, 1792, a petition was submitted for an important
bridge over the Piscataqua, and the matter was put off for a
hearing till the next session, the subject being advertised mean-
while.4 Without great delay, in 1793, the legislature granted
the petitioners the exclusive right of building a toll-bridge over
the Piscataqua River between Walton's Point and the island
in Great Bay, seven miles from Portsmouth and four from
Dover on the main road from Boston to the eastward. The
subscription of five hundred shares was filled at Portsmouth
late in August, numerous shares being taken by Bostonians.
1 N. H. State Papers, xii, 554-555, xxii, 523, 530, 572; C. E. Potter, The History
of Manchester (Manchester, 1856), 521-522, 709; Columbian Centinel, Oct. 24, 1792;
Dwight, Travels, i, 406.
2 Session Laws, 1792, pp. 419-422. For earlier history of this bridge, see
N. H. State Papers, ix, 570-604.
3 Ibid., xii, 175-176, xxii, 525, 533, 575, 586; MSS. Laws, vi, 541 (Index, 580).
See supra, 169.
4 N. H. State Papers, xxii, 688, 697.
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200 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
The town of Portsmouth subscribed £1000, on condition that
the full amount should not be subscribed by individuals.¹ Work
was begun in the following spring, under the supervision of
two agents appointed by the directors,2 upon a plan devised
by Timothy Palmer of Newburyport, the successful architect
of the Essex Merrimac Bridge. In all the structure was twenty-
three hundred and sixty-two feet long, in three parts - pile
bridges from Newington shore to Rock Island and from Goat
Island to Durham shore, and a two hundred and forty-four
foot arch connecting the two islands. Besides the bridge the
proprietors constructed on Goat Island "A convenient Tavern
House, and stables
for the accommodation of travellers."
The bridge was opened late in December. Nine assessments,
totalling perhaps $130 per share, were called in, chiefly during
1794; toll was collected beginning Nov. 22, 1794; and a divi-
dend, possibly the first, was declared in December, 1795. The
bridge finally cost some $66,000.³ In 1798 the proprietors sub-
mitted to the legislature a financial statement
"from which it Appears that nett Income of the bridge does not much ex-
ceed two per centum p' Annum - whenever it shall need repairs the devi-
dend to the Proprietors of course will be greatly diminished, - altho the
Bridge is of great public utility - it is now and probably will continue to
be to the Proprietors a very Unproductive property."
In 1794 charters were granted to the proprietors of Northbury
Bridge, between Salisbury and Northfield, which, was not
built;⁴ and of Orford Bridge, which was not completed till
some seventeen years later.5
In January, 1795, Col. Asa Porter and associates were incor-
porated the proprietors of Haverhill Bridge, to build a bridge
1 Adams, Annals of Portsmouth, 303; advertisements in Boston papers, e.g.,
Columbian Centinel, Aug. 24, 1793.
2 Thomas Thompson and John Peirce.
3 Description in Adams, Annals of Portsmouth, 306-308, and Columbian Cen-
tinel, Dec. 24, 1794. Cf. ibid., Dec. 14, 1793, March 29, May 21, June 18, Sept.
10, Nov. 12, Dec. 20, 1794, Feb. 7, Dec. 2, 1795; Dwight, Travels, i, 420-421;
financial statement to the legislature, Dec. 12, 1798, in N. H. State Papers, xiii,
304-305.
4 MSS. Laws, viii, 215 (Index, 407); Dearborn, History of Salisbury, N. H.,
317. Petitions and committee report in N. H. State Papers, xiii, 389-390.
5 MSS. Laws, viii, 256, xiii, IO, xix, 134 (Index, 414).
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TOLL-BRIDGE CORPORATIONS
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between Haverhill, N. H., and Newbury, Vt.; and in June
following another set of Proprietors of Haverhill Bridge secured
a similar charter, for a bridge on a somewhat different site.
The second company succeeded in building its bridge in 1796,
but owing to the undue ambition of the proprietors in desir-
ing to have the longest arch yet constructed, the bridge col-
lapsed after a year's service, and another had to be constructed.
The first company, though given in 1797 an extension of time to
complete its bridge, never accomplished its object.¹ In neither
instance does Vermont's coöperation appear to have been
secured.
About the same time there were incorporated the Proprietors
of Litchfield Bridge, over the Merrimac at Cromwell's Falls,
which was probably not constructed; Proprietors of the Cornish
Bridge, which evidently soon completed its structure, even be-
fore, in November, 1797, the Vermont legislature granted it a
charter; and the Company of Northumberland Bridge, which
had to be rechartered in 1802 before attaining its object.2
More important in this year were the Proprietors of Concord
Bridge, incorporated in January, and the Proprietors of Federal
Bridge, incorporated late in December, to build bridges over
the Merrimac in Concord, the former between Butler's Ferry
and Concord south line, the latter near Tucker's Ferry. For
each a hundred shares were subscribed. The first was opened
Oct. 29, 1795, hardly more than nine months after its charter
was granted; it had cost $13,000. The second was completed
in 1798, more than two years after its incorporation; its cost
was some $4000.³
Further charters were granted in 1797 to proprietors of Fa-
vour's Bridge at New Chester, Nottingham Bridge, and Holder-
ness Bridge, but it is not apparent with what success the projects
1 Wells, History of Newbury, Vt., 307, 309-310; J. Q. Bittenger, History of
Haverhill, N. H. (Haverhill, 1888), 193; N. H. State Papers, xii, 185-186.
2 MSS. Laws, ix, 20, 86, 105, X, 26, 160, xiii, 411, xiv, 412 (Index, 292, 408);
Vt. Session Laws, 1797, pp. 66-69; petitions in N. H. Town Papers, xi, 458-459,
xii, 423, 458-459.
3 Bouton, History of Concord, 326-329; Lyford, History of Concord, i, 36 ff.
Lists of subscribers are given by Bouton; illustrations by Lyford. Petitions in
N. H. Town Papers, xi, 404-405.
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202 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
met. 1 After a lapse of three years charters were granted in 1800
for the New Castle Bridge, which evidently was not completed for
many years; and for the "Republican Bridge" over the Pemige-
wasset Branch at Webster Falls between Salisbury and San-
borton, which was completed in 1802.2
From this sketchy review it is evident that New Hampshire's
companies, though more numerous than those of Massachusetts,
were on the whole smaller, less conspicuous, and less successful.
Yet the list of charters indicates a surprisingly ready resort to
incorporation even for small ventures.
As noted above, Vermont somewhat tardily accorded charters
to two companies first incorporated by New Hampshire for
bridging the Connecticut: The proprietors of the White River
Falls Bridge waited from 1792 to 1795 for the Vermont act, the
Cornish Bridge company from 1795 to 1797 for its act.³ Almost
at the same time as the first of these The West River Bridge com-
pany in Brattleborough was chartered, and within a few years
it had completed its object.⁴ Practically simultaneously with the
second joint charter, in 1797, Vermont incorporated The Second
West River Bridge Company, for building a bridge at Dummer-
ston; and in November, 1799, the Onion River Bridge Company
was chartered to bridge the Onion River in Waterbury.5 The
success of these is not evident. Vermont, therefore, with not
very different topographical conditions, appears to have been
during these years notably behind her twin sister in this form of
business enterprise.⁶
In general it is to be remarked that the bridge companies of
northern and western New England found much more difficulty
in securing capital, were slower in completing their structures,
and were less successful than the companies near Boston. The
1 MSS. Laws, X, 278, 380, xi, 42 (Index, 177, 410, 244).
1 Ibid., xiii, 17, IO2 (Index, 404, 473-474, 486). Cf. ibid., xxii, 5, 264, xvii,
256; Dearborn, Salisbury, N. H., 316-317. Petition in N. H. Town Papers,
xii, 392.
3 Session Laws, October, 1795, pp. 62-66; ibid., October, 1797, pp. 66-69.
4 Ibid., Oct. 16, 1795, pp. 22-25; ibid., Nov. 16, 1801, pp. 66-67.
5 Ibid., 39-42, 59-63.
6 For lack of complete files of the Session Laws, however, it is not certain that
this list is complete.
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TOLL-BRIDGE CORPORATIONS
203
trouble in securing capital was due partly to the smaller supply
of it available near at hand and its timidity in venturing far
from the large centres except for special attraction, and partly
to the smaller amount of travel, upon which success depended.
The relatively smaller success of the bridges erected reflects the
special importance of the second factor. The delays in complet-
ing structures were due partly to the delay in securing capital,
but also, no doubt, to the poorer management available outside
the considerable towns. Yet the numerous charters attest the
willingness of promoters to dare failure and the readiness of the
legislatures to encourage them.
Three toll-bridge companies were chartered in Rhode Island.
In February, 1792, the Providence citizens set on foot sub-
scriptions and preferred petitions for charters for building
bridges over the Seekonk, "at the upper ferry and the lower
ferry;" and in June the legislature incorporated The Proprietors
of the Central Bridge, leading to and from Providence and The
Providence South-Bridge Society, in the Town of Providence for
these purposes. The first of these bridges was first used April
12, 1793. Possibly the second was also completed in due course.¹
A bridge to connect Portsmouth and Tiverton at Howland's
Ferry was under discussion in February, 1792, when these
companies were chartered, and two years later The Rhode Island
Bridge Company was incorporated to construct it. Two hundred
shares of $100 each were subscribed, and between May II and
Oct. 15, 1795, the bridge was built, by one Whiting of Con-
necticut. It was thirty-six feet wide and eight hundred feet
long exclusive of the abutments. In January following, the
greater part of the bridge was carried away in a gale and flood.
In April $30 was assessed on the original stockholders, two hun-
dred new shares were taken at $80, and the reconstruction of
the bridge was contracted for with John Cooke of Tiverton for
$20,000. This bridge was completed Nov. 20, 1796, only to be
carried away by a storm in the fall of 1797. Eventually, in
1 Providence Gasette, Feb. 25, 1792, Sept. 14, 1793; Session Laws, 1792, pp. 15-
17; R. I. Records, xii, 478, 491-493; Staples, Annals of Providence, 359; Dwight,
Travels, iii, 61-62.
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204 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
1806-07, it was replaced by a stone bridge costing $70,000.¹ In
view of the size of the state and its topographical conditions it
is easy to understand why no more companies were chartered.
Connecticut, though from 1795 a leader in the turnpike com-
pany movement, had surprisingly few bridge companies. Only
three were incorporated, and but one of these clearly completed
its object before the end of the century. The first bridge charter
was granted in October, 1796, to The Company for erecting and
supporting a Toll Bridge from New Haven to East Haven.² This
bridge was completed in due time, at a cost of some $60,000,
much greater than had been anticipated; and in May, 1799,
upon representing that the tolls yielded only 41/2 per cent on
this cost, the company secured an increase of toll. In 1797
were incorporated The Proprietors of Niantic Toll Bridge, in
New London County,4 and in 1798 a Company for erecting and
supporting a Toll bridge, with Locks, from Enfield to Suffield, which
was completed without the locks in November, 1808.5
Outside of New England toll-bridge corporations were much
less numerous. There seems to have been none in Delaware,
Virginia, North Carolina, Georgia, or Tennessee. New York,
South Carolina, and Kentucky show each but a single one.
Maryland had four, Pennsylvania had five. New Jersey, with
the same number, alone of the middle and southern states
incorporated companies at all numerous in comparison with her
size and importance. Perhaps this was to be expected, for her
territory lay right athwart the seaboard highway between north
and south; geographically she was a bridging state.
Under the stimulus of the success of the Massachusetts un-
dertakings a movement was set on foot to improve by similar
means the greatest highway of the day - between New York
1 Amer. Museum, xii, App. III, 6 (1792); Newport Mercury, Aug. II, Oct. 20,
1795; Session Laws, October, 1795, p. 26; N. Y. Magazine, vi, 639 (October, 1795);
W.A. Watson, "History of the Rhode Island Bridge Company," in The Newport
Historical Magazine, iii, 170-172 (January, 1883).
2 Private Laws (ed. 1837), i, 241-242.
3 A further increase was granted in May, 1805: ibid., i, 242-243.
4 Ibid., i, 279.
5 Ibid., i, 250-252; Love, Navigation of the Conn. River, 404.
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TOLL-BRIDGE CORPORATIONS
205
and Philadelphia, the two chief cities of the country. This
road not merely required the crossing of the noble Hudson and
Delaware, near its extremities, but within New Jersey it crossed
three New Jersey streams of some size. The improvement of
this communication was of more than local interest, whether
the national capital was at New York or (as after 1790) at
Philadelphia; and the execution of the project shows interest-
ingly the transition that was painfully made from the older
methods of lotteries and state commissioners to the newer
method of corporate enterprise.
On May 31, 1790, the assembly heard a petition from the
quasi-public trustees of the ferries over the Passaic and Hacken-
sack,¹ requesting permission to erect toll-bridges over these
streams and submitting an estimate of the expense prepared by
George Cabot, the honorable senator from Massachusetts.
The matter was laid over till the next session, leave being given
to advertise the proposal. The outcome then was the appoint-
ment of a commission composed of three Jerseymen and two
New Yorkers, with power to select sites, to "erect or cause to
be erected" bridges thereon, and to lay out roads joining New-
ark, the bridges, and Powles Hook (Jersey City). The com-
missioners were authorized to farm out the bridges "to be erected
and made, and afterwards maintained and kept in Repair by
the Toll arising therefrom," at rates to be fixed by the commis-
sion, but not in excess of three-fourths of existing ferry rates,
upon conditions such as they should deem expedient and for a
term not exceeding ninety-nine years from the passage of the
act. Other bridges within certain distances were prohibited,
provided these be completed within four years. The commis-
sioners were authorized to receive voluntary subscriptions, and
any person contributing £20 or more was to be entitled, "with
his Dwelling, household, and his and their Goods and Chattels,
to pass and repass the said bridge Toll free." Moreover, by an-
other act passed the same day the commissioners were authorized
1 Incorporated 1765; see Essay I, 99.
2 Assembly Minutes, May 31, p. 29.
3 Ibid., Nov. 8, 10, 1790, pp. 24, 27; Session Laws, Nov. 24, 1790, pp. 685-692.
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206 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
to raise £4000 by lottery for constructing the road and
causeways.¹
In February, 1791, the ground was surveyed by Casimer Th.
Goerck for the commissioners, and in April the commissioners
advertised for bids for building the bridges, setting forth the
terms of the contract they were empowered to make.³ The
lottery was promptly put into operation. The various "classes"
were drawn during the summer and fall,4 and so satisfactory was
the outcome that the commissioners thought it possible to raise
by this means the entire cost of the bridges.⁵ Accordingly, in
November, 1791, the same legislature which so liberally incor-
porated the "S: U. M." authorized the commissioners to raise by
lottery the sum of £27,000, of which £20,000 was to be applied
to building the bridges, with the prospect that tolls not exceed-
ing one-fourth of the ferriage rates would suffice for maintenance
and replacement fund.⁶ The New York assembly consented to
allow the lottery tickets to be sold in that state.⁷ Despite this
privilege, and though liberally advertised for a year,⁸ this second
lottery proved a disappointment. John Pintard, one of the com-
missioners, was deeply immersed in the speculative activities of
1791 and 1792, and failed with Duer in March, 1792; and rumor
charged that the lottery funds were misappropriated by the spec-
ulators.⁹ Finally in November, 1792, when almost two years had
been wasted, the legislature directed procedure according to the
original plan.¹⁰
1 Session Laws, 693.
2 Map and description in N. Y. Magazine, ii, 365-368 (July, 1791).
a Brunswick Gasette, June 21; Gazette of the U.S., July 2; N. Y. Daily Advertiser,
August I; and other newspapers.
4 See advertisements in N.J. Journal, June 22, July 6, September 28; Nework
Gasette, July 7, November 24.
5 Assembly Minutes, Nov. II, 1791, p. 60.
6 Session Laws, Nov. 24, 1791, pp. 752-755. Of the balance, £2000 was to be
applied to provide buildings to accommodate the legislature in Trenton, the new
state capital, and £5000 to the building of the New Brunswick bridge.
7 Newark Gasette, Feb. 2, 1792.
8 See New Jersey newspapers, passim. Whitehead, Perth Amboy (1856), 287,
says that £14,000 was raised, but this is doubtful.
9 Cf. Essay II, 284. Alexander Macomb, a leading speculator, had been one
of the petitioners for permission to sell tickets in New York: Newark Gasette,
Feb. 2, 1792.
10 Session Laws, Nov. 29, 1792, p. 810.
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TOLL-BRIDGE CORPORATIONS
207
On Jan. 31, 1793, the commissioners advertised the location
of the bridges, the terms of the contract, and themselves called
for subscriptions of two hundred shares of $200 each for build-
ing the bridges. Subscriptions were proinptly opened in New
York and Newark and filled with avidity. On February 19,
after a meeting of the subscribers, a contract was signed with
them by the commissioners giving them the right to tolls to
Nov. 24, 1889.¹ Late in April, Joseph Nottage of Boston, an-
nounced as the builder of the Charles River Bridge, arrived with
a number of workmen to begin the construction, and in May
the first instalment was called in.² The work was pushed, and
although a six months' extension of the time allowed for com-
pletion had to be secured, the passage was permanently opened
early in 1795.⁸ The Passaic bridge was four hundred and ninety-
two feet long, the Hackensack bridge nine hundred and eighty
feet; both were thirty-eight feet wide, with five-foot footways.
Up to this time the "proprietors" had existed as a joint
stock company without any legislative sanction of their organi-
zation. In October, 1795, they petitioned for incorporation,4
and finally, after delays due to opposition, legislative hearings,
and the habitual dilatoriness of the assembly, a very simple
charter was granted in March, 1797.5 A year later they were
empowered to take charge of the road between the bridges
(which had occasioned no little trouble to the commissioners
and the inhabitants near by), charging toll upon it unless volun-
tary subscriptions should be forthcoming to cover the expense.⁶
From the outset the proprietors were prosperous. The bridges
seem not to have cost much more than $50,000, and up to 1811
the dividends had averaged more than ten per cent and the stock
1 Newark Gasette, February 7; N. J. Journal, February 20; Bridge Proprietors
V. the State, 21 N. J. Law 386 (1848).
2 National Gasette, N. J. Journal, May I; Newark Gasette, May 15.
Session Laws, Nov. 5, 1794, p. 926; Newark Gasette, Dec. 31, 1794, Feb. 4,
1795.
4 Assembly Minutes, Oct. 30, 1795, p. IO.
5
Session Laws, March 3, 1797, p. 201.
6
Ibid., March 8, 1798, p. 342. Cf. also N. J. Journal, Feb. 19, 1794; Newark
Gazette, Feb. 12, May 21, 1794, Jan. 7, March 4, 1795; Assembly Minutes, Feb. 6,
March 3, 1798, pp. 24, 67.
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208 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
had risen to "one hundred per cent advance." 1 The company
was the subject of repeated complaint, ostensibly on the ground
that bridges and road were not properly maintained, doubtless
also in part because of its prosperity, but the legislature con-
sistently refused to weaken its position.²
The Proprietors of the New-Brunswick Bridge originated about
the same time and in somewhat the same way. In November,
1790, two or three groups of petitioners sought the right to build
this bridge over the Raritan, and the legislature appointed
commissioners to decide between them and fix tolls to be re-
ceived.3 After the decision, upon ten days' notice posted in
the town, the successful aspirants were authorized to meet and
"establish such and so many Constitutions, Articles, Covenants,
Agreements and Associations, as they may think necessary to
enable them to raise Money for the building of their said Bridge,
and to carry into Effect all and singular their Purposes and In-
tentions respecting the same." The subscription to these arti-
cles, duly filled up and acknowledged, was to be recorded in
the county clerk's office, and thereafter to "be binding and
conclusive on all Persons who shall subscribe the same, and in
all Respects be effectual and valid, as if the same were herein
particularly specified and set forth." The bridge was to be
completed by Dec. I, 1793, and the toll franchise granted for
ninety-nine years from that date. As in the case of the other
bridges, a monopoly was given within specified points, and rates
of toll were not to exceed three-fourths of existing ferriage
rates.
As in the other instance, action was delayed by the initial
success of the lottery, and the Passaic and Hackensack com-
missioners were directed in 1791 to turn over £5000 of their
1 Monitor (pseud.), The Rights and Privileges
Examined, 4 (1811). (A
copy is in the library of the New Jersey Historical Society at Newark.)
2 Ibid., 3-4: In the ten years since the road and bridges were first travelled
"there has not been a day nor an hour, that the bridges and road have answered
the public expectation, or been in a state conformable to the intent of the legisla-
ture." Cf. also Assembly Minutes, January-February, 1814, pp. 122-123, 127,
161-165, 212-214; January, 1829, pp. 56, 69.
8 Session Laws, Nov. 24, 1790, p. 694; Assembly Minutes, Nov. 3, 4, 10, 1790,
pp. 18-20, 28.
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TOLL-BRIDGE CORPORATIONS
209
lottery proceeds to new commissioners for building the New
Brunswick Bridge, which was thereafter to be controlled by
trustees appointed by the city of New Brunswick.¹ When the
lottery proved a delusion, this act was repealed and a company
organized in accordance with the original plan.² Early in 1793
the town considered the question of subscribing to the bridge,
but decided in the negative.³ Delayed by a disastrous storm in
June, 1794,4 and by the time required for building so solid a
structure as the proprietors planned, the bridge was not ready
for passage until Nov. 2, 1795, after an expenditure of $86,695.41.5
Because of the extremely high initial outlay the company was
not at first especially prosperous. The legislature came to its
aid in November, 1796, however, with permission to increase
the tolls, taking the precaution to require decennial reports to
the legislature and to limit the annual net proceeds to fifteen
per cent of the cost of building and repairs; but by 1814, in
spite of the necessity of rebuilding the bridge in 1811 at an ex-
pense of nearly $12,000, the annual income had amounted to
nearly seven per cent on the capital sunk.⁷ On June I, 1799,
the legislature provided them with a simple charter of incor-
poration to supplement the somewhat irregular guarantee of
their articles of association.⁸
While these were the first considerable bridge projects to get
under way in the state, the first bridge company to be incor-
porated was The President, Managers and company of Rancocus
Toll-Bridge, chartered Nov. 28, 1792,9 when final arrangements
1 Session Laws, Nov. 23, 24, 1791, pp. 753, 758. Disputes may have figured in
the delay: cf. Assembly Minutes, November-December, 1791, pp. 21, 26-27, 60-62.
2 Session Laws, Nov. 29, 1792, p. 818; N. J. Journal, March 27, 1793; N. J.
State Gazette, April IO, 1793.
3
Bergen V. Clarkson, 6 N. J. Law, 428-446 (1796).
4
Wansey, Journal of an Excursion, 102-109.
5
Report to the legislature, in Assembly Minutes, Nov. 14, 1806, p. 91; Newport
Mercury, Dec. 15, 1795.
Session Laws, Nov. 17, 1796, p. 123.
7
Reports to legislature, in Assembly Minutes, Nov. 14, 1806, p. 91, and Jan.
16, 1817, p. IOI.
$
Session Laws, 528.
Session Laws, 806. The act is clearly modelled upon the most recent Penn-
sylvania charters - those creating companies for the Philadelphia and Lancaster
Turnpike Road and the Delaware and Schuylkill Navigation, of April 9 and IO,
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210 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
were being made for the East Jersey bridges. Its structure,
located at Wallace's Ferry over Rancocus Creek in Burlington
County, was completed with unprecedented promptness in the
summer of 1793, 1 but its size was such that one hundred shares
of $80 each were ample. In the winter of 1797-98 the company
pleaded successfully for an increase in the toll, "in some degree
proportionate to the universally advanced rates of ferriage," on
the ground that the former rates were "insufficient to support
the great and unavoidable expense of keeping it in repair, with-
out loss to the stockholders." Thereafter the company pros-
pered: in 1801 a dividend of ten per cent was declared; the
average rate for the years 1801-05 was 8.44 per cent, and for
1811-15, 9.45 per cent.
The two Delaware bridge companies of this decade, for build-
ing bridges at Easton and Trenton, were chartered respectively
in 1795 and 1798.4 Like some Connecticut River bridge com-
panies and several navigation companies, they had to seek char-
ters from the two states into whose jurisdiction they were to
extend. These were secured without difficulty or delay. Both
companies were slow, however, in organizing and effecting their
objects. Hampered by difficulty in securing subscriptions
($25,000 authorized), the Easton company did not secure its
formal letters patent till September, 1798.5 Perhaps earlier
than this work was commenced, with Cyrus Palmer of New-
buryport as architect, but little progress was made.⁶ In 1799
the two interested legislatures authorized the company to raise
$12,500 by lottery "to aid and assist them in completing the
1792: Pa. Stats. at Large, xiv, 279-294. No provisions seem to have been copied
from the charter of the "S.U.M." the only New Jersey precedent, although in
several respects, having been based on the same models, the two charters resemble
each other.
1 N. J. State Gazette, Aug. 7, 1793.
2 Session Laws, Feb. I, 1798, p. 263.
3 N. J. State Gasette, Jan. 13, 1801, and reports to the legislature, in Assembly
Minutes, Nov. 10, 1807, p. 38, and Jan. 12, 1816, pp. 86-87. Dividends were on
eighty-five shares, the others probably having been forfeited.
4 N.J. Session Laws, March 18, 1795, p. 1067, and March 3, 1798, p. 321; Pa.
Session Laws, March 13, 1795, p. 670, and April 4, 1798, p. 303.
5
Hazard, Register of Pa., ii, 295 (1828).
6
Pa. Mag. of Hist. and Biog., xxxiv, 329 (1910). Was this Timothy Palmer or a
relative?
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TOLL-BRIDGE CORPORATIONS
2II
said bridge; 1 but, as usual, this resource proved of little value.²
An extension of time having been granted,' work was begun in
earnest in 1803, under the energetic superintendence of Samuel
Sitgreaves; but it was October, 1806, before the bridge was
ready for crossing, and May, 1807, before it was finally com-
pleted.4 The bridge was thirty-four feet wide, and about six
hundred feet long between the abutments.
Of the total cost of $61,854.57, $42,200 was contributed by the
subscribers; the balance stood at first as a debt, but was wiped
out by the proceeds of toll within six years;⁸ and as early as I816
a seven per cent dividend was declared as the result of six months'
operation.⁶ The company was unusually fortunate in that the
bridge withstood ice, floods, and freshets. In recent years the
company has replaced its ancient covered structure with one of
modern type, and this it continues to control.
The Trenton Bridge, though proposed as early as 1796 7 and
granted its act of incorporation in April, 1798, did not succeed
in securing its subscriptions and letters patent until the summer
of 1803.⁸ On May 21, 1804, the first cornerstone was laid,9 and,
extensions of the time for completion having been secured,¹⁰
the bridge was finally opened in 1806. Its cost, originally esti-
mated at $75,000, proved to be more than twice as great, and
over $160,000 of stock was issued. Like the Easton Bridge Com-
pany this also flourished. In 1835 its control passed into the
hands of the Philadelphia and Trenton Railroad Company, and
since then the Pennsylvania Railroad and its predecessors have
enjoyed its benefits.
In Pennsylvania only three companies were chartered besides
1
Session Laws, Nov. II, 1799, p. 646.
2
See N. J. State Gasette, Nov. 21, December, 1800, April 2, Oct. 29, 1804.
3
Session Laws, March 12, 1803.
4
Pa. Mag. of Hist. and Biog., xxxiv, 239-240 (1910).
5
Uzal W. Condit, The History of Easton
(Easton, 1895), 465, showing
picture of the bridge about 1830.
N. J. State Gazette, April 15, 1816.
7 Newark Gazette, Feb. IO, 1796.
$
Hazard, Register of Pa., ii, 295 (1828).
9
True American (Trenton), June 6, July 4, II, Aug. 22, 1804; N.J. State Gasette,
Dec. 31, 1804.
10 Pa. Session Laws, April 2, 1804; N. J. Session Laws, Dec. 3, 1804, p. 478.
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212 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
the Easton and Trenton Delaware Bridge companies. In
April, 1793, a company was chartered to build a bridge over the
Susquehanna, four miles below Wright's Ferry; but letters
patent were never issued, and it probably was not constructed.¹
Five years later a company was chartered to build a bridge over
the Lehigh near Northampton, but letters patent for this were
not issued till 1812.2 The third was more important and
successful.
The Schuylkill Permanent Bridge Company act of March 16,
1798, was, like many others, the outcome of steps taken over a
period of years. During the Revolution a floating bridge, little
more than a military pontoon, was thrown across the Schuylkill
at Market Street, Philadelphia, the principal highway to the
west; and after the war this was maintained by the city because
of its superiority to the ferry. With the growth of the city in
importance the need of a fixed structure became increasingly
evident, and a flood of 1789 which swept away the floating
bridge further emphasized the need. In 1786 Thomas Paine
had proposed an iron bridge of a single arch, and prepared a
model which was much admired. The Philadelphia Agricul-
tural Society petitioned that this be carefully examined and a
charter granted, and the legislature resolved to grant a charter
to any company agreeing to build and maintain a bridge till
the tolls should repay principal and interest; but neither the
terms nor the times were propitious, and the enterprise slum-
bered.³ In the winter of 1787-88 a company was formed to
build a permanent bridge, but the city wardens (and perhaps
others) were heard in opposition, and no charter was granted.
The city council desired to build the bridge, but could not raise
the requisite funds. Finally, early in 1798, a company of
weighty capitalists headed by Richard Peters, justice of the su-
preme court, was formed and secured a charter. It bought for
1 Session Laws, 380; Hazard, Register of Pa., ii, 295 (1828).
2 Session Laws, 141; Hazard, Register of Pa., ii, 295 (1828).
3 Scharf and Westcott (History of Phila., 2141) say that Paine produced another
model in 1787 "and the Assembly chartered a bridge company, included in whose
members were John Paine, Samuel Powel, and Robert Morris, with a nominal
capital of $66,666.66." Such a company may have been formed, but the published
acts give no evidence of a charter.
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TOLL-BRIDGE CORPORATIONS
213
$40,000, half in stock, the rights of the city in the ferry and
floating bridge, then yielding about $3500 per annum. A de-
sign by Timothy Palmer of Newburyport, builder of the Mer-
rimac, Piscataqua, and Potomac bridges, was accepted. After
numerous delays, due principally to capitalist backwardness,
the corner-stone was at last laid Oct. 18, 1800. The engi-
neering difficulties, chiefly in the construction of the huge
piers, were finally overcome through the energy and inge-
nuity of Reynolds, the constructing engineer, in the face of
much scoffing and criticism; but not till Jan. I, 1805, was the
bridge ready for use. Originally $150,000 capital had been au-
thorized, in $10 shares; 750 new shares were later added, and
in all $218,000 stock was fully paid; but the cost mounted to
some $300,000, the income from the ferries and floating bridge
having been invested in the new one and a considerable sum
raised by loan.¹
New York's sole charter in this class was granted in 1795
to The Cayuga Bridge Company for erecting a bridge across
Cayuga Lake, with a capital of $25,000 in $50 shares. Two
years later its term to complete the bridge was extended one
year. When it was finally completed, in September, 1800, this
structure was reported the largest in the world.2 One of New
York's turnpike companies, as noted below, was empowered to
build and operate a toll-bridge over the Mohawk at Schenectady,
on its route westward to Utica. It may be that the presence
of numerous turnpike companies, in this state and in Connecti-
cut, was partly responsible for the smallness of the number of
separate toll-bridge companies.
The George-town Bridge Company was incorporated by Mary-
1 Scharf and Westcott, History of Phila., iii, 2141-2143; Joseph Jackson, in
Public Ledger (Philadelphia), March 14, 1915, showing picture of the bridge; Pa.
Stats. at Large, xvi, 36-46, 244-245, 397-398; Hazard, Register of Pa., X, 145-I50,
179, 193, 213 (1832) - an account by Judge Peters; ibid., ii, 295 (1828), xi, 292-
293 (1833); Pa. Mag. of Hist. and Biog., xvi, 175, 422 - extracts from the diary of
Jacob Hiltzheimer; ibid., xxviii, 131 (1904); Mass. Centinel, May 16, 1787, Dec.
18, 1790. Cf. J.J. Currier, History of Newburyport, Mass.
i, , 369, for Timothy
Palmer's testimonial when the bridge was completed.
2 Ringwalt, Transp. Systems in U. S., 36; Laws (ed. 1887), iv, 78-80, 326-327.
3 Infra, 223.
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214 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
land late in 1791, to build a bridge over the Potomac to connect
Georgetown with northern Virginia. Subscriptions were not
forthcoming at the first invitation. In 1795, however, a contract
was made with Timothy Palmer, the renowned bridge builder
of Newburyport, Mass., and the majority of the four hundred
shares ($200 par) were subscribed. The bridge was opened in
October, 1797, having cost nearly $84,000, of which $47,000
had been secured from the stockholders and the rest by a loan.
In 1801 the directors announced that the tolls had sufficed to
cover maintenance and interest on the debt, and proposed to
sell eighty-six unissued shares at $200 to pay off the debt, set-
ting forth the prospect of early dividends at six per cent. This
plan failed, and the next year a suit was brought to enforce the
sale of the property to settle the debt. This seems to have been
averted, but possibly the deferring of maintenance on account
of financial difficulties may have been partly responsible for
the catastrophe of 1804, when the high wooden arch fell into
the river. This was replaced in 1806, at a cost of $8000. This
having been destroyed by a flood in 1808, a chain bridge was
built at a cost of $4000; and when this was likewise swept away
in 1810, another better one was built at an expense of $8000.
In I826 the stock of the company amounted to $81,562.50-
three hundred and sixty-two and one-half shares of $225
each. The directors then reported that the profits had not
averaged one per cent and were at this time yielding only 21
per cent.¹
Late in 1795 a company was chartered to build a bridge over
the eastern branch at the foot of Kentucky Avenue (where the
Pennsylvania Avenue Bridge now is). In January, 1798, The
Anacostia Bridge Company, chiefly a Benjamin Stoddert en-
terprise, was chartered with an authorized capital of $20,000
to build another bridge over the same branch. Neither com-
pany was floated at this time. The former, however, known as
the Lower Bridge, was opened in January, 1804, three months
1 Bryan, History of the National Capital, i, 243, 290-291, 430-431, 490-491;
petitions in Sen. Doc. 86, 19th Cong., Ist Sess. (1826); Md. Session Laws, Dec. 29,
30, 1791, pp. 81, 89, and Dec. 24, 1795; McDonough V. Templeman, I Harris and
Johnson (Md.) 156-163 (1801).
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TOLL-BRIDGE CORPORATIONS
215
before the first destruction of the Georgetown Bridge, and within
two years the other, known as the Upper Bridge, was completed.¹
Late in 1796 Maryland also chartered the Water-street Bridge
Company, which erected a bridge over Jones' Falls in Baltimore
at the site of the so-called Tower Bridge.2
South Carolina chartered, in May, 1794, The port Republic
Bridge Company to construct "Causeys and a Bridge, across the
marshes and river, which separate the Island and Port Republic,
(formerly Port Royal) from the
mainland."⁸
Finally Kentucky, in 1799, chartered the Frankfort Bridge
Company, for erecting a toll-bridge at the town named. This
was the sole business corporation chartered by that state prior
to 1800. It appears not to have accomplished its purpose.
In the main it is to be said that the toll-bridge companies per-
formed important services in many states and were highly re-
garded both by legislatures and by investors. The type of enter-
prise was one for which the corporation was peculiarly fitted,
and it was one field in which corporations usually justified
expectations.
The bridge companies varied greatly in size, but few could
be called large. The Massachusetts charters fixed no capital,
but the investment there usually came to less than $50,000 and
was frequently under $10,000. Among the most costly of those
finished before 1801 were the New Brunswick Bridge, costing
over $80,000, and the Piscataqua Bridge, costing between
$60,000 and $70,000. Several companies had specific authority
to raise over $100,000, but none of these completed its under-
taking till after the end of the century. Probably more than
half of the number floated built structures costing under
$20,000.
The charters were not far different from the turnpike charters,
though somewhat briefer and simpler. Of their outstanding
features a few words will be said at the end of the chapter.
1 Md. Laws (Kilty); Bryan, History of the National Capital, i, 336-337, 491-492.
2 Session Laws, c. 56.
3 Stats. at Large (ed. 1838), viii, 182; Columbian Centinel, Sept. 10, 1794.
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216 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Turnpike corporations followed both canal and bridge com-
panies.¹ The first company was chartered in 1792, and it was
only in 1794, as the accompanying table witnesses, that the
turnpike movement began in earnest. They were offspring of
the same movement for improved communication. Yet the
prejudice, in some places, in favor of water communication, and
the generally firm establishment of roads as "public goods"
and subjects of public management, operated to delay the
TABLE X. EIGHTEENTH CENTURY CHARTERS TO TURNPIKE CORPORATIONS
1792
1793
1794
1795
1796
1797
1798
1799
1800
Totals
New Hampshire
I
2
I
4
Vermont
I
I
3
4
9
Massachusetts
I
2
3
3
9
Rhode Island
2
I
3
Connecticut
4
6
6
2
5
23
New England
2
4
3
,
6
10
14
48
New York
I
2
5
5
13
Pennsylvania
I
I
2
I
5
Middle states
1
1
2
1
3
5
5
18
Maryland
I
2
3
Virginia
2
I
3
Southern states
2
1
2
1
6
Totals
I
o
3
6
6
IO
II
IS
20
72
entry of the private corporation into this sphere.2 It is probable
that an impetus to the private toll road was furnished by the
success of the toll-bridge companies and the ill success of the
navigation companies. Late in appearing, the turnpike com-
pany was also slow in getting upon a firm footing. Difficulties
in securing capital proved more formidable than in the case of
bridges, and the works, quite naturally, required more time to
1 For English turnpikes, see Edwin A. Pratt, A History of Inland Transport
and Communication in England (New York, 1912), 77-107. The system was
generally adopted about 1767. The common form of organization was somewhat
different from the simple American business corporation.
3 Cf. supra, II2, 149, 151, and Washington to Patrick Henry, Nov. 30, 1785,
regarding repairs of roads "until the period shall arrive when turnpikes may
with propriety be established": Henry, Works, iii, 339.
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TURNPIKE CORPORATIONS
217
complete. As a result the history of the turnpike belongs largely to
the nineteenth century. The available records of these early years,
moreover, are especially scanty. We must therefore rest content
with a brief and inadequate survey of the veriest beginnings.
As with canal and bridge companies, there were forerunners
of the turnpike corporation in the nature of less highly de-
veloped forms of organization. In the south, at least, it was
common in the eighties for the legislature to appoint commis-
sioners to lay out a road between two specified points and to
construct it either with the aid of voluntary subscriptions or
by the required labor of neighboring inhabitants. In some
cases a road improved at private expense by individuals was
vested in those individuals and their heirs and assigns for a term
of years with power to take toll.¹
A Maryland act of May 21, 1787, provides for the establish-
ment of several turnpike roads from Baltimore to the western
parts of the state, on the grounds that the existing roads,
"by means of the great number of waggons that use the same, are rendered
almost impassable during the winter season, and the ordinary method of
repairing the said roads is not only insufficient but exceedingly burthen-
some; and the establishment of
turnpike roads
would greatly
reduce the price of land carriage, of produce and merchandise, and raise
the value of lands in the said county, and considerably increase the com-
merce of the state."
Commissioners are therefore appointed to lay out roads from
Baltimore to Frederick-town, Reister's-town, York-town, and
from Reister's-town to Winchester-town and toward Hanover-
town, subject to review by certain other commissioners ap-
pointed, and then to construct them, with ample powers of
eminent domain. Funds were to be provided by a county tax
of 3s. 9d. and 2S. 6d. per £100. Tolls were to be collected and
applied by the commissioners of review to defray the expense
of clearing and maintaining the roads. A supplementary act of
Dec. 22, 1790, authorizes these commissioners, "as a considera-
1 N. C. Session Laws, 1792, c. 16, p. 22; Va. acts of October, 1785, October, 1786,
Dec. 28, 1788, in Stats. at Large (Hening), xii, 75-80, 282, 295-297, 725, 728; Md.
Laws (Kilty), 1789, C. 2; Ga. Laws (Marbury & Crawford), 404-405 (1797).
2 Laws (Kilty), 1787, C. 23; several supplements later.
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218 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
tion to induce persons to undertake the execution of any such
work," to "let and farm the revenue arising under the authority
of the aforementioned act, to any person or persons for any
term not exceeding twenty years," at what is deemed a reason-
able compensation (Sect. 14).¹
In July, 1789, an association was formed to improve the
seven-mile road between Norwich and New London, Conn., with
permission of the legislature a lottery was drawn in June, 1791,
in aid of the road. In May, 1792, the company, still unincor-
porated, was authorized to take toll, and this was begun the
following month. A little later, toll was taken on the "Stage
Road" through Greenwich.² Other examples in the north could
also be found.
The first turnpike company was one outgrowth of the agita-
tion for improved internal communication in Pennsylvania,
which was fostered by the Society for promoting the improvement
of Roads and Inland Navigation formed in 1789, and which led
to the adoption of extensive canal plans.³ On Oct. IO, 1791, in
accordance with a resolution of the assembly almost simulta-
neous with the incorporation of the Schuylkill and Susquehanna
company, Governor Mifflin appointed Benjamin Rittenhouse,
John Ewing, and John Noncarrow commissioners to lay out a
road from the middle ferry on Schuylkill to Lancaster. On
January 3I they reported. A company was soon formed to con-
struct the road, and on April 9 the assembly incorporated them
as The President, Managers, and Company of the Philadelphia
and Lancaster Turnpike Road.4
On June 4, books were opened in Philadelphia and Lancaster,
for subscriptions of six hundred and four hundred shares re-
spectively, of $300 each. In order to reduce the likelihood of
1 Laws (Kilty), 1790, c. 32. Cf. ibid., 1794, C. 48, for a similar act respecting
a bridge.
2 Caulkins, Norwich, Conn., 530. The author says a charter was granted, but
I find no evidence to that effect. Cf. Anderson, Waterbury, Conn., i, 566; Caulkins,
New London, Conn., 658; Mass. Hist. Soc. Proc., 2d Series, iii, 44.
3 Supra, 149-153.
4 Barton, David Rittenhouse, 360-361; General Advertiser, Jan. II, Feb. 2, 4,
June 7, 1792; Pa. Stats. at Large, xiv, 279-294.
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speculative subscriptions, which had recently played havoc with
several promising companies, the law provided for a deposit
of $30 cash for each share subscribed. Despite this, twenty-
two hundred and seventy-six shares were subscribed in a few
hours in Philadelphia alone and the $68,280 in cash was accord-
ingly deposited, while over five thousand persons were reported
present and eager to subscribe, to the amazement of the popu-
lace. Resort was had to a lottery to decide which subscriptions
should be allowed, and the fortunate recipients of scrip soon
found it possible to sell them for $100 each. Managers, includ-
ing Benjamin Rittenhouse, and officers, including William Bing-
ham, president, were elected, and on June 21 the requisite letters
patent were secured from the governor. Early in August by-
laws were adopted and arrangements made to begin work.¹
The execution of the project was hampered by opposition of
property owners, who objected to the exercise of the right of
eminent domain, and by thrifty Pennsylvania Germans and
other wagoners, who objected to paying tolls. Nevertheless, the
road was pushed with noteworthy speed and completed in 1794.
Its cost was $465,000, averaging $7500 a mile for the sixty-two
miles; practically the whole was contributed by shareholders.
Francis Baily, an Englishman who visited the region early in
1797, remarked upon it as "a masterpiece of its kind,
paved with stone the whole way, and overlaid with gravel, so
that it is never obstructed during the most severe season." 2
The company continued to encounter hostility. Perhaps with
a view to changing this attitude, an act of April, 1795, forbids
the company to demand or receive toll "from or for persons
living on or adjacent to said road, who may have occasion to
pass by the said road, upon the ordinary business relating to
their farms or occupations, and who shall not have any other
convenient road or way by which they may pass." An act of
1 National Gazette, June 7, Aug. 25, 1792; Hazard, Register of Pa., ii, 293-299.
2 Hazard, Register of Pa., ii, 299 (1828); Wansey, Journal of an Excursion, 155,
210-211; Governor Wolf's message of 1831, quoted in Ringwalt, Transp. Systems
in U. S., 31; Francis Baily, Journal of a Tow
(London, 1856), 107; S. C.
Frazer, "Old Pennsylvania Milestones," in Pa. Mag. of Hist. and Biog., xxxii,
201-206.
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220 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
1798 reflects continuing troubles when it establishes penalties
for evading tolls or defacing or destroying signboards or mile-
stones, and authorizes the company to establish scales to ascer-
tain the weights of vehicles for purposes of collecting toll.¹
Unlike most of the companies that were erected upon its model,
the company still exists, surviving criticism and complaint much
as it did one hundred and twenty years ago.
At the time of chartering the "Lancaster pike" a charter was
sought for another from Germantown to Reading. This was
delayed by opposition and not secured until March 29, 1798.2
A few other companies, however, were chartered in the mean-
time in Pennsylvania. April 22, 1794, a company was char-
tered for building a turnpike ten miles long from Lancaster to
the Susquehanna. Some delays in securing subscriptions were
experienced, but on Feb. 24, 1796, letters patent were issued.
Further obstacles hindered operations, and it was 1801 before
the road was begun. Then $48,300 was subscribed in $300
shares, and in 1803 the road was completed at a cost of $5816
per mile.³ In the spring of 1796 were chartered the Lancaster,
Elizabethtown, Middletown, and Harrisburgh, and the Gap,
Newport, and Wilmington, neither of which was begun for many
years - the first in 1806, the second in 1809.4 In short, up to
1800 Pennsylvania's turnpikes were confined to the single
pioneer enterprise.
In September, 1795, books were opened in New Jersey, and
probably also in Philadelphia and New York, to secure subscrip-
tions to a company for constructing a turnpike road to con-
nect these cities, at an expense calculated at $300,000. At least
one-fourth was subscribed, but the scheme was not pushed and
had to wait for further interest till the fall of 1800.5 No other
turnpikes were pushed in New Jersey until about the same time,
1
Stats. at Large, XV, 330-331, xvi, 130-133.
2 Scharf and Westcott, History of Phila., i, 496; Stats. at Large, xvi, 71-88. No
mention is made of this company in the 1821 legislative report quoted in Hazard,
Register of Pa., ii, 293-300 (1828).
3
Session Laws, 607; Hazard, Register of Pa., ii, 293, 299 (1828).
4
Session Laws, 27, 50; Hazard, Register of Pa., ii, 298-299 (1828).
5
N. Y. Magazine, vi, 574 (September, 1795).
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and travellers were left bitterly complaining of the abominable
roads.
Rhode Island was the second state to incorporate a turnpike
company and established three. In February, 1794, there was
incorporated The Society for establishing and supporting a Turn-
pike Road from Cepatchit Bridge, in Gloucester, to Connecticut
Line, on the great road leading to Killingly and Hartford; and
in October The Providence and Norwich Society, for the establish-
ing a Turnpike Road from Providence to County Line, through
Johnston, Scituate, Foster and Coventry.¹ In October, 1800, an
important highway was handed over to The Proprietors of the
Providence and Boston Turnpike-Road.2
Connecticut, while not the pioneer, was the real leader in the
turnpike movement. Beginning in 1795 with four companies,
she chartered six in each of the two years 1797 and 1798, two
in 1799, and five more in 1800 - twenty-three in all, as compared
with nine for Massachusetts and thirteen for New York. To-
gether these touched all sections of the state.
Two of the earliest of these reached out toward Providence -
the Hartford, New-London, Windham and Tolland County So-
ciety, southeast to Norwich via Franklin (1795), and the New-
London and Windham County Society, east from Norwich via
New Lisbon, Preston, Plainfield and Sterling to the Rhode
Island line (1795). Five others radiated from Hartford, of
which three were especially important: the Boston, east north-
east via Bolton, Coventry, Mansfield, Ashford, Pomfret, and
Thompson to the Massachusetts line (1797); the Hartford and
New London, southward via New Salem, Marlborough, and
Glastonbury (1800); and the Hartford and New Haven (1798).
The Talcott Mountain connected the capital city with Farm-
ington, Simsbury, and New Hartford (1798); and the Granby ran
north to the Massachusetts line (1800). New Haven was con-
nected with Litchfield by the Strait's, running through Water-
town, Waterbury, and Woodbridge (1797), and with Cheshire by
1 Session Laws, 9-II, 13-14; Providence Gasette, Jan. 18, 1794; Anderson, Water-
bury, Conn., i, 566.
2 Session Laws, 29-34.
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222 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
the Cheshire (1800). Litchfield was also linked up with New Mil-
ford by the New-Milford and Litchfield (1797); with Bristol by
the Litchfield and Harwinton (1799); and with the Massachusetts
line by the Canaan and Litchfield (1799). New Hartford was
connected with the Massachusetts line by the Green Woods
(1798) and the Farmington River (1800). In the southwestern
part of the state were three touching Derby - the Oxford, run-
ning northwest to Southbury (1795), the Derby (1798), and the
Ousatonic, running northwest to New Milford (1798), connecting
there with the New Milford and Litchfield (1797); and four
others - the Norwalk and Danbury (1795), the Saquituck, be-
tween Norwalk and Fairfield (1797), the Fairfield, Weston and
Reading, between Bethel and Weston (1797), and the Stratfield
and Weston (1799). Two of lesser importance in the east were
the Windham, from Windham to Plainfield (1799), and the
Windham and Mansfield, from Franklin to Stafford (1800).
These companies were, as a rule, not obligated to build new
roads, but to put existing roads in good repair and to keep them
so with the aid of the tolls received. Nearly all of them, judg-
ing by later acts or resolves, the talk of the public, and local
histories, attained their immediate objects and continued long
to take toll, to the irritation of those who had to use their high-
ways. Of few does any significant published record remain.¹
Massachusetts, beginning in 1796, chartered nine or ten turn-
pike companies,2 nearly all in the western part of the state.
The First ran from Western Bridge to Palmer and in 1798 was
authorized to be extended through to Wilbraham, six miles be-
yond. The Second, chartered in 1797, ran from Charlemont to
Adams, and the Williamstown, chartered two years later, car-
ried it through Williamstown to the Massachusetts line to con-
nect with New York's Eastern Turnpike, chartered soon after,
1 Cf., however, Private Laws (ed. 1837), ii; Woodward, Hartford Bank, 96-97,
Blake, History of Hamden, 93-94, and Dwight, Travels, ii, 285 (the Hartford and
New Haven); Larned, Windham County, ii, 295 (the Boston); Orcutt and Beards-
ley, Derby, Conn., 305-306 (the Oxford); Blake, Hamden, Conn., 95-96 (the
Cheshire); Anderson, Waterbury, Conn., i, 566 (the Strait's); Caulkins, New Lon-
don, 659 (the Hartford and New London); and cf. infra, 223, 306-307.
2 They are usually designated by number. The Williamstown was really the
fourth; the seventh seems to be missing.
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running from Bath (Rensselaer County) through Petersborough.
