Suffolk County, Massachusetts - The whole text, 1894 (part 6 of 17)

It is intcrestinsj to note that tlic copper coins sent out from this mint, encircled with the letters of the word Massachusetts, were the first to have upon them the American eagle that has since been found on so many of our other coins, having in its right talon a bunch of arrows, and in its left an olive branch, the semblance of defence and peace. This effort on the part of the local authorities to enter into the coinage of money was arrested by the adoption of the Federal constitution, which provided that " no State shall coin money, emit bills of credit, or make anything but gold and silver coin a tender in payment of debts."

This was a drastic law; liut when one takes into account the painful experiences through which the people of this and other American communities had passed, how they had witnessed from time to time the depletion of their specie and the depreciation of their paper currency in consequence of excessive issues of bills of credit, one can well understand why, as a safeguard for the future, it was thought desirable to place this salutary check upon their action.

The next step in the financial history of Boston was the formation of what has has been .since that time the banking system of Massachusetts. In 1784 a charter was obtained for the first officially recognized local bank, and one which from that time to this has been in constant and regular existence.

The establishment of the Massachusetts Bank was i-ecognized in its charter as a species of experiment. In this it was said that it would probably be of great public utility and particularly beneficial to the trading part of the community if such an institution was established within the borders of this State. The grant of authority from the General Court was that the corporation should have the right to hold ;^50,0()fl and no more, in lands, rents and tenements, and ^500,000 and no more, in moneys, goods, chattels and effects. These it was permitted to sell, grant and devise, alien or dispose of; but except that it was liable to be sued, and that it could not make, establish and put in execution regulations that were repugnant to the laws and constitution of the State, the charter granted was a broad one, giving to its holders permission, without interference on the part of the authorities, to carry

It is probable that partly through want of experience and partly from a tolerably fair knovvledg-e of the purposes of the incorporators, the restrictions that now apply, both in general and special laws, to the proceedings of corporations were then thought unnecessary. But two months after the act of incorporation, and doubtless at the instigation of the bank officials, the Legislature passed, March 1(1, 1781, an act entitled " An Act to Prevent Frauds on the Massachusetts Bank." This is so far charactetistic of the spirit of the times that it warrants reproduction :

Section 1. Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, that if any president, director, officer or servant of the Massachusetts Bank shall secrete, embezzle or convert to his own use any note, bill, obligation, security, money or effect belonging to the said bank, or deposited there by any other persons, every person so offending and being thereof convicted before the Supreme Judicial Court, shall be set in and upon the gallows with a rope about his neck, or be set in and upon the pillory for the space of two hours, shall forfeit all his personal estate and the issties and profits of his real estate during life to the use of the Commonwealth (after deducting such sum as shall indemnify the bank for the loss they may have sustained by means of the said fraud) and shall ever after be rendered infamous and incapable of sustaining any office, either civil or military.

Section 2. And be it enacted by the authority aforesaid, that if any person shall forge, counterfeit or alter any bill, note, or obligation made, signed or given for or in the name of the president, directors, cashier, or other person in behalf of the said bank, or shall forge, alter, or counterfeit any endorsement on such bill, note or obligation, or shall forge, alter or counterfeit any order or check drawn by any person on the said president, directors or cashier, ever)' person so offending and being therof convicted before the Supreme Judicial Court, shall suffer the pains, penalties, forfeitures, and disabilities as aforesaid, and shall be subjected to hard labor within this Commonwealth during the term of seven years, to be disposed of by the directors of the said bank in such manner and under such confinement as they shall direct for the use and benefit of the said bank.

Section 3. And be it enacted by the authority aforesaid, that if any person shall utter, pass, tender in payment, or offer to pass any forged, altered or counterfeited bill, note or obligation made, signed or given in the name of aaid president, directors, cashier, or other person in behalf of the said bank, or any order or check drawn by any person on the said president, directors, or cashier, knowing such bill, note, obligation or check to be so forged, altered or counterfeited, every person so offending and being convicted as aforesaid, shall suffer the pains, penalties, forfeitures and disabilities as aforesaid, and shall be subjected to hard labor in such manner and for the purpose as aforesaid.

Section 4. And be it enacted by the authority aforesaid, that if any person shall forge, alter or counterfeit any letter of attorney, order or other instrument to transfer or convey any share or shares of stock in tlie said bank, or to receive the same or any dividend or part tliereof, or shall knowingly and fraudulently demand to have the share or shares, dividend, or any part thereof transferred, conveyed or received by virtue of such forged, altered or counterfeited letter of attorney, order or other instrument, or shall falsely and deceitfully personate any true and lawful proprietor or proprietors of any share or shares of stock or dividend or money, or other property deposited in the said bank, thereby transferrmg, or endeavoring to transfer, the said stock, dividend, money or other property, in every such case the person so oiTending, and being thereof convicted as aforesaid, shall suffer the pains, penalties, forfeiture and disabilities as aforesaid, and shall be subjected to hard labor in such manner and for the purpose as aforesaid.