The Third Massachusetts (1797) connected Northampton and
Pittsfield, and the Eighth (1800) ran from Westfield to Pitts-
field. The Fifth (1799) connected Northfield and Leominster,
with a branch from Greenfield striking the main road at Athol. 1
The Sixth (1799) connected Amherst with Worcester and Shrews-
bury. The two others were junction roads - the Ninth (1800)
running from Bellingham to Douglass, linking up with Con-
necticut's Boston Turnpike Company (1797), and the Tenth
running across southwestern Massachusetts from the Con-
necticut line near Sandisfield, through Bethlehem, Lee, and
Lenox to Canaan, Conn., probably connecting with the Canaan
and Litchfield (1799).
The First had its road in use by November, 1797. The Fifth
was perhaps the most important. Most of the others seem
to have utilized their privileges more or less promptly and
completely.
New York met several Massachusetts and Connecticut com-
panies halfway. Besides the Eastern (1799), the Rensselaer and
Columbia (1799) was to connect Albany with the Massachusetts
line near Lebanon Springs, and the Columbia (1799) was to con-
nect Hudson, Claverack, and Hillsdale with the Massachusetts
line on the route to Hartford. The Susquehannah (1800) was to
run from Salisbury, Conn., to Wattle's Ferry on the Susquehanna,
"by Aneram Furnace in Livingston," and the West-Chester (1800)
was to run from East Chester to the Connecticut line at Byram.
Three companies struck westward. The Great Western (1799)
was to run from Watervliet, near Troy, over fifty miles west
to Cherry Valley, Otsego County; and the Mohawk Turnpike
and Bridge Company (1800) was to bridge the Mohawk at
Schenectady and run thence, by what became the Erie Canal
route, seventy-odd miles west to Utica. The Seneca (1800) was
to run from Utica to Cayuga and Canandaigua. Another fairly
1 J. H. Temple, History of Palmer, 224-225 (First); J. E. A. Smith, History of
Pittsfield
508-509 (Third and Eighth); A. L. Perry, Origins in Williamstown, 25
(Williamstown); F. A. Currier, "The Old Turnpike and Turnpike Days," in Fitch-
burg Hist. Soc. Proc., iv, 160-163 (1908), Thompson, Greenfield, i, 506, 558, and
Sheldon, Deerfield, ii, 916 (Fifth).
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224 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
long route was that of the Northern (1799), which followed the
present Boston and Maine line from Lansingburg on the Hudson
via Cambridge and Salem to Granville, and from Salem to
Rupert, Vt. Probably the most profitable was the Albany and
Schenectady, the first to be chartered (1797). The Orange (1800),
running from Cheescocks, Orange County, to "the road from
Stirling Iron Works," was a small local company.
Toward the close of the century the New York developments
in this direction were quite reassuring to "friends of public im-
provements." Robert Troup, for example, wrote to Rufus King,
March 9, 1800, when several charters were about to be con-
sidered: "General efforts are now making in the Legislature by
Mr. Williamson & his friends to have the western roads turn-
piked; and if the object can be accomplished, of which I am far
from despairing, the improvement of the country will travel
on with much quicker step."¹ To him the enactment of six
charters within the next month must have been decidedly
pleasing.
To the northward also there was considerable turnpike en-
terprise. Maine had no companies prior to 1800, but New
Hampshire had four fairly important ones and Vermont as
many as nine - nearly half of her quota of eighteenth century
corporations.
The first turnpike corporation of New Hampshire, the pro-
prietors of the New-Hampshire turnpike road, was chartered June
16, 1796,2 to erect a "direct road from Concord to the Piscataqua
bridge," running thirty-six miles through Pembroke, Chichester,
Epsom, Northwood, Nottingham, Barrington, Lee, and Dur-
ham, to the Merrimac in Concord, "that the communication
between the seacoast and the interior parts of the State might
be made much more easy, convenient, and less expensive."
The "expensiveness" of the enterprise was assigned as a reason
for difficulty in accomplishing it "otherwise than by an incor-
porated company" to be "indemnified by a toll for the sums
1 King, Rufus King, iii, 207.
2 For interest here in 1791-93, see Stackpole and Thompson, Durham, N. H.,
i, 236-237; Session Laws, June 16, 1793, pp. 539-543.
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that should be expended." The road was promptly completed.
In I800 new regulations regarding the toll were adopted, and in
1803 an extension of the road was authorized. In 1796 petitions
for two other turnpikes failed to evoke the encouragement of
the legislature. Late in 1799, however, the Proprietors of the
Second and Third Turnpike Roads in New Hampshire were in-
corporated. The former was to build a fifty-mile turnpike from
Claremont to Amherst. The town of Claremont voted encour-
agement, Francestown not to remonstrate, Antrim no objection,
and the road was opened in the summer of 1801, at a cost of
$80,000. The latter was to build a fifty-mile road from Bellows
Falls through Keene and Jaffrey toward Boston. This was
completed in 1803. In June, 1800, Elisha Payne, Russell Free-
man, and Constant Storrs petitioned for a charter to enable
them to open a turnpike road from Boscawen or Salisbury west
to the Connecticut River at Lebanon, to connect with the road
about to be opened by a Vermont company from the mouth of
White River to Lake Champlain. After due advertisement the
act was passed Dec. 8, 1800, and the Fourth company began its
successful career.¹
Vermont's First turnpike corporation (1796) was to build a
short road to connect Bennington and Wilmington. The second,
The Green Mountain Turnpike Corporation, was to run from
Clarendon to Shrewsbury (1797). The Green Mountain Turn-
pike Company was incorporated in 1799. Three touched Wood-
stock: The Windsor and Woodstock (1799); The centre, from
Middlebury to Woodstock, with a branch to Royalton on White
River (1800); and the Royalton and Woodstock (1800).2 The
1 N. H. Index of Laws, 401, 542; Session Laws, 539-543; Lord, Dartmouth Col-
lege, 622-623; John M. Shirley, "The Fourth N. H. Turnpike," in Granite Monthly,
iv (March, 1881); Lyford, History of Concord, i, 299-300; Laws of N. H. (ed. 1797),
325-329; C.J. Smith, History of the Town of Mont Vernon, N. H. (Boston, 1907),
39-42, 45-47; Otis F. R. Waite, History of the Town of Claremont, N. H.
(Manchester, 1895), 358; W. R. Cochrane, History of the Town of Antrim, N. H.
(Manchester, 1880), 85; ibid., History of Francestown, N. H
(Nashua, 1895),
149-150; George Aldrich, Walpole as it Was and as it Is
(Claremont, 1880),
85; John J. Dearborn, The History of Salisbury, N. H. (Manchester, 1890), 300-
315.
2 See Samuel Swift, History of
Middlebury
(Middlebury, 1859), 314-
315, and H. S. Dana, History of Woodstock, Vt. (Boston, 1889), 538-542, for facts
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226 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
White River probably was to link up with the second of these.
In Windham County were The Windham (1799) and the Con-
necticut River (1800), running from Rockingham (Bellows Falls)
to Thetford, Orange County. Nearly all, it will be noted, were
in southern or southeastern Vermont, but at least three crossed
the mountain range.
The six turnpike companies south of Pennsylvania were con-
fined to two states, - Virginia and Maryland. The Virginia
legislature chartered, late in 1795, the Fairfax and Loudoun turn-
pike road company and the Matildaville company, to construct
turnpike roads from Alexandria westward to Little River and
northward to the Great Falls of the Potomac.¹ Late in 1800
Virginia further incorporated the Alleghany Turnpike Road, for
"making easy the communication" between the head naviga-
tion of the Potomac, at the mouth of Savage River or George's
Creek, "to the nearest western navigation;"2 but this, condi-
tioned on Maryland's passing a similar act, did not go into effect.
Maryland chartered in October, 1796, the Washington Turn-
pike Road company, to build a turnpike from Baltimore to the
rising Washington; and in January, 1798, similar charters were
granted for turnpikes to Frederick and Reisters-town. None of
these Maryland roads was built, presumably because the req-
uisite capital could not be raised.³
It is not clear why, in the south, where canal and navigation
enterprises flourished, there was such a paucity of corporate
toll bridges and toll roads. It would seem that at numerous
points companies would have found such undertakings profit-
able, and the numerous charters to private canal companies do
not indicate strong prejudice against imposition of tolls. Clearly
the tradition of public building and control of land highways
was much stronger than in the case of waterways, and business
enterprise was not active enough to press into the field.
concerning these. It is possible that Dana treats the branch of the centre turnpike
company as an independent corporation.
1 Stats. at Large (ed. 1835), i, 378-388.
2 Ibid., ii, 249-254.
3 Griffith, Annals of Baltimore, 120; Laws (Kilty), 1796, c. 69, and 1797,
c. 65, 70.
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Most of the turnpike companies were small affairs with
capitals of less than $100,000 and with stretches of road per-
haps most commonly twenty to thirty miles, and rarely over
seventy. Among the largest were the first, the Philadelphia and
Lancaster (1792), with $300,000, soon enlarged some fifty per
cent; the Fairfax and Loudoun (Virginia, 1795), with $245,000;
the Lancaster and Harrisburg (Pennsylvania, 1796), with
$180,000; and the Germantown and Reading, with $500,000.
New York's largest, the Great Western (1797), was authorized
to raise but $80,000. In view of the uncertainty of requirements,
Massachusetts charters fixed no definite amount, and even left
to the company the decision as to the number of shares. South
of New York the par value of shares was high, $300 in the first
three Pennsylvania companies and $200 in the first two of Vir-
ginia. In New York $25, $40, and $50 were most common. In
New England also the par was low, as fixed by the companies
themselves; and elsewhere the trend was clearly toward the
smaller par value.
The charters of the canal, bridge, and turnpike companies
were roughly similar, though there were considerable variations
in different states. Something may well be said at this point
of certain of their significant elements.
Provision was ordinarily made for forfeiture of the charter
(and sometimes also of improvements made) if the work should
not be completed within a specified time,¹ but extensions of
time were freely granted. An uncommon requirement is that
in a few later Connecticut turnpike charters compelling the com-
pany to give bond to the state treasurer, of $10,000 to $50,000,
to complete the road within a certain time, or to pay damages
and make the road free of charge upon the towns within a speci-
fied period.² I have seen no evidence of forfeiture of such a bond.
In the case of turnpike companies it was frequently provided
that the road should be inspected by a temporary commission,
1 In Massachusetts three to six years, in New York two years, were allowed for
beginning, and usually five years thereafter for completion. The First New Hamp-
shire Turnpike charter allowed ten years, the Fourth, six.
2 Private Laws, ii, 1217, 1223, 1273, I297.
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228 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
appointed by the governor, before turnpike gates could be set
up for taking toll.
The charters varied greatly in their regulation of the initial
establishment and the internal organization of the corporations.
Pennsylvania charters, in general, were elaborate and detailed;
Massachusetts charters gave the proprietors much leeway,
being silent even as to the authorization of capital. In most
states the provisions were much looser and freer than in bank
charters. Ample powers of eminent domain were freely given.
Penalties were commonly prescribed for malicious injury to the
works. The companies were made liable, however, in case of
illegal taking of toll, or for obstructions of the highway.
Policies as to term of franchise, rates of tolls and profits, and
relinquishment of the works to the public varied greatly. Five
principal ones may be distinguished. (I) Most commonly, per-
haps, a perpetual charter would be granted, but rates of divi-
dend limited, say, to twelve (Massachusetts turnpikes), fourteen
(New York turnpikes), fifteen, or twenty-five per cent. (2) Or
a perpetual charter might be given, subject to the regulation of
tolls after, say, twenty, thirty, or fifty years - a common policy
in Massachusetts bridge charters. (3) In some cases the fran-
chise was definitely limited to thirty, forty, fifty, or seventy
years. Upon the expiration of this period the work should re-
vert to the state or "be delivered up in good repair," and this
was sometimes accompanied by a provision for regulating the
tolls after part of this period had expired - another common
policy in Massachusetts bridge charters. (4) The state might
be authorized to buy out the company after a certain period,
say forty years, upon repaying outlays and a certain percentage
per annum (typically twelve per cent) upon them, less the profits
divided, as in New Hampshire turnpikes. (5) The works might
revert to the state as soon as the tolls had repaid the advances
of the proprietors and a certain percentage (typically twelve
per cent) per annum upon them, as in Connecticut turnpike
companies.
A few specific variants from these may be cited. In the charter
the Lancaster and Harrisburg turnpike (1796) the legislature
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reserved the right to take possession of the road at any time after
1825, paying the company a sum agreed upon by ten persons,
five appointed by the legislature and five by the president and
managers. A somewhat similar provision occurs in the charters
of the Northainpton Bridge Company (1797) and the Schuylkill
River Bridge (1798).¹ The charter of the Germantown and Read-
ing turnpike (1798) requires profits exceeding nine per cent to
be appropriated to retire the stock of the company at par, the
road to become free when all should be so retired. The charter
of the Schuylkill River Bridge (1798) provides that "a fund for
the redemption of the bridge" shall be constituted of receipts in
excess of fifteen per cent annual net profits, private donations for
the purpose, and income upon this capital invested " in bridge
stock, or other productive funds," with a view to making the
bridge toll free within the twenty-five year period from its
completion for which the franchise was granted.
Moreover, in many charters provision was made that when
tolls did not yield an income equal to a stated percentage (usually
six per cent) of the total outlays on construction and repair, in-
creases in rates might be made directly or authorized whereby
to bring dividends up to this minimum. Coupled with this was
a provision that the tolls should not exceed a liberal maximum
of twelve, fifteen, or even twenty-five per cent. To ascertain
these facts periodical reports to the legislature or courts were
required - typically either annually or semi-annually till con-
struction was completed and triennially or decennially there-
after - of tolls, expenses for repairs and operation, and profits.
There was no penalty imposed for neglect of this provision, and
it appears to have been commonly a dead letter.
Where the rate of toll was fixed directly by the charter the
legislature turned an attentive ear to memorials showing that
costs had exceeded expectations and profits were incommen-
surable with the outlays, and granted solicited increases in
maximum rates of toll.4 Changes in dimensions of the canal or
1 Pa. Stats. at Large, XV, 419.
2 Ibid., xvi, 86.
3 Ibid., xvi, 44.
4
Cf. Mass. Priv. and Spec. Stats., ii, 75, 33I (Andover Bridge, 1796, 1799);
N. H. MSS. Laws, X, 160, 166 (Cornish Bridge, White River Falls Bridge, 1796);
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230 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
in location of turnpike gates or canal toll gates, permission to
take toll on part of the works before the whole was completed,
are other evidences of the same nature. There was a disposi-
tion to assure the companies, so far as it lay in the power of the
legislature, returns "fair to the investor;" and if the demand
was so elastic and the costs so high that even the best rates would
not yield a "fair" profit, that was the fault of the miscalculation
of the promoters and not of a hostile legislature or public opinion.
Vt. Session Laws, Nov. 16, 1801 (West River Bridge, incorporated 1795); Conn.
Priv. Laws, i, 242-243 (New Haven - East Haven Bridge, 1799, 1805).
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CHAPTER V
INSURANCE, WATER SUPPLY, MANUFACTURING, AND MISCEL-
LANEOUS COMPANIES
BESIDE the banks and highway corporations already dis-
cussed the other business corporations appear of secondary im-
portance and can be dismissed with slighter consideration. The
insurance companies were the most important, aqueduct com-
panies the most numerous, manufacturing companies the most
interesting. A common interest attaches to these three groups
because in all one may observe quite clearly the transition from
the non-corporate to the corporate form.
Two branches of the insurance business had grown to con-
siderable importance by the end of the eighteenth century.
Marine insurance expanded with the growing commerce of
American merchants even before, but especially after, the
Revolution. Fire insurance, though much less widespread, be-
came more and more vital as the population increased and
crowded more into the towns. A third branch, life insur-
ance, deserves passing mention. Other forms are entirely neg-
ligible.
In an earlier essay reference has been made to two charitable-
religious organizations which were virtually life insurance com-
panies for Presbyterian and Episcopal clergy.¹ These continued
their operations after the Revolution, within their limited fields.
One has maintained its existence to the present day. Several of
the regularly chartered insurance companies had authority to
insure lives. The first, the Insurance Company of North Amer-
ica, probably made as much use of this power as any before
1800. In January, 1795, a committee of the directors was ap-
pointed to draw up a plan for life policies. No effort was made
1 Essay I, 81.
23I
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232 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
to solicit this form of business, but the board acted on such ap-
plications as came in. On May 26, 1796, policies were approved
of $24,000 on the life of John Holker, from June 6 to September
19, and $5000 on the life of Bon Albert Briois de Beaumez (for
the benefit of Theophile Cazenove) for eighteen months. On
September 27 a third was approved, but apparently not issued.
Not more than two or three others were issued before the end
of the century.¹ In April, 1800, the Manhattan Company ad-
vertised extensively its willingness to insure lives and grant
annuities, and published rates, conditions, etc.2 Whether it
issued any policies does not appear. I have seen no evidence
that any other company attempted any business in this field in
the eighteenth century.
In a word, the life insurance business in America prior to
1800 was insignificant in amount. Its growth may have been
retarded by the serious variations in the death rate which were
due to the prevalent epidemics,⁸ but it is to be remarked that
this type of insurance was not yet far developed abroad and
that its phenomenal spread has occurred only in the nineteenth
century.
The marine insurance business first gained a foothold. As
early as May, 1721, John Copson advertised in Philadelphia
his intention to open a marine insurance office in that city; but
if he did so, he soon abandoned it.4 In 1724 Joseph Marion,
notary public, trained as a clerk, copyist, "accountant," etc.,
opened such an office in Boston, which he continued to conduct
for upwards of twenty-four years. Other offices for marine in-
surance were soon in operation in Boston, and toward 1750
others were added in Philadelphia and other commercial centres.⁵
Commonly these offices merely served as a meeting ground for
merchants desiring insurance and capitalist insurers, often them-
1
Thomas H. Montgomery, History of the Insurance Company of North America
(Philadelphia, 1885), 72-74.
2
Columbian Centinel, May 28, 1800; Hardy, Early Insurance Offices, 91.
3 Zartman and Price, Readings in Insurance: Personal Insurance, 8o.
4 Montgomery, Ins. Co. of N. A., 15-16.
5 Hardy, Early Ins. Offices, 25, 31-32, 37-50, 93-96, giving a chronological list
of the Massachusetts underwriters before 1880; Montgomery, Ins. Co. of N. A.,
17-27; F. L. Hoffman, Insurance Science and Economics (Chicago, 1911), 160-
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INSURANCE CORPORATIONS
233
selves merchants, and the agent was little more than a secretary.
In some instances, however, a definite company of insurers was
formed, whose names were inserted in each policy, and who
were liable for proportionate parts of losses on policies signed by
two or three of the members. Thus in 1757 an insurance firm
known as Thomas Willing & Co. was established in Philadelphia.
The partnership was not renewed after two years. A similar
company formed in Philadelphia in 1762, by a member of the
earlier one, lasted likewise two years. In 1783, if not earlier,
such a company, composed of twenty gentlemen, was in opera-
tion in Boston, under the leadership and in the office of John
Hurd. A similar company was advertised by James Jeffry in
Salem in March, 1784. In 1794 Sanford and Wadsworth, mer-
chants, signed policies "for the Hartford Insurance Company."
In July, 1795, this firm, Jeremiah Wadsworth, John Caldwell,
Elias Shipman, and John Morgan formed a partnership "for
the purpose of underwriting on vessels, stock, merchandise, etc.,
by the firm of the Hartford and New Haven Insurance Com-
pany." Numerous other examples of this sort may doubtless
be found, especially in the commercial centres, but these "com-
panies" were no more than partnerships, and apparently they
did not seek corporate privileges.¹ The first incorporated com-
pany to undertake marine insurance appeared in 1794, with
powers ample to enable it to write other types of insurance as
well.
It is not difficult to suggest reasons why the corporate form
was not earlier utilized in marine insurance. The possible loss
was definitely limited in each case by the length of the voyage
and the value of ship and cargo. The insurance was an affair
of the active merchant class, and the risks were ordinarily so
scattered that a group could easily be formed to bear them.
There was little need for large capital, little gain from con-
tinuity of existence, small occasion for formal organization.
Till the merchant importers became so numerous that a spe-
161. In the Providence Gazelle of Dec. 27, 1794, Joseph Lawrence advertises that
he "has for upwards of thirty years kept an Insurance Office" in that town.
1 Hoffman, Ins. Sci. and Econ., 161, 177; Hardy, Early Ins. Offices, 45-48, 50;
Montgomery, Ins. Co. of N. A., 23-24; Woodward, Hartford Bank, 89-91.
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234 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
cialized capitalistic organization had an advantage, the more
elastic and more temporary associations of insurers, with the
aid of a broker or secretary with an office, sufficed.
Fire insurance, however, was an affair not merely of the mer-
chant importer, but of other merchants and householders as well.
The hazard was indefinite as to time and, in view of conflagra-
tion possibilities, as to extent as well. A large membership was
a distinct advantage, and the fact that the members were en-
grossed in other occupations prevented their active attention
to this business. The necessity for central management was
greater because of larger membership; yet this management,
distinctly of a routine nature, involved no problems too difficult
for the eighteenth century business corporation. One is not
surprised, therefore, to find that fire insurance, though later in
developing, affords the earlier examples of corporate insurance.
In the Boston News-Letter of Nov. 28, 1728, Joseph Marion
advertised a scheme "for the erecting an Insurance Office for
Houses and Household Goods from Loss and Damage by Fire in
any part of the Province of Massachusetts Bay, by the name of
the New England Sun Fire Office of Boston," to which scheme
he invited the attention of prospective undertakers "desirous
to promote and encourage a work of such Publick Good, Benefit
and Safety to the Inhabitants of this Province in General."
Apparently capital was not forthcoming, for twenty years later
Marion advertised the scheme afresh - again without success.¹
Meanwhile, in consequence of proposals prosecuted in November,
1735, the Friendly Society of Charleston, S. C., was organized
early in 1736 for mutual insurance against fire. It operated
successfully for four years, when a conflagration which destroyed
some three hundred houses gave it its deathblow.2
In March, 1752, at the instance of one John Smith, a marine
underwriter, a mutual fire insurance company on the model of
the London Amicable or "Hand in Hand" was formed in
Philadelphia, with the name of The Philadelphia Contribution-
ship for the Insuring of Houses from Loss by Fire. Benjamin
1 Hardy, Early Ins. Offices, 25-35.
2 S. C. Hist. and Geneal. Mag., viii, 46-53 (January, 1907).
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INSURANCE CORPORATIONS
235
Franklin was a subscriber and one of the first directors, and
Lieutenant-Governor James Hamilton put his name first to the
deed of settlement. Two other directors were marine under-
writers, another became clerk, and Smith became treasurer, the
general executive officer, - so closely was the new type linked
with the old. At first there was some enthusiasm, and on March
25, 1753, $108,360 insurance was in force. Interest lagged, how-
ever, and ten years later only $67,773 was in force, and funds
TABLE XI. EIGHTEENTH CENTURY CHARTERS TO INSURANCE COMPANIES
1768
1786
1787
1791
1792
1793
1794
1795
1796
1797
1798
1799
1800
Totals
Maine
I
I
New Hampshire
I
I
Massachusetts
I
I
2
I
5
Rhode Island
2
4
6
Connecticut
I
I
2
New England
2
1
1
5
6
15
New York
3
3
Pennsylvania
I
I
2
4
Middle states
1
1
2
3
7
Maryland
I
I
I
2
I
6
Virginia
I
I
I
3
South Carolina
2
2
Southern states
1
1
2
3
2
2
11
Totals
I
I1100450365633-
in hand were but $982.25. In this year, 1763, a plan was adopted
for accumulating a fund to provide for the conflagration hazard,
and business picked up again. In 1768 the assembly was suc-
cessfully petitioned for a charter.¹ Business continued much as
before, with modifications necessitated by experience or sug-
gested by possibilities of further extension of business. Opera-
tions were continued during the Revolution, and the company
continues its existence to-day. At the end of its first century
its insurance written amounted to nearly eight million dollars
1 Montgomery, Ins. Co. of N.A., 28-34; Hoffman, Ins. Sci. and Econ., 170-171.
Cf. Centennial Meeting of the Phila. Contributionship for Insurance of Houses from
Loss by Fire (Philadelphia, 1852), 22 ff.
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236 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
and its funds to $694,545.1 To-day it has insurance in force
of over twenty-two millions, and net ledger assets of more
than six.2
The second fire insurance company, likewise mutual, arose
out of discontent with the policy adopted by the Contribution-
ship not to insure or reinsure houses having trees planted before
them. This was voted in April, 1781, and finally made a by-
law of the company three years later. In October, 1784, a new
society was under way, formed largely of seceders from the old,
and in February, 1786, it secured without difficulty a charter
as the Mutual Assurance Company for Insuring Houses from Loss
by Fire. This was organized on much the same basis as the
older society. It too has enjoyed a long and modestly success-
ful existence, and to-day has over nine million dollars of in-
surance in force, and net ledger assets of nearly four millions.*
The next year (1787), by deed of settlement, The Mutual As-
surance Company of
New York was founded, even nearèr
than its predecessors to the London model. This continued suc-
cessfully as a voluntary organization, and a disastrous fire Dec. 9,
1796, merely caused it to increase its rates of premium. In 1798
it secured a charter.4
Other mutual fire insurance companies were chartered during
the nineties. The Baltimore Equitable appeared in 1794, and in
the same year The Mutual Assurance Society against fire on build-
ings, of the State of Virginia, at Richmond, followed a year later
by a similar company insuring goods and furniture.⁵ The Balti-
more company to-day has insurance in force of over twenty
million dollars, and a surplus of some $700,000. The first
Richmond company has over twenty-seven millions in force,
and a surplus of over two and a half.⁶
1 Fowler, Hist. of Ins. in Phila., 292-302, 395.
2 42d Annual Report of Ins. Comsr. of Pa. (1914), 407-409.
$ Fowler, Hist. of Ins. in Phila., 302-303, 306-307; Montgomery, Ins. Co. of
N. A., 31-33; 42d An. Rep. of Ins. Comsr. of Pa. (1914), 343-344.
4 Fowler, Hist. of Ins. in Phila., 307 n; Laws (ed. 1887), iv, 198-201.
5 Md. Laws (Kilty), 1794, c. 39; Va. Stats. at Large (ed. 1835), i, 307, 412. On
the Virginia companies see Samuel Mordecai's Richmond in By-Gone Days (Rich-
mond, 1856), chap. 28.
6 39th An. Rep. of Ins. Comsr. of Md. (1910), 21; 10th An. Rep. of Comsr. of
Ins. of Va. (1916), 75-77.
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INSURANCE CORPORATIONS
237
Early in 1797 Boston citizens became enthusiastic over the
constitution of the New York Mutual and, hopeful of securing
lower rates than from the stock companies, they drew up a
constitution and in March, 1798, secured a charter. Heading
the list of petitioners for the charter was Moses Michael Hays,
a well-known Jewish underwriter. Others were Paul Revere;
James Sullivan, of the Middlesex Canal and Boston Aqueduct
companies; Samuel Salisbury, who had been an incorporator of
the Massachusetts Fire in 1795; and William Parsons, the next
year a director of the Boston Marine. Policies could not be
written till applications for insurance amounted to $2,000,000.
Very low rates were advertised. By December the requisite
applications were in, and on Feb. I, 1799, policies began to issue.
Evidently many applications were rejected or soon withdrawn,
however, for in May, 1800, it was stated that $940,000 was in-
sured, "t of which is in the country" - this despite the fact
that up to this time no loss whatever had occurred.¹
The Massachusetts Mutual Fire survived for seventy-five
years - the last of Massachusetts eighteenth century insurance
companies. In 1855 it reported insurance in force on real estate,
$14,100,710, and on Dec. 31, 1871, a surplus of $419,009. But
the great Boston conflagration of Nov. 9, 1872, wiped it out,
with twenty-five other Massachusetts companies.2
In December, 1794, a mutual was organized in Norwich,
Conn., which secured a charter the following May. It still
lives and continues to do a small local business. At present
its insurance in force amounts to some $130,000, its net sur-
plus to over $16,000.⁸ In December, 1797, the South Carolina
legislature chartered the Charleston Mutual.4 In 1798 the
Georgetown Mutual appeared,⁵ and in October, 1800, Rhode
1 Columbian Centinel, Jan. 4, Feb. I, 1797, March 14, April 7, May 19, Aug. 4,
Dec. 8, 15, 1798, Feb. 6, 1799, May, 1800; Hardy, Early Ins. Offices, 78-79.
2 An. Reports of Ins. Commissioners of Mass. (1855), 156; (1872), 41; (1873),
p.l.
3
F. M. Caulkins, History of Norwich, Conn. (ed. 1874), 649; 49th An. Rep.
of the Ins. Comsr. (1914), 105-106.
4 Stats. at Large (ed. 1838), viii, 195. Cf. advertisement of the Vigilant Fire
Insurance Office, in Charleston, in the S. C. State Gazette, Sept. 18, Nov. 27, 1795.
5 Bryan, National Capital, i, 337.
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238 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Island added to its two stock companies in Providence the
Providence mutual Fire Insurance Company, which in 1915 re-
ported assets over $800,000 and an income above $150,000.¹
In May, i787, the Maryland assembly chartered The Balti-
more insurance fire-company, the first to be organized on a joint
stock basis. Its plan was interesting. Subscriptions of £10,000
or more, current money (equal to $26,666.67), were authorized,
in shares of £100. Subscribers were to deposit with the trustees,
at the opening of the office, demand notes for £40, £30, £20,
and £10 on each share, with security acceptable to the trustees.
When losses occurred, the acting trustees were to call on the
subscribers to pay to the treasurer, by a specified day within a
month, sums in proportion to their holdings and sufficient in all
to pay the loss; and process was provided for enforcing prompt
payment. Thus no paid-up cash capital was requisite. The
trustees, nine in number, must all live in Baltimore, and there
the office was to be; but insurance elsewhere might be written.
New shares of any amount might be issued, if voted by a stock-
holders' meeting, called for this purpose, at which sixty-six
shares should be represented. Dividends were to be declared
only once in five years. The company was established, but
found its basis unsatisfactory. To the legislature, in the fall
of 1791, it was represented
"by the stockholders
and other inhabitants of Baltimore-town, that
inasmuch as the capital
consists of notes of hand, convertible into
money in cases of loss by fire, and that in the event of failure or bankruptcy
among the stockholders, the insured might become considerable sufferers:
circumstances which, by affecting the solidity of the funds,
operate to
destroy the public confidence in the said institution."
The company was therefore rechartered as The Maryland In-
surance Fire Company. The capital was now fixed at $30,000 to
$60,000 in $300 shares, payable in six per cent stock of the United
States or in United States Bank stock; and shareholders in the
earlier company were to have six weeks' preference in subscrib-
ing to the new. The arrangements regarding the capital re-
1 Annual Report of Ins. Comsr. (1915), 90-96.
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INSURANCE CORPORATIONS
239
mained peculiar. The securities paid in were to become legally
the property of the company. Nevertheless the depositors
were to receive the dividends upon them and have full privi-
leges of holders in most other respects. No stock was issued by
the insurance company, and it was the other stock, or rather the
limited rights attaching to it, which was transferable. When a
loss occurred, the trustees were to assess the shareholders pro-
portionately and to dispose of the stock of delinquents, the pur-
chasers succeeding as shareholders. Thus in effect the stock
was deposited as security for payment of assessments; yet it
could not be withdrawn. Assessments were limited to the par
value of the stock. Yearly dividends were now provided for,
as also a triennial "exact and particular" statement, to the
stockholders' meeting, of debts and surplus. On this new basis
the company continued with more satisfaction.¹
The next company developed from a tontine association,
which was itself in part an insurance device.2 Before the Boston
association had emerged as a bank, but after the Massachusetts
legislature refused it a charter as a tontine association, one of
its projectors, Samuel Blodget, Jr., was induced by Ebenezer
Hazard, a Philadelphia broker, to help float a similar associa-
tion in that capital city. On March 19, 1792, subscriptions
were solicited for The Universal Tontine. Blodget subscribed
fifty thousand of the shares to transmit for sale in Boston,
and perhaps some subscribers were secured there. For reasons
which have been made clear in an earlier essay, the time was
highly inauspicious for flotations, and of the one hundred thou-
sand shares desired, but eighty-four hundred were subscribed
(by one hundred and eighty-seven persons). The agents re-
ported early in November no new subscriptions and that "Ton-
tines in general appear to be in disrepute
many who have
subscribed are dissatisfied and are desirous either that the
Association be dissolved or the funds be appropriated to some
other use." 8 Thereupon the subscribers agreed to convert the
1 Md. Laws (Kilty), May, 1787, c. 22, November, 1791, c. 69.
2 The account in the following pages is based directly on Montgomery's Ins.
Co. of N. A.
3
Cf. Essay II, chap. 7, and this essay, supra, 70-73. The agents' report is more
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240 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
organization into the Insurance Company of North America.
A constitution was adopted Nov. 19, 1792, the company under-
taking "to make Insurances upon Vessels and Merchandize at
Sea, or going to Sea, or upon the life or lives of any person or
persons, or upon wares, merchandize, or other property, going
by land or water." Next day subscriptions were opened; within
two weeks two-thirds of the $600,000 capital proposed was sub-
scribed (in $10 shares); and on December I organization was
effected and $4 per share called in. Incorporation was imme-
diately sought. It was represented to the legislature that with
the increase in the national commerce local underwriters of
responsibility were too few and that the company would benefit
the community at large as well as the mercantile part of it
"by retaining in the State the money invested in their capital stock and the
large sums that must otherwise be drawn from the country for premiums
of insurance, by relieving commerce from the present tribute paid to foreign
underwriters, and by securing the assured through the means of an ample
capital stock from a possibility of loss, which in the manner of making in-
surance heretofore practised hath frequently happened through the failure
of individual underwriters."
Corporate powers were desired
"in order to establish a greater confidence in the minds of persons who may
incline to do business with them, and to enable the assured, in case of dis-
puted losses, to have more convenient recourse to law, as well as to enable
the company to prosecute their undertaking with greater ease and effect." 1
Remonstrances from other merchants and underwriters were
presented, and followed by memorials favoring incorporation,
"from Merchants, Ship owners, Insurers, and Citizens." These
slept in the hands of a committee of the House till on February
28 the directors appointed a committee to seek a charter from
Delaware - the move which some years before had materially
aided in bringing another assembly to terms with the Bank of
North America. The stratagem succeeded. The committee
reported favorably March II. The advantages of a corporate
organization were set forth - the greater ease of recovery in
intelligible when one recalls that John Pintard, secretary of the New York Tam-
manial Tontine Association, was among those bankrupted and temporarily dis-
graced by the panic of March and April, 1792.
1 Montgomery, Ins. Co. of N. A., 35-37.
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INSURANCE CORPORATIONS
241
case of loss, the "solidity," the advantage of size. They re-
marked precedents in other countries and for fire insurance in
America, and the fact that no exclusive privilege was sought.
They pointed out "That already the charges of insurance
have been considerably abated since the establishment of the
company whereby a great saving to the mercantile body is
affected, who can afford to give so much more for the produce,
as they pay less for insuring it" - the last a persuasive touch
for the benefit of country members. A bill was accordingly re-
ported April I, but the assembly adjourned before it could be
put through.
The company had not waited to begin business, and in July,
1793, a six per cent dividend was declared on the paid-in capital,
followed six months later by another. Such success as this
transformed the opponents into would-be competitors. Assert-
ing the advantages of competition and that they had been un-
able to secure shares in the earlier company, they petitioned for
a charter providing "that those who are more immediately in-
terested in commerce may have an opportunity at subscribing
thereto." The upshot was the passage of two charters in April,
1794.1
The North America company at first concentrated upon
marine insurance. Premiums rose from $213,465 in 1793 to
$1,304,200 in 1798, then declining to $103,902 in 1802. The
first decade showed a surplus over losses of $536,569 on premiums
of $6,037,457. In 1794 plans were adopted for the insurance of
the contents of buildings against fire, which existing fire com-
panies were not insuring, and of buildings themselves. At first
exclusively on town risks, the fire policies were extended in
March, 1795, to risks within ten miles of Philadelphia, and in
April, 1796, to any point in the United States. Advertisements
were placed in distant cities, such as Boston, but in 1798 the
board refused to establish an agency at Charleston. On this
branch of the business the surplus of premiums over losses to
the end of 1802 was $51,137 on $81,254.
1 Montgomery, Ins. Co. of N. A., 35-44; Pa. Stats. at Large, XV, 4I-48,
70-76.
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242 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
The company did not set aside any reserves and paid out its
profits promptly. From July, 1793, to January, 1798, the divi-
dends amounted to $591,296.63, an average of over twenty per
cent per annum on the capital of $600,000. In January, 1799,
a twenty per cent dividend was declared. In July, 1798, July,
1799, and thereafter till July, 1806, inclusive, no dividends at all
were paid. Such were the variations in the business done. Yet
for the period 1793-1800 as a whole a considerable profit was
yielded.
The second company was The Insurance Company of the State
of Pennsylvania, with an authorized capital of $500,000 in $400
shares and about the same powers. This was promptly estab-
lished and has maintained its friendly rivalry with the older
company down to the present day. At the present time the
Insurance Company of North America has a paid-up capital
of four million dollars, net ledger assets of over eighteen
millions, and fire and marine risks in force (net) of upwards of
a billion dollars each; while the corresponding figures for its
rival are one million, four millions, two hundred and sixty-six
millions (fire) and thirteen millions (marine).¹
In December, 1795, following Pennsylvania's example, Mary-
land chartered for Baltimore the rival Baltimore and Maryland
companies for marine insurance, with capitals of $300,000 and
$500,000 respectively.2 Three years later New York followed
suit with the New York Insurance Company and the United In-
surance Company of the City of New York. All of these seem to
have been successfully established; in 1801 the shares of the New
York companies were quoted at I28 and 119.⁸
In 1795 also a body of seven petitioners sought and secured a
charter as The Massachusetts Fire Insurance Company, on the
plea that they were
"anxious to lend their aid to prevent the Calamities incident to themselves
and fellow Citizens from the frequent Fires experienced in this and other
populous Towns" and that "Experience has taught that this species of
1 42d Annual Report of the Ins. Comsr. of Pa. (1914), 54-57, 68-71.
2 Laws (Kilty), Dec. 24, 26, 1795.
3 Laws (ed. 1887), iv, 24I-245, 192-195; Pratt, Work of Wall St., 5, citing
N. Y. Evening Post, Nov. 16, 1801.
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INSURANCE CORPORATIONS
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Insurance must be performed by Companies, or corporate Bodies, having
large and permanent Funds at immediate command, in order that the busi-
ness may be carried to so great an Extent as to embrace any object that
may offer, and still afford full Security to the Insured, without producing
inevitable Ruin to the Insurers, in the greatest Losses that may probably
take place."
A capital of $300,000 in $100 shares was authorized, and this
the proprietors might increase at their discretion to a maximum
of $600,000. Ten dollars per share was to be paid in before any
insurance was written. The balance was payable in annual
instalments of $10 each; but in case losses, prior to completion
of payments, should exceed "the amount of stock on hand,"
the excess was to be collected by proportionate assessments
and an additional assessment of $10 collected forthwith, sub-
ject, of course, to the limitation of liability of each proprietor
to $100 per share. The charter itself was limited to twelve years.
Provisions were inserted requiring investment of the capital of
the company, within sixty days of its collection, in stocks of the
United States, of Massachusetts, of the United States Bank, or
of incorporated banks in Massachusetts.¹
The company opened an office at I6 State Street, called in the
first instalment in August, and in September published rates
and terms and appealed for business "from any of the citizens
of Massachusetts, New Hampshire, Rhode Island and Con-
necticut." In November they offered "to make insurance for
any citizens of the United States." The business was not large -
about one thousand policies were written in the first three years;
prospective competition with the new mutual company brought
rates down about twenty-five per cent, but fewer than two
thousand policies were written in the next five years. This ex-
perience led the company to secure an amendinent to its charter
early in 1799, enabling it to write marine policies, as the Massa-
chusetts Fire and Marine Insurance Company.²
Contemporaneously with the entry of the Massachusetts Fire
into the marine business, Stephen Higginson and others secured
1 Hardy, Early Insurance Offices, 57-61. Cf. a petition to the town of Boston
in 1785 for a fire insurance company refused as not for the "advantage of the Town."
2 Timothy Dwight gives its capital as $400,000 in 1820: Travels, i, 499.
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244 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
a charter as the Boston Marine Insurance Company. It was to
raise $500,000 in $100 shares, which according to law was to be
paid in by March, 1800, and promptly began business. The
Newburyport and Salem marine insurance companies, on the
same model, were chartered in 1799 and 1800 respectively, and
began business with capitals of $100,000 and $200,000. In 1800
also the Maine Fire and Marine at Portland, on the principle
of the Massachusetts company, was chartered and floated
its $100,000 stock.¹ The New-Haven Insurance Company, in-
corporated in October, 1797, successfully prosecuted a marine
insurance business with a capital of $50,000.2
In 1799-1800 Rhode Island was struck by an insurance craze.
In February, 1799, companies were chartered for Providence
and Newport, and a year later others for Providence (the Wash-
ington), Warren, and Bristol. The Providence Insurance Com-
pany and the Washington Insurance Company amalgamated in
1820 as the Providence-Washington. In this form it has ever
since done business. It is now the largest Rhode Island insur-
ance company, with a capital stock of $1,000,000, ledger assets
of over $4,000,000, and a normal business nearly as much. It
still does both fire and marine insurance, the fire insurance
being roughly double its "marine and inland" business. The
Newport company's stock ($100,000 in $100 shares) was con-
siderably oversubscribed in March, 1799. A dividend was de-
clared as early as June 18, and the third instalment of twenty
per cent was called in October. The par value of shares was
soon reduced to $60. The company remained in operation only
five years, paying five per cent per annum during that period.⁴
The Warren company operated with a capital of $40,000 till
July I, 1844; during this time it paid losses of about $200,000,
and its dividends averaged fourteen per cent per annum.⁵
1 Hardy, Early Ins. Offices, 77; Columbian Centinel, April 3, July. 3, Sept. 4,
Nov. 2, 1799. Dwight gives its capital in 1820 as $300,000: Travels, i, 499.
2 Private Laws (ed. 1837), i, 680-682; Dwight, Statistical Account, 78.
3
Report of the Insurance Commissioner of R. I. (1915), i, 9-16; William E.
Foster, "Stephen Hopkins, A Rhode Island Statesman," in R. I. Hist. Tracts, xix
(Providence, 1889), 117.
4
Newport Mercury, March 12, 26, April 2, 23, June II, 18, Sept. 17, 1799; G. C.
Mason, Reminiscences of Newport, 174-177.
5
G. M. Fessenden, History of Warren, R. I.
(Providence, 1845), I05.
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INSURANCE CORPORATIONS
245
There were thus incorporated, and possibly all in active opera-
tion at the end of the century, eleven mutual fire insurance com-
panies and twenty-two stock companies, most of which did both
fire and marine insurance, the latter business predominating.
Very naturally they were concentrated chiefly in the populous
mercantile towns. Baltimore had four, not counting the one
reorganized; Philadelphia four; Boston, Providence, and New
York each three, not counting New York's Manhattan Com-
pany; Charleston and Richmond each two. The others were
scattered chiefly through trading towns of lesser rank: Portland,
Portsmouth, Newburyport, Salem, Newport, Warren (R. I.),
Bristol (R. I.), Norwich, New Haven, Georgetown, and Alex-
andria. Most of them were purely local enterprises, but some
of the fire companies secured business from outlying towns and
country districts, and a few of the larger companies attempted
to secure business from distant places.
The joint stock insurance companies came nearer than any
others to rivalling the banks in size, measured by the capital
employed. The earliest (Baltimore) had a minimum capital
of $26,667, and its successor was entitled to have $60,000.
Most of the later ones had upwards of $100,000, and the Boston
Marine was authorized to raise $820,000. The par value varied
greatly, all the way from $6 (in the North America company)
to $1000 (Maryland, 1795).¹ On the whole they were finan-
cially successful, though their dividends varied much more than
did those of the banks. None met failure before the end of the
eighteenth century, and several have survived the nineteenth
as well.
A close relation existed between the insurance companies and
the banks,2 chiefly because premiums were usually paid with
notes and because the insurance companies had large funds
which they needed to invest or have safely kept. Bank stock
1 Cf. others: Alexandria, $20; New York, $50; Boston, $100; Baltimore, Massa-
chusetts Fire, Maine, $300; United, $500.
2 No company was chartered in this period, as was later the case, to combine
the two businesses (e.g., Newark Banking and Insurance Co., 1804), and only the
Manhatian Company undertook without specific grant to do these two types of
business.
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246 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
furnished an investment, along with national debt, and the bank
vaults were the safest place for temporary surpluses. Massa-
chusetts insurance companies were required to invest their funds
in stocks of the United States or Massachusetts or stocks of the
Bank of the United States or incorporated banks of the state.
Pennsylvania charters were similar, though they allowed wider
leeway - stock of any corporation chartered by the state was
an eligible investment. The relationship was the closer, also,
because the merchant class demanded both services and natu-
rally tended to control both types of institutions, and because
the leading underwriters were important local financial figures.
Here one may find the explanation of the almost simultaneous
incorporation of the banks and insurance companies in Bristol
and Warren, R. I.¹ The Providence Insurance Company, by
1814, was the largest stockholder (one hundred and fifty shares)
in the Providence Bank.
The charters of the insurance corporations were less elaborate
than those of the banking and highway companies, and the
mutual charters were especially simple. The term of charter
was indeed usually limited, after 1790, to nine, ten, eleven,
twelve, or twenty years. Trading was ordinarily specifically
prohibited, and sometimes banking as well. Directors, varying
greatly in number (at least from nine to twenty-four), were
usually required to be citizens of the state, and sometimes a
majority were required to be chosen from citizens of the town.
Usually directors in other insurance companies, and sometimes
private insurers, were ineligible to the directorate, and in the
New York Mutual any person serving the corporation "in the
way of trade." A provision in Maryland charters preventing
stockholders in one insurance company from being directors in
another was eliminated in 1796.2 Regressive voting, or else
one vote per share up to a maximum of ten, thirty, or fifty, was
1 Stokes, Public and Private Finance, 274-276; Mason, Reminiscences of New-
port, 174-177. The records of the Massachusetts Bank show that Edward Payne
and John Hurd, insurance brokers, were among the large stockholders of the bank
in its early days and that the Boston Marine held eight shares of this bank: Di-
rectors' Records, 61, and Dividend Book.
2 Md. Laws (Kilty), 1796, c. 63.
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CORPORATIONS FOR SUPPLYING WATER
247
the rule. Reserves were occasionally, though seldom, men-
tioned, but certain of the later charters stipulated that after
losses impaired the capital the impairment must be made good
before dividends were paid. Massachusetts adopted the policy
of requiring statements to stockholders once in two or three
years, statements to the legislature when required, and submis-
sion to examination by it; and some of these provisions appear
elsewhere. The enlarged charter for the Massachusetts Fire
and Marine Insurance Company (1799) stipulated that previous
to its issuing marine policies it should publish in two Boston
newspapers "the amount of their actual funds, the periods
when the remainder will be paid, the greatest amount to be
taken upon any Vessel or house, and the risques they propose
to insure against." A similar statement was to be kept posted
conspicuously in the company's office and published annually.
This was inserted in later charters of that state.¹ These regula-
tions constituted the closest supervision established for any class
of corporations prior to 1800, even more than for banking,
bridge, and navigation companies. Much still, however, was
left to each company to regulate entirely to suit itself.
Companies for supplying water were almost the sole repre-
sentatives during this period of the local public service cor-
porations which in latter days have become so ubiquitous. In
the eighteenth century these were numerous only in Massa-
chusetts; they were generally of minor importance financially;
they were not conspicuous in failure or success; and so little is
chronicled of them that frequently the charter tells the whole
story that is extant.
Four water companies had been incorporated in colonial days,
as we have noted in a preceding essay, and two or three of them
outlived the war.2 The next charter was not granted till 1792,
and nearly three years elapsed after that before a movement to
incorporate aqueduct companies appeared. This long gap is
not easy to explain. Certainly as the population increased,
1 Cf. Columbian Centinel, April 3, 1799, for the Boston Marine Insurance Com-
pany's first advertisement meeting this requirement.
2 Essay I, 89-90.
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248 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
easily accessible water supplies became inadequate or tended to
be polluted, and larger water resources were needed for fire
fighting; and municipal authorities rarely took measures to fur-
nish the new supply. It is probable, however, that the Rhode
Island companies had not been notably successful and inspired
no imitation, and that for the time being the requisite invest-
ment of capital, the need of coöperative action, and the neces-
sity of stable organization and powers of eminent domain were
so small that voluntary associations of neighboring householders
were adequate without incorporation. Moreover, the low state
of development of hydraulic engineering hindered the extension
of aqueduct systems: till the nineteenth century bored saplings
were almost exclusively used for pipes, and these easily rotted,
leaked, and made infinite trouble. Here, as so often, economic
progress waited on technical advance.
There were numerous abortive schemes of various sorts, in
this period, for supplying water, of which a few typical instances
may be recounted.. In Albany one Captain Machin took levels
in 1779 and presented plans to the council for supplying water
by means of an aqueduct. In March, 1792, when the bank cap-
ital was so quickly oversubscribed, the furnishing of a city water
supply was one of the objects of a tontine subscription which
was filled in the speculative fervor. In February, 1796, an
act was passed to enable the city corporation to supply the
inhabitants with water. It was some years more, however,
before an effective system was here introduced.¹ In 1787 an
attempt was made to float an aqueduct company in Baltimore.
The proprietors of the Delaware and Schuylkill navigation
company (1792) planned to combine with their principal enter-
prise a project for "the watering of the city" of Philadelphia -
an object of "immense consequence to the health of the city,
and to the extinguishing of fires." For this they procured the
right to raise additional capital (£50,000 was planned) and to
pay ten per cent dividends upon it.⁸ Nothing was done upon
1 Munsell, Annals of Albany, ii, 192-193, iii, 151; Columbian Centinel, April 4,
1792.
2 Griffith, Annals of Baltimore, I2I.
3 Historical Account, 63-65.
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CORPORATIONS FOR SUPPLYING WATER
249
this, and late in 1798 the company, various citizens, and the
hospitals petitioned the legislature for aid. A committee of the
Senate reported in favor of a state subscription of $200,000 for
the completion of the canal and incidentally the water system.
Benjamin H. Latrobe, an engineer, presented a proposal to
build works for the city, and his plan was accepted. The follow-
ing spring a large house for water power was constructed near
the Schuylkill south of High Street and a marble receiving
fountain at Center Square; pipes were laid in the streets, and
Nicholas I. Roosevelt was secured to build the pumping engines.
The works proved expensive, defective, and inadequate. By
1803, $300,000 had been laid out, and only $960 was received in
rentals, though one hundred and twenty-six houses of private
adventurers in the enterprise were receiving water free.¹
There were also a considerable number of small unincorporated
associations for this purpose. The semi-public character of
these "companies" is recognized by a New York act of March
9, 1790, "for the better regulating and protecting of Aqueducts
in the city of Hudson." This provided for details of organiza-
tion without granting corporate powers, much as the well-known
acts enabling proprietors of swamp lands to drain them by com-
mon action at common expense.2 Here the proprietors were to
elect a treasurer, clerk, collector, and two inspectors, and to
vote a sum to be assessed pro rata according to shares held.
The mayor and recorder of the city were to supervise the meet-
ings of the proprietors, and the council was to make by-laws on
application of the proprietors and fix penalties for their infrac-
tion. No powers of eminent domain, however, were bestowed.
The Baltimore Water Company was the first of the new line
of aqueduct companies. It was authorized December, 1792, in
a supplement to the charter of the Maryland Insurance Fire
Company.³ The directors of the latter company were to open a
subscription when they should think proper, but the new com-
pany was to be entirely distinct from the old. It is not clear
1 Scharf and Westcott, Hist. of Phila., i, 466, 499-50I; Watson, Annals of Phila.,
ii, 457; Latrobe, Journal, xix-xxi; Hazard, Register of Pa., xi, 381 (1883).
2 Session Laws, 73. Cf. Essay I, 99.
3 Md. Laws (Kilty), 1792, C. II.
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250 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
that the subscription was ever opened. At all events, in De-
cember, 1800, the legislature authorized the mayor and city
council "to introduce water into the said city," 1 as if no water
had yet been "introduced." This move, too, was unsuccessful.
Massachusetts was foremost in chartering water companies,
having to her credit a total of sixteen created by special charter.
TABLE XII. EIGHTEENTH CENTURY CHARTERS TO CORPORATIONS FOR
SUPPLYING WATER
1772
1773
1792
1793
1794
1795
1796
1797
1798
1799
1800
Totals
Maine
I
I
New Hampshire
I
I
Vermont
I
I
Massachusetts
2
4
5
4
15*
Rhode Island
2
I
3
Connecticut
I
2
2
s
New England
2
1
2
4
8
6
3*
26*
New York
2
2
New Jersey
I
I
2
Middle states
3
1
4
Maryland
I
I
South Carolina
I
I
Southern states
1
1
2
Totals
2
I
I
o
o
2
4
8
6
4
4
32*
* Under the Massachusetts general incorporation act of Feb. 21, 1799, there were probably several
corporations established, but data concerning these are not available.
Moreover, such was the pressure for corporate privileges for
this purpose that, as we have seen, the General Court early in
1799 passed a general incorporation act for aqueduct corporations
under which others may have been formed.3
The impetus to the Massachusetts movement seems to have
come from New Hampshire. In I794 Abijah Wilder and Luther
Eames formed a partnership in Keene, N. H., for the building
1 Md. Laws (Kilty), 1800, c. 77.
2 Cf. Griffith, Annals of Baltimore, 121, 171; Scharf, Chronicles of Baltimore,
263.
3 Supra, 15-18. Records of its operation are not accessible. It is highly proba-
ble several such companies were organized.
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CORPORATIONS FOR SUPPLYING WATER
25I
of aqueducts. They first utilized their skill in their home town,
but then sought wider opportunities. Securing as associates
Nathan Bond and William Page of Lebanon, N. H., and the in-
terest of the entrepreneur James Sullivan, leader in the West
Boston Bridge and Middlesex Canal enterprises, they petitioned
the Massachusetts legislature late in I794 for a charter enabling
them to bring water from Jamaica Pond in Roxbury to Boston.
Roxbury remonstrated, and the petitioners got leave to with-
draw their bill. Sullivan, however, secured a vote of approval
from the town of Boston, and against the opposition of Rox-
bury a charter was granted Feb. 27, 1795.1 Sullivan became
president, Bond engineer, and these with Joseph Knapp were
appointed agents to carry the scheme into execution. In No-
vember, 1795, they advertised for proposals to supply straight,
sound, winter-cut hard-pine logs of specified dimensions to be
delivered Jan. I, 1796. These were evidently procured, for in
February bids were requested by March 20 for contracts to
bore, fix, and lay the logs over part or all of the fifteen-mile
distance. By July $120 had been assessed on each share, and
shares of delinquent subscribers were ruthlessly sold.² In August
bids were requested for the relaying of pavements, to begin early
in October, and about fifty yards per day to be relaid, the cor-
poration supplying the stones, undertakers the gravel. Per-
sons desiring to have brick sidewalks were invited to make ap-
plication, since the company would bear part of the expense.
In mid-October this work was "prosecuting with vigor." Late
in 1797 rules and regulations for the distribution of water were
advertised, with rates and other provisions.
In all the shareholders paid in about $1300 on each of the
one hundred shares, the par being indefinite, as in many of
1 Priv. and Spec. Stats., ii. 19-21; S. G. Griffin, A History of the Town of Keene
(Keene, N.H., 1904), 297-302; Amory, James Sullivan, i, 373-376; Nathaniel
B. Shurtleff, A Topographical and Historical Description of Boston (3d ed., Boston,
1891), 412-414. The company had accidentally been left anonymous in 1795, in
curious similarity to the Boston water company of 1652; a supplementary act of
June, 1796, christened it The Aqueduct Corporation.
2 Columbian Centinel, Nov. 25, 1795, Feb. 13, May II, July 2, 1796.
3 Ibid., Aug. 27, Oct. 15, 1796, March 25, 1797, July 25, Aug. I, Sept. 22,
1798, Dec. 21, 1799. Cf. further Boston Town Recs., Selectmen's Minutes, 1787-98,
pp. 296, 329, 332, 382.
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252 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
the Massachusetts public service companies. The concern was
not highly profitable. The wooden pipes soon had to be re-
placed by iron ones, at considerable expense. Customers were
not very numerous: at its best the company supplied some
fifteen hundred houses. For the first ten years no dividends
were paid, and for the next thirty they averaged under four per
cent. Eventually, in the late forties, the property was sold to
the town of Boston for $44,000.
The Manhattan Company (1799) was, as we have seen, formed
ostensibly and incorporated primarily to furnish New York
City with a satisfactory water supply. Its charter was to be
void unless it should accomplish this object within two years.
The company still operates under its charter, hence it may be
presumed to have served the purpose intended. It contemplated
bringing water from the Bronx River, but actually did no more
than build a pump near the "Collect pond" and distribute water
in the usual wooden pipes from there or a well at Cross and
Duane streets to the lower part of the town. It need hardly be
said that no large part of its $2,000,000 capital was thus em-
ployed, and in spite of its efforts New York was far from enjoy-
ing a satisfactory abundant water supply.¹
A few facts regarding smaller companies may be briefly pre-
sented. The first Massachusetts corporation, chartered two
days before the Boston company, was named The Proprietors
of the water-works in the middle of the town of Pittsfield. It con-
tracted in April, 1795, for laying the aqueducts, and this was
probably done. In 1803 the company advertised for a person to
repair the works and keep them in repair for a fixed sum paid
annually by each member. In the following year the company
had become so disorganized that the regular meeting was not
held.2 A project for the Salem and Danvers aqueduct was
promoted in 1796, incorporation secured in the spring of 1797,
a reservoir completed on Gallows Hill in 1798, and water sup-
plied through three-inch sapling pipes in the spring of 1799. A
capital of some $60,000 is said to have been raised. The com-
1 Cf. Memorial History of New York, iii. 344, 394-395.
2
J. E. A. Smith, The History of Pittsfield
(Springfield, 1876), ii, 258.
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CORPORATIONS FOR SUPPLYING WATER
253
pany lived long, introducing improvements and maintaining its
monopoly with considerable success. In 1848 the price of shares
in the company was $4 for each family of three, and fifty cents
for each additional person, annually.¹ In 1796 Joshua Thomas
organized an association to bring water from the Town Brook
near Deep Water Bridge in Plymouth, a charter was secured in
February, 1797, and the company continued to supply the in-
habitants till 1855.2 The Proprietors of the Portsmouth Aqueduct
were incorporated in December, 1797, with a view to bringing
water from a spring about three miles from the courthouse.
Pipes were laid first in 1799, and by 1800 some two hundred and
fourteen houses and stores were supplied with abundant water
of excellent quality. The Morris Aqueduct Association in Morris-
town, N. J., was organized in February, 1799, chartered in No-
vember, and completed its works about the same time.⁴ A sim-
ilar company incorporated for Newark in 1800 accomplished its
object. Both had long and modestly successful careers. A
New London Aqueduct company was chartered in May, 1800,
with a capital of $400, increased two years later to $20,000. It
contracted to supply the whole city with water and laid pipes
accordingly, but for lack of adequate custom its venture proved
unprofitable, and the works were eventually abandoned.5
An examination of the census statistics of 1800 brings out the
rather surprising fact that many of the companies were. estab-
lished in small towns, while many of the larger towns had none.
In Massachusetts (including Maine), for example, nine out of
sixteen companies clearly chartered were in towns with popula-
tions between one and two thousand, and four more in towns
of less than twenty-four hundred. Of the towns with over five
thousand population, only Portsmouth, Boston, Salem, New
London, Hartford, New York, Baltimore, and Charleston were
1 Osgood and Batchelder, Salem, 69-71; J. W. Hanson, History of the Town of
Danvers (Danvers, 1848), 154.
2 William T. Davis, Ancient Landmarks of Plymouth (Boston, 1883), 127.
3 N. H. MSS. Laws, xi, 18 (Index, 24); Nathaniel Adams, Annals of Ports-
mouth (Portsmouth, 1825), 319-320; petition in N. H. State Papers, xiii, 305.
4 N. J. Hist. Soc. Proc., IST Series, viii, 32 (1856); Session Laws, 1799, p. 617,
800, p. IO.
5 Caulkins, New London, 663.
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254 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
provided before 1800 with water companies, and three of these
had populations only slightly exceeding five thousand. There
was, in other words, no clear general tendency to the establish-
ment of water supply corporations in the eighteenth century.
In the main, large investments in aqueducts were premature
from the private capitalists' standpoint, in view of the low value
currently placed upon pure water in ample' quantities and the
technical difficulties of constructing serviceable and durable
works. Had values been based on "long-run" considerations
the situation might have been different, for poor water supplies
had a heavy responsibility for both the epidemics and the con-
flagrations which inflicted serious losses upon at least the larger
towns. Furthermore, the advantages secured by the smaller
companies were not so greatly appreciated that there was wide-
spread imitation, and where associations were established in-
corporation did not always seem worth the bother of securing it.
These charters are, in general, exceedingly brief and simple.
Commonly no specification is made as to directors, capital
stock, or par value, and only occasionally is a limitation imposed
on the amount of property which may be held. Powers of emi-
nent domain are rarely given; indeed it is usually specified that
the use of the spring and the laying of the pipes over private
property shall be conditioned on the voluntary consent of the
landowners concerned. Powers are commonly granted for lay-
ing pipes in the streets, usually with the restriction that travellers
shall not be inconvenienced thereby, often with the reservation
that not more than a few rods shall be torn up at any one time,
and sometimes subject to permission and regulation of the town
authorities. Penalties for injuring the "works" are nearly al-
ways designated. Frequently no provision is made for directors,
and the assumption is that the proprietors themselves, with their
committees, will be adequate to handle the business. Further,
it is assumed that in the main the water users will be the members
of the corporations, dividends are rarely mentioned, and assess-
ments on shares are often spoken of as "taxes." In short, the
companies were commonly coöperative rather than capitalistic,
like the mutual insurance companies.
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MANUFACTURING CORPORATIONS
255
For manufacturing companies, more than for any of the pre-
ceding groups of corporations, this period was one of tentative
beginnings, and the story here to be told is one of experiment,
on the whole unsuccessful, in applying a device for which the
economic conditions were not ripe. It is a story also, however,
of a tendency in the direction of the corporation by enterprises
not yet incorporated.
Throughout this period household manufacture was wide-
spread in America. Peter Colt of Hartford wrote for the Secre-
tary of the Treasury, July 21, 1791, that there was "scarcely a
Family in the State either so rich or so poor as not to be con-
cerned therein.' 1 Anselm Bailey wrote similarly from Surry,
Va., a month later, that in that state an average of about two
hundred yards of cloth (mostly cotton) was turned out annually
by each family and that five-sixths of all the cloth, shoes, and
stockings were home made.² In 1794 Henry Wansey wrote of
New Jersey:
"Spinning of flax, is the general employment in private families in the
evenings, and when they are not in the fields; each family usually making
their own coarse linen, which they put out to weave, and afterwards
bleach and finish at home.
Some manufacturing was organized upon the so-called "do-
mestic system," with a capitalist entrepreneur dealing with
numbers of home workers. Fisher Ames said in Congress in
1789:
"It has become common for the country people in Massachusetts to
work small forges in their chimney corners; and in winter, and in evenings,
when little other work can be done, great quantities of nails are made even
by children. These people take the rod iron of the merchant and return
to him the nails, and in consequence of this easy mode of barter the man-
ufacture is prodigiously great."⁴
The wool-card and cotton-card industry in and around Boston
was similarly organized and attained importance at this time. In
1 Hamilton Papers.
2 Ibid., Aug. 23, 1791.
3
Journal of an Excursion, IOI. See also descriptions of manufactures in Con-
necticut Courant, July 14, 1788; Phineas Bond to the Duke of Leeds, from Phila-
delphia, Nov. 10, 1789, in Amer. Hist. Assoc. Report, 1897, i, 651-654.
4 Quoted by J. M. Swank, in Mag. of Amer. Hist., xiii, 100.
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256 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
July, 1789, it was stated that Giles Richards & Co. had produced
sixty-one thousand eight hundred pair in the preceding eleven
months, fifty per cent cheaper than the imported product, and
that over eight hundred persons were employed in the industry.
Two years later it was reported that sixteen hundred women
and children were employed to stick the cards and that two-
thirds of the ten thousand dozens of product were exported from
the state, at a value of $53,000.1
In America, as in England, the great bulk of manufacturing
enterprises, as they emerged from the household stage, were in-
dividual or partnership undertakings. This, for example, was
the form of organization characteristic, throughout the colonial
period and long afterwards, of the typical manufacturing estab-
lishments - grist mills, saw mills, iron forges and foundries,
slitting mills, fulling mills, paper mills, glass works, and the
like. None of these unincorporated enterprises attained large
scale, as they did at this time in England and in France.2 Phineas
Bond, British consul at Philadelphia, reported in 1789 that the
ordinary capital of the numerous paper mills in that vicinity
was £1500-1600, Pennsylvania currency, four-fifths of it in-
vested in mills and buildings - too small for manufacturing any
but coarse grades.³ Accounted large was the plant of James
Caldwell, merchant of Albany, erected in 1790-91, containing
a snuff mill, chocolate mill, mustard mill, an "engine" for cut-
ting smoking tobacco, and a machine for cutting tobacco for
the snuff mill. The output of his snuff mill was estimated at
more than the consumption in the northern states.⁴ O. Burr
& Co. of Danbury, the largest hat manufacturers in Connecticut,
had an output of between £1300 and £1400 in 1790 and sent
"large quantities" abroad.⁵ Mix, Barney & Co., button manu-
1 Columbian Centinel, July 29, 1789, June 8, 1791; Mass. Magazine, iii, 268-269
(May, 1791).
2 Cf. the report in the General Advertiser (Philadelphia), March 28, 1792, of Eng-
lish manufactories employing 19-20,000 (Peele, Wedgewood), 12-15,000 (Phillips &
Co.), 8-9000 (Arkwright). Arthur Young mentions in his Travels in France (Aug.
26, 1787) a tide corn mill constructed by a company at Bordeaux costing £350,000.
3
Amer. Hist. Assoc. Report, 1896, i, 633-634.
4
Described in N. Y. Magazine, ii, 268-269 (May, 1791). Cf. Mansell, Annals
of Albany, i, 338-340.
5
J. P. Cook to John Chester, Sept. 12, 1791, in Hamilton Papers.
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MANUFACTURING CORPORATIONS
257
facturers of Connecticut, were considered large when in 1791
their output was worth $300 to $500 a month and they employed
only twelve workmen.¹ A somewhat typical successful firm is
that of Almy & Brown of Providence, which commenced busi-
ness about June 15, 1789, and in the next two years and a
quarter manufactured some seventy-eight hundred and twenty-
three yards of corduroys, royal ribs, cottonets, jeans, fustians,
velverets, thicksets, etc.2 The AEra & Atna Iron Works of
North Carolina, with its four grist mills and two saw mills, had
attached to it some ninety negro workmen.3
Equally important with these partnerships as predecessors of
manufacturing corporations were the associations of tradesmen
and manufacturers and the more capitalistic associations formed
for the promotion of manufactures and the useful arts. Rep-
resentatives of the former type were established in Boston in
April, 1785, and in New York and Baltimore in the fall of the
same year.4 Similar organizations were doubtless formed in
other centres within a short time, and within a few years several
of them secured charters of incorporation.5 On March 21, 1776,
the Continental Congress resolved, on motion of John Adams,
that the local authorities
"take the earliest measures for erecting and establishing, in each and every
colony a society for the improvement of agriculture, arts, manufactures,
and commerce, and to maintain a correspondence between such societies,
that the rich and numerous natural advantages of this country, for support-
ing its inhabitants, may not be neglected."
After the war an early example of an association to promote
manufactures was founded in Boston in 1786.7 Most important
1 Mix to John Chester, Sept. 30, 1791, in Hamilton Papers.
2 Early operations described in letters from Moses Brown to John Dexter,
July 21, Oct. 15, 1791, in ibid. See also White, Samuel Slater, 64-68, 72-76.
3 Columbian Centinel, June 3, 1795; S. C. State Gazette, July 30, 1795.
4 Bagnall, Textile Industries, 81, 89; Mag. of Amer. Hist., xxii, 90.
5 E.g., Providence, March, 1789 (Session Laws, 3-6); New York, March 14,
1792 (Laws, ed. 1887, iii, 300); Newport, May, 1792 (Session Laws, 18-20). Cf.
also the agricultural societies of Pennsylvania, 1785, Massachusetts, 1792, and
South Carolina, 1795.
6 Journ. of Cont. Cong., iv, 224; Adams, Works, ii, 487.
7 Mass. Centinel, Nov. 29, 1786; Mass. Hist. Soc. Proc., 2d Series, viii, 496
(1894).
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258 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
was The Pennsylvania Society for the Encouragement of Manufac-
tures and the Useful Arts, formed in August, 1787.1 Others were
soon established in Boston, New York, Philadelphia, Baltimore
(1788), Wilmington, Del. (1789), Burlington (1791), Morristown
(1792), and Newark, N. J.2 Ordinarily these did not directly
undertake manufacturing operations. Commonly, however, they
held meetings at which methods were discussed, and the proceeds
of these meetings were published as well as articles of "intelli-
gence;" the members agreed to patronize American industries,
giving their products the preference over foreign goods; pre-
miums were awarded for excellence of products and new inven-
tions; and individual artisans claiming special knowledge or skill
were given financial aid by individual members. While the direct
effect of these associations was small, they undoubtedly paved
the way for larger efforts.
Most important as forerunners of the manufacturing cor-
poration were unincorporated joint stock associations, which
in this period sprang up in numbers. Where the single entre-
preneur caught a clear vision of profits, even in the face of con-
siderable risk of failure and loss, he would adventure heavily
his own funds and efforts and supplement them as far as neces-
sary by support from friends whom he could interest or by aid
got by similar persuasion from state or town. Where, however,
the outcome, no less desirable, seemed more doubtful; where
the possessor of the idea lacked the skill necessary to initiate
the business or the leisure to conduct it; and where a public
interest seemed to be involved, the formation of a joint stock by
subscriptions from numerous individuals, partnerships, corpora-
tions, towns, and the state was a natural resort. For such ends
various motives could be relied upon. There was the patriotic
motive, in the establishment of an enterprise useful to the coun-
try, either in itself or to blaze the way for others founded upon
1 Constitution in Amer. Museum, ii, 167-169 (September, 1787); and see
infra, 264-266.
2 Mass. Centinel, Sept. 13, 1788; Amer. Museum, v, 161-163 (February, 1789);
N. Y. Journal, Feb. 20, 1791; Independent Gasetteer, Jan. 15, March 19, 1791;
National Gazette, Feb. 20, 1792; N. J. Hist. Soc. Proc., IST Series, viii, 3I (1856);
Gasette of the U. S., Aug. 3, 1793.
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MANUFACTURING CORPORATIONS
259
its model. There was obviously the prospect, however remote,
of direct pecuniary gain. There was the speculative possibility
of a rise in the value of the shares, should the venture succeed.
There was the chance of incidental pecuniary advantage, in the
rise of local land values or the enlargement of local markets
consequent upon the naturalization of a new business. Chari-
table motives also were played upon. Thus in October, 1786,
Newburyport citizens planned a "Society for the relief of the
industrious poor," with the idea of advancing money to procure
wool, flax, etc., to be delivered in small quantities to those
"disposed to spin" and paid for in money according to the
fineness of the yarn, the cloth resulting to be sold for the bene-
fit of the Society.¹ The Massachusetts Centinel of Sept. 6, 1788,
commented favorably on the near completion of the manufac-
tories for sail cloth and glass, which promised "to give employ-
ment to a great number of persons, especially females who now
eat the bread of idleness, whereby they may gain an honest
livelihood." An avowed object of the New-York Manufacturing
Society was "furnishing employment for the honest industrious
poor." On behalf of the Beverly company it was urged that
the manufacture offered support "for infirm women and chil-
dren, who for want of employ are often burdensome to the
Public." Griffiths, in his Annals of Baltimore, reports an asso-
ciation formed in that city in 1790 "As a relief to the pecuniary
distresses of the inhabitants
to carry on the manufacture
of cotton upon a small scale," which turned out "some jeans
and velvets." Under the stimulus of these and like motives
there were many - rich, poor, and moderately circumstanced -
who could be induced to invest a small fraction of their wealth
which could be lost without great regret, while its very invest-
ment satisfied the love of risk-taking so characteristic of the
American temper, which had hitherto found its principal out-
lets in individual pioneering, commerce overseas, land specula-
tion, and ubiquitous lottery schemes.
1 Mass. Centinel, Oct. II, 1786.
2 Amer. Museum, v, 325 (April, 1789).
3
Petitions of June, 1788, and June, 1790, cited in Rantoul, First Cotton Mill,
12, 24.
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260 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Most of these joint stock associations never even sought cor-
porate privileges. Several which became corporations passed
through an earlier stage of unincorporate existence. Hence it is
desirable to notice specifically some of the pre-corporate associa-
tions as well as the manufacturing corporations themselves.
One of the earliest of these to appear after the war 1 was The
Associated Manufactoring Iron Company of the City and County
of New York, "for the purpose of promoting the manufactur-
ing of iron in this State." Among its associates were William
Constable, then vice-president of the New York Chamber of
Commerce, a prominent merchant and soon a prominent spec-
ulator as well; Samuel Ogden, who was later interested in vari-
ous land speculations; William Neilson, Solomon Simpson, and
Alexander Stewart. By act of April 28, 1786, the legislature
granted the associates limited liability, for seven years, for debts
contracted in the company name, provided that a duplicate of
the subscription agreement and an up-to-date list of the sub-
scribers, with their holdings, should be filed within four months
and kept on file in the office of the clerk of the city and county.
Whether incorporation was even sought is doubtful. Clearly
it was not granted, though one of its most prized elements -
limited liability - was bestowed.2 The company apparently
made no use of its privileges or did not attain even temporary
significance. Certainly it had no imitators on any significant
scale.
An example of joint stock manufacture on a factory scale,
which thrived for a time, was the Boston Duck or Sail Cloth
Manufactory. Bounties on hemp had been introduced in the
fall of 1786 and were continued for a number of years.³ In 1788
this company was established by a number of "gentlemen of
fortune," among whom Samuel Breck was prominent. A fac-
tory one hundred and eighty feet long and two stories high was
1 For earlier ventures see Bagnall, Textile Industries, chaps. I-3, and Essay I,
94-95.
2 N. Y. Laws (ed. 1887), ii, 295. This company is occasionally treated as a
corporation.
3 Mass. Resolves, Nov. 8, 1786, March 28, 1788, Jan. 31, 1789, June 18, 1791,
June 28, 1792, and see Columbian Centinel, Feb. II, 1792.
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MANUFACTURING CORPORATIONS
26I
built in Frog Lane, Nassau Street, and equipped, at a cost of
some $6000. In January, 1789, the company stated that several
hundred poor persons were constantly employed. As early as
July, 1789, the factory was reported to be turning out over
twelve hundred yards per week. On October 28 President
Washington visited the plant and wrote in his diary that it
"appeared to be carrying on with spirit, and is in a prosperous way.
They have 28 looms, and 14 Girls spinning with Both hands, (the flax
being fastened to their waste). Children (girls) turn the wheels for them,
and with this assistance can turn out 14 lbs. of Thread pr. day when they
stick to it, but as they are pd. by the piece, for work they do, there is no
other restraint upon them but to come at 8 o'clock in the morning and re-
turn at 6 in the evening. They are the daughters of decayed families, and
are girls of Character - none others are admitted.
This is a work of
public utility and private advantage." 1
In April, 1790, it was reported to be employing over three hun-
dred persons, and late in May testimonials to the excellence of
its product were signed by sail makers who had worked up the
cloth and by merchants and schooner commanders who had
used it for their vessels. In the year 1790 as much as seventeen
hundred bolts, of nearly forty yards each, were sold, part in
Baltimore and Philadelphia, and ships were being entirely
clothed with its product.² In 1791 the works were enlarged,
and in September of that year Hamilton was informed that
two hundred women and girls and fifty men were employed and
that the capital invested amounted to $4000 in buildings and
$2200 in tools, etc. In December the proprietors petitioned
Congress for the exclusive right to a trade mark they were using
and secured Jefferson's support for their request, though no
action was taken at this time.⁴ The concern may have pros-
pered temporarily. Certainly it continued to satisfy its cus-
tomers, as one learns from a letter written by Stephen Higginson
to Hamilton in July, 1794, in which he speaks in high praise
1 Columbian Centinel, Sept. 6, 1788, Jan. 28, April 25, July 29, Aug. 22, 1789;
Gazelle of the U.S., May 6, 1789; Rantoul, First Cotton Mill, 31.
2 Columbian Centinel, March 31, June 5, 1790, Jan. 19, 1791; Boston Gasette,
April 12, June 14, 1790; Amer. Museum, ix, App. III, 7 (1791).
3 Breck to Hamilton, Sept. 3, 1791, in Hamilton Papers.
4 Argus (Boston), Dec. 23, 1791, and cf. Columbian Centinel, Dec. 24, 1791, for
"A Manufacturers' Commendation."
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262 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
of its product.¹ Some time before 1800, however, it ceased
operations, finding them unprofitable.²
There were several duck factories of lesser importance and
smaller scale. At Exeter, N. H., stimulated by a state bounty
of 7s. per bolt, one was established in 1789. Washington found
another in Haverhill, Mass., in November, 1789, conducted
"upon a small ingenious scale." At this very time Phineas
Bond writes of one in Stratford, Conn., "carried on to great
advantage." At least as early as 1790 one was established in
Salem, which continued for some years. In Providence, late in
1791, and again early in 1793, a plan for a sail duck and twine
manufactory was pushed by "a number of public spirited gen-
tlemen," who sought to form a company with fifty shares for
the purpose. In 1792 those interested in this concern procured
from the Rhode Island assembly a five-year bounty of 6s. for
each piece of topsail and stouter sail cloth of good quality,
thirty-nine yards by twenty-four feet, which should be prop-
erly inspected by state inspectors and duly labelled. Late in
1792 others were established in Nantucket, Mass., and Newport,
R. I.; and within the next two years others at Springfield, Mass.,
and Wallenponpank Falls, Penn.3 None of these became of
consequence, and most of them soon closed down.
Similar to the Boston duck company, but even less successful
in its early days, was the "Boston Glass House." On March I,
1783, lottery privileges to the extent of £3000 had been granted
to Robert Hewes for erecting such an establishment, after New
Hampshire had given him inadequate encouragement of the
same sort. July 6, 1786, an exclusive right to manufacture
1 Hamilton, Works, v, 599-601. Cf. the puff in Columbian Centinel, May 5,
1796.
2 William Tudor, Letters on the Eastern States (2d ed., Boston, 1821), 253-254.
3 Charles H. Bell, History of the Town of Exeter
(Exeter, 1888), 339; Ran-
toul, First Cotton Mill, 36; Columbian Centinel, May 21, 1791; letters of Phineas Bond,
in Amer. Hist. Assoc. Report, 1896, i, 651; Boston Gasette, April 12, 1790; Bentley's
Diary, Sept. 29, 1790; Columbian Centinel, Jan. 2, 1793; Providence Gazette, Oct.
22, 1791, Jan. 25, 1793; Amer. Museum, X, App. III, 3I (1791); R. I. Session
Laws, 1792, pp. 9-10; Winterbotham, View of the U. S., ii, 92, 148, 166; N. Y.
Magazine, v, 585 (1794); Bagnall, Textile Industries, II7-I20; Newport Mercury,
April, 7, Aug. II, 1795, Dec. 5, 1797; G. G. Channing, Early Recollections of New-
port
(Newport, 1868), 144.
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MANUFACTURING CORPORATIONS
263
glass for seven years was substituted. In January, 1789, a co-
partnership was formed, including Hewes, William Phillips, and
Henry Higginson (two Boston capitalists); to these the legis-
lature gave the exclusive right of manufacturing glass for fifteen
years, provided after three years they should manufacture an-
nually £500 worth; further, the workmen were exempted from
military duty and the stock was exempted from taxes for five
years after its establishment.¹ Early in 1788 the factory was
built. For several years difficulties were encountered in securing
skilful and honest workmen. Samuel Breck wrote to Hamilton
Sept. 3, 1791:
"We wait only for Workmen, which are engaged & probably on their
passage, to commence making Sheet and other Glass - the Director, who
appears competent to the business has prepared everything. The Oven,
Furnaces, & implements are in perfect order - Their cost including the
building materials &cª, about Eleven thousand Dollars."
In October, 1792, a party of workmen was secured from Am-
sterdam, but for some years more the "patriotic adventurers"
enjoyed "nothing but accunulating loss." In the winter of
1794-95, however, affairs looked up. In April, 1795, it was ad-
vertised that
"The Proprietors of the Boston Glass Manufactory, after great trouble
and expence, have got this useful Manufacture established so as to be able
to supply any quantity of Window-Glass that may be wanted, and of any
sizes from 6 by 8 to I9 by 13, of a quality superior to any ever imported
into America - Therefore, hope they shall meet the encouragement of
their fellow-citizens in this and the other States, by having their orders for
Glass, which will be executed with care and dispatch, by Samuel Gridley,
superintendent, at the manufactory, or by sending their orders to Messrs.
Joseph Anthony and Son, merchants, Philadelphia, or William Codman,
merchant, New-York."
Financial success, however, was reluctant to come. Competi-
tion from imports was severe. In March, 1796, Congress was
1 Session Laws, July 6, 1787, p. 642; Priv. and Spec. Stats., i, pp. viii, xi, xii;
Henry Ames Blood, The History of Temple, N. H. (Boston, 1860), 166-173; N.H.
Town Papers, xiii, 559-560; Mass. Centinel, Sept. 6, 1788.
2 Hamilton Papers.
3 Dated April 8, 1795, in Columbian Centinel, May 2, 1795. For earlier data
see Mass. Centinel, Aug. 8, 1789, Columbian Centinel, Oct. 3, Dec. 15, 1792, Dec.
14, 1793, April 23, 1794, Feb. 14, 1795.
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264 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
petitioned "for encouragement, by bounty, or additional duty
on imported glass;"¹ but this appeal was in vain. In June the
glass blowers there employed advertised their desire for employ-
ment elsewhere,² presumably because the proprietors despaired
of profiting by their activity; and only in October, 1797, was the
manufacture recommenced and the same workinen reëmployed.³
In 1816, however, Niles' Register could remark: "The Boston
glass works have long been famous for their window lights, said
to be superior to any other made in the world."
Another considerable venture of the same kind is mentioned
by Phineas Bond in a letter of Nov. IO, 1789:
"A glass house at Fredericktown in Maryland was set on foot at a vast
expence by a German Co: who being discouraged at the cost of the under-
taking soon relinquished the pursuit: another company with a large capital
has lately resumed this enterprize, they have also expended very large sums
of money and make glass of different kinds to a very large amount. Their
white glass if it may be so called, is of a very mean quality, vastly thick
and heavy and full of specks; the window glass made there and sent for
sale to Baltimore Philadᵃ etc is thick irregular and dim
Washington refers to this enterprise in a letter to Jefferson,
Feb. 13, 1789, and reports it likely to produce during the year
"nearly to the ainount of ten thousand pounds value." William
Barton of Philadelphia, in his Observations on the Manufactures
and Commerce of the United States, published as early as July,
1790, reported the factory to be employing five hundred
persons.⁵ Nevertheless it seems soon to have proved a dis-
appointment.
The Pennsylvania Society for the Encouragement of Manufac-
tures was not content merely with holding meetings and offer-
ing premiums. It contemplated from the outset definite man-
ufacturing operations. To quote its constitution:
1 Columbian Centinel, March I9, 1796.
2 Ibid., June I, 1796.
3 Advertisement signed Charles P. Kupfer, in ibid., Oct. 7, 1797.
4 Vol. x, p. 382 (Aug. 3, 1816), remarking a recent increase in output.
5 Amer. Hist. Assoc. Report, 1896, i, 654; Pickell, Potomac Co., 155; Columbian
Centinel, July 17, 1790. Cf. Mass. Magazine, ii, I90 (March, 1790), which reports
it to be "thriving fast." Brissot de Warville, in his New Travels, 374, says it "ex-
ported last year [1789?] to the amount of ten thousand pounds in glass;" but his
information was probably not reliable.
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MANUFACTURING CORPORATIONS
265
"For the better employment of the industrious poor, and in order to
render the society as useful as possible, a subscription, for sums not less
than ten pounds for any one person or company, shall be immediately
opened to all persons whatever, for the purpose of establishing factories in
such places as shall be thought most suitable."
The subscribers to this "manufacturing fund" were to hold
separate meetings, appoint a manufacturing committee of twelve
members to manage the operations, and take all the profits;
and shares in this fund were transferable. In August, 1787, a
large number of subscribers were secured, and within the next
few months the equivalent of £1327 IOS. 6d. in specie was col-
lected. Machines were procured from England, largely through
the enterprise of Tench Coxe, and efforts were made to secure
models of more. Premises were hired and work was promptly
begun. During the winter and spring two or three hundred
women were employed in spinning linen yarn, while workmen
were engaged to make carding engines and spinning jennies for
the cotton manufacture. On April I2 the first loom was set to
work and by August twenty-six were in operation. At the end
of the first year a report of the committee showed expenditures
for machines, utensils, fittings, etc., of £453 IOS. 2d.; materials on
hand worth £550 2S. 6d.; and goods on hand amounting to £732
14s. IId. The sales had amounted to £448 5s. 111d., and a profit
of £72 4s. 9½d. was calculated. The products had amounted
to over seven thousand yards, chiefly of jeans, corduroys, plain
cottons, linen, and tow hinen. Up to Nov. I, 1788, four thousand
yards more were produced, and the twisting mill had manufac-
tured one hundred and eighty-five pounds of thread. At the
celebration of the adoption of the new federal Constitution the
workers and products of the society figured prominently in the
grand procession. By act of March 26, 1789, the legislature
subscribed a hundred shares in the manufacturing fund, refer-
ring in the preamble to the great prospects of success in the cot-
ton manufacture and the fact that "the sums subscribed being
inadequate to the prosecution of the plan upon that extensive
and liberal scale, which it is the interest of this state to promote."
Later a loan of £200 was made to John Hewson, calico printer
to the society. Yet in November, 1789, Phineas Bond, who had
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266 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
been quite apprehensive about the society two years earlier,
wrote home that it was then so much undersold by the importers
of its products from Manchester "that the quantity manufac-
tured has diminished essentially." On March 25, 1790, the
factory and materials were destroyed by fire, with a loss esti-
mated at £1000. The subscribers were discouraged, and opera-
tions were not resumed.¹
A widely known company was organized in Hartford, Conn.,
in April, 1788, to establish a woollen manufactory. It was evi-
dently modelled upon the Manufacturing Fund of the Pennsyl-
vania Society, and £2150 was subscribed in £10 shares by thirty-
one shareholders - Jeremiah Wadsworth, the leading member,
with fifteen shares, Peter Colt (later superintendent for the
"S.U.M.") having five, and Peter Colt & Co. ten more. The
capital was later increased to £2800. By the articles of associa-
tion no part of the stock might be withdrawn before May I, 1795,
except by agreement of a majority of the shareholders. Though
no charter seems to have been requested, legislative encourage-
ment was sought and secured. By an act of May, 1788, a bounty
of Id. per pound was offered on yarn spun and made into cloth
up to June I, 1789; buildings were exempted from taxation for
five years, and polls of employees for two years. Further aid
was sought early in 1789, and though Wadsworth was on the
committee appointed to consider the matter, nothing was then
granted. Early in 1789 its products were on sale in New York,
and in April President Washington was inaugurated in a dark-
brown suit manufactured by this company which he found to
exceed his expectations. During 1789 and 1790 a considerable
quantity of goods was produced: in, January, 1790, report was
made that since Sept. I, 1788, ten thousand two hundred and
seventy-eight yards of cloth had been made, of as good quality
and as cheap as could be imported.
1 Amer. Museum, ii, 167-169, 248-259, 360-362, 507-509, iii, 179, 286, iv, 48-
49, 404-409, v, 268-269, vii, 228; Mass. Centinel, Sept. 8, 1787, July 19, Aug. 9,
1788; Federal Gasette; January, 1792; Boston Gasette, April 12, 1790; Pa. Stats. at
Large, xiii, 239-240; Bagnall, Textile Industries, 75-80; Bishop, Amer. Manufac-
tures, i, 404-4II, ii, 18-19; White, Samuel Slater, 50-5I, 58-60; Amer. Hist. Assoc.
Report, 1896, i, 552-554, 653.
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MANUFACTURING CORPORATIONS
267
Despite the auspicious beginning the business did not prove
profitable. There were prejudices against American goods.
Wool was high. The smallness of the capital and the fact
that the company could not borrow on good terms added
to their embarrassment. The machinery was much inferior
to that of the English. Workmen and materials were scarce.
And there were those who opposed the establishment because
they believed it to interfere with other interests which they
had. Legislative aid was again sought in May, 1790, this
time by way of a loan for a year. This was refused, but
in October a lottery to the extent of £1000 was granted to
enable the purchase of additional machines, implements, and
stock. The lottery proved a success. In September, 1791,
dyeing vats were reported in excellent order, and soon after
it was announced that "This manufacture, after struggling with
every obstacle, begins to flourish, and bids fair to be advan-
tageous to the proprietors as well as to the public." Henry
Wansey, however, who visited the plant in the summer of 1794,
"found it much on the decay, and hardly able to maintain itself."
He added that the machines were inadequate and old-fashioned,
the fabric poor, and further: "Ninety-three hundred dollars
have been lent towards the undertaking by the State. None of
the partners understand anything about it and all depends on an
Englishman who is a sorter of the wool." This very year the
factory suspended operations, and in 1795 its property was sold
at auction to Wadsworth and its existence terminated.¹
In the first half of 1789, evidently stimulated by Philadel-
1 Articles of association, with list of subscribers, are printed in Maine Hist.
Soc. Colls., iv (Portland, 1856), 54-56; the preliminary announcement is in Conn.
Courant, April 7, 1788, mentioning persons at Middletown, Wethersfield, Farm-
ington, and Windsor, with whom subscriptions might be left. For legislative docu-
ments see Conn. Session Laws, May, 1788, p. 361, and October, 1791; Conn.
MSS. Archives (Hartford), Industry, ii, 230-231, 235. See further Peter Colt to
John Chester, July 21, 1791, Elisha Colt to Chester, Aug. 20, 1791, in Hamilton
Papers; Wansey, Journal of an Excursion, 60, 258-259; John Adams to Mrs.
Adams, April 19, 1789; Washington's Diary, Oct. 20, 1789; and notices or adver-
tisements in Conn. Courant, September, 1789, April, May 24, Sept. 27, Dec. 27,
1790, Jan. 3, Feb. 21, 1791; Boston Gazette, Jan. 18, 1790; American Mercury
(Hartford), Sept. 19, 1791; N. Y. Journal, Oct. 19, 1791; Bagnall, Textile Indus-
tries, 100-109; and Walton, Story of Textiles, 163-165.
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268 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
phia's example, The Baltimore Manufacturing Company was set
on foot. A capital of "at least one hundred pounds, of ten pounds
each share" was proposed; seven "of the company" were to be
elected directors with full control of the funds and operations;
limited liability and the transferability of shares only when
they were fully paid were specified in the articles, and incor-
poration was to be sought. The primary object was the cotton
manufacture. The project, however, encountered effective oppo-
sition, quite natural in a town so devoted to trade as Baltimore
then was; incorporation was not secured, and the scheme fell to
pieces.¹
In 1794 the Cecil Manufacturing Company was established
near Elkton, Md., for the manufacture especially of woollen
yarns and cloths. Its chief promoter was Col. Henry Hollings-
worth of Elkton, a prominent, enterprising man. Philadelphia
and Delaware capitalists, as well as others of Cecil County,
were interested. The factory was sixty feet by thirty-six, three
stories high. It was burned in March, 1796, but promptly
rebuilt; and the company is said to have carried on its opera-
tions for twenty years with reasonable success.2
Scattered through the states there were a good many other
small unincorporated joint stock associations, generally of very
minor importance. Peter Colt, writing to Hamilton's agent in
July, 1791, reported the existence of several small cotton and
woollen manufacturing companies in Connecticut, each with a
capital "raised by Subscription, & managed by an Agent for
the benefit of the adventurers." A gunpowder manufactur-
ing company was founded in Baltimore in 1790 which continued
to operate until 1812.4 Several cotton manufacturing associa-
tions were formed. Tench Coxe, in 1792, mentioned one in
Virginia; one "containing forty of the most respectable planters
and farmers, in the western district of South Carolina; and
1 Constitution in Amer. Museum, v, 59I (June, 1789). Cf. White, Samuel
Slater, 184 n; Bishop, Amer. Manufactures, ii, 19, 43; Walton, Story of Textiles,
188-189.
2 Bagnall, Textile Industries, 232-235; Johnston, History of Cecil County, Md.,
382.
3
Letter of July 21 to John Chester, in Hamilton Papers.
4 Bishop, Amer. Manufactures, ii, 23; Mass. Centinel, April 10, Dec. 8, 1790.
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MANUFACTURING CORPORATIONS
269
one which had raised a subscription of about $25,000 in Ken-
tucky.¹ In 1795 a company of some fifty shareholders was or-
ganized to erect a furnace to manufacture salt at Muskingum,
Ohio.² These are random instances of what must have been a
considerable group in the last decade of the century.
Such, then, were the forerunners of the manufacturing cor-
poration. The first incorporated company for manufacturing
purposes was concerned with silk. As early as March I, 1784,
TABLE XIII. EIGHTEENTH CENTURY CHARTERS TO MANUFACTURING
CORPORATIONS
1789
1790
1791
1792
1793
1794
1795
1796
1797
1798
1799
1800
Totals
Massachusetts
I
I
I
I
4
Connecticut
I
I
New York
I
I
2
New Jersey
I
I
Totals
2
I
I
o
o
I
o
I
I
o
o
I
8
an act was passed by the Connecticut assembly offering a bounty
of IOS. per annum for three years for planting one hundred mul-
berry saplings and another of 3d. per ounce for raw silk, the
first act to be in force nine years, the second fifteen.3 Thanks
especially to the efforts of one Aspinwall,4 some twelve thousand
trees were reported in full bearing in the spring of 1788, and in
Mansfield alone eighty families raised in six years some one
hundred and fifty-seven pounds of raw silk. President Ezra
Stiles of Yale undertook at this time to distribute to the min-
isters of the state a quantity of seeds, with instructions for
1 "Reflexions on the State of the Union," in A View of the United States
303, 305.
2 Bishop, Amer. Manufactures, ii, 66-67.
3 Session Laws, 232-233. Cf. act of May, 1794, replacing the bounty on raw
silk with one of 2d. per ounce to be paid for ten years from July I, 1794: Session
Laws, 282-283.
4 Peleg Sanford, in a letter to Jeremiah Wadsworth, Dec. 25, 1791, in Wads-
worth Papers, refers to "Aspinwalls having devoted nearly twenty years of his
life almost entirely to this business."
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270 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
cultivating mulberry trees, and secured "zealous coöperators." 1
Encouraged by this progress, and "with a view of introduc-
ing among them a greater degree of neatness and perfection,"
thirty-two Mansfield inhabitants solicited a charter in Septem-
ber, 1788, and in January, 1789, were incorporated The Director
Inspectors and Company of the Connecticut silk manufacturers.
This was not a typical business corporation. It was much
more like the ancient "regulated companies." The members
lived near together and seem to have wished incorporation chiefly
to secure power of making by-laws "for the well ordering and
regulating themselves, in and about the raising and manufactur-
ing of silk." The company was to meet annually and then to
choose a director, a treasurer, and two inspectors of silk. There
was also to be a clerk with an indefinite term. The director was
to act as moderator of the meetings and "give such information
to sd Company from time to time as he shall Judge beneficial,
and for the good of the public in general, as relative to said
manufacture." The company was exempted from assessments
on profits for twelve years.2
The company, however, came to little. Constant South-
worth, who was named in the act as the person to call the first
meeting, wrote Hamilton's agent Sept. I, 1791, that "no special
advantage can be derived from this grant, however generous,
until workmen can be obtained skilled at least in some one
branch of the Silk manufacture."3 The organization inspired
no imitators and played no appreciable part in the rise of
manufacturing corporations.
The Beverly Cotton Manufactory, second in order, was first
1 Letter from New Haven, dated July 5, in Columbian Centinel, July 25, 1789.
2 Bagnall, Textile Industries, 82-84, printing petition for charter; Conn. MSS.
Archives (Hartford), Industry, ii, Agriculture, Manufactures, Fisheries, 1764-89,
pp. 236, 237. The charter is not in the published laws of the state. Cf. Mass.
Centinel, Sept. 3, 1785, referring to "the Silk Company in Connecticut."
3 Hamilton Papers. Cf. Gazette of the U.S., May II, 1791, for mention of silk
culture in Northford, Conn., in 1790; Sanford to Wadsworth, Dec. 25, 1791, in
Wadsworth Papers. F. Morgan, in Connecticut as Colony and State (Hartford,
1904), ii, 266, says: "The Connecticut Silk Society was incorporated in 1788, with
its headquarters at New Haven. Its object was the encouragement of silk culture
and manufacture throughout the State." If this society was incorporated, it prob-
ably is not to be classed as a business corporation.
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MANUFACTURING CORPORATIONS
271
established in October, 1787. It grew out of the efforts of two
Englishmen, Leonard and Somers, to get a foothold in this
country. They had made "various applications both publick
and private" in several states for encouragement, "with no
other effect than loss of time and money," and were about to
leave the country when George Cabot,
"convinced of the importance and practicability of introducing a manu-
facture for which large sums are yearly sent out of the country, generously
patronized them, and influenced a number of gentlemen in Beverly, to
associate for the purpose of establishing these much wanted manufactures." 1
Early in June, 1788, the associates petitioned the legislature
for an act of incorporation. They dilated upon the importance
of manufactures, both because of the products and as a means
of employment to a great number of women and children,
"many of whom would otherwise be useless if not a burden to
society." They reported success in small experiments in the
cotton manufacture and convictions that it would prove profit-
able as well as socially advantageous except for the extraordinary
expenses attendant upon its introduction. As pioneers they re-
quested a charter with such accompanying favors as might be
deemed necessary to offset the initial disadvantages and expense.
The petition, after consideration by a committee, was referred
to the session meeting January, 1789. Then, on February 3,
a simple act was passed incorporating The Proprietors of the
Beverly Cotton Manufactory. Power was given to hold £10,000
real estate and £80,000 personal estate. Goods manufactured
by the company were to bear a lead label impressed with seal
of the corporation, and they were protected in the use of this
trade mark. Two weeks later the legislature passed a resolve
for "encouraging" the establishment, reciting that
"It is essential to the true interest of this Commonwealth, to encourage
within the same, the introduction and establishment of such manufactures
as will give the most extensive and profitable employment to its citizens,
1 Mass. Centinel, April 9, 30, 1788. In March, 1787, Somers had been granted
£20 by the legislature through Hugh Orr of Bridgewater for whom Somers, after a
visit to England, constructed a model or machine for carding and spinning cotton:
White, Samuel Slater, 297-298. His petition to the Massachusetts legislature,
Feb. 15, 1787, is in Bagnall, Textile Industries, 89-90.
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272 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
and thereby, instead of those emigrations which are ruinous to the State,
increase the number of manufacturers, who by consuming the productions
of the soil will add to the value of it
"
Provided the corporation should within seven years manufacture
a quantity of cotton and cotton and linen piece-goods, of a
quality usually imported into this Commonwealth, not less
than fifty thousands of yards," duly recorded, or pay £500 in
gold or silver within eight years, Maine lands to the value of
£500 specie were granted the proprietors as tenants in common
in a proportion which was probably that of their shares in the
factory.¹
In August, 1788, before incorporation, the associates had
procured a suitable plot of land. There they soon erected a
three-story brick building sixty feet by twenty-five, and a small
woollen dye-house, at a cost of $3000. As early as 1788 the
foremen were excused from paying poll tax, by vote of the town,
and by January, 1789, the newspapers spoke of it as a promising
factory.2 In October, 1789, the factory was one of the sights in
which President Washington was especially interested on his
visit to this region. He found it "carrying on with spirit,"
using "the new Invented Carding and Spinning machines,"
fifteen or sixteen spring shuttle looms, turning out " Cotton
stuffs
excellent of their kind. At this time the product
was mostly coarse fabrics, chiefly strong and durable corduroys,
being manufactured at the rate of about ten thousand yards.
From December, 1789, these were well advertised, and in 1790
Beverly corduroys were widely known.4 In September, 1791,
George Cabot reported to Hamilton a working force of forty,
an output of eight to ten hundred yards per annum, considerable
improvement in technique, a solid basis of manufacturing
reached, and an increase in scale of operations desirable and
possible.⁵
1
The best account of the founding and early years of the company is Robert
S. Rantoul's address, The First Cotton Mill in America (Salem, 1897). The ap-
pendix to this address contains most of the relevant legislative documents, corre-
spondence, etc. For quotations just made see pp. 29-30.
2
Rantoul, 15-16, 40.
3
Ibid., 33; Columbian Centinel, November 7.
4
Rantoul, 19; Columbian Centinel, Jan. 16, 1790.
5
Rantoul, 39-42.
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MANUFACTURING CORPORATIONS
273
It appears that the Cabots were the chief stockholders.
Judging from the grant of lands there were forty shares, divided
as follows:
John Cabot
IO
Andrew Cabot
2
Joshua Fisher
9
Israel Thorndike
4
Henry Higginson
4
Isaac Chapman
I
Moses Brown
4
Deborah Cabot
2
George Cabot
4
Thus the several Cabots held eighteen shares. All but Henry
Higginson, who hailed from Boston, were Beverly citizens.
Moses Brown was a namesake and correspondent of another of
the same name in Providence who patronized Samuel Slater
shortly after. Fisher and John Cabot, the principal stockhold-
ers, were the managers.
The enterprise encountered numerous difficulties. Thanks
to the lack of skill of the artisans, the early machinery was
"bad and dear," the early products were ill wrought and costly,
and "extraordinary loss of materials" was suffered. But with
such awkward workers the best materials were essential. Pre-
tenders to knowledge, chiefly Irish, misled them. The scale of
manufacture was too small to be economical. Workers, men
and women, had to be instructed in detail, and when they had
been taught at considerable cost in the making and use of the
machinery, they were attracted away by "bribery" or higher
wages to other establishments - in Worcester, Mass., Provi-
dence and Greenwich, R. I., Lebanon, Conn., and elsewhere.
As a result the proprietors estimated the net loss to June, 1790,
at £2000, and to September, 1791, at about $5000, exclusive of
interest and depreciation.¹
Further appeals for public aid were made. In March, 1790,
the local member of Congress was appealed to to use his in-
fluence to get Congress to grant a lottery for the amount of the
extra expense they were undergoing by reason of the prompt
diffusion of the knowledge they gained and imprated. This
appeal, however, was in vain. In June, 1790, the proprietors
1 Cabot to Goodhue, March 16, April 6, 1790; petition of June, 1790; and Cabot
to Hamilton, Sept. 6, 1791, in Rantoul, 23-25, 37-42.
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274 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
petitioned the state legislature for some kind of aid in lieu of
the land grant, which had "not in any degree answered the pur-
pose of it." House and Senate concurred in favoring encourage-
ment, and the House passed a bill to grant lottery privileges for
raising £1300 to be "applied in prosecuting and perfecting such
manufacture by obtaining and using therein, all the requisite
art and machinery, so far as the said proceeds shall extend."
The Senate, however, failed to concur. In March, 1791, how-
ever, the proprietors were granted four hundred tickets in the
state lottery then in progress and three hundred in the next.
This with the land grant George Cabot estimated in September
might amount to $4000.1
It was not long, however, before the enterprise was recognized
a failure. Governor Hancock, in his message of January, 1793,
sadly admitted this was the prospect. Henry Wansey, the
Wiltshire clothier who visited so many cotton factories with
keen interest, did not think it necessary to go out to Beverly
in the summer of 1794 and accepted hearsay evidence that even
in the manufacture of coarse goods the factory did "not answer.
Yet in his diary Nov. 24, 1794, William Bentley of Salem wrote
of taking the famous Mr. Priestley to see the local sights:
"We visited the Beverly Manufacture, which from the fruitless attempt
to manufacture cotton velvet, & unfashionable goods, is now converted to
the profitable business of Bedticks, & the demand is much beyond the ability
of M' Burnham to supply. 60 hands are now employed
Despite this turn for the better, within a few years the corpora-
tion sold out the property to the two principal stockholders,
probably perforce, and virtually passed out of existence. The
factory passed through several hands and was for some years
the seat of manufacturing operations, but prior to 1813 busi-
ness had entirely ceased and part of the machinery had been
taken away.5
1
Rantoul, 23-28, 38-41; Columbian Centinel, Feb. 19, 1791.
2 Mass. Resolves, January 31, p. 40; and cf. Moses Brown to John Dexter, July
22, 1791, in Hamilton Papers.
3
Journal of an Excursion, 84.
4 Diary, ii, II3.
5
Bagnall, Textile Industries, 97-98; Cutler, Manasseh Culler, ii, II3-II5.
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MANUFACTURING CORPORATIONS
275
The New-York Manufacturing Society was formed early in
1789 as a joint stock association on the Philadelphia model,
"for the purpose of establishing useful manufactures in the city
of New-York, and furnishing employment for the honest in-
dustrious poor." Two hundred and forty-six subscribers (in-
cluding Hamilton, Duer, Pintard, Cruger, Matlack, Jay, Steuben,
Seton, Clarkson, Varick, Bancker, Craigie, Watson, and Me-
lancthon Smith) were soon found to take three hundred and
eighty shares of £10 each, New York currency. Operations
were early begun. A large brick building was constructed in
Vesey Street and stocked with "reels, looms, carding machines,
spinning jennies, with every other machinery necessary and
compleat for carrying on the cotton and linen manufacture,"
and a dwelling house was procured for the manager. Here
Samuel Slater found employment for the first two months after
his arrival in America late in 1789, leaving for more promising
if less pretentious quarters with Almy & Brown in Providence.
As early as January, 1790, fourteen weavers and more than one
hundred and thirty spinners were reported here at work. A
charter was secured March 16, 1790, authorizing a stock of
£60,000, and a twenty-five year franchise; and following the
example of Pennsylvania the state at once subscribed one hun-
dred shares. In the summer of 1790, "tickets," or paper cur-
rency in denominations of Id. to 6d., were issued, ostensibly "in
order to accommodate the operations of their Factory," but
more probably to secure driblets of additional funds. The
operations, however, were a disappointment to the proprietors,
and the entire property was advertised for sale at auction, first
in April, 1793, then in October, and finally in January, 1794. 1
Sufficient details regarding the New Jersey Society for
establishing useful Manufactures have been given in the pre-
ceding essay. Its origin was due to the belief that manufactur-
ing of textiles, in particular, was thoroughly practicable, pro-
1 Subscription list in Wilson, John Pintard, 19-20; constitution in mer. M useum
v, 325-326 (April, 1789); charter in Session Laws, 1790, pp. 24-25; and see White,
Samuel Slater, 41; Mass. Centinel, Jan. 27, 1790; N. Y. Journal, Aug. IO, 13, 1790,
Jan. II, 1794; Daily Advertiser, April 4, 1792, Oct. 7, 1793; Diary (New York),
April 17, 1793; and Bagnall, Textile Industries, I22-I27.
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276 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
vided it could be established on a scale sufficiently large and
with a satisfactory management. Experience with the small
companies, like those at Philadelphia, Beverly, Hartford, and
New York, revealed difficulties which needed to be offset or
overcome. Hence the seeking of a liberal charter, the care in
securing a site, the serious endeavor to insure efficient manage-
ment, and the actual procuring of a large capital, which marked
the New Jersey enterprise. Floated in the summer of 1791,
chartered and organized late in the same year, it was seriously
embarrassed first by the distraction into speculative activities
of the attention of its leading and most responsible directors,
and then by the financial collapse in the spring of 1792, which
carried down its chief pillars and involved the Society directly
in loss of funds and well nigh destroyed public confidence in it.
It had the advantage, both in its planning and in a good deal of
the execution of its plans, of the highly intelligent aid of the
Secretary of the Treasury. It finally had the advantage of
a capable superintendent, Peter Colt, of Hartford, who had
been interested in the Hartford Woollen Manufactory. Its
plans, however, proved to be on too magnificent a scale. Too
much was invested in fixed capital, and the technical knowledge
of the day in America was too small to insure serviceable con-
struction. It suffered severely from carelessness or extravagance
on the part of the chief engineer in charge of construction, Major
L'Enfant, and from the division of responsibility among several
men in a critical year before Peter Colt was appointed. Many of
its subscriptions proved to be those of mere speculators, and of
the subscribed capital of over $600,000 hardly more than a third
was ever received in specie or an equivalent. In the construc-
tion of machinery and in the conduct of its manufacturing
operations the Society suffered, like so many other contempora-
ries, from the inefficiency, carelessness, dishonesty, or wilful
antagonism of the artisans whom it employed. The result was
a troublesome period of construction of plant and utter disap-
pointment in carrying on manufacturing operations. The
works were closed down in 1796, after a considerable loss of
capital and without any return whatever to the investors.
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MANUFACTURING CORPORATIONS
277
The second Massachusetts manufacturing corporation grew
out of the coming to America, in the spring of 1793, of two
Yorkshire woollen manufacturers, Arthur and John Scholfield.
They introduced themselves to Rev. Jedediah Morse of Charles-
town, the widely known geographer (father of S. F. B. Morse),
and secured his patronage. Taking into partnership one John
Shaw, an English spinner and weaver who had come out in
the same ship, they built machinery, hired quarters in Charles-
town, and in October sold fifty-odd yards of broadcloth as their
first product. Morse attracted to them the attention of his
wealthy merchant friend, William Bartlett of Newburyport, at
whose suggestion they moved in December to that centre. Their
machinery and products attracted favorable attention immedi-
ately; a company was promptly formed to finance their efforts;
and without difficulty a charter was obtained Jan. 29, 1794, for
The Proprietors of the Newbury-Port oollen anufactory.1 Shares
were provided for, though without specified par, and the com-
pany was entitled to hold £10,000 in real estate and £80,000 in
personal estate. One hundred and twenty shares were first
subscribed, later eighty more, nearly all by Newburyport cap-
italists. Some six acres of land, with water privileges, were
secured on Parker or Falls River, in Byfield, and there early in
June a three-story building ninety feet by thirty was "raised"
and soon equipped with machinery made by local firms, at a total
cost of about $50,000. English workmen were secured, assess-
ments levied on the stockholders, and some broadcloths, cassi-
meres, serges, and blankets made to be sold by William Bartlett,
the principal stockholder, at his store in Newbury. A petition to
the legislature in 1795, for exemption of the property of work-
men from taxation, was not granted. The usual difficulties were
encountered, no dividends were paid, and the expenses were
partly met by charging a small sum to the strangers who came
out of curiosity to see the factory. In 1797 another petition to
the legislature for aid was in vain, the goods on hand were sold
at auction, and funds had to be borrowed to pay the workmen.
In 1798 the directors voted to continue "if laborers could be
1 Priv. and Spec. Stats., i, 478.
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278 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
procured for one-eighth less than the year preceding." The
Scholfields sold their interest in 1799 and moved to Connecticut.
The company dragged out an unprofitable existence till about
1803, when Bartlett bought out the other stockholders and
disposed of the plant to an Englishman.¹
In February, 1796, the Massachusetts legislature granted in-
corporation to The Proprietors of the Calico Printing Manufac-
ture, with power to hold property worth $10,000 exclusive of
their manufacturing stock. The company seems to have been
already in operation in Boston, on a site near the West Boston
Bridge, and to have occupied several buildings, the largest a
two-story building sixty feet by thirty. The next year, however,
they removed to Newton and do not henceforth appear. The
company is significant merely as one of the smallest and least
pretentious which secured a charter.2
As the foregoing discussion amply shows, most of the manu-
facturing corporations, and probably the majority of the
unincorporated joint stock manufacturing enterprises, were con-
cerned with textile manufactures, at least primarily. Two ex-
amples of other kinds appear. Not far from Albany a "glass
house" had been established as early as 1789. At first it con-
fined its manufacture to "bottles in thin green glass." In Octo-
ber, 1792, however, it advertised, as far away as Boston, in the
very face of the Boston Glass Manufactory, its window glass of
all sizes from eight inches by six to eighteen by fourteen. The
legislature, appealed to on behalf of the struggling infant, gave
aid in May, 1793, in the form of a loan of £3000, for three years
without interest and for the next five at five per cent. In 1794
the works were considerably enlarged and an output of £10,000
was anticipated, as well as the employment of nearly one hun-
dred hands. Congress was petitioned for an increase of the
duties on glass. Liberal exemptions from taxation and other
burdens were granted by the state in April, 1796. About the
1 Mrs. E. Vale Smith, History of Newburyport
(Newburyport, 1854), 152-
154; Currier, History of Newburyport, ii, 146-147 (naming the incorporators);
N. Y. Magazine, v, 382 (June, 1794); Bishop, Amer. Manufactures, ii, 54; Bagnall,
Textile Industries, 202-212.
2 Priv. and Spec. Stats., i, 64-67; Columbian Centinel, June IO, 1797.
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MANUFACTURING CORPORATIONS
279
same time the proprietors took steps to "consolidate their
establishment into a permanent manufacturing town," ap-
parently after the manner of the New Jersey manufacturing
society. Finally a charter was sought, and on March 30, 1797,
the company was incorporated as The Hamilton Manufacturing
Society. The charter was limited to fourteen years, the capital
to one hundred shares of not more than $1000 each, and the
act made the stockholders specifically liable for the debts of
the company, - the only instance of this kind that I have seen
among the corporate charters. What may have been the im-
mediate success is not clear. From the fact that henceforward
practically nothing is heard from the society one may infer
that it did not long survive and that it was of minor significance,
like the other manufacturing corporations.¹
Finally in March, 1800, Massachusetts granted a charter to
The Salem Iron Factory Company. This had existed as a volun-
tary joint stock company at least since May, 1796, evidently
headed by Ebenezer Beckford. Its mill seat and mills were on
Waters River ("formerly Cow-House River") in Danvers.
The corporation had fifty shares and was authorized to hold
real estate of not more than $30,000 and personal property not
over $300,000. Its later history too is "shrouded in the mists
of history."2
There is small need to inquire why there were no more manu-
facturing corporations, in view of the failure which so soon over-
took practically all that were chartered, as well as most of the
companies which remained unincorporated. It is worth while,
however, to consider the causes of failure. In 1790, newspaper
accounts of the rising manufactories were widely printed and
copied, with the belief that such accounts would
"wear off the diffidence of our citizens, stimulate them to improve and ex-
tend the manufactures already established, to attempt others which have
1 Columbian Centinel, Oct. IO, 1792; N. Y. Magazine, v, 585 (September, 1794);
Watson to King, Jan. 22, 1794, in King, Rufus King, i, 543; Newark Gazette, May
4, 1796; letter of Phineas Bond, Nov. 10, 1789, in Amer. Hist. Assoc. Report, 1896,
i, 652; N. Y. Laws (ed. 1887), iii, 707, iv, 95-97; Munsell, Annals of Albany, iii, 156-
157, 176-177; S. C. Gasette, May 1, 1796.
2 Priv. and Spec. Stats., ii, 378-381.
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280 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
not yet been tried, to convince them that Nature has done her part for the
United States in furnishing them with numerous sources of natural wealth
which only require the assistance of enterprize to turn them into their
proper channel, and to demonstrate the absurdity of depending on other
nations for what can be better obtained at home."1
Such a belief was responsible for Hamilton's lengthy essay in
his Report on Manufactures, which was given wide publicity,
for much of Tench Coxe's writings, and for Hamilton's hercu-
lean efforts on behalf of the New Jersey manufacturing society.
Experience, however, proved these beliefs vain. What were
the factors which caused manufacturing companies to fail where
banks had succeeded?
Jefferson wrote Thomas Digges from Paris, June 19, 1788:
"In general it is impossible that manufactures should succeed
in America from the high price of labour. This is occasioned by
the great demand for labour in agriculture." 2 Yet he now ad-
mitted that "if any manufactures can succeed
it will be
that of cotton." Certainly the manufacturers complained of
the high price of labor, and even more loudly of the difficulty of
keeping workinen who could so easily move to another employer
or become small landed proprietors - conditions reflecting the
fact that they could be retained only at considerably higher
wages. It was against the notion that this was an insurmount-
able obstacle that Hamilton argued at length in his Report on
Manufactures.
But dearness of labor was by no means the sole handicap.
Silas Deane wrote to Gen. S. B. Webb, July 16, 1785, from Lon-
don, telling of his visits to English factories, and adding:
"It is not the cheapness of labor, in this Country, as is generally sup-
posed, which ennbles [sic] them to manufacture at so cheap a rate, but the
use of machines which they have invented to lessen manual operations,
& their ingenious division, distribution, & combination of the several parts
of their work. Labor is dearer here than in any part of Europe, and full as
dear as it was with Us, before the late War."
1 Federal Gazette, July 8, 1790.
/
2 Jefferson, Works (Ford ed.), v, 27-29. Cf. also Brissot, New Travels, ii, II7;
Cooper, Some Information respecting America, I-2; Amer. Museum, v, 254-257,
493-495 (1789); Coxe, View, 38; and quotations and references in Essay III, 361-
362, 364 n.
3 Webb, Correspondence, iii, 5I-52.
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MANUFACTURING CORPORATIONS
281
Various efforts were made to procure the famous machines of
English invention which were playing so large a part in England's
industrial revolution. Great Britain, however, used the utmost
endeavors to prevent the exportation of either machinery or
models.¹ When machinery was smuggled out, efforts, sometimes
successful, were made to have it destroyed or returned.² Threats
were made against the rising American cotton factories in par-
ticular, and rumor had it that the fire which, in March, 1790,
destroyed the Philadelphia factory was set by an incendiary in
British pay. Deane wrote Webb, in the letter above quoted:
"I am about to form a Company" for the purpose of setting up
a steam engine in New York, Boston, or Philadelphia "to erect
several in different parts of America, if to be done with patents
and exclusive privileges, for a certain Term of Time, & have
already wrote to several of my friends in America on the
Subject." But his efforts did not meet with success. Occasion-
ally, it is true, individual artisans such as Samuel Slater came
over with accurate recollections of English machines or with
real inventive genius. Too often, however, such knowledge
and such genius were merely pretended, and American capitalists
were sadly imposed upon by the pretenders.
Especially in connection with manufactures much was made
of the handicap of lack of capital, for industry as a whole and
for particular plants. William Tudor, Boston merchant and
bank director, said in his Letters on the Eastern States some
years later: "It is not the price of labour, but the want of capital,
that prevents our success.
Whenever persons of capital
shall choose to employ it in manufactures, and give personal
attention to their concerns, it will be found that the price of
labour will be no impediment."3 Hamilton argued that capital
in general was available, and applied his energies to turn it into
1 See laws of 23 Geo. II, C. 13 (1750), I4 Geo. II, C. 71 (1774), 21 Geo. III, c. 37
(1781), 22 Geo. III, c. 60 (1782), and White, Samuel Slater, 88, quoting Moses
Brown.
2 Letters of Phineas Bond, Dec. 29, 1787, Jan. 2, 1788, Nov. 16, 1788, in Amer.
Hist. Assoc. Report, i, 557, 583.
3 Cf. Essay III, chaps. I, 6; Phineas Bond, in Amer. Hist. Assoc. Report, 1896,
i, 631, 633-634; William Tudor, Letters on the Eastern States (2d ed., Boston, 1821),
X, esp. 255-256, 262; and infra, 297-298.
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282 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
industrial channels. Yet the results of attempts at manufac-
turing, on the whole, well justified the reluctance of capitalists
to adventure freely in this field; and while it is true that indi-
vidual plants were usually on too small a scale to secure needed
economies, the problem of management - financial, engineer-
ing, and industrial - was so troublesome that it set very narrow
limits to the profitable scale of operations.
Skilled masters of the manufacturing arts were also lacking.
Americans had had no training in this line of work and could
get practically none abroad. Lacking this, entrepreneurs were
subject to be imposed upon by the first plausible talker who
came along with pretensions to expert knowledge of manufac-
turing processes, and instances of such imposition were numerous.
The result was waste, dampened enthusiasm, and failure. Serious
attempts were made, both by direct solicitation and by open
or disguised advertisement, to attract such artisans from across
the water. But no less than the English government was con-
cerned to prevent the emigration of skilled workmen to prevent
the export of machines, and its rigid laws must have succeeded
to no small extent.¹
Other difficulties are occasionally mentioned. For example,
Moses Brown of Providence, writing to Hamilton's agent July
22, 1791, complained of British dumping and said that such
a policy had begun ten or twelve years previous. Henry
Wansey found it a common tendency to sink "a vast deal of
money in buildings and machinery unnecessarily, so that the
interest on the money will eat up almost all the property." 3
John Adams, writing to Tench Coxe in May, 1792, said:
"Manufactures cannot live, much less thrive, without honor, fidelity,
punctuality, public and private faith, a sacred respect to property, and the
moral obligation of promises and contracts, virtues and habits which never
did and never will generally prevail in any populous nation without a
decisive, as well as an intelligent and honest government."
1 Cf. Digges to Jefferson, from Dublin, May 12, 1788, in Jefferson Papers, series
2, xxiv, 5I; British Stats. at Large, 5 Geo. I, C. 27 (1718); 23 Geo. II, C. I3 (1750);
22 Geo. III, c. 60 (1782).
2 Hamilton Papers.
8
Journal of an Excursion, 84, 217.
4
National Magazine, ii, 253-254 (1800).
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Certainly the failure was not due to lack of encouragement
by the legislatures. I have seen no evidence of refusal to
grant charters which were seriously sought for this purpose.
Time and again, in nearly every state, legislative "encourage-
ment" in one or another form was granted to manufacturers.
Bounties were granted, as in the case of sail cloth in Massachu-
setts, New Hampshire, and Rhode Island, woollen goods in
Hartford, and silk in Connecticut. Taxes on property or on
the polls of workmen were abated. Lottery privileges were
granted, as to the Hartford woollen manufacture and the New
Jersey manufacturing society. Loans were given at low rates
of interest or without any. National laws established protec-
tive duties. Patents were granted. And in several instances,
as in the case of the Pennsylvania manufacturing fund, The New-
York Manufacturing Society, and the "S. U. M.," subscriptions
were made by the state to the shares of corporations. It is
true that the extent of these aids may easily be exaggerated,
yet there is no doubt that the manufacturing companies, cor-
porate and voluntary, failed rather in spite of appreciable en-
couragement than because of legislative hostility or indifference.¹
It is significant that the corporation was here not a whit more
successful, and perhaps even less successful, than the unincor-
porated enterprises. The advantages in the raising of capital
and the greater possibility of continuous life were more than
offset by the less personal interest and control and the low stage
of development of the art of management. One is interested to
find the directors of the "S.U.M." weary of their job after
two years, hiring Peter Colt to run the establishment as if it
were his own.
Besides the manufacturing companies a few miscellaneous
business corporations may be mentioned. Here especially it is
frequently difficult to be certain just what companies should
be included and which excluded. Not to speak of marine so-
cieties and agricultural societies, I should exclude without much
1 Cf., in addition to those mentioned above, N. Y. Laws (ed. 1887), iii, I9I,
590, 679, 707, for loans to various manufacturers.
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284 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
hesitation such companies as The Proprietors of the New Bury-
ing Ground in New Haven,¹ chartered by Connecticut in 1797,
and in Massachusetts the Proprietors of the Mattakesset Creeks
in Edgartown (1783), the Associated Proprietors of Lumber in
Merrimack River (1790),2 and the Proprietors of Mills on Charles
River (1797). The last three were associations formed to pro-
tect the rights of owners of adjoining properties rather than
corporations to secure pecuniary gain. There must also be ex-
cluded the Trustees for the purpose of promoting Manufactories,
incorporated by Kentucky in 1798. These were not themselves
to undertake manufacturing, but were simply to grant lands on
easy terms to manufacturers to induce them to settle in that
state. Here is no business corporation, but an excellent example
of the sort of public body which Hamilton recommended in his
Report on Manufactures.³ Similar were the Directors and So-
ciety for promoting the cultivation of the Vine, incorporated in
the same state about the same time.4
The Proprietors of the Roxbury Canal were incorporated in
February, 1796, to cut a canal from Boston Harbor to Roxbury,
for which a fund had been subscribed, under the leadership of
Jonathan Davis. Since, however, no toll was allowed to be
taken "on any float, vessel, or transportation of articles through
the canal," this can hardly be accounted a business corporation.5
A case near the line is The River Machine Company, incor-
porated in January, 1790, "for the Purpose of clearing and deep-
ening the Channel of Providence River, and making the same
more navigable." The merchants of Providence had agreed to
raise $1,000 in forty "equal shares" to build, maintain, and
operate dredging machines. Vessels of more than sixty tons
(except those laden with lumber and wood) were to pay a duty
of two cents per ton, for the benefit of the company. Any sur-
plus of this sum over the company's disbursements was to be
1 Priv. Laws (ed. 1837), i, 298.
2 Priv. and Spec. Stats., i, 51, 265, ii, I5I.
3 Kentucky Laws (Toulmin ed., 1802), 310.
4 Kentucky Laws (ed. 1810), ii, 268.
5 Priv. and Spec. Stats., ii, 70-71. Cf. advertisement in Columbian Centinel,
March 17, 1798, offering lots for sale and announcing "In all probability the com-
pletion of the Canal will take place the ensuing summer."
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applied, at the end of twenty years, to further improvements of
navigation under the direction of the company. Thus no divi-
dends were contemplated. Later this year the company peti-
tioned Congress for a continuance of these privileges, on the
ground that there was "a greater number of vessels belonging
to this port than to New York, and that it was" a place of more
navigation than any of its size in the Union. Though Congress
did not respond, the machine was set in operation as early as the
spring of 1792. In 1794 and 1796, however, the operation of
the act was suspended, and it is doubtful if anything significant
was accomplished.¹
The joint stock company was frequently resorted to in order
to raise capital for construction of buildings. Some were ton-
tine associations, like those of Boston (1791-92) and Philadel-
phia (1792-93) which developed respectively into the Union
Bank and the Insurance Company of North America. An early
example was The New York Tammanial Tontine Association,
which was formed in January, 1791, partly to build a hall for
the Tammany Society, then six or seven years old. Four thou-
sand shares of $16 each were to be issued, with a maximum sub-
scription of twenty-five shares. For thirty days subscriptions
were confined to members of the society. Judging by quota-
tions of the scrip on the New York market in the winter of 1791-
92, the subscription was filled. But the speculative collapse of
the following spring seriously injured John Pintard, an officer
and leading promoter, as well as other supporters, and the object
was not carried out.2 In the summer and fall of 1792 a similar
association with one thousand shares was promoted in Albany
to build a $15,000 commodious "City Tontine Hotel."⁸ In the
spring of 1793 a joint stock company to build a theatre was
1 Session Laws, January, 1790, pp. 3-5, October, 1794, p. 19, October, 1796, p.
23; Staples, Annals of Providence, 35I-352; Providence Gasette, April 21, 1792.
Cf. Mass. Centinel, June 27, Aug. 18, Sept. 15, 1787, for data regarding a horsepower
dredging machine used earlier on the Hudson near Albany.
2 Daily Advertiser, Jan. 14, 1791, giving notice of a meeting of subscribers to
elect thirteen directors, secretary, treasurer, and five inspectors. See ibid., Jan.
18, 23, Feb. 4, Sept. 17 (constitution), Nov. 14, 1792, and E. P. Kilroe, Saint Tam-
many and the Origin of the Society of Tammany (New York, 1913), 118-119, 189-
193.
3 N. Y. Magazine, iii, 640 (October, 1792); Munsell, Annals of Albany, iii, 153.
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286 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
pushed in Boston, to issue one hundred and twenty shares of
£50 each.¹ In none of these cases, however, does there seem to
have been any effort to secure corporate privileges.²
There are, however, two wharf companies, after the order of
the colonial corporations in Boston and New Haven, proprietors
respectively of the Portsmouth Pier, incorporated 1795, and the
Kennebunk Pier, incorporated 1798, neither of more than local
importance.⁸ The first of these companies was given the title
of the New Hampshire Hotel and Portsmouth Pier; but there
is nothing else in its charter relating specifically to a hotel
enterprise. If such was in the minds of the proprietors, it
seems not to have been translated into concrete existence.
The only corporation to undertake agricultural operations
was authorized in Pennsylvania in March, 1793, as The President,
Managers and Company for promoting the cultivation of vines.
One Peter Legaux was at the bottom of it; he had made some
experiments and was desirous of such encouragement as capital-
ists might subscribe. A minimum capital of $10,000 in $20
shares was fixed, and as this could not be raised, full incorpora-
tion was not effected. A second attempt was made in 1800-01,
when the act of incorporation was revived and obstacles which
the promoters thought hindered subscription were removed.
This time the company was able to organize and begin opera-
tions on Legaux's farm at Spring Mill, but history is silent as to
its results.4
There was a single mining company, the proprietors of beds
of iron ore in Litchfield County, Conn., which was erected into
a corporation as early as 1784. The charter undoubtedly merely
1 Gasette of the U.S., April 24, 1793.
2 The joint stock device was also resorted to for various non-business pur-
poses, such as founding schools and libraries; these were sometimes incorporated.
Cf. N. J. Hist. Soc. Proc., ISt Series, viii, 18-23 (1856), for account of the
organization of the Morris Academy at Morristown, N. J., giving the subscrip-
tion list.
3 Adams, Annals of Portsmouth, 311-312; Mass. Priv. and Spec. Stats., ii, 187-
189; Charles Bradbury, History of Kennebunk Port
(Kennebunk, 1837), 181.
4 Pa. Stats. at Large, xiv, 356-360, xvi, 438, 516; Scharf and Westcott, Hist. of
Phila., i, 5II; Bishop, Amer. Manufactures, ii, 48. In 1787 Legaux had been
granted the privilege of maintaining a ferry over the Schuylkill at his farm: Pa.
Stats. at Large, xii, 485.
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gave corporate privileges to the group of proprietors who already
owned the land in common, and the company is to be classed
rather with the local wharf companies, water supply companies,
and unincorporated land associations than with the modern
joint stock mining corporations.¹ In 1799 a bill was presented
in Congress to establish a New Jersey copper mining company
to be aided by a $50,000 subscription from the United States.
This bill having been "smothered in the Birth," a new bill was
presented to authorize a federal loan of $50,000 to the company
at six per cent; but this too failed to pass.² Anthracite coal was
discovered in 1791 at Mauch Chunk, Pa., and in February, 1792,
the Lehigh Coal Mine Company was formed by Michael Hillegas
(former treasurer of the United States), Charles Cist, printer,
and others, but no charter was sought or secured, and because
of difficulty of marketing the output, mining efforts were soon
abandoned.⁸
There were no ordinary trading corporations. In 1780 Ham-
ilton had said, in recommending to Morris a plan for a bank
and suggesting a resolve against any grant of exclusive privileges:
"Large trading Companies must be beneficial to the commerce of a
nation, when they are not invested with these, because they furnish a capital
with which the most extensive enterprises may be undertaken. There is
no doubt the establishment proposed, would be very serviceable at this
juncture, merely in a commercial view; for private adventurers are not a
match for the numerous obstacles resulting from the present posture of
affairs."
4
At various times there were definite proposals to establish such
companies. In 1785 a modest and intelligent Englishman named
Wingrove came to America, recommended by John Adams and
Jay, and "submitted to Congress a plan for an American com-
1 Baldwin, Private Corps., 301, citing Conn. MSS. Archives, Agriculture, etc.,
1764-1789, ii, 186.
2 Southern Hist. Assoc. Publications, ix, I04 (March, 1905). Possibly this was
the "Mine and Metal Company" for which in 1801 the House passed a charter
which the Senate negatived: Annals of Congress, X, 912, 989, 738, 755, 758.
3 The prospectus is printed in Pa. Mag. of Hist. and Biog., xxxix, 170-175 (1915).
Cf. Thomas C. James, "A Brief Account of the Discovery of Anthracite Coal on
the Lehigh," in Hist. Soc. of Pa. Memoirs, i, 321-327 (1826, republished 1864);
and General Advertiser, Jan. 24, 1794.
4 Hamilton, Works, i, 131.
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288 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
mercial establishinent in the East Indies." A committee of
Congress reported "that the commercial intercourse between
the United States and India would be more prosperous if left
unfettered in the hands of private adventurers, than if regulated
by any system of a national complexion;" and Congress ap-
proved.¹ Stephen Higginson reports having seen in 1785 a
proposition which came through Lafayette from John Adams
and M. Tourtelle Saugrain, "the Providore for lighting Paris
and the other Cities of France, for a company here [Boston] to
supply him with I000 tons of our Whale Oil, and to receive the
manufactures and products of France in return." Nathaniel
Barret went to Paris the next winter to secure the contract and
was seemingly successful, but the company, if organized, never
attained large consequence.2 Phineas Bond wrote in an official
letter of July 2, 1787, speaking of the growing trade to China: 3
"A company of merchants in Philad is at this time in a train of being
established to engage in this trade - considerable sums (upwards of 100000
dollars) are already subscribed, a ship of between 300 and 400 tons now on
the stocks and nearly finished, is contracted for and will be ready to sail in
the Autumn."
If such companies were formed, they did not seek charters.
In January, 1799, Pitt and Grenville urged upon Rufus King,
the American ambassador in London, a plan for incorporating
an Anglo-American exclusive company as the best means of
managing the trade of San Domingo. King, however, expressed
his belief
that the Plan would be objected to as well on account of the general unpop-
ularity of monopolies in America as on the score of a defect of power in
Congress to create an Exclusive Corporation for the Purpose of Trade.
Besides," he added, "our merchants are numerous and full of enterprize,
and no way has suggested itself by which a limited number of them could
without undue preference be selected to compose a company."4
1 King to Adams, Feb. 3, 1786, in King, Rufus King, i, I55. Cf. Smilie and
Robert Morris, in the debates on the recharter of the Bank of North America,
March 29, 30, 1786, in Carey's Debates, 23, 40.
2 Higginson to Adams, Aug. 8, 1785, in Amer. Hist. Assoc. Report, i, 724. Cf.
ibid., i, 735-736; Adams, Works, viii, 364, 389, 414; Wharton, Diplomatic Corre-
spondence of the Amer. Rev., ii, 468, iii, 57-58.
3 Amer. Hist. Assoc. Report, 1896, i, 540-54I.
4
King to the Secretary of State, Jan. IO, 1799, in King, Rufus King, ii, 499-505.
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MISCELLANEOUS CORPORATIONS
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And the plan fell through. King touched upon the essential
reasons why trading companies were not formed - the preju-
dice against the kind of trading companies which had been
known, and the individual enterprise of the American merchants.
Perhaps it is correct to include here The Company for procuring
an accurate map of the State of New Jersey, incorporated in I799
as a sort of semi-official scheme to secure a good map of the state
without charging the whole cost to the public treasury. On
petition of Governor Howell and associates the legislature vested
in them as a corporation the exclusive right for fifteen years of
vending within the state a new map to be prepared, on condi-
tion that two thousand shares be subscribed and the maps pub-
lished within four years. Toward this object the state guaran-
teed a subscription of one hundred and fifty shares, of not more
than $5 per share, in return for the delivery of an equal number
of maps. Presumably individuals were expected similarly to
subscribe, getting the return of their capital in this form and in
addition such profits on outside sales as might be forthcoming.
The pretty scheme did not work. A year after the charter
was granted the trustees duly appointed reported so great
a discrepancy between the funds subscribed and the pros-
pective expense of surveys that the enterprise was declared
impractcaible.¹
It is somewhat surprising that, in this era when land specula-
tions flourished so extensively on large scale and small, there is
but one incorporated land company, The Proprietors of the Half
Million Acres of Land, lying south of Lake Erie, chartered by
Connecticut in 1796.2 There was indeed some popular preju-
dice against these land speculators which might have prevented
their obtaining charters. Probably the chief explanation is,
however, that there was slight occasion for employing the cor-
porate form: there was little outlay for incurring of debts; as a
rule the shares were not, and were not expected to become,
widely distributed; the management problem, though difficult,
1 Session Laws, Nov. 19, 1799, pp. 652-654; advertisement dated Nov. 17,
1800, in N. J. State Gazette, Nov. 25, 1800.
2 Session Laws, 45I.
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290 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
was not complicated; and the business was expected to be wound
up within a comparatively short time. Under such circum-
stances corporate organization might be more bother than it
was worth and make for unwelcome publicity and clumsiness of
operations.¹
In a word, the time was not yet ripe for the extension of the
corporation beyond the field of the financial and public-service
industries, and the experiments which were made in other fields
discouraged further attempts.
1 The Ohio Company of 1786 closely approximated a corporation and there
was talk of securing a charter; it is not clear why none was effectually sought.
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CHAPTER VI
CONCLUDING OBSERVATIONS
By the end of the eighteenth century the corporation was a
familiar figure in the economic life of the larger American cities;
and it was rapidly ceasing to be an object of awe in the smaller
towns and country districts. Here, in conclusion, it will be worth
while to review the success of the different groups of companies
and attempt an explanation of differences which appear; to
note the position which the corporation occupied in the com-
munity, and the public attitude toward it; and to present a
brief résumé of the corporation law and policy which the period
discloses.
In size the corporations varied extremely. None but banks
had paid-in capitals over $1,000,000, except the Manhattan
Company, which also was essentially a bank. The companies
with capitals between $500,000 and $1,000,000 included, besides
banks, a few joint stock insurance companies. In the group
having from $100,000 to $500,000 would be included most of
the other banks and insurance companies, several canal or
navigation companies, a few bridge and turnpike companies,
the Boston Aqueduct Corporation, and the New Jersey manufac-
turing society. The majority, including most of the turnpike
and bridge companies, raised less than $50,000. There were a
goodly number, notably bridge, water, and manufacturing com-
panies, which raised less than $10,000. Not even accurate
estimates can be given on this point, because of dearth of in-
formation extant; and because of the silence of many charters it
is impossible to make even a summary statement regarding the
capitals authorized.
There was great variation in the success achieved by the cen-
tury's close. Of the twenty-nine banking corporations chartered,
29I
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292 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
all but two had begun business; only one or two were struggling;
none had failed; nearly all yielded profits ample to remunerate
their stockholders, and some were paying such dividends that
the stock sold considerably above par. On the other hand, all
of the eight manufacturing corporations had got under way, but
not one had paid dividends, nearly all had suspended operations,
several had dissolved, and almost if not quite without exception
their shareholders suffered pecuniary loss. These represent the
extremes. The canal and navigation companies had not all suc-
ceeded in securing the capital requisite to organization; but two
of the major ones, and few of the minor ones, had completed
their undertakings and were in a position to pay dividends; as a
class they were distinctly a disappointment to those who had ad-
vanced capital, and did not please much better those who hoped
to make use of the intended improvements. Some of these,
indeed, like the Santee and Cooper, the Dismal Swamp, and the
Middlesex Canals, were destined to complete their objects and
to have a period of reasonably profitable existence. Several of
the smaller undertakings, financed largely by persons immediately
interested in the success of the improvements, served their pur-
pose in a small way, even if they yielded no dividends more tan-
gible than convenience, - as was the case somewhat later with
many of the turnpike companies. In general, however, the in-
land navigation companies of this era proved a disappointment,
and the experience with them tended to discourage further enter-
prises of this kind. The bridge companies, on the other hand,
were reasonably successful. Few failed to secure the requisite
capital, though in some cases, including the largest, delays were
encountered because of capitalist reluctance; most of them com-
pleted the intended structures within a comparatively short
time; the majority were successful, at least at the outset, from
the standpoints of their stockholders and the public, and there
were several, like the Charles River Bridge and the Passaic and
Hackensack bridges, whose stock was in high repute. Only the
catastrophes caused by floods and ice, with which they were not
yet technically able to cope, marred seriously their otherwise
good record. The turnpike companies stood between the other
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CONCLUDING OBSERVATIONS
293
highway corporations in these respects. Most of those chartered
seem to have attracted sufficient capitalist support; several had
completed all or considerable stretches of their roads, and were
taking toll; and unquestionably some were already reaping fair
returns or better; but the movement began so much later that
few had had an opportunity to display their possibilities before
the end of the century. Experience with those established was
on the whole encouraging, although none was a bonanza. The
insurance companies, mutual and stock, had their ups and downs,
but were on the whole successful, some greatly so. Apparently
none had yet come to grief. The water supply companies led a
quiet, modest existence, involving as yet no conspicuous success
or failure.
It would be highly interesting if we could express these facts
statistically, presenting. tables to show, by classes, states, and
years, figures for companies projected, floated, successful, to
compare with those incorporated. But no such data can be
obtained in any but the most fragmentary form. Mortality
statistics of corporations are interesting and valuable, but espe-
cially difficult to secure. It may be said, however, that to-day,
after the lapse of more than a century, some twenty-five of
these eighteenth century corporations are still in existence.¹
These include eight banks (not to mention at least four others
which after prosperous careers have lately been merged with
younger institutions), ten insurance companies (including all
those chartered by Pennsylvania), and one or two representa-
tives each of the canal, toll-bridge, turnpike, water supply,
and manufacturing companies. Two or three of these, like the
"S. U. M.," are inert, but most of them are operating as
actively as ever.
Reasons for the variations in success may be suggested with
some assurance. There was the clearest paying demand for the
services of the banks, insurance companies, and bridge corpora-
tions. For the navigation improvements, turnpikes, and fresh
water supplies there were desires often not backed by willing-
ness to pay. Furthermore, technical skill was highly important
1 See Appendix B.
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294 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
in the highway and aqueduct companies; the lack of it was most
seriously a handicap upon the navigation companies, to whose
failure it was perhaps the largest contributing factor. The
problem of management was simplest in the case of banking,
bridge, and insurance companies, and this fact told powerfully
in their favor. It was most difficult with the navigation and
manufacturing companies, and goes far to explain their failure.
In the same cases labor difficulties were bound to arise and proved
most troublesome. Where judgment, initiative, boldness were
required they were supplied, and if they were sufficient all went
well; but where long-planned policies, careful supervision, and
sustained effort were requisite, the American business man failed
to supply them through the medium of the corporation.
Despite the fact that a large number of the companies which
got under way failed to fulfil the hopes of their projectors and
supporters, I have discovered no instance prior to 1800 of losses
to creditors of business corporations. The stockholders suffered,
but the failure did not spell bankruptcy. This was largely
because the failure descended before construction was completed,
and the creditors were chiefly those who had loaned directly to
the company or furnished supplies for construction. Such ex-
tensions of credit were not large. That there were no bankrupt-
cies among banks and insurance companies speaks well for
the management. This freedom from losses by outside creditors
certainly conduced to the wider use of the corporate form with
its limited liability, which might otherwise, as happened later,
have come for this reason into bad odor.
Despite the marked increase in corporations during this period,
corporate securities figured but slightly in the security markets.
Soon after flotation, indeed, there were often speculative deal-
ings in "scrip" or stock of various sorts. A few banks and insur-
ance companies, an occasional bridge company, had securities
transferred sufficiently to warrant newspaper quotations. But
except in the highly speculative period of 1791-92 the stocks
were but little in speculative hands, and only a local, imperfect
market for them existed. Public securities remained, at the cen-
tury's end, by all odds the principal stock market commodity.
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CONCLUDING OBSERVATIONS
295
Certain further comments on the statistics of charters are
now warranted. Despite the success of the banks, their number,
and still more emphatically, their capital, did not increase
greatly after 1793. The reason would seem to be fourfold: the
country was so nearly saturated with banks that the profits
were no longer phenomenal enough to evoke large pressure for
additional charters; the existing banks could quietly exert
effective pressure against introduction of further competition;
in the smaller towns, where there was the greatest possibility
for expansion, success had on the whole been least, while the
problem of satisfactory management was greatest; and the in-
crease in normal business may have been somewhat offset by a
decline in speculative operations. The failure of the manufac-
turing companies effectually explains their failure to be char-
tered even in as large numbers. The ill-success of the inland
navigation companies accounts for the decline in such charters.
The turnpike companies were still in an experimental stage
when the century closed, and their increase was due to a current
of enthusiasm which a decade earlier had spent itself on naviga-
tion companies. That the toll-bridge companies did not con-
tinue their rate of increase was due partly to local opposition;
but chiefly to the facts that the more important and advantageous
opportunities were already taken, as in the case of the banks;
and that the public and the new turnpike companies were build-
ing the smaller bridges, while technical skill had not sufficiently
developed to make possible building larger bridges. The in-
crease in water supply companies, which would doubtless be
continuous if the statistics of charters formed under the Massa-
chusetts general law could be found, reflects local movements
of no great general importance, in the face of relatively unsatis-
factory results.
It is of interest to attempt an explanation of New England's
prominence in the corporation movement. It does not appear
that the legislatures to the southward were more cautious in
granting charters. Investments in corporate stock for purposes
of encouragement appear almost if not quite wholly confined to
the middle and southern states. The New England states, it
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296 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
seems, merely responded to a larger demand for corporate
privileges.
One observes that during this period New England held more
than its population's proportion of the public debt.
"The four New England states
received $440,800 in the interest
and capital disbursements on the public debt in 1795 out of a total national
disbursement of $1,180,909.19 in that year. Massachusetts alone received
in interest on the funds one-third more than did all of the Southern states.
The thrifty Yankees of Connecticut held more of the public debt
than all the creditors in Virginia, North Carolina, and Georgia." Indeed,
"Georgia and North Carolina held practically none of the public debt."¹
It would be easy to conclude that, as many of the admirers of the
funding system believed, the public debt constituted a liquid cap-
ital which naturally flowed into such new fields as the corpora-
tions opened, and that therefore the secret of New England's
supremacy in corporate activity lay in her possession of great
sums in public securities. There is certainly a modicum of truth
in this view. An owner of public securities could very easily
invest in corporate stock, since a good market for the public
debt was well established, in striking contrast to the market for
real estate. Furthermore, having owned public stock, the pur-
chase of corporate shares involved no difficult mental transi-
tion. It seems highly probable that there was a connection be-
tween the especially widespread ownership of the public debt in
Connecticut and the predominence in that state of turnpike
companies and small banks.
Yet it is probable that two factors were related less as cause
and effect than as effects of common causes, among which these
may be suggested. In New England, much less than farther
south, additional investments on the farms were not so impera-
tively required, nor did new and unoccupied lands cry out so
alluringly for cultivation. The merchant class was especially
large, and prominent in the smaller towns as well as in the large
centres. By contrast, in Virginia, the largest state, trade was
carried on chiefly with foreign capital, the traders "being factors,
agents, and shopkeepers of the merchants of Great Britain,"
1 Beard, Econ. Origins of Jeffersonian Democ., 393-394, 397. There was consider-
able concentration of holdings in the cities - New York, Albany, Charleston, etc.
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297.
rather than independent merchants. This was true of most of
the rest of the South, barring towns like Baltimore and Charles-
ton. The Yankee population was notoriously industrious and
thrifty. Thus there were supplies of capital available for in-
vestment. There was, moreover, a widespread spirit of enter-
prise. The distribution and concentration of population was
such that toll-bridges, turnpikes, and some aqueduct companies
could be made to pay, without making an enterprise so large
as to be difficult to manage; and the need for water supplies
and transportation facilities, outside the large centres, was
large by comparison with states farther south. It is in this
saturation of the outlying districts with corporate enterprises
that New England chiefly differed from other sections, where
the principal cities were about as fully provided.
The statement is frequently made that the development of
enterprises in the United States in these days, and presumably
corporate enterprises included, was hampered by lack of capital.
A recent American writer quotes with favor Bagehot's remark
that to-day
"we have entirely lost the idea of any undertaking likely to pay - and seen
to be likely - can perish for want of money; yet no idea was more familiar
to our ancestors, or is more common now in most countries;"
and continues:
"Liquid capital, available for investment in general development work, as
distinct from its intensive uses on the farm or in the local industry which
created it, depends clearly on three basic factors: order, good communication,
and credit in some more or less highly organized form. These factors, in
combination, are
considerably less than a hundred years old."1
The study of corporate enterprise during this period prior to
1800 does not support such a view. It is undoubtedly true
that more rapid development would have taken place before
1800 had larger supplies of capital been available. Yet not
only was capital readily forthcoming for every undertaking
likely to pay and seen to be likely, but it came forth for in-
numerable undertakings in which the risk was very great and the
1 Ray Morris, in the Atlantic M onthly, cxiii, 805 (June, 1914).
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298 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
chances of success were remote. Americans had then, as now,
a reputation for rash enterprise. It was reported a common say-
ing among foreigners especially in the early days of this period,
"that the Americans were fond of engaging in splendid projects,
which they could never accomplish." 1 Moreover, liquid capital,
after the war, and especially after 1789, was really abundant,
eagerly seeking investment, and ready to take in other lines risks
as high as those of the sea. Where, indeed, experience showed
that profit was not to be expected, capital in sufficient quantity
to float a considerable enterprise was not forthcoming. But if
facts could be had to-day of enterprises dear to the hearts of
sanguine promoters which never get under way, the percentage
would probably be as high as it was in the last decade of the
eighteenth century.
The largest source of capital for the rising corporations was
the merchant class, - ranging from the small country store-
keeper to the wealthy metropolitan merchant importer. It paid
such men to be stockholders in the local banks, for certainty in
securing discounts. They were quite naturally subscribers to
fire and marine insurance stocks. Support of bridge and turn-
pike ventures might bring business in their direction. More-
over, like few of their fellow citizens, they had surpluses that
could be thus at least temporarily invested in stocks which would
constitute a serviceable kind of reserve, or ventured in more
risky enterprises in which they could afford to lose. Such forces,
in their cases, supplemented effectually a normal public spirit
and a desire for direct income from the securities.
There were others, however, as well: retired farmers or mer-
chants; widows of substance; children who had inherited well;
landed proprietors who had picked up public securities; suc-
cessful speculators in stocks; and a considerable body of small
savers in town and country, of various occupations, who in these
days before the savings bank were able and willing to stake in
a local enterprise the cost of a share or two.
The small investor was especially appealed to for the sup-
1 Phillips, History of Inland Navigation, quoted in N. Y. Magazine, iv, 152
(March, 1793).
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CONCLUDING OBSERVATIONS
299
port of turnpikes, for which as a class par values were lowest
- ranging usually from $20 to $50, with $25 perhaps the most
common figure. In the banks and the early canals the par was
commonly $250 to $500, though toward the end of the period the
tendency appears for a par of $100. There are at least two in-
stances of $1000 shares - the Hamilton Manufacturing Society
(1797) and the Maryland Insurance Company (1795). Insur-
ance companies show high, low, and intermediate par values.
In a considerable number of companies, chiefly for bridges,
canals, and aqueducts, no fixed par was established, and share-
holders were assessed small sums, typically five or ten dollars, at
intervals as the funds were needed for construction.¹ Such a
method, when accompanied by a vigorous policy of enforcing for-
feiture of delinquent shares, was usually satisfactory, since it
involved no problem of temporary investment of capital paid in
before it was needed; 2 but otherwise it often left the company
unable to push construction steadily, and led to well-nigh fatal
discouragement.
Funds for investment were quite frequently secured outside
the locality to be directly benefited. A director of the Bank of
North America said in 1786 that "of the stock of the bank, 360,-
OOO dollars belong to inhabitants of others of the united states,
or of Europe. " Foreign investors - Dutch, French, and
English especially - held considerable stock in the Banks of
North America and the United States, and by the end of the
century very likely in other large institutions. Dutch capital-
ists supplied part of the funds for at least the Connecticut River
canals at South Hadley, the Potomac Company, the New Jersey
manufacturing society, and probably the Western Inland com-
pany of New York. During the speculative fever of 1791-92,
New York capitalists subscribed to practically every important
fresh project - the Boston Tontine, the Providence and Al-
1 This was the general rule for the companies chartered in Massachusetts;
south of New England it was unusual.
2 The Schuylkill and Susquehanna Navigation company purchased stocks at
good prices in the panic of 1792, a few months after its subscribers had paid in:
General Advertiser, May 23, 1792.
3 Carey's Debates, 32.
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300 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
bany banks, the New Jersey manufacturing society, the Pennsyl-
vania, New York, and Vermont canals, the Philadelphia and
Lancaster Turnpike- - to mention but a few instances. Boston
capital was largely behind the larger Maine bridge undertakings,
Piscataqua and White River Falls bridges (Hanover) of New
Hampshire, and probably many other corporate enterprises of the
northernmost states. In general, however, the bulk of the funds
for most companies seems to have been drawn at the outset from
the immediate neighborhood.
State subscriptions were important elements only in the larger
Virginia canals and the early New York canals, and the banks
of North America, the United States, the Union Bank of Boston,
and the Bank of Pennsylvania. Occasionally towns took a stake
in bridge or canal companies, but rarely, if ever, to any large
extent.¹
A careful study even of existing records would throw more
light on the sources of funds and the distribution of shares at
the origin of the corporations and later. Here a few facts,
gleaned almost at random, may be presented.
The number of original subscribers to the stock of certain
corporations was as follows:
Date
Subscribers
Subscriptions
Averages
Bank of North America
1782
147
$400,000
$2,72x
Massachusetts Bank
1784
104
$251,750
$2,421
Charles River Bridge
1785
88
£176,000
£200
Providence Bank
1791
138
$529,600
$3,838
Hartford Bank
1792
68
$100,000
$1,471
Insurance Company of North America
1792
560
$600,000
$1,071
Fourth New Hampshire Turnpike
1800
128
Germantown and Reading Turnpike
about
1800
2483
1 See also infra, 327-328.
2 Cf. Robert Morris's statement in 1786 that the two thousand one hundred and
seventy-six shares were held by about three hundred persons, an average holding of
about $2900. Carey, Debates, 32, 94. Cf. also the subscriptions to the Beverly
factory, shown supra, 273, and the subscription lists of the New Jersey and
Connecticut manufacturing companies of 1791-92, given in Essays II and III.
3 Pa. Mag. of Hist. and Biog., xxiii, 537-539 (1899).
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CONCLUDING OBSERVATIONS
30I
On its face this table points to the conclusion that the average
subscription ranged from $1000 to $4000. It cannot safely be
inferred, however, that this was the average investment. In
several cases the original subscriptions were partly or wholly
speculative; the subscribers either hoped to sell at an advance
all or part of their shares before paying for them in full, or
anticipated an over-subscription and subscribed more largely
than they wanted in the hope of getting a proper amount
when the subscriptions were cut down. Such factors would
tend to exaggerate the average investment holding. On the
other hand, many subscriptions were made in the names of
dummies to evade limitations upon the number of shares any
one might subscribe at the outset.
A few instances appear of control from the beginning by a
coterie of large capitalists. Nearly half of the original stock
of the Bank of North America was subscribed by five wealthy
individuals-Robert Morris, John Swanwick, William Bingham,
John Carter, and Jeremiah Wadsworth, who had four hundred
and sixty-six out of the one thousand $400 shares. With a sixth
member they had a clear majority. The one hundred and
twenty-one holders of five shares or less held only two hundred
and fifty-two shares.¹ In the Hartford Bank (1792) the sixteen
holders of six or more $400 shares had a clear majority.² Rob-
ert Morris and a few of his business associates dominated the
three Pennsylvania canal companies of 1791-93. At least the
initiation, and probably the support, of the two principal South
Carolina canal companies came from a relatively small Charles-
ton group. Five large capitalists, subscribing respectively one
hundred and fifty, one hundred and fifty, one hundred and
ten, one hundred, and fifty shares, took seventy per cent of the
stock of the Hartford and New Haven turnpike (1798).³ On
the other hand, subscribers of one and two shares had a ma-
jority of the stock in the Charles River Bridge (1785); sub-
scribers of five shares or less had a majority in the Fourth New
1 Lewis, Bank of N. A., 132-135. See Carey's Debates, 109, for Smilie's criti-
cism of the situation as "highly dangerous," in view of the one vote per share rule.
2 Woodward, Hartford Bank, 170.
3 Ibid., 96-97.
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302 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Hampshire Turnpike (1800); and the "S.U.M." subscriptions,
while averaging high, were well scattered.
In general it appears, as one might expect, that the greater
the certainty of success, the more heavily the large capitalists
ventured; and the more doubtful the outcome, the lower was
the average subscription. Here one may see the source of the
check to many of the companies which did not get beyond
the stage of incorporation: unless the larger fish could be
attracted by the bait, the interest of the smaller fry was
unavailing.
There was clearly some tendency to concentration of owner-
ship. In several bridge companies single stockholders gradually
acquired a controlling interest. The size of large holdings grew,
the number of large holders, the number of members from par-
ticular families, and the average holdings. Thus, in the Massa-
chusetts Bank, at the first dividend payment, only three stock-
holders had more than twenty shares, while control rested
largely with holders of fewer than ten. The decrease of capital
in 1786 did not proportionately reduce the number of share-
holders; but with later increases they did not proportionately
increase, so that average holdings changed 1785-87 from about
$2421 to $1538 to $3048. By 1792, and thereafter, eight holders
of more than twenty shares each held above three hundred and
twenty of the eight hundred shares, and needed little help to
control the bank policy. In the Providence Bank, in 1800, ten
men had six hundred and thirty-seven $400 shares, as follows:
twenty-five, twenty-five, thirty-one, thirty-six, fifty-three, fifty-
three, fifty-eight, sixty-one, one hundred and forty-five, one
hundred and fifty.¹ There were twenty-five holders of one share
each, twenty holders of two shares each. There were but ninety-
six holders of the one thousand shares - an average of $4167.
This bank, the Bank of North America, and the New Jersey
"S. U. M." early became virtually family companies, though
not until the nineteenth century. The concentration, however,
1 Data furnished by Mr. Earl G. Batty, cashier of the bank, in April, 1916.
Cf. Stokes, Chartered Banking in Rhode Island, 266, for the situation in 1811:
more than one hundred and forty stockholders, including fifty-one widows and
fatherless children.
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CONCLUDING OBSERVATIONS
303
was not far-reaching or thoroughgoing; new companies were
being formed; and while large capitalists were growing larger
new ones of power were rising into importance, and no great
increase in the concentration of ownership or management of
capital can be positively asserted.
A list of the incorporators named in the numerous Massachu-
setts incorporation acts shows a very large body of separate
incorporators, and a comparatively small number who figure in
more than two companies. It is dangerous to conclude from
this that the leading backers were as numerous as the published
names show, yet in default of contrary evidence it points to
the activity of a considerable number of entrepreneurs.
On the whole, the assertion may be ventured that the
eighteenth century corporations were initiated, financed, and
controlled by a considerable number of different members of
the capital-owning class, rather than by a few "captains of
industry" or by a large number of small investors.
At this distance in time it is impossible to gauge accurately
the public sentiment of this period toward the corporation, but
it is worth while to present some evidence and to endeavor to
assess the prevailing opinion and the changes which took place
in it as the corporation became more common.
That there was a certain prejudice against corporations as
such is undeniable. To the sentiments expressed in the summer
of 1792, quoted in the preceding essay,¹ a few other character-
istic utterances may be added. Among the objections reported
March 8, 1785, to a bill for incorporating a society of trades-
men and mechanics in New York City, the New York Council
of Revision included these: 2
"Because all incorporations imply a privilege given to one order of
citizens which others do not enjoy, and are so far destructive of that prin-
ciple of equal liberty which should subsist in every community; and though
respect for ancient rights induced the framers of the Constitution to tol-
erate those that then existed, nothing but the most evident public utility can
justify a further extension of them.
1 Essay III, chap. 5, esp. 430-432, 440.
2 Alfred B. Street, The Council of Revision of the State of New York
(Albany, 1859), 261-264.
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304 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
"Because the reason assigned in the preamble of this bill may equally
operate for the incorporation not only of the mechanics, but of every other
order of men in every county, whereby the State, instead of being a
community of free citizens pursuing the public interest, may become a com-
munity of corporations influenced by partial views, and perhaps in a little
time (under the direction of artful men) composing an aristocracy destruc-
tive to the Constitution and independence of the State."
The prejudice was loudly expressed in the debates over the
Bank of North America in 1785-87. The bank was denounced
as possessing exclusive rights, "whereby the natural and legal
rights of mankind are invaded, to benefit certain individuals
and as "having a natural tendency, by affording the means,
to promote the spirit of monopolizing." It was considered
relevant to remark that "Corrupt chartered boroughs in Great
Britain have eaten up the spirit of the constitution." 1 It was
argued that the institution would promote the concentration of
wealth, distinctly dangerous to a democracy.2 One legislator
voiced this fear:8
"If the legislature may mortgage, or, in other words, charter away
portions of either the privileges or powers of the state - if they may incor-
porate bodies for the sole purpose of gain, with the power of making bye-laws,
and of enjoying the emolument of privilege, profit, influence, or power, -
and cannot disannul their own deed, and restore to the citizens their right
of equal protection, power, privilege, and influence, - the consequence is,
that some foolish and wanton assembly may parcel out the commonwealth
into little aristocracies, and so overturn the nature of our government with-
out remedy."
In May, 1787, so innocent a would-be corporation as the
Connecticut Medical Society was denounced in the State Legis-
lature as "a combination of the doctors
directly against
liberty
a very dangerous thing,
a monopoly;" 4 and
it was refused a charter. Congressman Jackson of Georgia cried
out in Congress, in the debate on the incorporation of the Bank
of the United States (Feb. 4, 1791):
"What was it drove our forefathers to this country? Was it not the
ecclesiastical corporations, and perpetual monopolies of England and Scot-
1 Smiley and Finlay, March 29, 31, 1786, in Carey's Debates, 22, 23, 65. Fitz-
simons and Morris rightly denied that any monopoly was possessed; ibid., 30, 39.
2 Ibid., 66, 68.
3
Finlay, March 31, 1786, in ibid., 65.
4
Conn. Courant, June 4, 1787, quoting Granger and Barrall.
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CONCLUDING OBSERVATIONS
305
land? Shall we suffer the same evils to exist in this country
? For,
if we establish the precedent now before us, there is no saying where it shall
stop."
And Madison (February 7) dilated on the extensive influence
of incorporated societies on public affairs in Europe. "They
are a powerful machine, which have always been found compe-
tent to effect objects on principles in a great measure independent
of the people. 1 "Leonidas," writing in the New-York Journal,
Feb. 25, 1792, in praise of the late incorporation of the me-
chanics of the city as "a measure replete with much political,
agricultural, commercial and individual good," remarks: "The
dangers, attendant on incorporations of large monied interests,
which, at all times, have it in their power, by means of their
excessive wealth, to raise commotions in the state, do not pre-
sent themselves here;" and that such societies "would create a
bulwark, formed of the middle order of citizens, against the
undue influence which large associations of overgrown monied
importance and ambition, would produce among us." John
Taylor, a violent republican, said in 1794: 2
"It would be difficult
for a man of understanding, whose only mo-
tive was the common good, to find in the constitution, a single expression
which contemplated the erection of banks, or other corporations. For cor-
porations are only deeds of gift, or of bargain and sale, for portions of valu-
able common rights; and parts may be disposed of, until the whole is dis-
tributed among a few individuals."
There is reason to believe that this prejudice against corpora-
tions delayed for several years or prevented the grant or utiliza-
tion of several charters for municipal purposes. Clearly it was
one of the talking points in Boston, where leading citizens during
this period repeatedly agitated, but in vain, for a city charter. In
Philadelphia it was a factor in the delay until 1789 of the munici-
1 Clarke and Hall, Bank of the U.S., 55, 82. For further talk on the danger of
a precedent, cf. "Caius," in the Amer. Daily Advertiser, quoted in N. Y. Journal,
Feb. 8, 1792: "Thus it will not be remote, should the precedent be remarked on,
be suffered to remain, before under the power of Congress to grant exclusive char-
ters of incorporation, we may hope to see land jobbers as well as stockjobbers,
manufacturing, commercial and fishing companies severally incorporated under
the management of directors members of that honorable body [Congress]."
2 Enquiry into the Principles and Tendency of Certain Public Measures, 5. On
Taylor and his writings, see Beard, Economic Origins, esp. chap. 7.
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306 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
pal charter to replace that of William Penn which was made void
by the Revolution.¹ In Baltimore there was a like delay, and
when after years of agitation a charter was granted in 1793, "the
inhabitants of the Point, the mechanical, the carpenters and re-
publican societies, then lately formed, took part in opposition,
and it was not carried into effect." 2
A different sidelight appears in connection with the efforts of
the New Jersey Copper Mine capitalists to secure a national
charter, national subscriptions, a national loan - one or more -
in 1800. Hugh Williamson, who "lodged" in the neighborhood
of the works, and was "pretty well informed concerning the
measure of Prudence with which the Business is conducted, and
the measure of the Candour with which some Representations
have been made," wrote James McHenry urging him to caution
the President. Said he:
"Certainly it is to be desired that Companies were formed and that
Copper Mines were diligently wrought but if Government ever becomes
Partners they will infallibly be the milch Cow
I have seen too many of
these large companies foolishly and extravagantly managed, where they
have proved insolvent.
Such general objections were accompanied by specific ob-
jections in the case of particular companies or groups of com-
panies. Toll-bridge charters were opposed by owners of ferry
privileges, by towns and landowners preferring rival sites, by
objectors to obstructions to navigation.4 Turnpikes aroused
vigorous hostility from landowners because of the right of
eminent domain, from other landowners who were left to one side
by the route laid out, and from farmers who objected to having
to pay toll.5 Even defenders of the companies admitted just com-
1 Cf. Quincy, Municipal History of Boston, 23-26 contemporary newspapers,
e.g., Mass. Centinel, July 2, 1788; Hazard, Register of Pa., ii, 327 (1828); Winter-
botham, View of U.S.A., ii, 415.
2 Griffith, Annals of Baltimore, 141.
3
Southern Hist. Assoc. Publications, ix, 104-105 (March, 1905).
4 Cf. Hazard, Register of Pa., X, 148 (1832); Lord, Dartmouth College, ii, 655.
5
Cf. Scharf and Westcott, Hist. of Phila., i, 470, referring to remonstrances in
1792, "not only against the proposed Chestnut Hill turnpike, but also against the
different canal and turnpike companies already in existence, as being invested with
privileges in derogation of the rights of the people;" Anderson, Waterbury, Conn., i,
566; Orcutt, Torrington, Conn., 183; Blake, Hamden, Conn., 94-95; New Windsor
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CONCLUDING OBSERVATIONS
307
plaints where "the companies have not fulfilled their engage-
ments - or the roads have not answered the expence without too
high toll, or the Turnpikes have been set in the wrong place, or
without being under proper restrictions." 1 Canal companies
were similarly opposed and criticised, as well as because unwar-
ranted enthusiasm had been aroused among their subscribers.²
Banks had to meet considerable opposition of the sort which has
always arisen from those who fail to understand banking opera-
tions. Jefferson, for example, wrote Monroe, July IO, 1791,
commenting on the oversubscription to the national bank:8
"
we shall be paying thirteen per cent. per annum for eight mil-
lions of paper money, instead of having that circulation of gold and silver
for nothing. Experience has proved to us that a dollar of silver disappears
for every dollar of paper emitted; and, for the paper emitted from the
bank, seven per cent. profits will be received by the subscribers for it as
bank paper, (according to the last division of profits by the Philadelphia
bank,) and six per cent on the public paper [securities] of which it is the rep-
resentative. Nor is there any reason to believe, that either the six millions
of paper, or the two millions of specie, will not be suffered to be withdrawn,
and the paper thrown into circulation. The cash deposited by strangers for
safe keeping will probably suffice for cash demands."
Few could outdo the irascible federalist John Adams in de-
nunciation of banks. While president he blamed them for
increasing the instability of the circulating medium, which he
says has "committed more depredations upon the property of
honest men, than all the French pirates;"⁴ and some years later
he asserted:
Turnpike Co. V. Wilson, Coleman and Caines (N. Y.) 467-478 (1805). Cf. Pratt,
Inland Transport and Communication in England, 77-80, for similar hostility in
England.
1 Conn. Courant, June 26, 1797 ("A Philanthropist"). He remarks: "There is
something, I imagine, frightful in the very sound of the word Turnpike."
2 Cf. "An Enemy to Unnecessary Corporations," in the Gazette of the U.S., Jan.
I, 1794, apropos of the bill to incorporate the Insurance Company of North Amer-
ica, quoted in Fowler, Hist. of Ins. in Phila., 48-49.
3 Works (Washington ed.), iii, 267-268.
4 To Oliver Wolcott, June 21, 1799, in Adams, Works, viii, 660.
5 To John Taylor, in ibid., X, 375. Cf. ibid., ix, 638-639, for a letter to Benjamin
Rush, Aug. 28, 1811, expressing a belief in a national bank merely of deposit, with
a branch in each state. "Our whole banking system I ever abhorred, I continue
to abhorr, and shall die abhorring
every bank of discount, every bank by
which interest is to be paid or profit of any kind to be made by the deponent, is
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308 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
"I have never had but one opinion concerning banking, from the insti-
tution of the first, in Philadelphia , and that opinion has uniformly been
that the banks have done more injury to the religion, morality, tranquillity,
and even wealth of the nation, than they can have done or ever will do good.
They are like party spirit, a delusion of the many for the interest of the few."
The corporation had its defenders, of course. It was pointed
out that no exclusive privileges were granted, and that talk of
monopoly and the "corrupt chartered boroughs" was beside
the point; yet it could not be denied that being a corporation
carried with it peculiar privileges which all did not enjoy. His-
tory was called to witness that "all governments find the utility
of incorporating societies for peculiar purposes." 1 The dangers
were minimized, the need for enterprises for which incorpora-
tion was essential was stressed. But the talk of the opponents
resounds louder than the voices of the defenders.
There is no doubt that the opposition proved somewhat of a
hindrance to the extension of corporate privileges for business
purposes and caused a certain circumspection in granting
charters. The delays in granting charters to the Bank of New
York, the Essex Bank, the Bank of South Carolina, the In-
surance Company of North America, the Chestnut Hill turn-
pike, among others, were due in part to such objections. They
led to the postponement of charters to public service companies
till hearings upon them could be had, or petitions procured.
They were responsible in part for charter provisions limiting
downright corruption. It is taxing the public for the benefit and profit of individ-
uals; it is worse than old tenor, continental currency, or any other paper money."
Also his letters to John Taylor of Caroline, 1814, in ibid., iv, 509-510: "Have these
principles of government which we have discovered, and these institutions which
we have invented, which have established a 'moral liberty' undiscovered and uni-
versal,
inhibited monopolies and incorporations? Is not every bank a mon-
opoly? Are there not more banks in the United States than ever existed in any
nation under heaven? Are not these banks established upon a more aristocratical
principle than any others under the sun? Are there not more legal corporations, -
literary, scientifical, sacerdotal, medical, academical, scholastic mercantile, manu-
factural, marine insurance, fire, bridge, canal, turnpike, &c. &c. &c., - than are
to be found in any known country of the whole world." Cf. also the sentiments of
the Duke de Rochefoucault Liancourt, commenting in 1796 on the Wilmington
Bank: Travels in N. A., ii, 266, partly quoted supra, 100.
1 "An American," writing in the Mass. Centinel, June 16, 1784, apropos of the
proposed charter for Boston; he refers specifically to the "Weavers, Carpenters,
and Taylors" of England. Cf. also Essay III, 445-446.
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CONCLUDING OBSERVATIONS
309
the size of initial subscriptions, establishing regressive systems
of voting in corporate elections, limiting the term of franchises,
providing for reversion of property to the state or to individuals,
and reserving to the legislatures the right to alter or repeal acts
of incorporation.¹
Actions, however, proverbially speak louder than words.
Despite the prevalence of such talk as has been quoted, the ex-
tent and intensity of the distrust and hostility is easily magni-
fied. The unprecedented growth of corporations emphatically
attests the weakness of the opposition. Not many charters
were sought in vain, and these chiefly because of local objec-
tion to the particular project. And it is significant that expres-
sions of fear and criticism were more common before 1792
than after, when more experience with actual corporations had
accumulated. It is probably fair to say that the broader op-
position rested on traditional antipathy to such corporations
as the close corporations of the English boroughs, the restrictive
gilds, and the monopolistic companies for foreign trade; and
that the American business corporation turned out to be quite
a different sort of creature.
Further light on this subject is revealed by a survey of the
public policy toward the corporation. This must be gathered
almost entirely from the special acts of incorporation. The
historian of the law of business corporations before 1800 points
out that not even a beginning was made in America, before the
nineteenth century, in building up the great body of this law.2
There were practically no general statutes.⁸ The corporations
1 Cf. also the chartering of the Insurance Company of Pennsylvania simulta-
neously with the Insurance Company of North America, frankly as a rival to it:
Fowler, Hist. of Ins. in Phila., 49-50, and supra, 240-241, 242.
2 Samuel Williston, in Harvard Law Review, ii, esp. 165-166 (November, 1888).
Baldwin's remarks in his Private Corporations, on the attitude toward corporations
peculiar to American law, do not apply to this earlier period.
3 A single instance of something approaching a general act is one of South
Carolina passed Dec. 21, 1792. This recited "that bodies corporate should be en-
abled to recover from their members all arrears and other debts, dues and de-
mands which may be owing to them, in like mode, manner and form, as one indi-
vidual could recover the same from another, with whom he had no connection;"
and this power it gave. (Stats. at Large (ed. 1838), viii, 175.) This act, though gen-
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310 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
seldom appeared in court. No judicial decisions of consequence
had been rendered. American lawyers relied on English prece-
dents, many of which related to corporations not for business
purposes.
One fundamental question of corporation law, and of state
policy as well, arose soon after the Revolution: May a state re-
peal an act of incorporation? There was much shaking of heads
over the summary alteration of the charter of the college in
Philadelphia, in November, 1779, after an act announcing that
the new government would not interfere with existing corporate
privileges. This act, however, was defended on the ground that
the old charter had been forfeited by the actions of the trustees
under it.¹ A much greater storm was raised by the repeal, in
1785, of the Pennsylvania charter of 1782 to the Bank of North
America.2 Here the practical-minded directors dropped an
anchor to windward in securing a charter from Delaware; they
raised much talk about the validity of the congressional char-
ter, which antedated that of Pennsylvania; and they concen-
trated their efforts upon the election of an assembly for repeal
of the repealer or a recharter. They had also planned to con-
test the issue in the courts; but in the state of public senti-
ment and political disorganization then existing it seemed
better to discuss even the legal issue in the open court of
public opinion and in the new assembly itself.³ Hence on this
point a battle was waged in 1785-87.
While the bill to revoke the charter was under discussion,
James Wilson, perhaps the ablest lawyer of Philadelphia, sub-
mitted a carefully reasoned argument against the contemplated
action.4 After demonstrating the power of Congress to incor-
porate, he considered the question: "Would it
be wise or
eral in form, was almost certainly passed in the interest of the Santee and Cooper
canal company, and corresponds to provisions which in other states were inserted
in original charters or acts supplementary to them.
1 Pa. Stats. at Large, X, 23-30; Barton, David Rittenhouse, 363; Fitzsimons,
March 29, 1786, in Carey's Debates, 17-18. A new charter was granted Sept. 30,
1791.
2 See supra, 4I-43.
3 Cf. Robert Morris, March 30, 1786, in Carey's Debates, 33-34.
4 Wilson, Works, i, 565-577.
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CONCLUDING OBSERVATIONS
311
politic in the legislature of Pennsylvania, to revoke the charter
which it has granted to this institution?" Five grounds he pre-
sented for his negative answer. (1) Such act would be nugatory,
since the federal charter was an ample basis. (2) The state
cannot undo its legislative acknowledgment of that act. (3) The
repeal would wound confidence in the engagements of govern-
ments, which a state, in its own interest, should promote; since
the act of incorporation "formed a charter of compact" between
the legislature and the bank. (4) The repeal would injure the
credit of the United States, upon which the interest of Penn-
sylvania much depended. (5) The action would deprive the
state and nation of the benefits of the bank in war and peace.
Interest centres here on his third point. While "passed in
the same manner" and "clothed in the same dress of legislative
formality," acts conferring privileges on individuals or associa-
tions differ markedly, he said, from general legislative acts,
with respect to the "discretionary power of repeal." "Here
two parties are instituted, and two distinct interests subsist.
Rules of justice, of faith, and of honor must, therefore, be es-
tablished between them." Else such associations would be at
the mercy of the state.
" For these reasons, whenever the objects and makers of an instrument,
passed under the form of a law, are not the same, it is to be considered as
a compact, and to be interpreted according to the rules and maxims by
which compacts are governed. To receive the legislative stamp of
stability and permanency, acts of incorporation are applied for from the
legislatures. If these acts may be repealed without notice, without accu-
sation, without hearing, without proof, without forfeiture; where is the
stamp of their stability?
If the act for incorporating the subscribers
to the Bank of North America shall be repealed in this manner, a prece-
dent will be established for repealing, in the same manner, every other
legislative charter in Pennsylvania. A pretence, as specious as any that
can be alleged on this occasion, will never be wanting on any future occa-
sion. Those acts of the state, which have hitherto been considered as the
sure anchors of privilege and of property,¹ will become the sport of every
varying gust of politics.
Peletiah Webster's Essay on Credit, published Feb. IO, 1786,
also supported the charter-compact view.² A pamphlet by
1 Such a phrase as this the opponents rejoiced in.
2 Essays, 427-464, esp. 446, 456, 459. The same distinction "between Law and
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312 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Thomas Paine, published in the same month, presented much
the same arguments, including the emphasis on the contractual
nature of the charter, and asserting that the repeal had been
rushed through by a coterie of designing men relying onmistaken
notions and erroneous reasoning. Paine, however, acknowledg-
ing that omission of limitation of life opened the way for abuse,
admitted that a future generation "have the right of altering
or setting it aside, as not being concerned in the making of it,
or not being done in their day," though he denied this right to
the present generation.¹
In the legislative debates of March and April, 1786 this ques-
tion figured largely. The defenders of the repealer argued that
the charter was not "founded in justice," and in particular that
the assembly which passed it had no idea of the perpetuity of
the bank or of its impotence to alter the charter. One asserted
"that a clause had been introduced as a rider to the bill, for the purpose of
empowering the assembly that should sit in 1789, to alter or amend the char-
ter, as might be necessary. This was rejected by 27 to 24, and the express
reason assigned for the rejection, was, that the charter of the bank must
necessarily be always within the power of the house.' 2
He argued further that a charter could not be considered a con-
tract because no consideration was received for it by the state.
Smilie of Fayette County, a prime mover in the repeal, stated
that "The right of the house to repeal charters was debated in
the council of censors - and a member of that body, now in
this house, and in favour of the bank, conceded the point of
right in the legislature to revoke them." Finlay urged that
"the supreme legislature of every community necessarily pos-
sesses a power of repealing every law inimical to the public
safety" - as this act was declared to be. This power was rep-
resented as one of the necessary powers of the legislature -
and these the constitution had given without enumeration.
legislative Grants and Contracts" is pointed out in Noah Webster's essay on
"Principles of Government and Commerce," published in New York, 1788, in his
Essays
on Moral, Historical, Political and Literary Subjects (Boston, 1790),
40, 41.
1 Dissertations on Government, 34.
2 Lollar, March 29, 1786, in Carey's Debates, 14.
3 March 29, 1786, in ibid., 23.
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CONCLUDING OBSERVATIONS
313
Smilie intimated that a revolution was the only recourse if
such a power was not legally enjoyed.¹ Whitehill further con-
tended that "If charters cannot be repealed because they are
contracts, it affords a great invitation to fraud." 2 On the other
side, William Robinson followed Wilson and Paine in arguing
that
"In granting charters the legislature acts in a ministerial capacity
in
which they have the power to act for the community, whose agents they are
appointed. This is totally distinct from the power of making laws, and it is
a novel doctrine in Pennsylvania that they can abrogate those charters so
solemnly granted. There is this distinction between laws and charters of
incorporation
The first are general rules, which extend to the whole
community - the second bestow particular privileges upon a certain num-
ber of people
Charters are a species of property. When they are ob-
tained, they are of value. Their forfeiture belongs solely to the courts of
justice."
The point was not settled at this time. The repealing act was
neither repealed nor adjudged inoperative; the bank advocates
simply accepted a new charter. This action, however, must be
regarded as a set-back to those who supported the contract view
of charters, for the new charter was materially more restrictive
than the old. In the unsettled state of the government it is
clear that the bank supporters preferred to accept half a loaf
rather than risk an adverse court decision or adverse legislation
counteracting a favorable judgment.4
A few other instances of summary repeal or alteration appear.
In March, 1787, the Rhode Island legislature repealed its act
of May, 1784, incorporating Newport as a city, evidently with-
out judicial formality or the definite consent of the corporation.
The nullifying act recited that the charter had been granted in
1 March 29, 1786, in Carey's Debates, 65, 66.
2 March 31, 1786, in ibid., 64.
3 March 29, 1786, in ibid., II-12. He admits that Blackstone ascribes to
Parliament the power of repeal, but argues that the assembly is not here analo-
gous to Parliament.
4 Samuel B. Harding deals with this agitation in its connection with local poli-
tics, in his "Party Struggles over the First Pennsylvania Constitution" (Amer.
Hist. Assoc. Report, 1894, pp. 389-391). He concludes that the repealing act "un-
questionably contributed more than any other element to the overthrow of the
Constitutionalists in 1786 and secured the submission of the Federal Constitution
to a Republican assembly."
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314 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
consequence of a petition preferred "hastily, and without due
and proper consideration," by
"a number of the inhabitants of the then town of Newport convened in
town meeting, and without consulting many others of their fellow townsmen,
or giving them an opportunity to consider the consequence and import-
ance of a change in their town regulations, and of introducing a mode of
government novel, arbitrary, and altogether unfit for free republicans;"
and that since incorporation
"they have experienced many inconveniences and indignities, unknown to
them before said incorporation, injurious to their property and civil liberty,
and incompatible with the rights of freemen; that the choice of the mayor,
aldermen, and common council is effected by a few leading, influential men,
who, when chosen, have the appointment of all the city officers, indepen-
dent of the suffrages of the people, which they conceive to be a derogation
of those rights and immunities which freemen are indisputably entitled to
; that the power of the corporation is indefinite, and of consequence
dangerous; and that they were told that the city mode of government would
be economical, and much less expensive; in which they have been deceived
1
Here, however, the sentiment of the city seems to have clearly
favored the repeal. James Sullivan, in an anonymous pamphlet
of 1792, urged the repeal of the charter of the Massachusetts
Bank, saying: 2
"There is no lawyer in the state, who is disinterested, that will give it as
his opinion, that the legislature has not a right to repeal the act of incor-
poration of that society. It is by no means a charter of privilege; if it is,
the General Court had no right to grant it, because the constitution expressly
provides, that no exclusive privilege shall be granted to any man, or body of
men. It is not like an incorporation to build a bridge, or to cut a canal, be-
cause, in the first case, the government grants a property in a river, which
belongs to the state; and in the last it is only a grant of power to use the
property and soil which they have bought, or may buy of others. But the
incorporation of this bank is an open, express privilege of taking more in-
terest for their money than other people have a right to take. If it is not a
grant of exclusive privilege of taking more interest for their money than other
people have a right to take. If it is not a grant of exclusive privilege, it is
on the same footing of other legislative acts, such as incorporating towns
and proprietors, which laws may be repealed at pleasure. Here was no con-
tract between these people and the government, nor did the latter receive
any reward or consideration for the grant."
1 R. I. Recs., x, 233-234.
2 The Path to Riches (ed. 1809), 33-34.
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CONCLUDING OBSERVATIONS
315
The author of these sentiments was attorney-general of the state.
And the General Court, while not repealing, did soon after
materially alter the charter against the bank's protest.¹ North
Carolina repealed, in 1796, on petition of numerous inhabitants,
her act of 1788 incorporating the Catawba and Wateree com-
pany, which first came into existence by virtue of the South
Carolina act of 1787.2 Here it is not clear that the corpora-
tion seriously protested. Apparently without contest of the
issue, the Connecticut assembly seems to have freely reduced
rates of toll for her turnpike companies long before the charters
contained any reservation of the right of alteration.
There were probably other instances. It is fair to say, there-
fore, that at least to the end of the eighteenth century, cor-
porate charters were, without any specific reservation, legally
subject to repeal or alteration at the hands of the legislature.
Such action was, however, comparatively rare, and repeal, at
least, was resorted to only under what seemed a high degree of
provocation or else with the tacit consent of the corporation.
On the other hand, there were a number of examples of acts
passed to alter corporate charters which were to take effect upon
their formal acceptance by the corporations. The legislatures
show a tendency to become more cautious in interfering with
established privileges after the chaotic period of 1784-88 was
passed. It occasionally happened, however, that new privileges
sought by the corporations were granted along with restrictions
which had been omitted from the original grants.
Even before the power of repeal was settled, reservations to
the legislature of power to alter, amend, or repeal made their
appearance in corporate charters. The first instance of this
appears to have been the act of January, 1789, incorporating
the Connecticut silk manufacturers of Mansfield, which con-
tained the proviso "That if any of the Provisions of this Act
shall be found to be inconsistent or inadequate, the same may,
on application, or otherwise, be altered, repealed, amended or
enlarged by the General Assembly, as they shall shall [sic] find
1 Supra, 69.
2 Supra, 147.
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316 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
proper or necessary."¹ This reservation was apparently in a
friendly rather than a cautious spirit. But a similar proviso, in
the form characteristic of the period following the Dartmouth
College decision (1819), was common in Connecticut charters for
financial corporations in I795 and after; and other Connecticut
charters had more limited provisions of the same sort. The
practice does not seem, however, to have spread into other
states.
In the absence of general statutes and decisions, it is necessary
to turn to the specific acts of incorporation to discover details
of the public policy. Here one is confronted by large divergence
among different classes of corporations and in different states,
and it is hardly profitable to present all the varieties of pro-
visions which appeared in the three hundred charters and their
many supplements. Yet a few comments may be illuminating.
It would appear that the earliest charters were granted sub-
stantially in the form submitted by the applicants (with minor
modifications), and that these in turn served as models for later
drafts of bills, through which, as well as by direct legislative
amendment, changes were introduced. Frequently no models
seem to have been used for the earlier charters, except as charters
for ecclesiastical or social corporations afforded a form for in-
corporating clauses. In certain important instances, however,
notably the banks and the Virginia and Pennsylvania canals and
bridge companies, various English models were drawn upon.
These facts enable one to understand the remarkable looseness
of several early charters, such as those of the Bank of North
America (1781), the Massachusetts Bank (1784), the Charles
River Bridge (1785), and the Beverly Cotton Manufactory
(1789), and the contrasting elaborateness of others. They also
explain the great divergence of charters of one state from those
of another, and the tendency of charters of one type in each
state to be roughly similar.
The typical corporate powers - to have perpetual succes-
sion, to sue and be sued in the corporate name, to hold property,
1 Conn. MSS. Archives, Industry, ii, 237.
2 Private Laws, i, 99, 117, 128, 133, 279, 679-680.
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CONCLUDING OBSERVATIONS
317
to have a common seal, to make and alter by-laws, to appoint
officers and agents - were perhaps usually specified. Often, how-
ever, mention of particular powers was dispensed with by the
use of such clauses as "all privileges and franchises incident to a
corporation," or "doing all and every other act, matter and thing
which a corporation or body politic may lawfully do." Com-
monly the real estate which might be held was limited to a
specified amount (or occasionally to some multiple of its capital
stock) or to the amount requisite for the purpose of the company;
but sometimes, as in the case of the New Jersey manufacturing
company, the limit allowed was high enough to enable the cor-
poration to develop virtually into a land company.
By-laws were usually not further restricted than that they
must not be contrary to the charter, or the constitution and laws
of the state and nation. Connecticut turnpike company by-
laws, however, were subject to repeal or modification by the
Superior Court of the state.
Limited liability was recognized as an attribute of an incor-
porated company, almost invariably without specific mention;
indeed it was a principal object desired through incorporation.¹
A subscriber to the Bank of New York, in 1784, refused to pay
his subscription when the legislature denied a charter, saying:
"When the regulations were published and agreed upon, it was stipulated
that no subscriber should be liable for more than his stock. This presup-
poses the grant of a charter; for, without it, this article could not take effect;
should the subscription money be at present paid in, the stockholders be-
came to all interests and purposes bankers, and every man is liable - how-
ever small his share may be - for all the engagements of the bank to the
extent of his whole fortune."
In the petition of the directors of this bank for a charter in July,
1789, it is stated
"That standing on the footing of a private Company, in which each mem-
ber is supposed to be personally responsible for all the engagements entered
into, it has been found that many persons who would otherwise be desir-
ous of becoming subscribers, are deterred by that circumstance, from doing
it; whereby the increase of the stock of the bank is obstructed and its opera-
tions proportionably confined."
1 Cf. esp. Fowler, Hist. of Ins. in Phila., 48 (Ins. Co. of N. A.).
3 Domett, Bank of N. Y., 18-19, 34, quoting contemporary newspapers.
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318 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
In but a single instance, that of the Hamilton Manufacturing
Society (New York, 1797), was this limitation of liability re-
fused to a corporation.
Commonly in New York and South Carolina, occasionally
elsewhere, acts of incorporation were declared public acts, to be
taken notice of by all whom they might concern - thus reliev-
ing the companies of the necessity of showing on all occasions
the evidence of their rights.
The purposes authorized were never defined with the pre-
cision characteristic of those to-day, but the main purport was
usually clear enough. Trading, however, was specifically for-
bidden to most of the banks and insurance companies, as well
as the New Jersey manufacturing society - witnessing to the
fear of the trading corporation. Banking, also, was occasionally
specifically forbidden. Limitations of investment, except in
real estate, appear chiefly in the joint stock insurance companies
and the New Jersey manufacturing society, confining them to
specified classes of securities. The banks of Alexandria, Rich-
mond, and Pennsylvania were forbidden to purchase public
securities. Occasional other limitations appear, especially in
insurance charters. Thus the 1794 insurance companies of
Pennsylvania were required to keep their deposits with
the Bank of Pennsylvania. The New York Mutual was
authorized to insure only in New York City. The Baltimore
Equitable might insure no dwelling house for more than
£5,500, and none beyond five miles of the city limits. The
Providence Bank was forbidden to make a charge for de-
posits. The Banks of Pennsylvania and Baltimore were not
allowed to lend more than $50,000 to any one borrower. And
so on.
There were a few instances of corporations empowered to
undertake, or actually undertaking, different objects. Joint
stock insurance companies could usually write different kinds of
insurance, but commonly concentrated upon one or two. Manu-
facturing companies sometimes undertook different kinds of
manufacture. There were a few bridge-and-turnpike companies,
some bridge compamies with control of short stretches of toll
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CONCLUDING OBSERVATIONS
319
road, and at least two toll-bridge companies which were expected
to build short canals with locks. The New Jersey manufactur-
ing society had power to dig certain canals. The Niagara Canal
Company had the right to issue negotiable notes. The Delaware
and Schuylkill navigation company had authority to raise addi-
tional capital to provide Philadelphia with a water supply, and
planned also to develop mill sites along the canal and to build
wet and dry docks at the terminus. The Union Company of
Connecticut, for improving navigation, was authorized to build
wharves. The Maryland Insurance Fire Company (1791) was
authorized to build a gunpowder magazine, where all gunpowder
brought to the city was to be stored at specified rates. The
company was also to have the regulation of chimney sweepers,
issuing licenses, and keeping proper records.¹ The Manhattan
Company of New York, with specific powers only for furnishing
water, employed its large capital largely in banking but also
for insurance. As a rule ancillary powers of this general nature
were not utilized, except where, as in the case of bridge and turn-
pike, they were intimately related. In general, legislatures were
chary of granting, and the companies hesitated to ask, combina-
tions of diverse powers.
Ample powers of eminent domain, in various forms, were
granted almost always to highway companies, rarely, however,
to aqueduct companies, where voluntary agreement with land-
owners was usually insisted upon - the difference reflecting prob-
ably the smaller degree of public interest deemed to be involved
in the latter enterprises. The water companies were, however,
authorized to use the streets for laying pipes, sometimes subject
to the consent of the town, and usually in accord with restric-
tions in the interest of the public convenience. In the case of
highway companies these powers often extended beyond ena-
bling the taking of lands needed for the highway itself, to enabling
it to enter upon lands to make surveys and take materials neces-
sary for its structure. The use of these powers, probably often
1 Laws (Kilty), 1791, c. 69. Cf. supplement of Dec. 23, 1792 (Laws, c. II) au-
thorizing the company to permit any person or persons to erect this storage house
and conduct it, paying the company for the privilege.
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320 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
somewhat tactless, caused a vast deal of friction with inhabitants
along the route of turnpike and canal companies. The procedure
laid down for determining the amount of compensation in case
no voluntary agreement could- be reached, varied in different
states, and more or less in any one state. A jury impanelled by
the sheriff, and an arbitration commission of three members,
were two of the most characteristic agencies.
Exclusive privileges were rarely given. The Bank of the
United States was assured that no other bank charter would be
granted by the Federal government during its term of twenty
years. A few bridge companies were secured from competition
with other bridges within a certain distance of the structures
they raised. But while pressure from the corporations hindered
the extension of corporate privileges to banking, bridge, and
other companies which would compete with established ones,
the legislatures generally refused to recognize the existence of
vested rights in an implied monopoly. It is fair to say that the
glibly used phrases "monopoly" and "exclusive privileges"
meant no more than privileges given to some which were not
freely open to all, rather than privileges assured to some to the
exclusion of all others.
The earliest charters contained no limitation on the right to
subscribe. Very early, however, on account of certain great
rushes to subscribe (especially the Bank of the United States
and the Schuylkill and Susquehanna canals, 1791), a clause was
frequently inserted limiting subscriptions by any one person
for a certain time, to prevent oversubscription and the engrossing
of much-desired stock by a few individuals. This method, how-
ever, was not entirely successful, for the speculators resorted to
the use of several names, actual or fictitious, to attain their ends.¹
Pennsylvania charters frequently set not only a minimum number
of shares to be subscribed, but a minimum number of subscribers,
before organization of the company could be legally effected.
For the Easton Bridge, for instance, forty per cent of the au-
1 Cf. General Advertiser, January I2 (speech of Fisher in Pennsylvania legisla-
ture, January 1), Amer. Daily Advertiser, March 2 ("Honestus"), National Ga-
sette, June 7, 1792.
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CONCLUDING OBSERVATIONS
321
thorized capital had to be subscribed by twenty-five different
persons, and a certified subscription list sent to the governor by
the commissioners taking subscriptions.
There were conflicts between tendencies to keep the subscrip-
tion lists small and to make them extensive. Speculative sub-
scriptions would be fewer if subscriptions were quietly secured
and troublesome or otherwise undesirable subscribers could be
excluded. On the other hand, outcries were easily raised against
monopolizing subscriptions, and against granting charters to a
"few men." It was not politic to limit too greatly the opportun-
ity to subscribe. An early subscriber to the Hartford Bank, for
instance, wrote when time was nearly ripe to request a charter: 1
"There would be no difficulty in getting incorporated if it was not known
that the subscription was filled, for this reason, that there would be a number
in the Legislature who would wish to become subscribers, and would, of
course, advocate the bill while they supposed they could subscribe, and, on
the contrary, if it was known the subscription was full, they would oppose it
violently."
In some cases, notably the Hartford and New Haven banks
(1792), a limit was imposed on the number of shares that could
be subscribed or held by any person ($12,000); but this provision
was repealed as to the Hartford Bank in 1796.
For banks and insurance companies, definite dates were usually
set when the instalments of subscription should be paid in. In
other companies, subscriptions were usually subject to call by
the directors, after a small initial payment. Advertisements of
the calls, usually in local newspapers, were stipulated, and a
certain period of notice required. In later charters it was not
uncommon to set a maximum amount of a single instalment,
and occasionally a minimum interval between instalments was
set - reflecting probably an abuse of the unrestricted action
of the board in this respect. After the earliest charters, where
(as in the case of the Potomac company and "S. U. M.") the
lack of it caused trouble, provision was made for forfeiture of
delinquent shares, with sums previously paid, and this was
1 Woodward, Hartford Bank, 50. Cf. also the discussion over the West Boston
Bridge charter, in Boston Gazette, January, 1792.
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322 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
sometimes supplemented by authority to collect sums due by
action of debt.
Careful provisions were commonly inserted regarding the
regular and special meetings of the corporation, the method of
calling, advertisements in newspapers for a specified time in
advance, etc. These provisions were intended to be merely
directory, and late in the last decade one finds supplementary
acts and provisions in new charters declaring that failure to
elect in precise conformity to these provisions should not make
charters void or the election, when held, illegal.
Stipulations regarding a quorum of stockholders sometimes
appear, although this was usually left to be settled by by-law.
The earlier companies repeatedly found themselves in difficul-
ties because of carelessness of stockholders about attending
meetings or sending proxies. At the organization meeting of the
Massachusetts Bank (1784), only two hundred and sixty-six of
the five hundred and ten shares subscribed were represented.
At the next election an unusually large number were present,
and three hundred and eighty-seven votes out of a possible five
hundred and eleven were recorded. In 1786, however, less than
half, and in 1787 and 1788 only five eighths of the shares were
voted. In 1789 only thirty shares out of two hundred were
voted. This was in spite of the fact that nearly all the stock-
holders lived in Boston, and could easily have attended or sent
proxies. In September, 1791, "A stockholder" in the Bank of the
United States complained that of two hundred and fifty stock-
holders not more than twenty-four attended the first meeting.¹
This was at the time of greatest interest in a corporation
which attracted universal attention. Frequently, as in the cases
of the Potomac Company, the Northern Inland Navigation of
New York, and the "S. U. M.," meetings had to be postponed
for lack of a quorum. Then as now, stockholders received earn-
est appeals to send in proxies if unable to attend in person.
A board of directors - in highway companies more often
called "managers," in some cases denominated trustees - was
usually provided for, to be elected by the shareholders. These
1 Columbian Centinel, Sept. 24, 1791. Cf. also supra, 73 n.
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CONCLUDING OBSERVATIONS
323
boards varied in size from three or four to upwards of twenty,
most commonly ranging from seven to thirteen; sometimes the
determination of the size being left to the company. Usually
the president was elected by the board, from its own member-
ship, and it had full power to appoint all subordinate officers.
There were a good many charters, however, especially for build-
ing highways, which provided for the election of the president
by the stockholders, and often similarly the treasurer as well.
This board was given practically complete powers of management
often even to the extent of making the by-laws, subject usually
to modification by a stockholders' meeting. A common pro-
vision in the more elaborate charters forbade the directors any
emoluments for their service, except as allowed by the stock-
holders in regular meetings. Reports by the board to the
stockholders were sometimes specified, notably for highway com-
panies during the period of construction; and occasionally stock-
holders were given the right to inspect the corporate records.
Voting rights were usually not mentioned in water company
charters, where the rule of one vote for each proprietor may have
been general through this period; in Massachusetts bridge
charters, which were notably free; and in occasional other char-
ters, such as the congressional charter to the bank of North
America (1781). From the outset, however, most charters
specified voting rights. These were usually limited in one way
or another. A maximum of ten votes, or sometimes twenty,
was common, and well-nigh universal in case of turnpike com-
panies. Higher maxima were common in insurance companies.
Frequently a complicated system was drawn up giving less and
less weight per share as the size of the holdings increased.¹
1 Cf. Hamilton's proposal, adopted for the "national bank":
Shares
Votes
Shares
Votes
I-2
I for I
31-60
I for 6
3-10
I " 2
61-100
I " 8
II-30
I " 4
IOI+
I " 10
Maximum: 30 votes.
Thus a holder of thirty-six shares would have 2 + 4 + 5 + I, or twelve votes.
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324 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Alexander Hamilton, arguing for such a scheme in his report on
the "National bank," said:
"A vote for each share renders a combination between a few principal
stockholders, to monopolize the power and benefits of the bank, too easy.
An equal vote to each stockholder
allows not that degree of weight to
large stockholders which it is reasonable they should have, and which, per-
haps, their security, and that of the bank, require. A prudent mean is to
be preferred."1
The tendency was, however, for these limitations to be relaxed
toward a simple vote per share basis. This was done, probably
invariably, at the request of the corporations, probably under
pressure from those who were or would be large holders. And
voting rights of one per share were specified in occasional charters,
notably in those of the Bank of North America (Pennsylvania
charter, 1782), the Massachusetts Bank (1784), the New Jersey
manufacturing society (1791), and the New Haven Insurance
Company (1797).
Qualifications for directors were not invariably specified, and
there were occasional instances of directors acting who were
not stockholders.² The banks and insurance charters usually
stipulated membership in the corporation, citizenship and resi-
dence in the state, and sometimes required a certain proportion
to be residents of the town.⁸ One or more of these provisions
appeared frequently.
Rotation in office, for a part at least of a board of directors,
was stipulated in a number of bank and insurance charters, and
often in by-laws where the charter was silent. It was a feature
which Hamilton accounted important. Toward the end of this
period, however, it was more rarely embodied in new charters,
and was stricken out of some existing charters, while corpora-
1 Clarke and Hall, Bank of the United States, 28. Herein he differed from Robert
Morris. Cf. the latter's speech, March 31, 1786, in Carey's Debates, II7, defending
the existing rule in the Bank of North America, against Smilie's criticism (ibid., 109).
2 Cf. Hamilton in the "S. U. M.," Essay III, and the advertisement by Jere-
miah Van Renselaer, in N. Y. Journal, Feb. 20, 1793, of his resignation as direc-
tor of the Western Inland Lock Navigation because two directors not shareholders
were admitted, contrary to the charter.
3 Cf. Banks of Albany and Columbia (Hudson): nine out of thirteen, including
the president, were to be residents of the town.
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CONCLUDING OBSERVATIONS
325
tions which had adopted it as a by-law tended to drop it. The
New York Insurance Company, for example, in 1800 requested
the legislature to alter its charter in this respect, representing
it as "detrimental to the interests of the said company by re-
moving from the direction thereof persons well qualified by their
experience to accomplish the purposes of the said institution." 1
Interlocking directorates were sometimes forbidden. The
Union Bank of Boston (1792) might have on its board no director
of any other bank - and this provision appeared in all but one
(Nantucket) of the later bank charters in that state. It is found
also in the charters of the Bank of Pennsylvania (1793) and the
Bank of Baltimore (1795). Massachusetts joint stock insurance
corporations were not allowed to have on their directorates any
"person being singly or as a partner with one or more persons,
a member of any other company" carrying on the same type
of insurance. The policies of New York and Pennsylvania, at
least, were similar. At the stockholders' request, the charter
of the Bank of Albany was modified March 31, 1797 to provide:
"That no two or more persons who are or shall be interested or
connected together as copartners in any mercantile establish-
ment or manufactory or landed speculation shall be eligible to
the office of director at the same time.
2 No one serv-
ing the corporation in trade was eligible to the directorate of the
New York Mutual Fire (1798).
There was not much holding of stock in one corporation by
another, except in the case of insurance companies holding bank
or other corporate stock. Yet the law seldom frowned upon this,
and the common phrase "individual, partnership or body
politic" in the charter sections dealing with subscriptions, seems
to imply that subscriptions by corporations (whether business
or public) would not be unexpected. Dealing in stocks was
sometimes forbidden in so many words, as in the case of the
Massachusetts Bank after it had made a good profit on shares
subscribed in the Bank of the United States, or in the charters
1 N, Y. Laws (ed. 1887), iv, 539-540. Cf. Bank of N. Y., 1801; Mass. Bank
Stockholders' Records.
2 N. Y. Laws (ed. 1887), iv, 98.
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326, EIGHTEENTH CENTURY BUSINESS CORPORATIONS
of the banks of Alexandria, Richmond, and Pennsylvania with
respect to public stocks.¹
Little attention was paid to the protection of the corporate
estate. The first Massachusetts insurance charter (Massachu-
setts Fire, 1795), however, required that the capital should be
invested in federal or Massachusetts state debt, or in stock of
the national or Massachusetts banks, and "that if any loss or
losses shall at any time diminish the capital
no dividend
shall be made, until such loss or losses be completely restored."
This was followed thereafter in that commonwealth. In New
York and elsewhere, the latter provision was commonly found
in joint stock insurance charters. But no system of reserves
was provided for. Bridge charters often incidentally mention
reserve for reconstruction in case of decay or destruction, as for
example, the Easton Bridge company authorizing dividends out
of the clear profits, "deducting first all contingent costs and
charges," and "such proportion of the said income as may
be deemed necessary for a growing fund to provide against
the decay, and for rebuilding and repairing of the said bridge."
It does not appear that the companies often made any such
reserve.
It seems usually to have been expected that all the net profits
would be paid out regularly. Indeed, a common provision was
that dividends of all the profits should be made semi-annually,
though many charters left the amount to the discretion of the
directors, and many more failed to mention dividends. Few
companies actually set aside any surplus, and dividends conse-
quently commonly fluctuated with the annual earnings.
Not only did the legislatures grant corporate privileges. They
generally also displayed a favorable attitude toward the cor-
porations. Limitations of capital and real estate were liberal,
and usually enlarged upon request. Pennsylvania public serv-
ice companies, indeed, were authorized to increase the capital
beyond the specified amount as needed to complete the under-
taking, and Massachusetts charters for such companies imposed
1 The president and cashier of the Bank of Pennsylvania were forbidden any
concern in dealing in stocks, on penalty of $10,000.
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CONCLUDING OBSERVATIONS
327
no limitations at all. While time limits were usually set for
beginning or completion, or both, of bridges, canals, and turn-
pikes, extensions of time were seldom, if ever, refused; and it
is probable that the restriction was intended merely to prevent
"dog-in-the-manger" tactics. Increases in the term of franchise
were sometimes made for additional encouragement, or as an
offset to new competition introduced.¹ Other modifications of
charters were granted with no little freedom.
Lottery privileges were granted in a number of cases, as a
supplementary aid, notably for the New Jersey manufacturing
society (1791), the Santee and Cooper canals, the two principal
Pennsylvania navigation companies (1795), the South Hadley
Falls canals (Massachusetts, 1796), the Pocomoke (navigation)
company (Maryland, 1796), the Amoskeag Canal (New Hamp-
shire, 1799), and three New Jersey bridges (1790-92, 1798).
Probably the ill-success of lotteries in the period when the cor-
porations were most in need of additional funds, and a growing
public opinion against them - both probably related to the
growth of corporations, whose shares had many of the advan-
tages without most of the disadvantages of lottery tickets -
prevented larger resort to this means.2
Exemptions from taxation were occasionally granted, either
to the property of the corporation or to the workmen employed.
Exemptions from militia duty also appear. Usually both types
of exemptions were limited to a period of years. Both were
given only where a strong case for "encouragement" was made
out, notably for manufacturing corporations.
Furthermore, when occasion demanded, the legislatures fre-
quently responded to appeals for loans or subscriptions to shares.
Here one should carefully distinguish two diverse motives con-
tributing to induce state subscriptions. These were (I) a desire
for direct pecuniary gain, by productive investment of state
funds; and (2) a desire to promote operations within the state
1 E.g., Essex Merrimack Bridge, Charles River Bridge: Mass. Priv. and Spec.
Stats., i, 370, 403, 525, ii, 61-62.
3 Governor Hancock's message of May 26, 1791 (Resolves, p. 8), contains an
argument against lotteries, at a time when they were greatly in vogue but were being
forced out partly by the competition of the business corporation.
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328 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
destined to promote the general interest, somewhat regardless
of direct return. The latter motive seldom operated in sub-
scriptions to banks, for which funds usually came forth readily
in ample amount from private individuals; and in no instance
did a state subscribe to a struggling bank. At the outset, in
canal and manufacturing flotations, both motives were played
upon, but the second was clearly the more important. With
the encouragement motive dominating, Virginia subscribed
$60,000 to the James River Company, $17,500 to the Dismal
Swamp Company, more heavily still to the Potomac Company
to which Maryland also subscribed and loaned large sums;
New York subscribed nine hundred and fifty shares and paid
$92,000 to the Western canal company;¹ and New Jersey sub-
scribed and paid promptly $10,000 to her Society for establishing
useful Manufactures.² It is worthy of remark, however, that
no company aided in any important measure with the encour-
agement motive achieved success, except the Bank of North
America.
Reports to the legislature were required principally from
highway companies, usually at triennial or decennial intervals,
with a view to revision of tolls or furnishing data upon which
might be determined later the terms of surrender to the state.
These were seldom demanded, but were occasionally submitted.
A number of bank and insurance charters required submission
of statements on request, and a few (Bank of Pennsylvania,
1793-94) called for regular reports, of capital, debts, notes,
deposits, specie, etc. The Bank of Alexandria made regular
reports. Commonly the requirement seems to have been ig-
nored. Connecticut turnpike charters provided for an annual
accounting to the county court or courts, and sometimes in
addition for inspection by the General Assembly. Elsewhere,
especially in banking and insurance charters, the accounts were
sometimes required to be open to the legislature on request.
Neither power, however, was materially utilized.
The charters simply cannot be summarized as a whole.
1 Assembly Minutes, 1811, p. 85.
2 Essay III, 387, 508.
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CONCLUDING OBSERVATIONS
329
Throughout this period they reveal a combination of amateur
experiments in drafting, close following of older models, and in-
sertions of this, that, or another favorite clause of some legisla-
tor. The foregoing review is intended merely to indicate a
few particulars of policies which had become fairly well estab-
lished by 1800, and examples of other significant ones which
were tried out.
The corporation, then, was developed as an organization de-
vice in England before the discovery of America, and applied
to more and more uses during the exploration, settlement, and
upbuilding of the New World. English business corporations
figured largely in that exploration and settlement, and English
missionary corporations played a part in the upbuilding process.
During the colonial period, the corporation was naturalized in
the colonies, where it was used principally for local government,
ecclesiastical management, education, and public and private
charity. Although there are a few examples of colonial business
corporations, the device was not significantly utilized for business
purposes prior to the Revolution - partly because it was not
widely so applied in England, partly because of prejudice against
the prominent examples of English business corporations, but
chiefly because economic, political, and social conditions did not
require its presence.
The Revolutionary war checked for the time even the regular
increase of corporations, because of political uncertainty and the
interference with ordinary economic activities; but it laid the
foundation for more rapid progress after peace with independence
was established. Partly as a result of the triumph of the more
democratic spirit which had brought on the war, much freer in-
corporation of ecclesiastical and other non-business corporations
closely followed it. These tended to smooth the way for in-
corporating for business purposes, at least wherever a general
good could be persuasively presented in justification. Due
partly to the thoroughgoing stirring of the national life, the
stimulating contacts of the ablest men, and the inspiring op-
portunity of working out the country's destiny unrestricted
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330 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
by outside interference, there appeared a greater willingness to
experiment and a more vigorous spirit of enterprise. The first
business corporation, established as a war measure, amply
justified itself, and stimulated imitation in the field of commer-
cial banking. The need for better communication was empha-
sized by the war, and the leadership of the great man of the
continent, in Virginia navigation enterprises, attracted wide
attention to the usefulness of the business corporation in this
field. The marked success of the first toll-bridge companies,
experiments pure and simple, led to imitators here. The busi-
ness expansion accompanying, and in some measure attributable
to, the establishment of firm federal and state governments and
the substitution of sound public credit and finance for unsound,
tended strongly to promote the use of the corporation in tried
and untried spheres.
The result was an unprecedented application of the corpora-
tion to business uses. Here, in operation, it gradually overcame
most of the popular prejudice against it per se. Outcries against
specific evils were responded to by increased complexity and
caution in acts of incorporation. In certain fields it fully justi-
fied the sanguine hopes of its promoters and the public, and
was a highly important factor in the country's progress. This
was true notably in banking, insurance, bridge and turnpike
building. In other fields, notably manufacturing and the im-
provement of inland navigation, it was a disappointment, partly
due to inherent weaknesses in the corporate form, but chiefly
to a low stage of technical and business development.
By the end of the eighteenth century, the business corpora-
tion, in one form or another, was a familiar figure in all the large
towns and through much of the country, notably so in thrifty,
enterprising New England. The legislatures were beginning to
weary of pressure for special incorporating acts, and a beginning
had been made in establishing general acts of incorporation for
business purposes.
When all this is said, it must be repeated that the period is one
merely of beginnings. Yet before 1801 a substantial basis had
been laid upon which the nineteenth century could build.
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APPENDIX A
AMERICAN COLONIAL BUSINESS CORPORATIONS INCORPORATED AND
OPERATING IN THE FUTURE UNITED STATES
1732
Conn.
New London Society united for Trade and Commerce.
May
Conn. Col. Recs., vii, 390-391.
1760
Conn.
The Union Wharf Company of New Haven.
May
Conn. Col. Recs., xi, 400-401.
1768 Pa.
*The Philadelphia Contributionship for the Insuring of
Feb. 20
Houses from Loss by Fire.
Pa. Stats. at Large, vii, 178-181.
1772
R.I.
Field's Fountain Society [Providence].
May
Session Laws, 8-II.
1772
Mass.
Boston Pier, or the Long Wharf in the town of Boston in
July 14
New England, The Proprietors of.
Mass. Province Acts, x, 200-202.
1772
R.I.
Rawson's Fountain Society [Providence].
Oct.
Session Laws, 55-57.
1773
R.I.
Cooke's Fountain Society [East Greenwich].
Oct.
Session Laws, 76-78.
* Companies so marked are still in existence, though in some cases under
slightly different titles.
33I
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APPENDIX B
AMERICAN CHARTERS TO BUSINESS CORPORATIONS, 1781-1800,
CLASSIFIED BY OBJECTS AND ARRANGED UNDER EACH OBJECT
(so FAR AS POSSIBLE) IN CHRONOLOGICAL ORDER
Except as otherwise indicated, the charters here listed may be most
easily found for the different states in the following collections:
MAINE. As for Massachusetts.
NEW HAMPSHIRE. MS. Laws (see Index to the Laws of N.H.
Man-
,
chester, 1886); and Session Laws, for turnpike companies.
VERMONT. Session Laws.
MASSACHUSETTS. Laws, 1780-1800 (2 vols., Boston, 1801), for banks and
insurance companies; Private and Special Statutes, 1780-1805 (3 vols.,
Boston, 1805), for other corporations.
RHODE ISLAND. Session Laws.
CONNECTICUT. Resolves and Private Laws, 1789-1836 (2 vols., Hartford,
1837).
NEW YORK. Laws, 1777-1887 (vols. I-IV, Albany, 1886-87).
NEW JERSEY. Session Laws.
PENNSYLVANIA. Statutes at Large (16 vols., Harrisburg, 1896-1911).
DELAWARE. Laws, 1700-97 (2 vols., Newcastle, 1797).
MARYLAND. Laws (Kilty ed., 2 vols., Annapolis, 1799).
VIRGINIA. Statutes at Large, 1619-1792 (Hening ed., I3 vols., Richmond,
etc., 1819-23); and Statutes at Large, 1792-1806 (Shepherd ed., 3 vols.,
Richmond, 1835).
NORTH CAROLINA. Session Laws.
SOUTH CAROLINA. Statutes at Large (Vol. VIII, Columbia, 1837).
BANKS
1781
Dec. 3I U.S. *North America [Philadelphia], The President, Directors,
and Company of the Bank of.
Journals of Congress, vii, 257.
1782
Mar. 8 Mass. Do. Laws (ed. 1788), i, 187.
Apr. I Pa.
Do.
Apr. II N.Y. Do.
* Companies so marked are still in existence, though in some cases under
slightly different titles.
332
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APPENDIX B
333
1784
Feb. 7
Mass. $ Massachusetts Bank [Boston], the P. and D. of the.
1786
Feb. 2
Del.
North America, The P., D., and Co. of the Bank of.
1787
Mar. 17 Pa.
Do.
1790
Dec. 14
Md.
Maryland [Baltimore], The P. and D. of the Bank of.
1791
Feb. 25
U.S.
United States [Philadelphia], The P., D. and Co. of the
Bank of the.
U.S. Stats. at Large, i, 191-197.
Mar. 2I
N.Y. *New-York, The P., D. and Co. of the Bank of.
Nov. 5
R.I.
*Providence Bank, The P., D. and Co. of the.
1792
Jan. 3
N.H.
New-Hampshire Bank [Portsmouth].
Apr. IO
N.Y.
Albany, The P. D. and Co. of the Bank of.
May
Conn.
Hartford Bank, P., D. and Co. of the.
May
Conn.
Union Bank, in New London, The P., D. and Co. of the.
June 22
Mass.
* Union Bank [Boston], The P. and D. of the.
Oct.
Conn.
New Haven Bank, The P., D., and Co. of the,
Nov. 23
Va.
Alexandria, The P., D., and Co. of the Bank of.
Dec. 23
Va.
Richmond, The P., D., and Co. of the Bank of.
1793
Mar. 6
N.Y.
Columbia [Hudson], The p., d. and co. of the bank of.
Mar. 30 Pa.
Pennsylvania [Philadelphia], The P., D., and Co. of the
Bank of.
Dec. 28 Md.
Columbia [D. C.], The P., D. and Co., of the Bank of.
1795
Feb. 27
Mass.
Nantucket Bank, The P. and D. of the.
June 25
Mass.
Merrimack-Bank [Newbury Port], The P. and D. of the.
Oct.
Conn.
Middletown Bank, The P., D. and Co. of the.
Oct. 28
R.I.
Rhode-Island [Newport], The P., D., and Co. of the
Bank of.
Dec. 24
Md.
Baltimore, The P., D., and Co. of the Bank of.
1796
Feb. 9
Del.
"Delaware [Wilmington], The P., D. and Co. of the Bank of.
May
Conn. *Norwich Bank, The P. D. and Co. of the.
1799
June I5
Maine
Portland Bank, The P., D. and Co. of the.
June 18
Mass.
Essex Bank [Salem], The P., D. and Co. of the.
*
Companies so marked are still in existence, though in some cases under
slightly different titles.
t Companies so marked were clearly not organized under the charter.
# These companies, after prosperous histories, have been merged in recent
years with younger institutions.
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334 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
1800
Jan. 27
Mass.
Gloucester Bank, The P., D. and Co. of the.
June
R.I.
Bristol, The P., D. and Co. of the Bank of.
June
R.I.
Washington Bank [Westerly], The P., D. and Co. of the.
NOTE. The Bank of New-York (1791) was founded in 1784, and the Essex Bank
(1799) in 1792, and they thus operated for several years without charters. Be-
sides the above, the Bank of South Carolina was founded in 1792 and operated in
Charleston without a charter; and the Manhattan Company, chartered by New
York in 1799 ostensibly to furnish a water supply, immediately established a bank
in the metropolis, which is still in operation.
INSURANCE CORPORATIONS
1786
Feb. 27 Pa.
* The Mutual Assurance Company for insuring Houses
from Loss by fire [Philadelphia].
1787
May 2I Md.
The Baltimore insurance fire-company.
1791
Dec. 26 Md.
The Maryland Insurance Fire Company [Baltimore].
1794
Apr. 14 Pa.
North America [Philadelphia], The P. and D. of the
Insurance Company of.
Apr. 18 Pa.
* Pennsylvania [Philadelphia], The Insurance Company of
the State of.
Dec. 22 Va.
The Mutual Assurance Society against fire on buildings,
of the State of Virginia [Richmond].
Dec. 26 Md.
The Baltimore Equitable Society for insuring Houses
from Loss by Fire.
1795
May
Conn.
*Norwich, The Mutual Assurance Company of the city of.
June 25
Mass.
The Massachusetts Fire Insurance Company [Boston].
Dec. 3
Va.
Mutual Insurance company against fire on goods and
furniture, in the state of Virginia [Richmond].
Dec. 24
Md.
The Maryland Insurance Company [Baltimore].
Dec. 26 Md.
The Baltimore Insurance Company.
1797
Oct.
Conn.
The New-Haven Insurance Company.
Dec. I6
S.C.
The Charleston Mutual Insurance Company.
Dec. 16
S.C.
The Charleston Insurance Company.
1798
Jan. IO
Va.
Alexandria, The marine insurance company of the town of.
Jan.
Md.
Georgetown Mutual Insurance Company.
Mar. I
Mass.
The Massachusetts Mutual Fire Insurance Company
[Boston].
Mar. 20 N. Y.
United Insurance Company in the City of New York.
Companies so marked are still in existence, though in some cases under
slightly different titles.
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APPENDIX B
335
Mar. 23 N. Y.
The Mutual Assurance Company of the City of New
York.
Apr. 2
N.Y.
The New York Insurance Company.
1799
Feb. 3
R.I.
*The Providence Insurance Company.
Feb. I3
Mass.
The Boston Marine Insurance Company.
Feb.
R.I.
Newport Insurance Company.
June 15
N.H.
The New Hampshire Insurance Company [Portsmouth].
June 18
Mass.
The Newburyport Marine Insurance Company.
1800
Feb. 7
Maine
The Maine Fire and Marine Insurance Company [Port-
land].
Feb. 17
R.I.
* 'The Washington Insurance Company in Providence.
Feb.
R.I.
The Warren Insurance Company.
Feb.
R.I.
The Bristol Insurance Company.
June 9
Mass.
The Salem Marine Insurance Company.
Oct.
R.I.
*The Providence mutual Fire Insurance Company.
CORPORATIONS FOR IMPROVING INLAND NAVIGATION
1783
Dec. 26
Md.
Susquehanna Canal, The Proprietors of the.
1784
Dec. 28
Md.
the Patowmack Company.
1785
Jan. 5
Va.
the Potowmack Company.
Jan. 5
Va.
James River Company.
1786
Mar. 22 S.C.
Santee to Cooper River, the Company for the Inland
Navigation, from.
1787
Mar. 27 S.C.
Edisto and Ashley rivers, the company for improving the
navigation of, and making a communication by a canal
and locks from the one to the other of the said rivers.
Mar. 27 S.C.
Catawba and Wateree rivers, the company for opening
the navigation of the.
Dec. I
Va.
the Dismal Swamp Canal Company.
1788
Feb. 29
S. C.
Broad and Pacolet rivers, The company for opening the
navigation of.
Dec. 6
N.C.
Catawba and- Wateree rivers, the company for opening
the navigation of the.
N. C. Records, xxiv, 961-962.
Dec. I5 Va.
the Mattapony trustees.
Dec. 17 Va.
the Appamattox trustees.
Dec. 30 Va.
the Appamattox company.
Companies so marked are still in existence, though in some cases under
slightly different titles.
Companies so marked were clearly not organized under the charter.
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336 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
1789
Dec. 9
Va.
the Pamunkey trustees.
1790
Dec. I5 N.C.
The Fayetteville canal company.
Dec. I5 N.C.
the Dismal-Swamp Canal Company.
1791
June 17 Maine
New-Meadow Canal, the Proprietors of the.
Sept. 29 Pa.
Schuylkill and Susquehanna Navigation, The President,
Managers and Company of the.
Nov. I Vt.
Bellows falls, the company for rendering Connecticut
river navigable by.
1792
Feb. 23 Mass.
Connecticut River, the Proprietors of the Locks and
Canals on.
Mar.
8
Mass.
Massachusetts Canal, the Proprietors of the.
Mar. 30 N.Y.
northern inland navigation in the State of New York,
The p., d. and co., of the.
Mar. 30 N.Y.
western inland lock navigation in the State of New York,
The p., d. and co., of the.
Apr. IO Pa.
Delaware and Schuylkill Navigation, The P., M. and Co.
of the.
June 20 N.H.
White River Falls Bridge, The proprietors of the.
June 27
Mass.
Merrimack River, the Proprietors of the Locks and Canals
on.
June 27
Maine
Mousom Harbour in Wells, The Proprietors of the.
Oct. 25 Vt.
Bellows falls, the company for rendering Connecticut
river navigable by.
Laws (ed. 1798), 81-85 [second charter].
Dec. 18 N. H.
Bellows Falls, Company for rendering Connecticut River
`navigable by.
Dec. 31 N.C.
the Cape-Fear company.
Laws (Martin ed.), 54-55.
1793
Apr. IO Pa.
The Conewago Canal Company.
Apr. IO Pa.
Brandywine Canal navigation, The P., M. and Co. of the.
June 17 Del.
Brandywine Creek, The company for opening a canal and
lock navigation in the waters of.
June 22 Mass.
Middlesex Canal, the Proprietors of the.
Dec. II Va.
the Rappahannock company.
1794
Feb. 27 Mass.
Connecticut River, The Proprietors of the Upper Locks
and Canals on, in the County of Hampshire.
Oct. 22 Vt.
Water Queche Falls, The Company for rendering con-
necticut River navigable by.
Companies so marked are still in existence, though in some cases under
slightly different titles.
t
Companies so marked were clearly not organized under the charter.
Digitized by
Google
APPENDIX B
337
1795
Mar. I6 N.J.
Rancocus Creek, The P., M. and Co. for the improvement
of the navigation of the north branch of.
June 25
Maine
Cumberland Canal, the Proprietors of the.
June 25
Maine
Falmouth Canal, Proprietors of the.
Oct. 2I
Vt.
White-River-Falls-Bridge, the proprietors of the.
Oct.
Conn.
Ousatonic River, The Company to clear the Channel of
the.
Dec. 9
N.C.
The Clubfoot and Harlow's creek canal company.
Dec. I
Va.
Piankitank canal company, the trustees of the.
Dec. 5
Va.
The Quantico Company.
Dec. 21
Va.
Upper Appamatox company, the trustees of the.
1796
Jan. I
N.H.
Winnepesaukee and Merrimack Canal, Proprietors of the.
Feb.
R.I.
Providence-Plantations Canal, The Proprietors of the.
Mar. 15
N.J.
Assanpink Creek, The P., M. and Co. for opening the
navigation of the.
June 14
Maine
Saco River, The Proprietors of the Sluice-way on.
Dec. 8
N.H.
Water Queche Falls Canal, Ye Proprietors of.
Dec. I2
Va.
The North River Canal Company.
Dec. 30
Md.
the Pocomoke Company.
Session Laws, c. 33.
?
N.C.
The Roanoke Navigation Company.
?
N.C.
The Roanoke and Pungo Canal Company.
?
N.C.
The Deep and Haw River Company.
?
N.C.
Yadkin Canal Company.
?
N.C.
the Tar river Navigation Company.
1797
Feb. IO N.J.
Great Timber Creek, The P., M. and Co. for improving
the navigation of the south branch of, in the county of
Gloucester.
Mar. II Maine
Little Falls, The Proprietors of the Sluice-Ways in the
Plantation of.
Mar. II
Maine
Ten Mile Falls Canal, the Proprietors of.
Nov. I
Vt.
White River, The company for locking.
Dec. 16
S.C.
The Pine-tree Creek Navigation Company.
Laws (ed. 1808), ii, 163-167.
1798
Feb. 27
Pa.
Lehigh Navigation Company, The P., M. and Co. of the.
Apr. 5
N.Y.
The Niagara Canal Company.
Jan. 29
Va.
the Shenandoah company.
Dec. 24
N.H.
Blodgett's Canal, Proprietors of.
?
N.C.
Union Canal Company.
1799
Feb. 14 Ga.
Savannah Navigation Company.
Laws (Marbury & Crawford ed.), 371-374.
Companies so marked were clearly not organized under the charter.
Digitized by Google
338 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Dec. 7
Md.
The Chesapeake and Delaware Canal Company.
Laws (ed. 1811), ii, 509. (Cf. Pa. charter, Feb. 19,
1801).
Dec. 2I S. C.
Back River to Chapel Bridge, The Company for opening
a Canal from.
1800
Jan. 23
Va.
the Appamattox company [second charter].
Oct.
Conn.
Union Company.
Nov. 17 N.J.
Salem Creek, in the county of Salem and state of New
Jersey, The P. M. and Co. to cut a canal to shorten
the navigation of.
TOLL-BRIDGE CORPORATIONS
1785
Mar. 9
Mass.
Charles River Bridge, the Proprietors of.
1787
Mar.
I
Mass.
Malden Bridge, the proprietors of.
Nov. 17
Mass.
Essex Bridge [Beverly], the proprietors of.
1791
Dec. 29
Md.
The George-town Bridge Company.
Session Laws, c. 8r.
1792
Feb. I
Mass.
Middlesex Merrimack River Bridge [Pawtucket Falls,
Chelmsford-Dracut], the Proprietors of the.
Feb. 24
Mass.
Essex Merrimack Bridge [Newbury-Salisbury], The Pro-
prietors of.
Mar. 6
Mass.
[Connecticut River, a company to build a bridge over the,
between Montague and Greenfield, no corporate name
specified.]
Mar. 9
Mass.
West-Boston Bridge, the Proprietors of the.
June
R.I.
Central Bridge, leading to and from Providence, The Pro-
prietors of the.
June
R.I.
The Providence South-Bridge Society, in the Town of
Providence.
June I6
N.H.
Amoskeag Bridge [Goffstown], Proprietors of the.
June 20
N.H.
White River Falls Bridge, the proprietors of.
June 2I
N.H.
Newmarket and Stratham bridge, the proprietors of the.
Nov. 28 N.J.
Rancocus Toll-Bridge, The President, Managers and
company of.
1793
Mar. 9
Maine New Meadows River, a company to build a bridge over;
no corporate name clear.]
Mar. I9 Mass.
Andover Bridge, The Proprietors of.
Mar. 22. Mass.
Haverhill Bridge, The Proprietors of the.
Apr. II Pa.
Susquehanna [near Wrights Ferry], The P., M. and Co.
for building a bridge over.
t Companies so marked were clearly not organized under the charter.
Digitized by Google
APPENDIX B
339
June 20
N.H.
Piscataqua Bridge, the proprietors of.
June 22
Maine
Sheepscott River Bridge, The Proprietors of.
1794
Jan. II
N.H.
Northbury Bridge [Northfield], Proprietors of.
Jan. 29
N.H.
Orford Bridge, Proprietors of.
Feb.
R.I.
The Rhode Island Bridge Company.
Feb. 25
Maine
Portland Bridge, the Proprietors of the.
Feb. 27
Maine
Back-Cove Bridge, the Proprietors of.
May IO
S.C.
The port Republic Bridge Company.
June 14
Mass.
Merrimack Bridge, the Proprietors of.
1795
Jan.
N.H.
Litchfield Bridge, the Proprietors of.
Jan. 14
N.H.
Haverhill Bridge, proprietors of.
Jan. I4
N.H.
Cornish Bridge, Proprietors of the.
Jan. I6
N.H.
Northumberland Bridge, Company of.
Jan. I6
N.H.
Concord Bridge, Proprietors of.
Feb. II
Maine [Damarascotti River, a company for building a bridge
over; exact title not clear.]
Mar. I3 Pa.
*Easton, The P., M. and Co. for erecting a bridge over the
river Delaware at the borough of.
Mar. 18 N.J.
Do.
June 18 N.H.
Haverhill Bridge, The Proprietors of. [A second com-
pany. Cf. Wells, Newbury, Vt., 307-310.]
Oct. I6 Vt.
The West River Bridge company [Brattleborough].
Oct. 21
Vt.
White-River-Falls-Bridge, The Proprietors of.
Dec. 24
Md.
The Eastern Branch Bridge Company [Washington].
Dec. 28
N.H.
Federal Bridge [Concord], Proprietors of.
Dec.
N.H.
Bridgewater and New Hampton Bridge, Proprietors of.
1796
Feb. 8
Maine
Kennebeck Bridge [Hallowell], The Proprietors of the.
Feb. 26
Maine
Androscoggin Bridge [Brunswick], The Proprietors of.
June 17
Mass.
New-Bedford Bridge, The Proprietors of.
June 18
Mass.
Connecticut River Bridge [Montague], The Proprietors of.
Oct.
Conn.
New Haven to East Haven, The Company for erecting
and supporting a Toll Bridge from.
Dec. 30
Md.
Water-street Bridge Company [Baltimore], The P. and
D. of the.
1797
Mar. 7
Maine
Eastern River Bridge, at Calls Ferry in Dresden, The
Proprietors of the.
Mar. 7
N.J.
Passaic and Hackensack [near Newark], The Proprietors
of the bridges over the rivers.
Mar. 8
Maine
Upper Bridge over Eastern River [Dresden], The Proprie-
tors of the.
*
Companies so marked are still in existence, though in some cases under
slightly different titles.
Companies so marked were clearly not organized under the charter.
Digitized by
Google
340 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Mar. IO Maine [Damariscotta Bridge company, Lincoln County; exact
title not clear.]
Mar. 28 N.Y.
The Cayuga Bridge Company.
Mar. 28 Pa.
Northampton, The P., M. and Co. for erecting a Bridge
over the river Lehigh, near the town of.
June 2I N.H.
Favour's Bridge [New Chester], Proprietors of.
June 22
Mass.
Deerfield Falls Bridge, The Proprietors of.
June 22
Maine
Lewiston Bridge, The Proprietors of.
Oct.
Conn.
Niantic Toll Bridge, The Proprietors of.
Oct. 28
Vt.
The Second West River Bridge Company [Dummerston].
Nov. IO Vt.
Cornish Bridge, The Proprietors of.
Dec. I2 N.H.
Holderness Bridge, Proprietors of.
Dec. I5 N.H.
Nottingham West Bridge, Proprietors of.
1798
Jan. 20
Md.
The Anacostia Bridge Company [Washington].
Feb. 16
Mass.
The Wilbraham Bridge Company.
Feb. 17
Maine
York Bridge, the Proprietors of.
Mar. 3
N.J.
Trenton, The P., M. and Co. for erecting a bridge over
the river Delaware at.
Mar. I6 Pa.
Philadelphia, The P., M. and Co. for erecting a perma-
nent bridge over the river Schuylkill, at or near the
city of.
Apr. 4
Pa.
Trenton, The P., M. and Co. for erecting a bridge over
the river Delaware at or near.
Oct.
Conn.
Enfield to Suffield, The Company for erecting and sup-
porting a Toll Bridge with Locks, from.
1799
June I
N.J.
New-Brunswick Bridge, The Proprietors of the.
?
Ky.
Frankfort Bridge Company, The P. and D. of the.
Nov. 5
Vt.
Onion River Bridge Company [Waterbury].
1800
June 14
N.H.
New Castle Bridge, Proprietors of.
Dec. 9
N.H.
Republican Bridge [Salisbury], The Proprietors of the.
TURNPIKE CORPORATIONS
1792
Apr. 9
Pa.
Philadelphia and Lancaster Turnpike Road, The P., M.,
and Co. of the.
1794
Feb.
R.I.
Cepatchit Bridge, in Gloucester, to Connecticut Line,
The Society for establishing and supporting a Turnpike
Road from.
Apr. 22 Pa.
Lancaster and Susquehanna turnpike road, The P., M.,
and Co. of the.
* Companies so marked are still in existence, though in some cases under
slightly different titles.
t Companies so marked were clearly not organized under the charter.
Digitized by Google
APPENDIX B
341
Oct.
R.I.
The Providence and Norwich Society, for establishing a
Turnpike Road from Providence to County Line,
through Johnston, Scituate, Foster and Coventry.
1795
May
Conn.
New-London and Windham County Society.
May
Conn.
The Oxford Turnpike Company.
Oct.
Conn.
The Hartford, New-London, Windham, and Tolland
County Society.
Oct.
Conn.
The Norwalk and Danbury Turnpike Company.
Dec. 17
Va.
Fairfax and Loudoun turnpike road, The P, M., and Co.
of the.
Dec. 17
Va.
the Matildaville company.
1796
Mar. 28 Pa.
Lancaster, Elizabethtown, Middletown, and Harrisburgh
Turnpike Road, The P., M. and Co. of the.
Apr. 4
Pa.
Gap, Newport, and Wilmington Turnpike Road, The
P., M. and Co. of the.
June II
Mass.
The First Massachusetts Turnpike Corporation.
June I6
N.H.
New-Hampshire turnpike road, the proprietors of the.
Nov. 3
Vt.
The First Vermont turnpike corporation.
Dec. 31
Md.
Washington Turnpike Road, The P., D. and Co., of the.
1797
Mar. 8
Mass.
The Second Massachusetts Turnpike Corporation.
Mar. 9
Mass.
the Third Massachusetts Turnpike Corporation.
Mar. IO
Vt.
The Green Mountain Turnpike Corporation.
Apr. I
N.Y.
Albany and Schenectady turnpikes in the country of
Albany and State of New York, The P., D. and Co.
of the.
May
Conn.
The Fairfield, Weston, and Reading Turnpike Company.
Oct.
Conn.
The Boston Turnpike Company.
Oct.
Conn.
The New-Milford and Litchfield Turnpike Company.
Oct.
Conn.
The Saquituck Turnpike Company.
Oct.
Conn.
The Strait's Turnpike Company.
Oct.
Conn.
The Stratfield and Weston Turnpike Company.
1798
Jan. 20
Md.
Elizabeth-town Turnpike Road, The P., D. and Co. of the.
Jan. 20
Md.
Rister's-town turnpike Roads, The P., D. and Co. of the.
Mar. 29
Pa.
Germantown and Reading Turnpike Road, The P., M.
and Co. of the.
Apr. 4
N.Y.
Western Turnpike Road, The P., D. and Co. of the.
Apr. 5
N.Y.
Albany & Columbia Turnpike Road, The P., D. & Co. of
the.
May
Conn.
The Derby Turnpike Company.
May
Conn.
The Ousatonic Turnpike Company.
May
Conn.
The Talcott Mountain Turnpike Company.
Oct.
Conn.
The Green Woods Turnpike Company.
Companies so marked were clearly not organized under the charter.
Digitized by Google
342 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
Oct.
Conn.
The Hartford and New Haven Turnpike Company.
Oct.
Conn.
The Litchfield and Harwinton Turnpike Company.
1799
Mar. I
Mass.
The Williamstown Turnpike Corporation.
Mar. I
Mass.
Fifth Massachusetts Turnpike Corporation.
Mar. I5
N.Y.
Great Western Turnpike Road, The P., D. and First
Company of the. [New charter of the Western, 1798.]
Mar. 29
N.Y.
Columbia Turnpike Road, The P., D., and Co. of the.
Apr. I
N.Y.
Rensselaer and Columbia Turnpike Road, The P., D.,
and Co. of the.
Apr. I
N.Y.
Northern Turnpike Road, The P., D., and First Company
of the.
Apr. I
N.Y.
Eastern Turnpike Road, P., D., and Co. of the.
May
Conn.
The Canaan and Litchfield Turnpike Company.
May
Conn.
The Windham Turnpike Company.
June 22
Mass.
Sixth Massachusetts Turnpike Corporation.
Nov. I
Vt.
The Windham Turnpike Company.
Nov. 2
Vt.
The Green Mountain Turnpike Company.
Nov. 5
Vt.
Windsor and Woodstock Turnpike Company.
Dec. 26
N.H.
Second Turnpike Road in New-Hampshire, Proprietors
of the.
Dec. 27
N.H.
Third Turnpike Road in New-Hampshire, Proprietors of
the.
1800
Feb. 24
Mass.
The Eighth Massachusetts Turnpike Corporation.
Feb. 25
Mass.
The Ninth Massachusetts Turnpike Corporation.
Apr. I
N.Y.
Seneca Road Company, The P. and D. of the.
Apr.
I
N.Y.
Susquehannah turnpike road, the P., D. and Co. of the.
Apr. 4
N.Y.
Orange Turnpike Road, The P., D. and Co. of the.
Apr. 4
N.Y.
Mohawk Turnpike and Bridge Company, The P., D.
and Co. of the.
Apr. 7
N.Y.
West-Chester Turnpike Road, The P., D. and Co. of the.
May
Conn.
The Cheshire Turnpike Company.
May
Conn.
The Farmington River Turnpike Company.
May
Conn.
The Windham and Mansfield Society.
June I6
Mass.
Tenth Massachusetts Turnpike Corporation.
Oct.
R.I.
Providence and Boston Turnpike-Road, The Proprietors
of the.
Oct.
Conn.
The Granby Turnpike Company.
Oct.
Conn.
The Hartford and New London Turnpike Company.
Nov. I
Vt.
White River turnpike company.
Nov. 4
Vt.
the centre turnpike company.
Nov. 7
Vt.
the Connecticut river turnpike company.
Nov. 7
Vt.
Royalton and Woodstock turnpike company.
Nov. 25 N.H.
Fourth Turnpike Road in New Hampshire, the proprie-
tors of the.
Dec. I
Va.
Allegany Turnpike Road, the P., M. and Co. of the.
Digitized by Google
APPENDIX B
343
CORPORATIONS FOR SUPPLYING WATER
1792
Dec. 23
Md.
The Baltimore Water Company.
1795
Feb. 25
Mass.
Pittsfield, The Proprietors of the Waterworks in the
town of.
Feb. 27
Mass.
The Aqueduct Corporation [Boston].
1796
Feb. 26
Mass.
Williamstown, The Proprietors of the Waterworks in
the Town Street in.
June I5
Mass.
Stockbridge, The Proprietors of the Aqueduct in.
June 17
Mass.
Greenfield, The Proprietors of the Aqueduct in.
Nov. 24
Mass.
Richmond, The Proprietors of the Aqueduct in.
1797
Feb. 9
Maine
Hallowell, The Proprietors of the Aqueduct in.
Feb. 14
Mass.
Lancaster, The Proprietors of the Aqueduct in.
Feb. I5
Mass.
Plymouth Aqueduct, The Proprietors of the.
Feb. 20
Mass.
Wilbraham, The Proprietors of the Aqueduct in.
Mar. 9
Mass.
Northfield, The Proprietors of the Aqueduct in.
Mar. 9
Mass.
Salem and Danvers Aqueduct, The Proprietors of the.
May 4
Conn.
The Hartford Aqueduct Company.
Dec. 19
N.H.
Portsmouth Aqueduct, Proprietors of the.
1798
May
Conn.
The Windsor Aqueduct Company.
June 14
Mass.
Springfield Aqueduct, The Proprietors of the.
June 21
Mass.
Wrentham, The First Aqueduct Company in.
June 27
Mass.
Amesbury Ferry Aqueduct, The Proprietors of.
June 27
Mass.
Hopkinton, The Proprietors of the Aqueduct in.
Oct.
Conn.
Durham, Aqueduct Company of the Town of.
1799
Mar. 25 N.Y.
Whitesborough, The Aqueduct Association in the Village
of.
Apr. 2
N.Y.
*Manhattan Company, President and Directors of the.
Nov. 16 N.J.
Morris [town] Aqueduct, The Proprietors of the.
Dec. 21
S.C.
The Charleston Water Company.
1800
May
Conn.
Chelsea Aqueduct Company.
May
Conn.
New London, The Proprietors of the Aqueduct at.
Nov. 6
Vt.
[Rutland, Proprietors of the aqueduct in the East Pre-
cinct of.] (The act gives no title.)
Nov. 17 N.J.
Newark Aqueduct Company.
* Companies so marked are still in existence, though in some cases under
slightly different titles.
Digitized by
Google
344 EIGHTEENTH CENTURY BUSINESS CORPORATIONS
MANUFACTURING CORPORATIONS
1789
Jan.
Conn.
Connecticut silk manufacturers [Mansfield], The Direc-
tor, Inspectors, and Company of the.
Conn. MSS. Archives, Industry, ii, Agric., Mfs., Fish-
eries, 1764-1789, p. 237.
Feb. 3
Mass.
Beverly Cotton Manufactory, The Proprietors of the.
1790
Mar. I6 N.Y. The New-York Manufacturing Society.
1791
Nov. 22 N.J. *The Society for establishing useful Manufactures [Pat-
erson].
1794
Jan. 29
Mass.
Newbury-Port Woollen Manufactory, The Proprietors
of the.
1796
Feb. 25
Mass.
Calico Printing Manufacture [Boston, Newton], The Pro-
prietors of the.
1797
Mar. 30 N.Y.
The Hamilton Manufacturing Society [near Albany].
1800
Mar. 4
Mass.
The Salem Iron Factory Company.
MISCELLANEOUS CORPORATIONS
1784
?
Conn.
Ore bed [in Litchfield], Proprietors of.
Conn. MSS. Archives, Industry, ii, Agric., Mfs., Fish-
eries, 1764-1789, p. 186.
1793
Mar. 22 Pa.
cultivation of vines, The P., M. and Co. for promoting
the.
1795
Jan. 8
N.H.
New Hampshire Hotel and Portsmouth Pier.
1796
Oct.
Conn.
Half Million Acres of Land, lying south of Lake Erie,
The Proprietors of the.
Session Laws, 45I.
1798
Feb. 3
Maine
Kennebunk Pier, The Proprietors of the.
1799
Nov. I9 N.J. Map of the State of New-Jersey, The Company for pro-
curing an accurate.
Companies so marked are still in existence, though in some cases under
slightly different titles.
t Companies so marked were clearly not organized under the charter.
Digitized by Google
APPENDIX B
345
NOTE. The following titles of corporations chartered before 1800 appear in the
list given by Judge Baldwin (Private Corporations, 296-311), but are omitted from
the foregoing lists, for reasons indicated.
NoT CORPORATIONS
1675 N.Y. The New York Fishing Company.
1792 Mass. Proprietors of George's River Canal.
NoT INCORPORATED FOR BUSINESS PURPOSES
Massachusetts
1782 The Marine Society of Salem.
1783 Proprietors of Mattakesset Creeks.
1789 Proprietors of the Androscoggin Boom.
1790 Associated Proprietors of Lumber in Merrimack River.
Massachusetts Society for Promoting Agriculture.
1796 Proprietors of the Roxbury Canal.
Portland Marine Society.
1798 Proprietors of Mills on Charles River.
1799 Marblehead Marine Society.
New York
1770 The Corporation of the Chamber of Commerce in the city of New York.
1792 The Society of Mechanics and Tradesmen of the city of New York.
1793 The Society for the Promotion of Agriculture, Arts, and Manufactures.
Pennsylvania
1785 The Agricultural Society of Philadelphia.
1790 The Carpenters' Company of Philadelphia.
South Carolina
1795 The Agricultural Society of South Carolina.
Kentucky
1799 Directors and Society for promoting the Cultivation of the Vine.
Trustees for the purpose of promoting manufactures.
DUPLICATES
1792 Mass. The Merrimack River Bridge Company.
1795
Vt.
The White River Bridge Company.
1796
Mass. The Kennebec River Bridge Company.
Digitized by Google
Digitized by Google
BIBLIOGRAPHY
PRELIMINARY NOTE
The accompanying list includes all sources which have been cited in any
of the foregoing essays, including court decisions, - classified as (I) His-
tories of Corporations; (II) Biographies, Letters, Collected Works, etc.;
(III) Local Histories; (IV) Public Documents; (V) Miscellaneous Books
and Articles; (VI) Law Cases; (VII) Newspapers and Periodicals; (VIII)
Manuscripts. Each work is earmarked with a Roman numeral to show
for which essay or essays it has been utilized. Especially serviceable sources
are starred. Where occasion seemed to require, comments are appended to
indicate the special significance of particular works for the subject here
treated.
In the study of the history of American corporations Judge Baldwin has
been a pioneer, and his essays on "Freedom of Incorporation," "Private
Corporations," and "American Business Corporations before 1789" have
long been the principal secondary sources in this field.
On the colonial corporations, principal sources have been public docu-
ments, such as charters, laws, council minutes, and archives of various states.
Fairlie's Municipal Corporations in the Colonies, Scott's Early Cities of New
Jersey, and Davis's Corporations in The Days of the Colony [Massachusetts],
are valuable secondary sources.
For the study of William Duer, the chief sources have easily been the
letters and private and public papers, in collections published and un-
published, and newspapers, contemporary with him. Especially valuable
have been the Craigie, Duer, Knox, Scioto, and Wolcott papers, among
the manuscripts; and the Brissot, Clinton, Cutler, Deane, Hamilton, and
St. Clair papers, among the published material of the same nature. Of the
periodicals Freneau's National Gazette, the Gazette of the United States, the
New York Journal, and the monthly American Museum and Massachusetts
Magazine contributed most. Chief among the secondary sources should be
rated the Knickerbocker Magazine memoir, and the works on the Scioto
company by Belote, Dawes, and Hulbert.
On the New Jersey manufacturing society the principal reliance has been
the records of the company itself; Hamilton's papers and the published
collections of his works; contemporary newspapers, especially of Philadel-
phia and New Jersey; and New Jersey public documents. Several important
letters also are in the various collections of the Historical Society of Penn-
sylvania. William Nelson's paper on "The Founding of Paterson" and
the account in Trumbull's Industrial Paterson are the only valuable sec-
ondary sources.
347
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348
BIBLIOGRAPHY
For the last essay the information has been drawn from widely scattered
sources. The session laws, collections, digests, and indexes of laws of the
several states have been essential. Contemporary newspapers added much.
At certain points, pamphlets of ancient vintage have been serviceable.
Biographies and collections of works have been very useful. For a number
of companies, special accounts are available. Of these, Mrs. Bacon-Foster's
Patomac Route, Lewis's Bank of North America, Domett's Bank of New
York, Woodward's Hartford Bank, and Montgomery's Insurance Company
of North America are among the best. In the cases of the Massachusetts
and Union (Boston) Banks, the writer gained access to the early corporate
records. Save Baldwin's essay on "Private Corporations," no secondary
works, except the accounts of particular corporations, merit special mention.
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HISTORIES OF CORPORATIONS
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" II. The Patowmack Company, 1784 to 1828.
" III. Life of Colo. Charles Simms, Gentleman.
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[NEW HAMPSHIRE.] Acts and Laws of the State of New Hampshire. Exeter,
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[NEW HAMPSHIRE.] Constitution and Laws of the State of New Hamp-
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[NEW HAMPSHIRE.] The Laws of the State of New-Hampshire. Ports-
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[NEW YORK.] Calendar of Historical Manuscripts in the Office of the Secre-
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[NEW YORK.] Calendar of New York Colonial Manuscripts Indorsed
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DAVIS, JOHN P. Corporations. A Study of the Origin and Development of
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STOCKBRIDGE, HENRY. The Archives of Maryland as Illustrating the Spirit
of the Times of the Early Colonists (Md. Hist. Soc. Fund Pubs.,
no. 22.) Baltimore, 1886. (I)
STOKES, HOWARD KEMBLE. Public and Private Finance. A History of
the Finances of Rhode Island, 1636-1900 and of Chartered Banking in
Rhode Island, 179I-I900. Providence, 1901. (IV)
(Reprinted from Vol. iii of The State of Rhode Island and Providence Plantations at the End of the
Century.)
STREET, ALFRED B. The Council of Revision of the State of New York
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STUBBS, WILLIAM. The Constitutional History of England in its Origin and
Development. 3 vols. Oxford, 1903-1906. (I)
SULLIVAN [JAMES]. The Path to Riches: An Inquiry into the Origin and
Use of Money; and into the Principles of Stocks & Banks
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Includes an attack on the Massachusetts Bank, and a proposal for a state bank.
SULLIVAN, JNO. L. Report, on the Origin and Increase of the Paterson
Manufactories, and the Intended Diversion of their Waters by the Morris
Canal Company
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TACTTUS (pseud. for DEWITT CLINTON). The Canal Policy of the State of
New York, Delineated in a Letter to Robert Troup, Esquire.
Albany,
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States
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TAYLOR, JOHN. An Enquiry into the Principles and Tendency of Certain
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TIFFANY, CHARLES COMFORT. A History of the Protestant Episcopal
Church in the United States of America. New York, 1895. (I)
TROUP, ROBERT. Vindication of the Claim of Elkanah Watson, Esq., to
the Merit of Projecting the Lake Canal Policy
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TRUMBULL, BENJAMIN. A Complete History of Connecticut, Civil and Eccle-
siastical, from
1630, to
1764
2 vols. New Haven, 1818. (I)
TUDOR, WILLIAM. Letters on the Eastern States. 2d edition. Boston,
1820. (IV)
TURNER, F.J., editor. Correspondence of the French Ministers to the United
States, 1791-97. (Amer. Hist. Assoc. Report, 1903, II.) Washington,
1904. (II)
TURNER, FREDERICK J. "Documents on the Relations of France to
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TURNER, O. Pioneer History of the Holland Purchase of Western New
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TUTTLE, J. F. "Hibernia Furnace and the Surrounding Country, in the
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1796.
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*WANSEY, HENRY. The Journal of an Excursion to the United States of
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WEBSTER, PELETIAH. Political Essays on the Nature and Operation of
Money, Public Finances, and Other Subjects
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(II, III, IV)
WEEDEN, WILLIAM V. Economic and Social History of New England, 1620-
1789. 2 vols. Boston and New York, 1890-91. (I, IV)
WELD, ISAAC, Jr. Travels through the States of North America, and the
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WHARTON, FRANCIS. The Revolutionary Diplomatic Correspondence of the
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ing an Account of the Steps taken Relative to the Converting the Georgia
Orphan-House into a College. Together with the Literary Correspondence
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WHITEHEAD, WILLIAM A. East Jersey under the Proprietary Governments.
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of the First Iron Works in Maryland," in Pa. Mag. of Hist. and Biog.,
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WICKES, STEPHEN. History of Medicine in New Jersey....
Newark,
1879. (III)
WILHELM, LEWIS W. Local Institutions of Maryland. (Johns Hopkins
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WILLIAMSON, WILLIAM D. The History of the State of Maine, from its
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sophical View of the United States of America
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390
BIBLIOGRAPHY
VI
LAW CASES
Bergen V. Clarkson (1796), 6 N. J. Law 352. (IV)
Bloomfield V. Charter Oak Bank (1887), I2I U.S. I29. (I)
Bordentown and South Amboy Turnpike Co. V. Imlay (18,8), 4 N. J. Law
327. (III)
Boston V. Sears (1839), 39 Mass. I22. (I)
Bridge Proprietors V. the State (1848), 21 N. J. Law 384. (IV)
Brunswick V. Dunning (1811), 7 Mass. 445. (I)
Butler and Taylor V. Society (1859), I2 N. J. Eq. 264, 498. (III)
Charles River Bridge V. Warren Bridge (1829), 24 Mass. 344. (IV)
Commonwealth V. Roxbury (1857), 75 Mass. 45I. (I)
Cuddon V. Eastwick (1704), I Salkeld 192. (I)
Dillingham V. Snow et al. (1809), 5 Mass. 547. (I)
Hill V. Boston (1877), I22 Mass. 344. (I)
Jackson V. Cory (1811), 8 Johnson (N. Y.) 388. (I)
Jackson V. Schoonmaker (1807), 2 Johnson (N. Y.) 23I. (I)
Kean V. R. L. Colt et al. (1846), 5 N. J. Eq. 365. (III)
Lehigh Valley Railroad Co. V. Society (1878), 30 N. J. Eq. 145. (III)
Livingston et al. V. Swanwick (1793), 2 Dallas (Pa.) 300. (II)
Ludlow V. Bingham (1799), 4 Dallas (Pa.) 45. (II)
McCulloch V. Maryland (1819), 4 Wheaton 316. (IV)
McDonough V. Templeman (1801), I Harris & Johnson (Md.) 156. (IV)
McKim V. Odom (1829), 3 Bland Ch. Rep. (Md.) 407. (I)
Morris Canal and Banking Company V. Society (1845), 5 N. J. Eq. 203. (III)
N. Hempstead V. Hempstead (1828), 2 Wendell (N. Y.) IO9. (I)
New Windsor Turnpike Co. V. Wilson (1805), Coleman & Caines (N. Y.)
467-478. (IV)
Paterson V. Society (1854), 24 N. J. Law 385. (III)
Pawlet V. Clark (1815), 9 Cranch (U. S.) 292. (I)
Respublica V. Cornelius Sweers (1779), I Dallas 45. (IV)
Robinson V. Groscot (1696), Comberbach 372. (I)
Rumford V. Wood (1816), I3 Mass. 193. (I)
Sarah Zane, Case of (1833), in Hazard, Register of Pa., xiv, 305-31I, 32I-
329, 337-347, 353-360 (1834). (I)
Society V. Haight (1831), I N. J. Eq. 393. (III)
Society V. Holsman (1845), 5 N. J. Eq. I26. (III)
Society V. Low (1864), I7 N. J. Eq. I9. (III)
*Society V. Morris Canal and Banking Co. (1830), I N. J. Eq. 157. (III)
State V. Blundell, Collector (1854), 24 N. J. Law 402. (III)
*State V. Flavell and Fredericks, Assessors (1854), 24 N. J. Law 370. (III)
State V. Powers, Collector (1854), 24 N. J. Law 400, 406. (III)
*Sutton's Hospital, Case of, (1612), IO Coke's Reports I. (I)
A classic statement of the early law of corporations.
Watkins V. Pintard (1795), I N. J. Law 375. (II)
Weston V. Hunt (1807), 2 Mass. 500. (I)
Wrentham Proprietors V. Metcalf (1763), Quincy (Mass.) 36. (I)
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NEWSPAPERS AND PERIODICALS
39I
VII
NEWSPAPERS AND PERIODICALS
NOTE. Facts regarding issues, titles, editors, etc., of American newspapers in
the eighteenth century are to be found in Clarence S. Brigham's Bibliography of
American Newspapers, 1690-1820, appearing regularly in Amer. Antiq. Soc. Proc.,
beginning vol. xxiii (1913); and in John Van Ness Ingram's Check List of American
Eighteenth Century Newspapers in the Library of Congress (Washington, 1912).
AMERICAN ANTIQUARIAN SOCIETY. Proceedings ...
ist Series, Worcester,
1843-1880. New Series, Worcester, 1880-. (II, IV)
The American Apollo, Containing the Publications of the Historical Society,
Essays, Moral, Political, and Poetical, and the Daily Occurrences in
the Natural, Civil, and Commercial World. Boston (weekly, Jan. 5-
Sept. 28, 1792). (IV)
*American Daily Advertiser, Dunlap's (1791-93), Dunlap & Claypoole's
(1793-95), Claypoole's (1796-1800). Philadelphia (daily). (III)
American Historical Review. New York (quarterly), 1895-. (III)
American Mercury. Hartford (weekly, 1785-1800). (II, IV)
*The American Museum, or, Repository of Ancient and Modern Fugitive
Pieces, &c. Prose and Poetical. [Edited by Mathew Carey.] 4 vols.
Philadelphia (monthly), 1787-88. (IV)
*The American Museum, or, Universal Magazine
[Edited by Mathew
Carey.] 8 vols. (V-XII: a continuation of The American Museum,
or, Repository, etc.) Philadelphia (monthly), 1789-92. (III, IV)
The Argus. Boston (semi-weekly, 1791-93). (III)
The Boston Gazette, and the Country Journal. Boston (weekly, 1780-94).
(III, IV)
Brunswick Gazette. New Brunswick, N. J. (weekly, 1791-92). (III)
The Burlington Advertiser, or, Agricultural and Political Intelligencer. Bur-
lington, N. J. (weekly). (III)
*Columbian Centinel. Boston (semi-weekly, 1790-99). (IV)
Continuation of Massachusetts Centinel. A capitalist paper, containing numerous advertise-
ments of corporate meetings, dividends, etc.
Columbian Gazetteer. New York (semi-weekly). (III)
The Connecticut Courant, and Weekly Intelligencer. Hartford (weekly,
1778-1800). (III)
The Connecticut Journal. New Haven (weekly, 1775-99). (III)
*The Daily Advertiser [title varies]. New York (daily, 1785-1800). (II,
III, IV)
The Diary; or, Loudon's Register. New York (daily, 1792-95). (III)
ESSEX INSTITUTE. (Salem, Mass.)
Historical Collections. Salem,
1859-. (IV)
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392
BIBLIOGRAPHY
Essex Journal and New Hampshire Packet. Newburyport, Mass.
(weekly, 1786-94). (IV)
The Federal Gazette and the Philadelphia Evening Post. Philadelphia
(daily, 1788-93). (III)
The Freeman's Journal; or the North American Intelligencer. Philadelphia
(weekly, 1781-92). (III)
*Gazette of the United States. Philadelphia (semi-weekly, 1790-1800). (II, III)
Established April 15, 1789, at New York, moved to Philadelphia, November, 1790. The ad-
ministration paper, in Washington's terms.
*General Advertiser [title varies]. Philadelphia (daily, 1790-94). (III)
The Granite Monthly: A New Hampshire Magazine, devoted to Literature,
History, and State Progress. Dover, 1877-78; Concord, 1878-. (TV)
The Guardian; or, New Brunswick Advertiser. New Brunswick, N. J.
(weekly, 1793-1800). (III, IV)
*HAZARD, SAMUEL, editor. The Register of Pennsylvania. Devoted to the
Preservation of Facts and Documents
respecting the State of Penn-
sylvania. 16 vols. Philadelphia, 1828-36. (I, ш, IV)
The Historical Magazine, and Notes and Queries Concerning the Antiquities,
History, and Biography of America. 3 series, 23 vols. Boston,
1857-75. (I)
Independent Chronicle and the Universal Advertiser. Boston (weekly,
1776-93; semi-weekly, 1793-1800). (IV)
The Independent Gazetteer, and Agricultural Repository [title varies]. Phila-
delphia (weekly, semi-weekly, daily, 1782-96). (III)
The Magazine of American History [title varies]. 30 vols. New York
(monthly, 1877-93). (II, III)
Maryland Historical Magazine
Baltimore, 1906-. (IV)
Organ of the Maryland Historical Society.
*Massachusetts Centinel. Boston (semi-weekly, 1784-90). (IV)
MASSACHUSETTS HISTORICAL SOCIETY. Proceedings
...
3 series. Boston,
1791-. (I, IV)
*The Massachusetts Magazine, or Monthly Museum
...
8 vols. Boston,
1789-96. (II, IV)
Valuable for security prices, 1789-93.
Massachusetts Spy, Thomas's, or Worcester Gazette. Worcester (weekly,
1782-1800). (IV)
*National Gazette. Philadelphia (semi-weekly, 1791-93). (III, IV)
Ably edited anti-administration paper; valuable.
National Magazine; or A Political, Historical, Biographical and Literary
Repository
By James Lyon. Richmond (monthly), 1799-1801.
(III)
N. C. Booklet. Raleigh, N. C. (quarterly, 1901-). (IV)
*Newark Gasette, Wood's, and New Jersey Advertiser [title varies]. Newark,
N. J. (weekly 1791-1800). (III)
New Brunswick Advertiser. See The Guardian
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NEWSPAPERS AND PERIODICALS
393
NEW JERSEY HISTORICAL SOCIETY. Proceedings
...
3
series.
Newark
(and other cities), 1845-. (I, II, III, IV)
*New Jersey Journal and Political Intelligencer [title varies]. Elizabeth-
Town (weekly, 1787-99). (III)
New-Jersey State Gasette [title varies]. Trenton (weekly, 1792-.) (III, IV)
Newport Mercury, or the Weekly Advertiser. Newport (weekly, 1758-
1800). (IV)
The New York Genealogical and Biographical Record, Devoted to the In-
terests of American Genealogy and Biography. New York (quarterly),
1870-. (III)
Organ of the New York Historical Society.
*The New-York Journal, & Patriotic Register [title varies]. New York
(semi-weekly, 1790-1800). (II, III, IV)
*The New York Magazine; or, Literary Repository. 7 vols. New York,
1790-96. (II, IV)
NILES, HEZEKIAH, editor. Weekly Register. Baltimore, 1811-48. (IV)
Pennsylvania Gazette [title varies]. Philadelphia (weekly, 1728-1800). (III)
The Pennsylvania Journal, or the Weekly Advertiser. Philadelphia (weekly,
1789-97). (III)
*The Pennsylvania Magazine of History and Biography. Philadelphia
(quarterly), 1877-. (I, II, III, IV)
Organ of the Historical Society of Pennsylvania.
Pennsylvania Mercury and Universal Advertiser. Philadelphia (weekly,
1790). (II, III)
Pennsylvania Packet. Philadelphia (daily, 1771-1800). (II)
Providence Gazette and Country Journal [title varies]. Providence (weekly,
1762-99). (III, IV)
South Carolina Historical and Genealogical Magazine. Charleston,
I900-. (IV)
Organ of the South Carolina Historical Society.
SOUTHERN HISTORY ASSOCIATION. Publications
II vols. Washing-
ton, D. C., 1897-1907. (IV)
The State Gazette of South Carolina. Charleston (semi-weekly, 1786-
95). (III, IV)
Trenton Federalist; or New Jersey Gazette. Trenton (1798.) (III)
True American. Trenton, N.J. (1800-.) (III, IV)
The Universal Asylum and Columbian Magazine. Philadelphia (monthly),
Jan.-June, 1791. (III)
Virginia Gazette and General Advertiser. Richmond (weekly, 1790-99).
(IV)
The Virginia Magazine of History and Biography. Richmond, 1894-. (IV)
Organ of the Virginia Historical Society.
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394
BIBLIOGRAPHY
VIII
MANUSCRIPTS
Barlow Papers. Harvard College Library. (II)
Chiefly papers of Joel Barlow, the property of Peter Barlow of New York, a descendant.
Boudinot Papers. Historical Society of Pennsylvania. (III)
Chiefly papers of Elias Boudinot, of Elizabethtown, N. J., and Philadelphia.
Connecticut MSS. Archives: (I) Agriculture, Manufactures, and Fisheries;
(2) Colleges and Schools; (3) Trade and Maritime A fairs. State Library
at Hartford. (I, IV)
*Craigie Papers. American Antiquarian Society, Worcester. (II, ш, IV)
Chiefly letters to and from Andrew Craigie, with his account books; highly valuable.
[DAVIES, SAMUEL.] The Diary of the Rev⁴. Samuel Davies, from July 2 A.D.
1753 to bril 28 A.D. 1754. Carefully transcribed, compared and cor-
rected by Philander Camp 1845. Princeton University. (I)
Dreer Collections. Historical Society of Pennsylvania. (I) Letters of
American Statesmen; (2) Letters of Architects and Sculptors; (3) Letters of
Governors of the States; (4) Letters of Members of the Federal Convention;
(5) Letters of Members of the Old [Continental] Congress; (6) Letters of
Presidents of the United States, Members of their Cabinets, and Ladies
of the White House; (7) Letters of Soldiers of the American Revolution.
Collected, arranged, and presented to the Historical Society of
Pennsylvania by Ferdinand J. Dreer. (II, III)
Include a number of letters significant in the history of the "S.U.M."
*Duer Papers. New York Historical Society. (II, III)
A collection of the papers of William Duer presented by his son William A. Duer. Chiefly of
value for his contract experiences.
Duponceau Letter-book B. Historical Society of Pennsylvania. (II).
One of the letter-books of the Philadelphia lawyer, Peter S. Duponceau.
East Jersey Records. See NEW JERSEY.
Emmet Collection. New York Public Library. (II, III)
Etting Collection. Members of the Old Congress. Historical Society of
Pennsylvania. (II, III)
Ford Collection. New York Public Library. (II, IV)
*Hamilton Papers. Library of Congress. (II, III, IV)
A large and very valuable collection of letters to and from Alexander Hamilton, drafts of re-
ports, speeches, plans, etc., covering chiefly the period of his official life. Much of the material
was formerly in the State Department. Most of it has never been printed. It has lately been
arranged, so far as possible, in chronological order.
Jefferson Papers. Library of Congress. (III)
Accessible through Calendar of the Correspondence of Thomas Jefferson: Part I. Letters from
Jefferson. Part II. Letters to Jefferson [and others). (Bulletins of the Bureau of Rolls and
Library of the Department of State, Nos. 6, 8, July, Nov., 1894.) Washington, 1894-95.
Jefferson Papers. Massachusetts Historical Society. (III)
Most of these are in print.
Johnson Papers. Connecticut Historical Society, Hartford. (III)
Chiefly papers of Samuel Johnson, described in Amer. Antiq. Soc. Proc., xxiii, 237-246 (Octobe:
1913).
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MANUSCRIPTS
395
*Knox Papers. Massachusetts Historical Society. (II)
Chiefly letters to and from, and documents of General Henry Knox. Well arranged. Not yet
well utilized by historians.
Madison Papers. Library of Congress. (III)
Accessible through Calendar of the Correspondence of James Madison. (Bulletin of the Bureou
of Rolls and Library of the Department of State. No. 4. March, 1894. Washington, 1894.)
Cf. also Index to the Calendar of the Correspondence of James Madison. Ibid., Supplement to
No. 4. August, 1895. Washington, 1895.
*Massachusetts Bank Records. First National Bank, Boston. (IV)
Include most of the original records, including Directors' Minutes, Stockholders' Minutes, Cash
Books, Ledgers, and Dividend Book.
Massachusetts Historical Society Autographs. Statesmen and Orators. (II)
New Hampshire MSS. Laws. State House, Concord, N. H. (IV)
Contain the acts of incorporation, few of which were published. An index is in print (r886).
New Jersey MSS. Archives. East Jersey Records: Commissions, Liber AAA;
Deeds, Liber I, III. State Library, Trenton. (I)
OHIO COMPANY. Miscellaneous Documents in the Col. John May
Collection of the Western Reserve Historical Society, copies in Har-
vard College Library. (II)
(1) Minutes of a meeting of Rhode Island shareholders, Sept. 20, 1788; (2) letter of their
committee to Col. John May, Sept. 25, 1788; (3) certificates of Col. Richard Platt, Treas-
urer, Nov. 13, 1788; (4) letters of Rev. Manasseh Cutler to the Agents of the Company,
Nov. 19, 1788, and to Col. John May, Dec. 9, 15, 1788.
Pickering Papers. Massachusetts Historical Society. (II, III)
Chiefly papers of Timothy Pickering.
Schuyler Papers. New York Public Library. (II, IV) 1
Chiefly papers of Gen. Philip Schuyler, containing much unworked material.
Scioto Papers. New York Historical Society. (II)
Documents and letters chiefly relating to the Scioto company. Copies of these are in the
Gallipolis Papers. Many of these manuscripts relate to other phases of Duer's life.
*Society for Establishing Useful Manufactures, Minutes of the Proceedings of
the Directors of the. (III)
In the possession of the Society, at Paterson, N. J.
*Union Bank Records. National Union Bank, Boston. (IV)
Comprising the Stockholders' Minutes of the Boston Tontine Association 1791-92, the Directors'
Minutes and certain financial books of the early days of the bank. The records are less com-
plete than those of the Massachusetts Bank.
Wadsworth Papers. Connecticut Historical Society, Hartford. (II, III, IV)
Papers of Jeremiah Wadsworth, politician, business man, leading citizen. III arranged, but
containing a valuable mass of material.
*Wolcott Papers. Connecticut Historical Society, Hartford. (II, III)
Papers of Oliver Wolcott, Jr., Secretary of the Treasury succeeding Alexander Hamilton.
George Gibbs drew on this material for his Memoirs of the Administrations of Washington and
John Adams
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INDEX
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INDEX
Acushnet River, 196.
"Aristides," 86.
Adams, John, 257, 282, 287, 288, 307 f.
Arkwright, Sir Richard, 256 n.
Adams, Mass., 222.
Arnold, Mrs. Benedict, 60 n.
Adams, Samuel, 14, 47.
Arnold, Welcome, 62.
Adams's Creek, N. C., 178.
Ashford, Conn., 221.
Adlum, John, IIO, 149.
Ashley River, 146.
AEra & Atna Iron Works, 145 n, 146, 257.
Aspinwall, 269.
Albany, N. Y., 158, 161, 166, 248, 256,
Assanpink Creek, Company for opening
278, 285 n, 296 n; Bank of, 80 f, 107,
the navigation of the, 181.
161, 299 f; and Schenectady turnpike,
Associated Manufacturing Iron Company
224.
of the City and County of New York,
Albemarle, N. C., 137.
260.
Alexandria, Va., 121, 125, 131, 226, 245;
Associations, voluntary, for insurance,
Bank of, 16, 79, 105 n, 106, 134; The
232 f; for supplying water, 249. See
Marine insurance company of the town
also Joint stock companies.
of, 245.
Athol, Mass., 223.
Alleghany Turnpike Road, Company of
Atkinson, Hodgson, 169.
the, 226.
Augusta, Maine, 198.
Allen, Ira, 176.
Almy & Brown, 257, 275.
Back-Cove Bridge, the Proprietors of the,
American Philosophical Society, IIO.
197.
Ames, Fisher, 3 n, 55 f, 88, 255.
Back River to Chapel Bridge, Company for
Amesbury Ferry Aqueduct, Proprietors of
opening a Canal from, 181.
the, 343.
Bagehot, Walter, quoted, 297.
Amesbury, Mass., 191, 194.
Bailey, Anselm, 255.
Amherst, Mass., 223.
Baily, Francis, 219.
Amherst, N. H., 225.
Baldwin, Col. Loammi, 171, 173,
Amoskeag Bridge, Proprietors of the, 199.
183.
Amoskeag Canal, see Blodgett's Canal.
Baldwin, Simeon E., list of corpora-
Amoskeag Falls, 183.
tions, 21 n, 345.
Anacostia Bridge Company, 214.
Ballendine, John, I13, II4, 116, 137.
Andover Bridge, The Proprietors of, 194.
Baltimore, Md., 40, 49, 52, 56, 59, 97, 98,
Androscoggin Bridge, The Proprietors of,
103, II5, II7 n, 122, 127, 181 n, 215,
198.
217, 226, 238 f, 245, 248, 253, 258, 259,
Androscoggin River, 182.
261, 264, 268, 297, 306; Bank of, 97 f,
Annapolis convention, 124.
103, 107, 108; Equitable Society for
Annapolis, Md., 98, II2 n, 123, 125.
insuring Houses from Loss by Fire,
Anthony & Son, Joseph, 263.
236, 318; Insurance Company, 242,
Antrim, N. H., 225.
245 n; insurance fire-company, 238,
Appamattox Company, 180.
245; Water Company, 249 f; Manu-
Appomattox River, 180.
facturing Company, 268.
Aqueduct Corporation (Boston), 69, 25I f,
"Banco," 85.
291.
"Bancomania" in New York City, 81-
Aqueducts, see Corporations for supply-
90, 153.
ing water and Water supply.
Banister River Trustees, 180.
399
Digitized by Google
400
INDEX
Banking practices, eighteenth century,
332 ff; chartered but not organized,
4I f, 45, 48, 60, 65, 67 f, 74, 75 f.
79, 100, 103; active though unin-
Banking system, efforts toward unified,
corporated, 45, 78, 80, IO2 f; land,
52-58.
44; relations with federal or state gov-
Bank, national, I3 n, 14, 50 f. See also
ernments, 38, 39, 46, 59, 62, 63, 72,
Bank of North America and Bank of the
74 f, 83, 94, 95, 96 f, 107 f; relations
United States.
with the Bank of the United States, 46,
Bank of Albany, 80 f, 107, 161, 299 f,
52-58, 61, 62, 63, 68, 87, 88, 89, 91 ff;
324 n, 325, 333.
relations with insurance companies,
Bank of Alexandria, 16, 79, I05 n, 106,
245 f; branch, 45, 52-58, 77, 78, 79,
134, 318, 326, 328, 333.
96, 98, IO6 f; profitableness of, 39, 44,
Bank of Baltimore, 97 f, 103, 107, 108,
46, 47, 55, 63, 65 f, 77 f, 80, 96, 97, 98,
318, 325, 333.
99, 100, IOI, 103 ff, 291 f; complaints
Bank of Columbia (Hudson, N. Y.), 81,
against, 41 f, 45, 66 ff, 87, 100, 307 f;
97, 324 n, 333.
charter features of, 51, 69, 105 ff, 318,
Bank of Columbia (Washington, D. C.),
324, 328; geographical distribution
16, 97, 103, 105 n, 134, 333.
of, IO2. See also Bank scrip, Bank
Bank of Delaware (Wilmington), 100,
stocks, Capitals, of banks, Corpora-
333.
tions, banking, names of states, and
Bank of England, 85.
names of banks.
Bank of Maryland (Baltimore), 49, 59,
Bank scrip, speculation in, 46, 52, 60,
98, 104, 333.
61, 62, 71, 72, 81 f, 161.
Bank of New York (New York City), 32,
Bank stock, as investment, 60, 74 f, 81,
44 ff, 47, 50, 52 n, 54, 55, 56, 57, 58,
90, 95, 96 f, 107 f, 156; distribution of,
59, 60, 81, 83, 84, 86, 87 f, 89, 90, 9I-
39, 41, 62, 67 f, 71, 72; government
95, 103, 104, 308, 317, 333, 334.
ownership of, 81, 83, 95, 96, 97, 106,
Bank of North America (Philadelphia),
107; speculation in, 46, 61, 86, 90.
3 n, IO f, 29, 30, 35, 36-44, 47, 49, 50 f,
Banyer, Goldsbrow, 162.
52 n, 58, 59, 66, 95, 96, 103, 104, 106,
Barnstable Bay, Mass., 174.
299, 300, 302, 304 f, 307, 308, 310-313,
Barret, Charles, 184.
316, 323, 324, 328, 332.
Barret, Nathaniel, 288.
Bank of Pennsylvania (Philadelphia),
Barretts Town, Maine, 184.
60 n, 95 ff, 103, 106, 107, 300, 318,
Barrington, N. H., 224.
325, 326, 328, 333.
Bartlett, William, 277, 278.
Bank of Rhode Island (Newport), 99,
Barton, William, 264.
104, 333.
Bath, Maine, 197.
Bank of Richmond, 79, 103, 106, 318, 326,
Bath, N. Y., 223.
333.
Beckford, Ebenezer, 279.
Bank of South Carolina (Charleston), 80,
Bed-ticks, manufacture of, 274.
103, 104, 308, 334.
Bellingham, Mass., 223.
Bank of the United States (Philadelphia),
Bellows Falls, at Rockingham (Vt.), the
14 f, 43, 46, 50-59, 60, 61, 62, 103, 104,
company for rendering Connecticut
299, 300, 307, 320, 322, 323 n, 324,
river navigable by, 21, 30, 168 f.
325, 333; branches of, 52-58, 63, 78,
Bennington, Vt., 225.
79, 81, 83, 84, 89, 91 ff; relations with
Bentley, William, 274.
state chartered banks, 46, 52-58, 61,
Bethel, Conn., 222.
62, 63, 68, 87, 88, 89, 91 ff.
Bethlehem, Mass., 223.
Banks, importance of, 6, 50, 81; colo-
Beverly Cotton Manufactory, The Proprie-
nial, 34 f; opposition to charters for,
lors of the, 32, 259, 270-274, 300 n,
13, 40, 44 f, 49, IOI; proposed but not
316.
chartered, 35, 40 f, 44, 49, 64, 69 f, 8I-
Beverly, Mass., 190, 274.
90; statistics of charters for, 22 f, 26,
Bingham, William, 219, 301.
27, 28, 30, 37, 295; list of charters for,
Blackburn, Col. Thomas, 121.
Digitized by Google
INDEX
40I
Blodget, Samuel, Jr., 71, 74, 97, 103 n,
Brown, Moses (Providence), 62, 257, 273,
239.
282.
Blodget, Samuel, Sr., 183.
Brown, Nicholas, 62.
Blodget's Economica, 103 n.
Brunswick, Maine, 198.
Blodgett, -, I9I.
"Brutus," 89.
Blodgett's Canal, 183, 327, 337.
"Bubble Act" of 1720, 5.
Bogart, C. J., 82.
Buchanan, Va., 139.
Bolton, Conn., 221.
Bull, John, 153.
Bond, Nathan, 251.
Bunker's Hill, 188 f.
Bond, Phineas, 256, 262, 264, 265 f, 288.
Burlington, N. J., 258.
Bordeaux, France, 256 n.
Burnham, Mr., 274.
Boscawen, N. H., 225.
Burr, Aaron, 100, IOI.
Boston, Mass., 4, 35, 40, 46, 47 f, 52, 56,
Burr & Co., O., 256.
66, 67, 78, 187 ff, 192 ff, 197, 221, 232,
Burying Ground in New Haven, Proprie-
233, 234, 237, 239, 241, 242 ff, 245,
tors of the, 284.
251, 252, 253, 255 f, 257, 258, 278,
Business corporations, see Corporations,
281, 284, 285, 286, 300, 305, 322;
business.
Aqueduct Corporation, 69, 25I f, 291;
Business cycles before 1800, 31, 40, 41,
First National Bank, 47 n; Duck or
45, 46, 47 f, 49, 59 f, 65, 78, 105, 116,
Sail Cloth Manufactory, 260 ff; "Glass
144.
House," 262 ff; Marine Insurance Com-
Butler, Pierce, 40.
pany, 243 f, 245, 246 n, 247 n; Tontine
Butler, Samuel, 62.
Association, 70-74, 108, 299.
Buttons, manufacture of, 256 f.
Boston Turnpike Company, 221, 222 n,
Buzzard's Bay, Mass., 174.
223.
Byfield, Mass., 277.
Boucher, Rev. Jonathan, III n, II2 n.
Byram, Conn., 223.
Bounties, 260, 262, 263, 266, 269.
Bowdoin, James, 47, 174, 198.
Cabot, Andrew, 273.
Bowen, Jabez, 49, 99.
Cabot, Deborah, 273.
Bradford, Mass., I91.
Cabot, George, 190, 205, 271, 272, 273,
Brandywine Canal navigation, The Presi-
274.
dent, Managers and Company of the, 30,
Cabot, John, 273.
177.
Caldwell, James, 256.
Brattleborough, Vt., 202.
Caldwell, John, 233.
Breck, Samuel, 260, 263.
Calico Printing Manufacture, The Pro-
Brewster, Ebenezer, 199.
prietors of the, 278.
Bribery charges, 72 n.
Cambridge, Mass., 192.
Bridge companies, see Corporations, toll-
Cambridge, N. Y., 224.
bridge.
Camden, S. C., 181 n.
Bridges, see Toll-bridges.
Canaan and Litchfield Turnpike Com-
Bridgewater, Mass., 102.
pany, 222, 223.
Brindley, James, 153.
Canada, Governor of, 176.
Brindley, Mr. , 129.
Canal companies, see Corporations for
Briois de Beaumez, Bon Albert, 232.
improving inland navigation and In-
Brissot de Warville, J. P., 197, 264 n.
land navigation.
Bristol, Conn., 222.
Canals of Great Britain, II2 n, 150 n.
Bristol, R. I., 99, 103, 245; Insurance
See also Corporations for improving in-
Company, 244.
land navigation, Inland navigation,
Broad and Pacolet Rivers, Company for
and names of states.
opening the Navigation of the, 181.
Canandaigua, N. Y., 223.
Bronx River, 252.
Cape Fear Company, 178.
Brown, John, 49, 62, 176, 257, 273.
Cape Fear River, 179.
Brown, Moses (Beverly), 273.
Capital, available in colonies, 6; avail-
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402
INDEX
able after the Revolution, 7, 298; fur-
143, 148, 234, 237 n, 245, 253, 296 n,
nished from Europe, 34, 39, 156, 167 f,
299, 301; Insurance Company, 245;
169, 299; sources of, for corporations,
Mutual Insurance Company, 237;
298 ff. See also Subscriptions to cor-
Water Company, 343.
porate securities.
Charlestown, Mass., 187, 197, 277;
Capitals of business corporations, 29I f;
Artillery Company, 187.
banks, 35, 38, 39, 41, 43, 45, 46, 47,
Charters of corporations, nature of, 311 f,
49, 51, 62, 63, 64, 65, 73, 74 f, 77, 78 n,
313, 314; ease of securing, 78; granted
79, 80, 81, 95, 97, 98, 99, 100, IOI, 103,
by the English Crown, 8, 9; concur-
291; companies for improving inland
rent or joint, 12, 29 ff, II9 f, I22 f, 134,
navigation, II6 f, 125, 126, 130, 134,
141, 146, 147, 169, 170, 176, 199, 201,
135, 137, 138, 139, 141, 142, 143 f, 145,
202, 210; ancillary or additional, 24 f,
146, 152, 165, 166 f, 168, 169, 170 n,
27, 29 ff, 37, 38, 43; opposition to, 13,
172, 173, 176, 177, 179, 180, 181, 183,
40, 44 f, 49, 101, II3 ff, II9, 122, 136 f,
291; toll-bridge companies, 187, 189,
140 f, 176, 190, 191, 193, 196, 240, 295,
190, 191 f, 198, 203, 209, 210, 211, 213,
305 f; repeal of, 42, 43, 106, 147, 310-
214, 215, 291; turnpike companies,
315; refused, 59, 304; modification
218 f, 220, 227, 291; insurance com-
of, 68, 69, 193, 195, 198, 204, 219, 315;
panies, 238, 239, 240, 242, 243, 244,
reservation of right to repeal, 106,
245, 291; water supply companies,
312, 315.
25I, 252, 253, 254, 291; manufactur-
Features of, in general, 316-329;
ing companies, 256, 261, 263, 265,
of banks, 51, 69, I05 ff; of highway
268, 269, 275, 276, 277, 279, 291; mis-
companies, 227-230; of insurance
cellaneous corporations, 285 f.
companies, 238, 239, 245 ff; of water
Cards, wool and cotton, manufacture of,
supply companies, 254; form of, deter-
255 f.
mined largely by applicants, 316;
Carr, I91.
as public acts, 318; term of, 105, 106,
Carroll, Charles, of Carrollton, 114, 117,
193, 205, 208, 228, 243, 246, 275, 279;
130, 135.
definitions of purposes by, 318 f; gen-
Carroll, Daniel, 134.
eral powers granted by, 316 f; powers
Carter, John, 301.
of eminent domain granted by, 228,
Carter, Nathaniel, 192.
254, 319 f; restrictions on powers by,
Cataba Company, 178.
105, 318; property limitations in, 105,
Catawba and Wateree rivers, The com-
254, 277, 278, 279, 317, 326; limita-
pany for opening the navigation of the,
tion of profits by, 209, 228, 229; in-
30, 146 ff, 177, 315.
vestment restrictions in, 243, 318;
Cayuga, N. Y., 223; Bridge Company,
protection of corporate estate by, 247,
213.
326; voting rights in, 17, 51, 69, 105,
Cazenove, Theophile, 232.
243, 246 f, 301, 323 f; provisions re-
Cecil Manufacturing Company, 268.
specting directors in, 254; number,
Central Bridge, The Proprietors of the, 203.
105, 322 f; election, 73 f, 322 ff;
Centre turnpike company, 225.
powers, 323; qualifications, 324; rota-
Champlin, Christopher, 99.
tion in office for, 105, 324 f; inter-
Champlin, George, 99.
locking boards of, 246, 325; liability
Channing, Walter, 99.
of, 106; reports to legislature required
Chapman, Isaac, 273.
by, 69, 105, 209, 229, 247, 328; pub-
Charlemont, Mass., 222.
licity requirements in, 247.
Charles River Bridge, The Proprietors of
Cheescocks, N. Y., 224.
the, 187 ff, 192, 193, 197, 292, 300, 301,
Chelmsford, Mass., 171, 194.
316.
Chelsea [Conn.] Aqueduct Company, 343.
Charles River, 173, 284; toll-bridges, 187-
Cherry Valley, N. Y., 223.
I9I, 192 f; proprietors of mills on, 284.
Chesapeake Bay, III, II9, 124, 136.
Charleston, S. C., 52, 56, 79, 103, 142,
Cheshire, Conn., 22I f.
Digitized by Google
INDEX
403
Cheshire Turnpike Company, 222.
221 f, 228, 296; insurance companies
Chester, Pa., III.
in, 233, 235, 237, 244; water supply
Chestnut Hill turnpike, 220, 228, 229,
companies in, 250; manufactures in,
300, 306 n, 308.
255, 256, 257, 262, 266 f, 269 f; min-
Chickahominy River, 180.
ing company in, 286 f; land company
China, trade to, 288.
in, 289; Medical Society, 304.
Chocolate mill, 256.
Connecticut River, companies for im-
Church, John B., 44.
proving navigation of, 30, 167-170;
Cincinnati, Society of the, 125 n.
companies to bridge, 30, 194, 196, 199,
Cist, Charles, 287.
200, 201.
"Citizen, A," 84.
Connecticut River Bridge, The proprietors
Claremont, N. H., 225.
of, 196.
Clarendon, Vt., 225.
Connecticut River, in the County of
Clark, John Innes, 62.
Hampshire, The Proprietors of the
Clarke, Peleg, 99.
Upper Locks and Canals on, 168.
Clarkson, Matthew, 89, 275.
Connecticut River, the Proprietors of the
Clason, Isaac, 82.
Locks and Canals on, 167 f, 299, 327.
Claverack, N. Y., 223.
Connecticut river turnpike company, the,
Clinton, Gov. George, 159.
226.
Clubfoot and Harlow's creek canal com-
Connecticut silk manufacturers, The Direc-
pany, 179.
tor Inspectors and Company of the, 270,
Cobb, David, 175.
315.
Cocheco River, N. H., 175.
Connecticut Silk Society, 270 n.
Codman, William, 263.
Constable, William, 260.
Coffin, Tristram, 192.
Constitution of the United States, 12-
Cohoes Falls of the Mohawk, 158.
16; amendment regarding exclusive
Colchester, Va., I13.
companies, 14; validity of Congres-
Colles, Christopher, 157 f, 167.
sional charters under, 14 ff.
Colt, Peter, 255, 266, 276, 283; & Co.,
Constitutional convention, federal, I2 ff,
266.
124, 131.
Columbia, see Bank of Columbia and
Constitutions, state, provisions relating
District of Columbia.
to corporations in, 9, 16.
Columbia Turnpike Road, Company of the,
Cooke, Col. John, 203.
223.
Coombs, William, I91.
Concord, N. H., 201, 224.
Cooper River, see Santee and Cooper.
Concord [N. H.) Bridge, Proprietors of,
Copper mines in New Jersey, 287.
201.
Copson, John, 232.
Concord River, 171.
Cornish Bridge, The Proprietors of, 30,
Conewago Canal Company, 153.
201, 229 n.
Confederation, Articles of, 10, II.
Corporation, Northwest Territory as,
Congress, Confederation, power of in-
3 n; United States as, 16 n.
corporation, IO ff, charters Bank of
Corporation for the Relief of Widows and
North America, 36, 38; Continental,
Children of Clergymen in the Commun-
174, 257; federal, powers of incorpora-
ion of the Church of England in Amer-
tion of, 3 n, I2-15, 305 n; charters
ica, 30, 234.
granted by, 51, 263 ff, 273, 285, 287.
Corporation sole, for maintaining a toll-
Connecticut, II, 13, 64, 296, 300 n;
bridge, 186 f.
legislature, 315 f, 321; business cor-
Corporations, states as, 3 n; colonial,
porations in, 22, 23, 26, 27, 28, 29, 37,
4 ff, 9 f, 22, 24, 26, 30, 247, 248; char-
38; banks in, 37, 63 ff, 100, 102, 103,
tered during the Revolution, 6; con-
104, 106, 107, 296; inland navigation
ditions favoring rise of, after the Rev-
improvements in, 118, 170, 184; toll-
olution, 6 ff.
bridges in, 188, 204; turnpikes in, 216,
Business, in the colonies, 5 f, IO, 22,
Digitized by Google
404
INDEX
24, 26; rise of, political conditions
135, 136, 137, 138, 139, 141, 142, 150,
affecting, 5; technical progress affect-
I5I, 156 f, 164, 166, 167, 275, 283, 295,
ing, 5 f, 295; conditions favoring, after
300, 327 f; state loans to, 116, 156 f,
the Revolution, 6 ff; in England, 6,
165, 327 f; other state aids to, 158,
7, 8, 304; statistics of, 2I-29, 32, 37,
326 ff; success of, 120, 134, I35 f,
118, 188, 216, 235, 250, 269, 295; his-
139 f, 142, 146, 148, 157, 165, 167, 168,
tories of, 32, 348-352; proposed but
169, 170, 171, 172, 173, 174, 180, 184 f,
not chartered, 35, 40 f, 44, 49, 64, 69 f,
186, 189, I90 f, 192, 194, 195, 196, 197,
81-90, 158, 174 f, 176, 182, 220;
198, 199, 200, 201, 202 f, 204, 207 f,
chartered but not organized, 79, 100,
210, 211, 214, 241 f, 243, 254, 279-283,
103, 175, 176, 177, 182; prejudice
291-295.
against, 6, 7, 13, 14, 303-309; hos-
See also Capitals, Charters of cor-
tility toward established, 40-43, 66 ff,
porations, Shares, corporate, Subscrip-
87, 100, 306.
tions to corporate securities, names of
Classification of business, 21 ff;
companies, and names of states.
"money" or "moneyed," 3; finan-
Cotton, manufacture of, 255, 257, 259,
cial, 22, 23, 24, 25, 26, 27, 28, 29, 30,
265, 268, 269, 270-276.
34-108, 234-247, 331, 332-335; bank-
Council of Revision, New York, IOI,
ing, 5, 13, 22, 23, 26, 27, 28, 29, 30, 34-
163 f, 303 f.
108, 291, 292, 293, 294, 295, 318, 320,
Coventry, Conn., 22I.
332 ff; insurance, 22, 23, 26, 27, 28,
Coventry, R. I., 22I.
234-247, 291, 293, 294, 318, 331, 334 f;
Cox, Lemuel, 189.
highway, 5, I2 f, 18 f, 20 f, 22, 23, 24,
Coxe, Tench, 265, 268, 280, 282.
25, 26, 27, 28, 29, 30, 117-230, 319,
Craigie, Andrew, 56, 275.
335-342; for improving inland navi-
Creditors, public, see Debt, public.
gation, 13, 18 f, 21, 22, 23, 25, 26, 27,
Cresap, Thomas, III, II4.
28, 29, 30, 117-185, 291, 292, 293, 294,
Cromwell's Falls, N. H., 201.
295, 319, 320, 335-338; toll-bridge,
Cruger, Nicholas, 275.
22, 23, 25, 26, 27, 28, 29, 30, 187-215,
Cultivation of the vine, Directors and
291, 292, 293, 294, 295, 319, 320,
Society for promoting the (Kentucky),
338 ff; turnpike, 23, 25, 26, 27, 28, 29,
284.
3I n, 216-230, 291, 292, 293, 294, 295,
Cultivation of vines, Company for promot-
319, 320, 340 ff; local public service,
ing the (Pennsylvania), 286.
4, 5, 22, 23, 24, 25, 26, 27, 28, 29, 247-
Cumberland Canal, the Proprietors of the,
254, 286, 331, 343, 344; dock, 4, 22,
182.
23, 26, 27, 286, 319, 331, 344; for sup-
plying water, 4, 17 f, 22, 23, 26, 27, 28,
Dallas, Alexander J., 149.
32, 247-254, 291, 293, 294, 295, 319,
Dalton, P. R., 58 n.
331, 343; transportation, 5, 22; man-
Damariscotta Bridge Company, 198.
ufacturing, 5, 22, 23, 26, 27, 28, 63,
Damariscotta River, 198.
269-283, 291, 292, 293, 294, 295, 343;
Danbury, Conn., 222.
mining, 5, 22, 26, 29, 286 f, 344; agri-
Dan River, 179.
cultural, 23, 26, 29, 286, 344; land,
Danvers, Mass., 252 f, 279, 343.
23, 26, 29, 289 f, 344; trading or com-
Dartmouth College decision, 316.
mercial, 4, 22, 26, 41, 287 ff, 331, 344;
Davis, Jonathan, 284.
exercising diverse powers, 63, 83, 207,
Deane, Silas, 280, 281.
248, 318 f.
Debt, public, 31, 40, 50, 65, 88, 89, 296,
Forfeiture of shares in, 130 f, 139,
307; speculation in, 5I, 68, 85.
145, 164, 165, 168, 172, 193, 210 f, 299,
Debts, state, assumption of, 50, 89.
321 f; sources of capital for, 298 ff;
"Decius," 88 f.
state subscriptions to, 46, 5I n, 62, 63,
Declaration of Independence, 7.
72, 74 f, 81, 83, 95 f, 96 f, 107 f, II2 n,
Deep and How River Company, 179.
121, 122, 123, 125 n, 130, 133, 134,
Deer Island, Mass., I9I.
Digitized by Google
INDEX
405
Deerfield Falls Bridge, The Proprietors of,
Eastern Turnpike Road, Company of the,
196.
222, 223.
Deerfield, Mass., 196.
Easton [Pa.], Company for erecting a bridge
Deerfield River, 196.
over the river Delaware at the borough of,
Delaware, II, 136, 137; general incor-
30, 210 f, 320, 326.
poration acts of, 16; business corpora-
Eddy, Caleb, 172.
tions in, 23, 25, 26, 27, 28, 30, 37;
Edgartown, Mass., 284.
banks in, 37, 43, 100; inland naviga-
Edisto and Ashley rivers, The company
tion improvements in, 118, 136 f, 177.
for improving the navigation of, 146.
Delaware and Schuylkill Navigation,
Eliason, A. O., quoted, 34 f.
Company of the, I52 f, 157, 209, 248 f,
Eliot, Samuel, 192.
319.
Elizabeth River, 140.
Delaware Bay, II9, 136.
Elizabethtown, Pa., 220.
Delaware River, III, 149, 152, 153, 205;
Elizabeth-town turnpike Road, Company
bridge companies, 30, 210 f.
of the, 226.
Dennis, Thomas, 99 n.
Emery, -, I91.
Derby, Conn., 222; Turnpike Company,
Enfield to Suffield, The Company for
222.
erecting and supporting a Toll bridge,
Derryfield, N. H., 183, 199.
with Locks, from, 204.
De Witt, Moses, 162.
Engineers, English canal, 129, 153 f, 162,
Dexter, Andrew, 62.
163, 164 f, 172, 174.
Dexter, Timothy, 192.
England, 85, II2 n, 150 n, 256, 265, 280,
Dickerson, Thomas, 192.
281, 282, 296.
Digges, Thomas, 280.
Enterprise, American reputation for, 298.
Dismal Swamp Canal Company, 30,
Epsom, N. H., 224.
140 ff, 174, 292, 328.
Essex Bank (Salem, Mass.), 77, 78, 98,
District of Columbia, 16, 97, 134.
103, 105, 308.
District, federal, see District of Columbia.
Essex Bridge, The Proprietors of, 190 f,
Dock companies, see Corporations, dock.
197.
Dorchester, S. C., 146.
Essex Merrimac Bridge, The Proprietors
Douglass, Mass., 223.
of, I9I f.
Dover, N. H., 199.
Ewing, John, 218.
Dracut, Mass., I94.
Exeter, N. H., 262.
Drain companies, colonial, 249.
Exeter River, 199.
Duck Creek, III.
Duck, manufacture of, 260 ff.
"Fair Dealer," 86.
Duer, Col. William, 86n, 89, go, 206, 275.
Fairfax and Loudoun turnpike road, Com-
Dummerston, Vt., 202.
pany of the, 226, 227.
Dumping, British, complained of, 282.
Fairfield, Conn., 222.
Duncan, -, 184.
Fairfield, Weston and Reading Turnpike
Durham [Conn.], Aqueduct Company of
Company, 222.
the Town of, 343.
Fairhaven, Mass., 196.
Durham, Maine, 182.
Falmouth Canal, Proprietors of the, 182.
Durham, N. H., 200, 224.
Farmington, Conn., 221, 267 n.
Duryea, Abraham, 81.
Farmington River Turnpike Company,
Dwight, Jonathan, 167.
222.
Dwight, Timothy, I94.
Favour's Bridge, Proprietors of, 20I f.
Fayetteville Canal Company, 179.
Eames, Luther, 250.
Fayetteville, N. C., 141.
East Chester, N. Y., 223.
Federal Bridge, Proprietors of, 20I.
East Haven, Conn., 204.
Federalists, 52, 55.
East India company, IOI, 287 f.
Fellowes, Capt. Nathaniel; 71.
Eastern Branch Bridge Company, 214.
Findlay, William, 152.
Digitized by Google
406
INDEX
Fire companies, 17.
Gilpin, George, 125.
Fire insurance, see Insurance, fire, and
Gilpin, Thomas, III.
Corporations, insurance.
Glass works, 256, 259, 262 ff, 278 f.
First Day Baptist Church of Hopewell
Glastonbury, Conn., 22I.
Township, Cumberland County, N. J.,
Gloucester Bank (Mass.), 99, 103.
9.
Gloucester, R. I., 221.
Fisher, Joshua, 273.
Goerck, Casimer Th., 206.
Fitzgerald, John, 125.
Goffstown, N. H., 63 n, 183, 199.
Fore River, Maine, 182, 197.
Goodrich, Chauncey, 64.
Fort Cumberland, Md., 120, 128, 132,
Gore, Christopher, 54 f, 57 f.
133.
"Gracchus," 83.
Fort Edward, N. Y., 159.
Granby Turnpike Company, 222.
Fort Schuyler, N. Y., 158, 162, 165.
Granville, N. Y., 224.
Fort Stanwix, N. Y., 159.
Great Dismal Swamp Company, 140.
Foster, R. I., 221.
Great Falls of the Potomac, 120, 127,
Foushee, Dr. William, 138.
128, 132, 133, 135, 226.
France, 256, 288.
Great Timber Creek, Company for open-
Francestown, N. H., 225.
ing the navigation of the south branch of
Frankfort Bridge Company, 215.
the, 181.
Franklin, Benjamin, 12, 129, 234 f.
Great Western Turnpike Road, First Com-
Franklin, Conn., 221, 222.
pany of the, 223, 227.
Frederick, Md., III, 125, 217, 226, 264.
Green Mountain Turnpike Company, 225.
Free Society of Traders in Pennsylvania, 4.
Green Mountain Turnpike Corporation,
Freedom of incorporation, 7, 8, 16-19.
225.
Freeman, Russell, 225.
Greenfield, Mass., 194, 223; aqueduct
French Revolution, 31, 49.
in, 343.
Fulling mills, 256.
Greenwich, R. I., 218, 273.
Funding system, 88, 89. See also Debt,
Green Woods Turnpike Company, 222.
public.
Grenville, , 288.
Gridley, Samuel, 263.
Gaillard, John, 146.
Grist mills, 256, 257.
Gap, Newport, and Wilmington Turn-
Gunpowder, manufacture of, 268; stor-
pike Road, Company of the, 220.
age of, 319.
Gates, Gen. Horatio, 121, 132 n.
General incorporation acts, 7, 16-19,
Hackensack bridge, see Passaic and
150 f, 179.
Hackensack Rivers.
George's Creek, 226.
Hale, Col. Enoch, 168 f.
George's River Canal, Proprietors of, 184.
Half Million Acres of Land, lying south of
Georgetown, Md., II4, II5, 125, 126,
Lake Erie, The Proprietors of the, 289.
131, 134, 213, 237, 245; Bridge Com-
Hallowell, Maine, 198; aqueduct in,
pany, 213 f; Mutual Insurance Com-
343.
pany, 237.
Halsey, Thomas Lloyd, 62.
Georgia, 13, 296; business corporations
Hamilton, Alexander, 3 n, I3 n, 14 f, 35,
in, 23, 25, 26, 27, 28, 181.
44, 45, 50, 53, 55, 56, 57, 58, 62 f, 76 n,
German-Flatts, N. Y., 165.
78 f, 87 f, 89, 90, 9I-95, 255, 261, 263,
Germantown and Reading Turnpike
272, 280, 281 f, 284, 287, 323 n, 324.
Road, Company of the, 220, 228, 229,
Hamilton, Lt. Gov. James, 235.
300, 306 n, 308.
Hamilton Manufacturing Society, 279.
Gibbs, George, 99.
299, 318.
Giles Richards & Co., 256.
Hampton, N. H., 184.
Gill, Moses, 74.
Hancock, John, 47, 74, 76, 274.
Gilman, Hon. John T., 63.
Hanover, N. H., 169, 199.
Gilpatrick, Richard, 182.
Hanover-town, Md., 217.
Digitized by Google
INDEX
407
Hardenberg, Maj. Abram, 159.
House of Representatives, federal, see
Harpers Ferry, Md., 126, 132.
Congress, federal.
Harris, Mr., manager of James River
Howell, Gov. Richard, 289.
Company's works, 139.
Hudson, N. Y., 81, 97, 223, 249.
Harrisburg, Pa., 120, 220.
Hudson River, 159, 160, 162, 205, 285 n.
Harrison, Gov. Richard (Virginia), 120 f.
Huntington, Gen. Jedediah, 64.
Harrison, Richard (New York City),
Hurd, John, 233, 246 n.
89.
Hartford, Conn., 63 f, 170, 221, 222, 223,
Immigration, 7.
233, 253; Bank, 32, 63 f, 104, 107,
Incorporation, English traditions regard-
300, 301, 321, 333; Insurance Com-
ing, 7; English precedents in, 8 f, 20,
pany, 233; and New Haven Insurance
21; powers of, after the Revolution,
Company, 233; and New Haven Turn-
8 f; general acts of, 7, 16-19, 150 f,
pike Company, 221, 222 n, 301; and
179; special acts of, I9 ff; by gov-
New London Turnpike Company, 221,
ernor's letters patent, after the Revo-
222 n; New-London, Windham and
lution, 9, 20 f; by act of Congress, 3 n,
Tolland County Society, 221; Woollen
12-16, 5I, 263, 273, 285, 287, 305 n;
Manufactory, 266 f; Aqueduct Com-
by acts of state legislature, I6 f. See
pany, 343.
also Charters.
Hartshorne, William, 125.
India, 288.
Harvard College, 193.
Individualism, in relation to economic
Harwinton, Conn., 222.
progress, 5, 6 n.
Hats, manufacture of, 256.
Industrial Trust Company, Providence,
Haverhill, Mass., 191, 194, 195, 262.
99.
Haverhill [Mass.] Bridge, The Proprietors
Industry, scale of, 5, 6.
of the, 194, 195.
Inland navigation, improvements of:
Haverhill IN. H.] Bridge, proprietors of,
need for, 13, 83, 109, IIO, 158; inter-
200 f.
state negotiations respecting, IIQ f,
Hays, Moses Michael, 237.
I2I f, 123 f, 136f 140 state con-
Hazard, Ebenezer, 239.
struction of, proposed, 121, 149, 150,
Henry, Patrick, 141, 174.
151, 159, 160; proposed but not
Hewes, Robert, 262, 263.
effected, 134, 146, 165, 169, 174-177.
Hewson, John, 265.
Corporations chartered for improv-
Hichborn, Benjamin, 175.
ing, 13, 18 f, 21, 22, 23, 25, 26, 27, 28,
Hico Company, 178.
29, 30, 117-185, 335-338; legislative
Higginson, Henry, 263, 273.
attitude toward, 101, 117, II9, 123,
Higginson, Stephen, 71, 167, 243, 261 f,
133, 135, I5I f, 157, 163 f, 165, 166 f,
288.
169; state aid to, 123, I25 n, 134, 135,
Highway companies, 5, I2 f, 18 f, 20 f,
300, 327 f; labor problems and poli-
22, 23, 24, 25, 26, 27, 28, 29, 30. See
cies of, II3, I14, 116, I26 ff, 134, 138,
also Inland Navigation, Toll-bridge
141, 144, 154, 163, 294; management
companies, and Turnpike companies.
problems of, 126, 128 ff, 162 f, 294;
Hill, William, proprietor of Hill's Iron
engineering problems of, 128 f, 144,
Works or the AEera & AEtna Iron
148, 155, 162, 169, 173; difficulties of
Works, 146.
superintendence in, I29 f, 145, 162 f,
Hillegas, Michael, 287.
164; contract method of, 130, 138, 141,
Hillsdale, N. Y., 223.
144, 150 f, 152, 172 f; financial diffi-
Holderness Bridge, Proprietors of, 20I.
culties of, 130 ff, 145, 148, 155, 164,
Holker, John, 232.
166 f, 195; local hindrances to, 144,
Hollingsworth, Col. Henry, 268.
I55, 164, 307; opposition to, 113,
Hopkinton, The Proprietors of the Aque-
I14 ff, 136 f, 140 f, 176; complaints of,
duct in, 343.
147, 208; operations of, 132 f, 134,
Hotels, 285, 286.
135, 139, 145, 146, 165, 168, 169, 170,
Digitized by Google
408
INDEX
171, 173; failure of, I35 f, 148, 157,
80, IO2 f; for improving inland navi-
167, 169, 173 f.
gation, 178, 179, 180, 183; for con-
Insurance companies: mutual, 22, 234-
structing and maintaining bridges,
238; joint stock, 22, 238-245; statis-
186, 207, 208 f; for turnpikes, 217, 218;
tics of, 22 f, 25 f, 28, 235, 295; capitals
for inanufacturing, 258-269; for mis-
of, 238, 239, 240, 242, 243, 244, 245,
cellaneous purposes, 285. See also As-
291; opposition to, 240 f; reserve and
sociations, voluntary.
dividend policies of, 235, 242, 247,
Jones, John Coffin, 175.
326; geographical distribution of,
Juniper Bay, N. C., 178.
245; relations with banks, 245 f;
charter features of, 246 f, 318, 323,
Keene, N. H., 225, 250.
324, 325, 326, 328; success of, 241 f,
Kennebec Bridge, The Proprietors of the,
243, 293; present existence and condi-
198.
tion of, 236, 237, 242, 293; list of,
Kennebec River, 182.
334 f. See also Insurance, fire, life,
Kennebunk Pier, The Proprietors of the,
marine, names of states, and names
286.
of companies.
Kentucky, general incorporation act, 17;
Insurance Company of North America,
business corporations in, 23, 25, 26,
231 f, 239-242, 245, 285, 300, 307 n,
27, 28, 181, 188, 204, 215; manufac-
308.
tures in, 269, 284.
Insurance Company of the State of Penn-
Killingly, Conn., 221.
sylvania, 242.
King, Rufus, I2 f, I3 f, 54, 57, 224, 288 f.
Insurance, fire, 4, 22, 234-239, 24I-244;
Knapp, Joseph, 251.
life, before 1800, 22, 23I f; marine, 22,
Knox, Gen. Henry, 175.
232 ff, 240-244.
Kupfer, Charles P., 264 n.
Investments, bank stocks as, 60, 81, 90,
95, 156, 299; other corporate stocks
Labor, supply of, in colonies, 6; after
as, 60, 156, 157, 296, 298; public
the Revolution, 7; advertisements
securities as, 46, 60, 296; foreign, in
for, 154, 163; dearness of, 165, 280 f;
the United States, 34, 39, 40, 130 n,
division of, in English manufactures,
156, 169, 296, 299.
280; difficulties encountered in use of,
Iredell, James, 14 n, 40.
I26 ff, 154, 294; in improving inland
Iron, manufacture of, 256, 257, 260, 279.
navigation, 113, I14, 116, I26 ff, 138,
Isle-a-hooksett Falls, N. H., 184.
141, 144, 154, 163; child, 259, 261,
271; woman, 259, 261, 271; in manu-
Jackson, congressman from Georgia, 305.
facturing, 263, 273, 276, 282.
Jackson, Gen. Henry, 175.
Lackawaxen navigation, 152.
Jaffrey, N. H., 225.
Lafayette, Marquis de, 288.
James River, II3, 116, 122, 123, 180;
Lake Champlain, 159, 160, 176.
Company, 137-140, 328.
Lake Erie, 176, 289.
Jay, John, IOI, 275, 287.
Lake Ontario, 160, 176.
Jefferson, Thomas, 13 n, 15, 51, II3, II9,
Lake Winnepesaukee, 175.
124, 126, 132, 136, 138, 261, 264, 280,
Lancaster and Susquehanna turnpike
307.
Road, Company of the, 220.
Jeffrey, James, 233.
Lancaster, Elisabethtown, Middletown,
Jenckes, John, 49.
and Harrisburgh Turnpike Road, Com-
Jersey City, N. J., 205.
pany of the, 220, 227, 228.
Johnson, Seth, 56, 81 n, 84.
Lancaster, Mass., aqueduct in, 343.
Johnson, Thomas, III, I14, II5, 116,
Lancaster, Pa., 9n, 96, 152, 218. See
121, 124, 125.
also Philadelphia and Lancaster Turn-
Johnston, R. I., 22I.
pike Road.
Joint stock companies, unincorporated,
Land companies, 289 f.
5, 33; for banking purposes, 45, 78,
Lansingburg, N. Y., 224.
Digitized by Google
INDEX
409
Latrobe, Benjamin, 137 n, 176, 249.
Livingstons, 86 n.
Lawrence, Joseph, 233 n.
Loan Office of the Commonwealth of
Lawrence, Mass., I94.
Pennsylvania, The Trustees of the,
Lebanon, Conn., 273.
42, 43.
Lebanon, N. H., 169, 199, 225.
Loan offices, state, in New York, 90;
Lebanon, Pa., 153.
in Pennsylvania, 42, 43.
Lebanon Springs, N. Y., 223.
Lollar, member of Pennsylvania legis-
Lechmere Point, 187.
lature of 1786, 312.
Lee, Henry, Jr., I17.
London, 113, 169, 280; Amicable or
Lee, Mass., 223.
"Hand-in-Hand" Insurance Com-
Lee, N. H., 224.
pany, 234, 236.
Lee, Thomas Sim, 125.
Loring, , 198.
Legaux, Peter, 286.
Lotteries, 70, II2, 142, 145, 148, 157,
Lehigh Coal Mine Company, 287.
174, 183, 197, 205 f, 208 f, 210f, 218,
Lehigh River, 152, 212.
262, 267, 273, 327.
L'Enfant, Maj. Pierre Charles, 145, 276.
Love Island, Md., II7.
Lenox, Mass., 223.
Low, Nicholas, 89.
Lenox, R., 82.
Lowell, Judge John, 54.
Leominster, Mass., 223.
Lowell, Mass., 171, 194.
Leonard, -, , 271.
Lukens, John, IIO.
"Leonidas," 305.
Lumber in Merrimack River, Associated
Lewis, Morris K., 21.
Proprietors of, 284.
Lewisburg, N. C., 137.
Lewiston [Maine] Bridge, The Proprietors
McCulloch V. Maryland, 15.
of, 198.
McGregor, Robert, 184, 199.
Liability of shareholders, need for limita-
McHenry, James, 49, 97, 306.
tion of, 7, 45; in early general in-
Machin, Captain, 248.
corporation acts, 17 f; in corporate
Machin, Mr., 174.
charters, 106, 243, 260, 268, 279,
Maclay, Senator William, 120, 137.
317 f; of directors, 69, 106.
Macomb, Alexander, 81, 84 n, 206 n.
Library companies, 17.
M'Vickar, John, 81.
Life insurance before 1800, 22, 231 f.
Madison, James, IO f, 12, 14, 15, 51, II9,
Lightall, -, 162.
122, 123, 124, 126, 136, 138, 305.
Linen, manufacture of, 255, 259, 265,
Maine, business corporations in, 23, 25,
275.
26, 27, 28, 29, 37; banks in, 37, 99,
Litchfield Bridge, The Proprietors of, 20I.
105; inland navigation improvements
Litchfield, Conn., 221, 222; and Harwin-
in, 118, 182 f, 184; toll-bridges in, 188,
ton Turnpike Company, 222.
197 f, 300; insurance company in,
Litchfield County, Conn., 286 f.
235, 244; water supply company in,
Little Falls of the Mohawk, 158, 164,
250; wharf company in, 286.
165; of the Potomac, 128, 134.
Maine Fire and Marine Insurance Com-
Little Falls [Maine], The Proprietors of
pany, 244, 245 n.
the Sluice-Ways in the Plantation of,
Malden Bridge, The Proprietors of, 189 f,
182 f.
197.
Little River Plantation, Maine, 182.
Manchester, England, 266.
Little River, Va., 226.
Manchester, N. H., 183, I99.
Livingston, Brockholst, 81, 82.
"Manhattan Bank," IOI, 103.
Livingston, Chancellor Edward, 44.
Manhattan Company, 100, 232, 245, 252,
Livingston, John R., 74 n.
291, 319, 334, 343.
Livingston, N. Y., 223.
Mansfield, Conn., 221, 222, 269, 270.
Livingston, Walter, 82.
Manufactory House (Boston), 47.
Livingston, William, governor of New
Manufactures, importance of, 6 f; re-
Jersey, 9.
lated to rise of banks, 34, 35 n; house-
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410
INDEX
hold, 255; domestic, 255 f; scale of,
Maryland Insurance Fire Company,
256 f, 261, 264, 272, 275, 276, 277,
238 f, 249 f, 299, 319.
278; associations for promoting, 257 f;
Mason, George, 13, 14, III, I14, II5,
joint stock associations for under-
I16.
taking, 258-269; motives in promot-
Mason, Jonathan, Jr., 54, 58 n.
ing, 258 f; women's labor in, 259, 261,
Massachusetts, II, 13, 14, 296; legis-
271; child labor in, 259, 261, 271;
lature, 49, 55, 71 f, I14, II5, 121, 176,
Hamilton's Report on, 280, 281, 284.
314, 315; general incorporation act,
State encouragement of, by boun-
17 f; business corporations in, 22, 23,
ties to, 260, 262, 266, 283; lottery
25, 26, 27, 28, 29, 37, 38; banks in,
privileges for, 262, 267, 274, 283; tax
37, 46 ff, 56, 65-70, 72-78, 98 f, IO2 f,
exemptions to encourage, 263, 266,
103, 104, 105, 106, 107; inland naviga-
272, 277, 278, 283; exclusive privileges
tion improvements in, 118, 167 f, 170-
for, 262 f; exemption 'from militia
173, I74 f, 184; toll-bridges in, 186-
duty, 263; state subscriptions to com-
197, 228; turnpikes in, 216, 222 f, 228;
panies for, 265, 267, 275, 283; state
insurance companies in, 233, 235, 237,
loans to aid, 265, 267, 278, 283; op-
242 ff; water supply companies in,
position to, 267; land grants to aid,
250-253; manufactures in, 255, 260-
272, 274.
264, 269, 270-274, 277 f, 279.
Protective tduties on, 283; patents
Massachusetts Bank (Boston), 47 f, 52 n,
for, 281, 283; difficulties with work-
53, 54 f, 58, 65-69, 71, 72, 76, 77, 78,
men in, 263, 273, 276, 282; machines
104, 106, 188, 246 n, 300, 302, 314,
for, 265, 267, 273, 280 f, 282; failure
316, 322, 324.
of companies undertaking, 279-283.
Massachusetts Canal, The Proprietors of
"Manufacturing Fund," see Pennsyl-
the, 175.
vania Society for the Encouragement of
Massachusetts Fire and Marine Insurance
Manufactures.
Company, 243, 247.
Manufacturing society proposed to be
Massachusetts Fire Insurance Company,
connected with Hartford Bank, 63.
242 f, 245 n, 326.
Map of the State of New Jersey, The
Massachusetts Mutual Fire Insurance
Company for procuring an accurate,
Company, 69, 237.
289.
Massachusetts Turnpike Corporation,
Marblehead, Mass., IO2.
First, 222, 223; Second, 222; Third,
Marine insurance, see Insurance, marine,
223; Fifth, 223; Sixth, 223; Eighth,
and Corporations, insurance.
223; Ninth, 223; Tenth, 223.
Marion, Joseph, 232, 233.
Matildaville Company, 226.
Marlborough, Conn., 221.
Matlack, , 275.
Marshall, John, 15.
Matlack, Timothy, IIO, 153.
Martin, Governor (North Carolina),
Mattakesset Creeks in Edgartown, Pro-
184 n.
prietors of the, 284.
Martin, Simeon, 99.
Mattamuskeet Lake, N. C., 178.
Maryland, 12, 13; legislature, 49, 114,
Mattapony Truslees, 180.
II5, 121; business corporations in, 22,
Mauch Chunk, Pa., 287.
23, 25, 26, 27, 28, 29, 30, 37; banks in,
Meadow Creek, 166.
37, 49, 56, 97 f, 103, 104, 106, 107, 108;
Medford, Mass., 171, 173.
inland navigation improvements in,
Mercer, George, III.
III, II7, 118, II9-137, 181; toll-
"Merchant, A," 84.
bridges in, 188, 204, 213 f; turnpikes
"Merchant's Bank," 82, 83.
in, 216, 217 f, 226; insurance compan-
Merrimack Bank (Newburyport, Mass.),
ies in, 235, 236, 237, 238 f, 242; water
99.
supply companies in, 249 f; manu-
Merrimac River, improvement of navi-
factures in, 264, 267.
gation of, 170, 171, 175, 183, 184;
Maryland Insurance Company, 242, 246.
toll-bridges over, I94 ff, 197, 199, 201;
Digitized by Google
INDEX
411
turnpike to, 224; Associated Proprie-
Morse, Rev. Jedediah, 277.
lors of Lumber in, 284.
Moultrie, Governor, 143.
Merrimack Bridge, the Proprietors of,
Mount Vernon, 124, I26.
195 f.
Mount Vernon Convention, 123 f.
Merrimack River, The proprietors of the
Mousom Harbour in Wells, The Pro-
Locks and Canals, on, 170f.
prietors of, 182.
Merry Meeting Bay, 182.
Muskingum, O., 269.
Methuen, Mass., 194.
Mustard mill, 256.
Middlebury, Vt., 225.
Mutual Assurance company against fire
Middlesex Canal, the Proprietors of the,
on goods and furniture, in the state of
32, 69, 171 f, 176, 183, 292.
Virginia, 236.
Middlesex Merrimack River Bridge, The
Mutual Assurance Company for insuring
Proprietors of the, 194.
Houses from Loss by fire (Philadel-
Middle states, business corporations in,
phia), 236.
24, 25, 28, 29; banks in, 37; inland
Mutual Assurance Company of the City
navigation improvements in, 118;
of New York, 236, 246.
toll-bridges in, 188; turnpikes in, 216;
Mutual Assurance Company of the city
insurance companies in, 235; water
of Norwich, 237.
supply companies in, 250. See also
Mutual Assurance Society against fire on
names of states.
buildings, of the State of Virginia, 236.
Middletown, Conn., 170, 267 n; Bank,
Myers, Captain, 129.
100, 103.
Myerstown, Pa., 153 f. (
Middletown, Pa., 220.
Mystic River, 171, 173, 189.
Mifflin, Governor (Pennsylvania), 152,
218.
Nails, manufacture of, 255.
Mill Creek, N. Y., 166.
Nantucket, Mass., 262; Bank, 77, 98,
Millers Falls, Mass., 168.
103, 105.
"Million Bank," 8I f, 83, 84, 85.
National bank, 50 f. See also Bank of
Mills on Charles River, Proprietors of,
the United States.
284.
Navigation companies, see Corporations
Mix, Barney & Co., 256 f.
for improving inland navigation and
Mohawk River, N. Y., 158, 159, 162, 213.
Inland navigation.
Mohawk Turnpike and Bridge Company,
Neilson, William, 260.
223.
Nesbit, Archibald, 162.
Monopolies, mercantile, 13, 14.
Nesbit, J. M., 127.
Monopoly or exclusive privileges,
Newark, N. J., 205, 207, 253, 258;
granted or imputed, 6, 13, 14, 38,
Aqueduct Company, 253, 343; Banking
39 f, 41, 42, 67, 69, 85, 87, 169, 193,
and Insurance Company, 245 n.
205, 208, 281, 287, 304 f, 308, 314, 320.
New-Bedford Bridge, The Proprietors of,
Monroe, James, 307.
196.
Montague Falls, Mass., 167, 168, 194.
New-Brunswick Bridge, The Proprietors
Morgan, John, 233.
of the, 208 f, 215.
Morris Aqueduct Association, 253.
Newbury, Mass., I86 f, I9I f, 277.
Morris Aqueduct, The Proprietors of the,
Newbury, Vt., 20I.
253, 343.
Newburyport, Mass., 170, 245, 259;
Morris, Gouverneur, 13 n, 45.
Merrimack Bank in, 99; Marine
Morris, Gen. Lewis R., 169.
Insurance Company, 244; Woollen
Morris, Ray, quoted, 297.
Manufactory, 277.
Morris, Robert, IO, I3 n, 35, 36, 38, 39,
New Castle Bridge, Proprietors of, 202.
40, I20 n, 149, I52 f, 161, 164, 172,
Newcastle, Maine, 197.
212 n, 287, 300 n, 301, 304 n.
New Chester, N. H., 20I.
Morris, Thomas, 176.
New England, business corporations in,
Morristown, N. J., 253, 258, 286 n.
24, 25, 28, 29, 295 ff; banks in,
Digitized by Google
412
INDEX
37, 102; inland navigation improve-
Newmarket and Stratham Bridge, The
ments in, 118; toll-bridges in, 188,
proprietors of the, 199.
202 f; turnpikes in, 216; insurance
New Meadow Canal, Proprietors of the,
companies in, 235. See also names of
182.
states.
New-Meadow River, 182, 197.
New England Sun Fire Office of Boston,
New Milford, Conn., 222; and Litchfield
proposed, 234.
Turnpike Company, 222.
New Hampshire, 13, 14, 171; business
New Orleans, La., 52 n.
corporations in, 23, 25, 26, 27, 28, 29,
Newport, Pa., 220.
30, 37; banks in, 37, 63, IO2 f, 107;
Newport, R. I., 245, 262, 313 f; Bank of
inland navigation improvements in,
Rhode Island, at, 99, 104; Insurance
118, 169, 175, 183, 184; toll-bridges
Company, 244.
in, 188, 198-202; turnpikes in, 216,
New River navigation, Commissioners of
224 f, 228; insurance company in, 235;
the, 178.
water supply company in, 250, 251;
New Salem, Conn., 22I.
manufactures in, 262; wharf company
Newton, Mass., 278.
in, 286.
New York (city), 13, 35, 40, 52, 56, 71,
New-Hampshire Bank (Portsmouth), 63,
81-90, 91, IOO f, 103, 160 f, 177, 204,
333.
205, 207, 220, 236, 245, 252, 253, 257,
New Hampshire Hotel and Portsmouth
258, 263, 266, 281, 285, 296 n, 299 f,
Pier, 286.
303; Mutual Assurance Company of
New Hampshire Insurance Company,
the City of, 236, 246, 318, 325; Insur-
245.
ance Company, 242, 245, 325; Manu-
New-Hampshire, Proprietors of the Second
facturing Society, 259, 275, 283; Tam-
Turnpike Road in, 225; Third, 225;
manial Tontine Association, 240 n.
Fourth, 225, 300, 302.
See also Bank of New York.
New-Hampshire turnpike road, the pro-
New York (state), 14, 206, 317; general
prietors of the, 224 f, 227 n.
incorporation acts, 16, 17; business
New Hartford, Conn., 221, 222.
corporations in, 22, 23, 25, 27, 28, 30,
New Haven, Conn., 4, 221, 222, 245,
37, 38, 318; banks in, 37, 44 ff, 56,
284; Bank, 32, 64 f, 103, 104, 321,
80-95, 97, IOO f, 102, 103, 104, 107;
333; Insurance Company, 244, 324.
inland navigation improvements in,
New Haven to East Haven, The Company
83, 118, 157-167, 300; toll-bridges in,
for erecting and supporting a Toll
188, 204, 213; turnpikes in, 216, 223 f,
Bridge from, 204.
228; insurance companies in, 235, 236,
New Jersey, 4, 9 f, 13; method of in-
242; water supply in, 250, 252; manu-
corporation in, 9, 20 f; general
factures in, 256, 260, 274, 278 f;
incorporation acts of, 16, 17; business
Council of Revision, 303 f.
corporations in, 23, 25, 27, 28, 30, 38,
Niagara Canal Company, 176, 319.
89; bank proposed in, IOI f; inland
Niantic Toll Bridge, The Proprietors of,
navigation improvements in, 118;
204.
toll-bridges in, 188, 204-211, 327;
Noncarrow, John, 218.
turnpike proposed in, 220 f; water
Norfolk, Va., 52 n, 79, 103, 137, 140, 141.
supply companies in, 250, 253; manu-
Norristown, Pa., 153.
factures in, 255, 275 f; copper mining
North America, see Bank of North
company in, 287, 306; map company
America and Insurance Company of
in, 289. See also Society for establishing
North America.
useful Manufactures.
Northampton, Mass., 223.
New Lisbon, Conn., 22I.
Northampton [Pa.], Company for erecting
New London, Conn., 4, 218, 253; Union
a Bridge over the river Lehigh, near the
Bank in, 64, 100; and Windham
town of, 212, 229.
County Society, 221; Proprietors of the
Northbury Bridge, Proprietors of, 200.
Aqueduct at, 253, 343.
North Carolina, 13, 14, 296; so-called
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413
general incorporation act of, 18 f;
Palmer, Timothy, bridge builder, 191,
business corporations in, 22, 23, 25,
195, 200, 210 n, 213, 214.
26, 27, 28, 30, 38; inland navigation
Pamunkey Trustees, 180.
improvements in, 118, 140 ff, 146 ff,
Panic of 1792, 31, 90, 91, 152, 206, 239,
177 ff, 184 n; iron works in, 257; re-
276, 285.
peals corporation charter, 147, 315.
Paper mills, 256.
Northern inland lock navigation in the
Paper money, issues of, 34, 42, 43, 45.
State of New York, The president,
Paris, France, 288.
directors and company of the, 160 f,
Parker, Rev. Dr., 71.
165 ff, 322.
Parker River Bridge in Newbury, in the
Northern Turnpike Road, First Company
County of Essex, The Trustee of, 186 f.
of the, 223 f.
Parliament, 5, 6, 8.
Northfield, Mass., 223; aqueduct in,
Parsons, William, 237.
343.
Passaic and Hackensack Rivers, ferries
Northfield, N. H., 200.
over, 205; bridges over, 205-208;
North-river, N. C., 178.
Proprietors of the bridges over, 207 f,
North River, Va., 140; Canal Company,
292.
337.
Pawtucket Falls, Mass., 171, 194; bridge
Northumberland Bridge, Company of, 201.
at, I94.
Northwood, N. H., 224.
Payne, Edward, 246 n.
Norwalk, Conn., 102, 222; and Danbury
Payne, Elisha, 225.
Turnpike Company, 222.
Peele (Peel?), 256 n.
Norwich, Conn., 64, 218, 221, 245; Bank,
Peirce, John, 200 n.
IOO.
Pembroke, N. H., 224.
Nottage, Joseph, 207.
Pendleton, Edmund, IO.
Nottingham, N. H., 224.
Penn, William, 4, IIO n.
Nottingham West Bridge, Proprietors of,
Pennsylvania, 13, 39, 136, 137; legis-
20I f.
lature, 9, IO f, 38, 40, II9 f, 122, 123,
124, 149, 151, 3Γo, 311, 312, 313;
Ogden, Samuel, 260.
council of censors, 312; general
Ohio Company (colonial), III; (post-
incorporation acts of, 16, 17; method
revolutionary), 290.
of incorporation in, 20 f; business
Ohio River, 124.
corporations in, 22, 23, 25, 26, 27, 28,
Onion River Bridge Company, 202.
30, 37, 38, 320; banks in, 35-44, 52,
Orange Turnpike Road, Company of the,
59, 95 ff, 103, 104, 106, 107; inland
224.
navigation improvements in, IO9 f,
Ore Bed, Proprietors of (Litchfield
118, 136 f, 148-157, 300, 316, 327;
County, Conn.), 286 f.
toll-bridges in, 188, 204, 210-213;
Orford Bridge, Proprietors of, 200.
turnpikes in, 216, 218 ff; insurance
Orr, Hugh, 271 n.
companies in, 23I f, 233, 234 ff, 239-
Oswego, N. Y., 158.
242; water supply in, 248 f; manu-
Ousatonic River, The Company to clear
factures in, 256, 262, 265; agricultural
the Channel of the, 184.
company in, 286; mining company
Ousatonic Turnpike Company, 222.
in, 287.
Oxford, Mass., 196.
Pennsylvania Bank, 35 f.
Oxford Turnpike Company, 222, 222 n.
Pennsylvania Germans, 155, 219.
Pennsylvania Railroad, 211.
Page, Dr. William, 21, 169, 251.
Pennsylvania Society for the Encourage-
Paine, John, 212 n.
ment of Manufactures and the Useful
Paine, Thomas, 19, 212, 312.
Arts, 258, 264 ff, 281.
Palmer, Captain, 145.
Peters, Richard, 212.
Palmer, Cyrus, 210.
Petersborough, Mass., 223.
Palmer, Mass., 222.
Petersburg, Va., 79.
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INDEX
Philadelphia, 4, IO n, 13, 15, 35, 39, 40,
Prescott, Benjamin, 167, 176.
43, 51, 52, 56, 83, 92, IIO, 127, 148,
Presque Isle, 149.
151, I54, 161, 177, 205, 212 f, 218, 220,
Preston, Conn., 22I.
232, 233, 234, 236, 240 ff, 245, 248 f,
Presumpscot River, 182.
256, 258, 261, 263, 264, 268, 281, 288,
Priestley, Joseph, 274.
305 f; Contributionship for the Insuring
Princeton college, new charter of, 9 n.
of Houses from Loss by Fire, 234 ff;
Providence, R. I., 49 f, 60 f, 176, 203,
and Lancaster Turnpike Road, I5I f,
221, 233 n, 238, 244, 245, 257, 262, 273,
177, 209 n, 218 ff, 300; and Trenton
284 f; Bank, 60-63, 246, 299, 300,
Railroad Company, 21I.
302, 318, 333; Plantations Canal, 176;
Phillips & Co., 256 n.
South-Bridge Society, 203; and Boston
Phillips, Samuel, 74.
Turnpike Road, 221; and Norwich
Phillips, William, 47, 263.
Society, 221; mutual Fire Insurance
Pinckney, Charles, 12.
Company, 238; Insurance Company,
Pine-tree Navigation Company, 181.
244, 246.
Pintard, John, 81 n, 206, 240 n, 285.
Providence-Washington Insurance Com-
Piscataqua Bridge, the proprietors of,
pany, 244.
I95 n, 199 f, 215, 224, 300.
Proxies, I25 n, 163, 322.
Pitt, William, 288.
Pulteney, Sir William, 176.
Pittsfield, Mass., 223; Proprietors of the
water-works in the middle of the town of,
Quantico Company, 337.
252, 343.
Quitapahilla Creek, IIO, 151.
"Plain Truth," 54 n, 86 n.
Plainfield, Conn., 221, 222.
Rancocus Creek, Company for the improve-
Platt, Richard, 82, 89.
ment of the navigation of the north
Plymouth Aqueduct, The Proprietors of
branch of, 181.
the, 253, 343.
Rancocus Toll-Bridge, company of, 209 f,
Pocomoke Company, 181, 327.
327.
Pokomoke River, 124.
Randolph, Edmund, 12, 14 f, 5I, 124,
Pomfret, Conn., 221.
138.
Poor, manufactures as relief of, 259, 265.
Raritan River, 205, 208 f.
Population related to density of cor-
Reading, Pa., 96, 149, 220.
porate charters (1800), 28, 29; related
Reister's-town, Md., 217, 226.
to ownership of federal securities, 296.
Rensselaer and Columbia Turnpike Road,
Porter, Col. Asa, 200 f.
Company of the, 223.
Portland, Maine, 102, 244, 245; Bank,
Rensselaerwyck, N. Y., 159.
99; Bridge, 197.
Republican Bridge, The Proprietors of
Port Republic [S. C.] Bridge Company,
the, 202.
215.
Revere, Paul, 237.
Port Royal, S. C., 215.
Revolution, economic effects of, 6 ff, 109,
Portsmouth, N. H., 63, 175, I99 f, 245;
I24.
Aqueduct, 253, 343; Pier, New Hamp-
Reynolds, 213.
shire Hotel and, 286.
Rhoads, Mayor, of Philadelphia, I29.
Portsmouth, R. I., 203.
Rhode Island, 4, II, 13, 14; legislature,
Potomac Company, 30, 98, 121-136, 138,
313; business corporations in, 22, 23,
173, 299, 321, 322, 328.
25, 26, 27, 28, 29, 37, 38; banks in, 37,
Potomac River, III, I12, II3, I14, II5,
49 f, 60-63, 99 f, 102, 103, 104, 106;
116, 120, 124, 214. See also Potomac
inland navigation improvements in,
Company.
118, 176; toll-bridges in, 188, 203 f;
Potts, John, Jr., 125.
turnpikes in, 216, 221; insurance
Powel, Samuel, 153, 212 n.
companies in, 235, 237 f, 244; water
Powles Hook, N. J., 205.
supply in, 249, 250; manufactures in,
Pownaboro, Maine, 197.
257, 262.
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INDEX
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Richards & Co., Giles, 256.
Salisbury, N. H., 200, 202, 225.
Richmond, Mass., 343.
Salisbury, Samuel, 237.
Richmond, Va., 79, 125, 137, 138, 139,
Salt, manufacture of, 269.
236; Bank of, 79, 103, 106.
San Domingo, 288.
Rister's-town turnpike roads, Company
Sanbornton, N. H., 202.
of the, 226.
Sandisfield, Mass., 223.
Rittenhouse, Benjamin, 110, 148, 149,
Sanford, Peleg, 63, 233.
152, 218, 219.
Santee to Cooper River, The Company for
Rittenhouse, David, IIO, 153.
the Inland Navigation, from, 32, 142-
River Machine Company, 284.
146, 292.
Roanoke and Pungo Canal Company, 179.
Saquituck Turnpike Company, 222.
Roanoke Navigation Company, 179.
Sargent, , I9I.
Roanoke River, 179; Trustees, 180.
Saugrain, M. Tourtelle, 288.
Roberdeau, I., 154 n.
Savage River, Va., 226.
Robeson, Jonathan, 153.
Savannah, Ga., 52 n; Navigation Com-
Robinson, James, 99 n.
pany, 181.
Robinson, William, member of Pennsyl-
Saw mills, 256, 257.
vania legislature of 1786, 313.
Sawyer, Enoch, 195.
Rochefoucault Liancourt, Duke de la,
Schenectady, N. Y., 160, 162, 213, 223.
100, 103 n.
Scholfield, Arthur and John, 277, 278.
Rockingham, Vt., 169, 226.
Schuyler, Gen. Philip, 159 f, 161, 162,
Rocky Mount, S. C., 147, 148.
163.
Rocky Mountain, Mass., 196.
Schuylkill and Susquehanna Navigation,
Rogers, Moses, 81.
Company for the, 152-157, 299 n, 320.
Roosevelt, Nicholas I., 249.
Schuylkill, at or near the city of Phila-
Roxbury Canal, The Proprietors of the,
delphia, Company for erecting a perma-
284.
nent bridge over the river, 212 f, 229.
Roxbury, Mass., 251.
Schuylkill River, IO9 f, 148, 149, 152.
Royalton, Vt., 225; and Woodstock turn-
Scituate, R. I., 221.
pike company, 225.
Scollay, Dr. William, 71.
Rumsey, James, I25 f, 127, I29 f.
Scotland, 304 f.
Rupert, Vt., 224.
Sebago Pond, 182.
Russell, Thomas, 58 n, 187.
Securities, market for, 294. See also
Rutgers college, new charter of, 9 n.
Bank scrip, Bank stock, Debt, public,
Rutherfurd, John, 83.
Investments, Shares, corporate, and
Rutherfurd, Walter, 83.
Speculation.
Rutland, Vt., aqueduct company in, 343.
Seekonk River, 203.
Rutledge, Chancellor John, 143.
Sellers, John, IIO.
Senate of the United States, see Congress,
Saccarappa, Maine, 182.
federal.
Saco River, The Proprietors of the Sluice-
Seneca Falls of the Potomac, 128, 132,
way on, 182.
133.
Sail cloth manufacture, 259, 261 ff, 283.
Seneca Lake, 162 n.
St. Lawrence River, 176.
Seneca Road Company, 223.
Salem Creek, Company to cut a canal to
Senf, Col. John, 143, 144, 145.
shorten the navigation of, 181.
Seton, William, 45, 56, 57, 87, 9I-94, 95,
Salem, Mass., 190, 197, 233, 253, 262;
275.
Essex Bank in, 77, 78; Marine In-
Sewall, Maj. Samuel, 74, 187, 189.
surance Company, 244; and Danvers
Shares, corporate: personal distribution
Aqueduct, 252 f, 343; Iron Factory
of, 35, 41, 192, 273, 298-303; geo-
Company, 279.
graphical distribution of, 39, 5I n;
Salisbury, Conn., 223.
intercorporate ownership of, 245 f;
Salisbury, Mass., 191.
par values of, 105, 160, 227, 244, 245,
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INDEX
251, 254, 277, 299; forfeiture of, 130 f,
inland navigation improvements in,
139, 145, 164, 165, 168, 172, 193, 210 f,
118, 142-148, 181; toll-bridge in, 188,
299, 321 f. See also Stockholders and
204, 215; insurance companies in, 234,
Subscriptions.
235, 237, 245; water supply company
Shaw, John, 277.
in, 250; manufactures in, 268; general
Sheepscott River Bridge, The Proprietors
act relating to corporations, 308 n.
of, 197.
Southern states, business corporations in,
Shenandoah company, 134.
24, 25, 28, 29; banks in, 37; inland
Shenandoah Falls of the Potomac, 126,
navigation improvements in, 117, 118;
128, 132.
toll-bridges in, 188; turnpikes in, 216,
Shenandoah River, 133, I34.
226; insurance companies in, 235;
Shipman, Elias, 233.
water supply companies in, 250. See
Shippen, Edward, 60 n.
also names of states.
Shoes, manufacture of, 255.
South Hadley, Mass., 167, 168.
Shrewsbury, Mass., 223.
Southworth, Constant, 270.
Shrewsbury, Vt., 225.
Speculation, 46, 51, 52, 59f, 61, 62, 68, 71,
Silk, cultivation and manufacture of,
72, 81 f, 84, 85, 86, 87, 88, 89, 90, 100,
269 f, 283.
152, 155, 206, 276, 294, 301, 320, 321,
Simpson, Solomon, 260.
325.
Simsbury, Conn., 221.
"Speculator, A," 85 f.
Sitgreaves, Samuel, 211.
Speculators, see Speculation.
Slater, Samuel, 273, 275, 281.
Springfield, Mass., 262; aqueduct, 343.
Slave labor, employed on improvements
Spring Mill, Pa., 286.
of navigation, 114, 116, 127, 134, 138,
Stafford, Conn., 222.
141, 144.
"State Bank" in New York city, pro-
Slitting mills, 256.
posed, 82.
Sluice-ways, 182 f.
Sterling, Conn., 221.
Smilie, member of Pennsylvania legis-
Steuben, Baron, 275.
lature of 1786, 312, 313.
Stewart, Alexander, 260.
Smith, Adam, 185.
Stewart & Plunket, 127.
Smith, James, 129 f.
Stewart, Richardson, 129 f.
Smith, John, marine underwriter of
Stewart, Robert, 84 n.
Philadelphia, 234 f.
Stiles, Pres. Ezra, 269 f.
Smith, Melancthon, 82, 275.
Stillwater, N. Y., 166.
Smith, William, 110, 152, 153.
Stirling Iron Works, N. Y., 224.
Snuff mill, 256.
Stockbridge, The Proprietors of the
Society for establishing and supporting a
Aqueduct in, 343.
Turnpike Road from Cepatchit Bridge,
Stockholders, rights of, I25 n, 163, 239,
in Gloucester, to Connecticut Line,
247, 322, 323 f; liability of, 7, 17 f,
22I.
45, 106, 243, 260, 268, 279, 317 f;
Society for establishing useful Manu-
meetings of, 322; attendance at meet-
factures, 32, 88, 89, 91, 130, 177, 206,
ings, 163, 322. See also Shares,
2IO n, 275 f, 279, 280, 283, 291, 294,
corporate, and Subscriptions.
299, 300, 302, 317, 318, 319, 321, 324,
Stockings, manufacture of, 255.
327, 328.
Stockport, Pa., 149.
Society for promoting the improvement of
Stoddert, Benjamin, 215.
Roads and Inland Navigation, 149,
Stone, Thomas, 52.
150, 151, 153, 218.
Storer, Woodbury, 182.
Somers, -, 271.
Storrs, Constant, 225.
Southbury, Conn., 222.
Strait's Turnpike Company, 221, 222 n.
South Carolina, 13, 16; business corpora-
Stratfield and Weston Turnpike Company,
tions in, 22, 23, 25, 26, 27, 28, 29, 30,
222.
318; banks in, 37, 56, 80, 103, 104;
Stratford, Conn., 262.
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INDEX
417
Subscriptions to corporate securities,
Thompson, Samuel, 171.
foreign, 39, 130 n, 156, 167 f, 169, 299;
Thompson, Thomas, 200.
by persons in other states, 39, 5I n, 71,
Thorndike, Israel, 273.
72, 199, 299 f; federal, 38, 39, 59, 62,
Tiverton, R. I., 203.
142; state, 46, 5I n, 62, 63, 72, 74 f,
Tobacco, manufacture of, 256.
81, 83, 95 f, 96 f, 107 f, II2 n, 121, 122,
Toll-bridges, adapted to corporate man-
123, 125 n, 130, 133, 134, 135, 136,
agement, 186; expense of, 189, 190,
137, 138, 139, 141, 142, 150, 151, 156 f,
191, 194, 196, 198, 199, 200, 201, 203,
164, 166, 167, 275, 283, 295, 300, 327 f;
204, 207, 209, 211, 213, 214, 215;
town, 106, 141, 167, 200, 209; cor-
dimensions and construction of, 190,
porate, 46, 54, 61, 68, 246, 325;
191, 193, 195, 196, 199, 200, 203, 207,
enthusiasm for, 46, 51, 8I f, 152, 207,
2II, 213; profitableness or unprofit-
219; exceeding issues, 51, 60, 62, 80,
ableness of, 186, 189, I90 f, 192, 194,
81, 152, 219, 244, 301, 320; inadequate,
195, 196, 197, 198, 199, 200, 201, 204,
38, 49, 64 f, 79, 97, 100, IOI, 103, 138,
207 f, 210, 211, 214; injuries to, 194,
147, 156, 175, 176, 177, 181, 194, 196,
196, 201, 203, 209, 214; opposition to,
197, 200, 201, 202, 210, 211, 220, 226;
193, 196, 306.
regulation of payment of, 238, 243,
Corporations for building and main-
321 f; limitations on, 320 f. See also
taining: statistics of, 22 f, 26, 27, 28,
Shares, corporate.
30, 188; forerunners of, 186 f, 205 ff,
Suffield, Conn., 204.
208; town subscriptions to, 200, 209;
Sullivan, James, 66, 69, 171, 193, 237,
charter features of, 228 ff, 323, 326,
251, 314 f.
327; list of, 338 ff. See also names of
"S. U. M.," see Society for establishing
companies and names of states.
useful Manufactures.
Toll roads, see Turnpike roads.
Susquehanna Canal, The Proprietors of
Tolls, provisions regarding, II2, 113,
the, 117, II9 f, 135, 136.
115, II9, 122, 133, 142, 143, 149, 150,
Susquehanna River, 110, 117, 118, II9,
151, 157, 169, 172, 209, 210, 227, 228,
151, 212, 220. See also Schuylkill and
229, 230.
Susquehanna Navigation.
Tompson, Jonathan, 189 f.
Susquehannah turnpike road, Company of
Tontines, 70, 80, 239, 248, 285. See also
the, 223.
Boston Tontine Association.
Swan River Canal, Commissioners of the,
Trade marks, 261, 271.
178 n.
Trenton, N. J., 101, 153, 206 n; Com-
Swanwick, John, 30I.
pany for erecting a bridge over the river
Swatara Creek, 153.
Delaware at, 30, 210, 2II.
Troup, Robert, 82, 89, 224.
Talcott Mountain Turnpike Company,
Troy, N. Y., 160, 166, 223.
221.
Trumbull, John, 64.
Tammanial Tontine Association, The
Trustees for the purpose of promoting
New York, 285.
Manufactories, 284.
"Tammany Bank," 82.
Tudor, William, 54, 71, 72, 281.
Tammany Society, 285.
Tulpehocken Creek, IIO, 149, I5I.
Tar river Navigation Company, 179.
Turnpike roads, English, II2, 150 n;
Taxation, of the Massachusetts Bank,
proposed for Pennsylvania, 149 ff;
68 f; exemptions from, 143, 263, 266,
expense of, 219, 220; opposition to,
270, 272, 278, 327.
219 f, 222, 306 f, 320.
Taylor, John, 305.
Corporations for building and main-
Ten Mile Falls Canal, the Proprietors of,
taining: statistics of charters for, 27,
182.
28, 216, 295; forerunners of, 217 f;
Thetford, Vt., 226.
size of, 227, 291; par value in, 227,
Thomas, Joshua, 253.
299; charter features of, 228 ff, 319,
Thompson, Conn., 22I.
323, 327, 328; success of, 292, 293;
Digitized by Google
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INDEX
prominence in New England, 28,
Washington Bank (Westerly, R. I.), 99 f,
297; list of, 340 ff.
103.
See also names of states and names
Washington, D. C., 52 n, 97, 103, 214 f,
of companies.
226. See also Bank of Columbia.
Washington, George, 15, 51, III f, I14,
Union Bank (Boston), 70-78, 98, 103,
115, 116, 120, 121, 122, 123, 124, 125,
104, 105, 106, 285, 300, 325, 333.
126, 127, 129, 130, 131, 132, 134, 138,
Union Bank, in New London, 64, 100,
140, 141, 158, 159, 174, 216 n, 261,
333.
264, 266, 272, 306.
Union Canal Company, 179.
Washington Insurance Company in
Union Company, 170, 319.
Providence, 244.
United Insurance Company of the City of
Washington Trust Company, 100.
New York, 242, 245 n.
Washington Turnpike Road, Company of
United States, business corporations
the, 226.
chartered by, 22, 23, 24, 27, 28, 30,
Waterbury, Conn., 22I.
36, 37, 38; Treasury of the, relations
Waterbury, Vt., 202.
with Bank of North America, 38 f.
Wateree River, 146, 148.
See also Bank of the United States.
Waterford, N. Y., 166.
Universal Tontine, 239.
Water Queche Falls, The Company for
Utica, N. Y., 213, 223.
rendering Connecticut River navigable
by, 30, 170.
Water-street Bridge Company, 215.
Vanderhorst, Governor, 145.
Water supply, colonial corporations for
Van Renselaer, Jeremiah, 324 n.
providing, 247 f; need for adequate,
Varick, Richard, 275.
247 f; abortive schemes for furnish-
Vaughan, -, 197.
ing, 248 f, 319; unincorporated asso-
Venice, Bank of, 40.
ciations for furnishing, 249.
Vermont, 9 n, 13, 21, 171; business
Corporations for providing, 22 f,
corporations in, 23, 25, 26, 27, 28, 29,
26, 27, 28, 249-254, 319, 343; slight
30; inland navigation improvements
success of, 254, 293; features of char-
in, 118, 166 168 176, 300; toll-
ters for, 254; Massachusetts general
bridges in, 188, 199, 202 f; turnpikes
act of incorporation for, 17 f.
in, 216, 225; water supply company
Watertown, Conn., 22I.
in, 250.
Watervliet, N. Y., 223.
Vermont turnpike corporation, First, 225.
Watson, Elkanah, 134, 143 n, 158 f, 160,
Virginia, 12, 13, 39, I2I, 296; general
161, 162, 176.
incorporation act of, 17; business
Watson, James, 161, 275.
corporations in, 22, 23, 25, 26, 27, 28,
Wattle's Ferry, N. Y., 223.
29, 30, 3I n, 37; banksin, 37, 78 f, 103,
Webb, Gen. Samuel B., 280, 281.
106.f; inland navigation improve-
Webster Falls on the Pemigewasset,
ments in, III, 118, I20-142, 180, 300,
202.
316; turnpikes in, 216, 226; insurance
Webster, Noah, Jr., 64, 311 n.
companies in, 235, 236; manufactures
Webster, Peletiah, II, 311.
in, 255, 268.
Wedgewood, —, 256 n.
Wells, Maine, 182.
Wadsworth, Jeremiah, 39 n, 44, 63, 64,
Wendell, Judge Oliver, 71, 74.
233, 266, 30I.
West-Boston Bridge, the Proprietors of,
Wages, rates of, 126, 127, 144, 154.
69, I92 ff.
Wallenponpank Falls, Pa., 262.
West-Chester Turnpike Road, Company
Wansey, Henry, 255, 267, 274, 282.
of the, 223.
War, influence on industry, 6 n, 7.
Westerly, R. I., 99 f.
Warren, R. I., 245; Insurance Company,
Western Bridge, Mass., 222.
244.
Western inland lock navigation in the
Digitized by Google
INDEX
419
State of New York, The president,
Willing, Thomas, 38, 52; & Co., 233.
directors and company of the, 160-165,
Willis's River, 180.
299, 300, 324 n, 328.
Wilmington, Del., 43, 220, 258; Bank
Western settlements, 13, I20 f, 123.
of Delaware in, 100.
Western states, business corporations in,
Wilmington, Vt., 225.
24, 25, 28, 188. -
Wilson, James, 3 n, II. 12, 13, 19, 42,
Westfield, Mass., 223.
310 f.
Westham, Va., 113, 137, 139.
Winchester, Va., 125, 217.
West Newbury, Mass., 195.
Windham, Conn., 221, 222; and Mans-
Weston, Conn., 222.
field Society, 222; Turnpike Company,
Weston, William, 129, 153 f, 164, 172.
222.
West River Bridge company, 202; The
Windham Turnpike Company [Vt.], 226.
Second, 202.
Windsor, Conn., 267 n; Aqueduct Com-
Wethersfield, Conn., 267 n.
pany, 343.
Wharf proprietors, 4, 22, 23, 26, 27,
Wingrove, -, 287.
286, 319, 331, 344.
Winnepesaukee and Merrimack Canal,
Whiskey Insurrection, 154.
Proprietors of the, 175.
Whitehall, N. Y., 166.
Winthrop, 198.
Whitehill, member of Pennsylvania
Woburn, Mass., 171, 173.
legislature of 1786, 41, 313.
Wolcott, Oliver, 94.
White River Falls Bridge, the proprietors
Wood Creek, N. Y., 159, 162, 164, 165,
of the, 30, 32, 169, 199, 202, 229 n, 300.
166.
White River turnpike company, 226.
Woodbridge, Conn., 22I.
White River, Vt., 225.
Woodstock, Vt., 225.
Whitesborough, The Aqueduct Association
Woollens, manufacture of, 257, 259, 266f,
in the Village of, 343.
268, 277, 283.
Whiting, builder of the Rhode Island
Worcester, Mass., 175, 176, 273.
Bridge, 203.
Worthington, John, 167.
Wilbraham, Mass., 222; aqueduct in,
Wrentham, The First Aqueduct Company
343.
in, 343.
Wilder, Abijah, 250.
Wright's Ferry, Pa., 120, 151, 153, 212.
Wilkes, 83.
Williams, John, 167, 196.
Yadkin Canal Company, 179.
Williamson, , 224.
Yadkin Company, 178.
Williamson, Charles, 176.
Yadkin Pedee Company, 178.
Williamson, Hugh, 306.
York Bridge, The Proprietors of, 198.
Williamstown, The Proprietors of the
York, Pa., 96.
Waterworks in the Town Street in, 343.
York River, Maine, 189 n.
Williamstown Turnpike Corporation,
York-town, Va., 217.
222 n, 223.
Youghiogheny River, 122.
4648
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WELLS
NOV 1984
WITH PA 02154
HB 3DWZ P
HDI
v.2
Davis
Essays in the earlier
history of Amer.
corporations
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