It hardly needs to be pointed out that an act of this kind is a peculiar species of special legislation which would find little countenance in any of our present State Legislatures. While it was considered necessary to protect the stockholders of the bank against malfeasance on the part of its officers and employees, and while the.se if the}^ committed wrong doing were to be exposed to public scorn and contempt, and were to have whatever property they possessed either taken, or made use of, for the benefit of the defrauded corporation, there seems to have been a singular leniency shown respecting punishment by imprisonment. The defaulting cashier or teller having sat for two hours upon the gallows with a rope about his neck, or having pas.sed the saiue period of time in the uncomfortable confinement of the public pillory, had his liberty granted to him and might go wherever he pleased, the seizure of his property, if he had not previously disposed of it, being the only serious drawback.

On the other hand, those who forged or counterfeited notes, or those who endeavored to obtain stock and dividends that did not belong to them - offences which would now be considered perhaps less heinous than the betrayal of trust on the part of a bank official - had to endure under this law all of the public disgrace brought about by infamous exposure which fell to the share of the defaulting bank official, had to lose such property as might be posse.'ssed, and had, moreover, to suffer a restraint or confinement for seven j^ears, which we take to have been an intention on the part of the law to reduce the offender during that period to a state of slavery, in which his labor was at the disposal of the bank officials, and apparently without the least interference on the part of the State authorities, except that they were to see that his time and services inured to the benefit of the bank. It would seem from this rather one-sided means of punishment that the law in question was drawn np by the officers of the bank, having in so doing a wish, if not to shelter themselves, at least to clear themselves from too severe a punishment if the weaknesses of human nature prevailed over the dictates of common honesty.

At the same time, March Ifi, 1784, it was considered advisable to enact a law restricting the taking of excessive usury. B)^ this it was declared that six per cent, per annum interest was a sufficient return for money or merchandise loaned, and that any contract arranging for a higher rate of interest should be considered utterly void, and that all and every person who made such a contract or entered into any corrupt bargain as a means of evading the law, .should forfeit and lose for every such offence the full value of the goods and moneys or other things loaned, and that a moiety of the same should go to the use of the Commonwealth, the other half to him or them who prosecuted or complained by suit for the same, any custom, usage or law to the contrary notwithstanding.

It was under these conditions that the Massachusetts Bank began its business, and there is abundant reason, from the returns that it made to its stockholders, to believe that it had a satisfactory experience. Its charter, as we have pointed out, was a broad and comprehensive one, and although it was brought into competition, in certain classes of its business, with the branch of the Bank of North America that had been established here, yet this did not prevent it from accuinulating to itself the larger part of the local business and of establi.shing, in spite of the usury laws, its own rate of discount.

While at that time Boston was a small town, considered from a numerical standf)oint - for it was no larger than Taunton, Haverhill, and some of our minor Massachusetts cities - it had an importance in the world wholly independent of its size. It was the center of trade for this part of the American continent, and the same energy that its people had displayed in insisting upon their rights in opposition to the dictation of the British crown, was shown in the activity they displayed in prosecuting their business. To provide the financial support for carrying on this business, to give to our merchants of that day, who had begun sending their ships not only to China and the East Indies but to the West Coast of North America, the temporary credit they needed, was a work of finance so obviously necessary that the Wf)ndcr is that banks stach as the Massachusetts Bank were not established in Boston years before they were.

It is probable tluit if the directors and managers of this first institution had exhibited in the conduct of their business a greater regard for the irrolonged maintenance of their interests, not onh^ would it have been of material advantage to them and to their bank, but that the entire system of banking in Boston as we now know it would have been quite different. The Massachusetts Bank made through these early years of its existence a very large profit, this averaging in 1791 and 1793 quite sixteen per cent, per annum on the par value of its stock.

It was obvious that this was altogether too large a source of revenue to be continued without competition, and hence in 1793 the second Boston bank, the Union Bank, as it was called, was incorporated, having its capital fixed at $1,200,000, this being nearly five times greater than the original paid in capital of the Massachusetts Bank when it started eight years before.

It is sufficiently evident that the money needed for banking purposes could then be obtained in this city, partictxlarly when the returns held out to investors were as large as we have shown them to have been. The large returns received through discounts indicate that the financial facilities that the Massachusetts Bank had at its disposal were not sufficient to meet the demands of its customers, and hence the proper course would have been to have expanded these facilities so that a fair and even large return might be obtained upon the capital invested, but not one so great as to encourage outside competition.

If the directors of the Massachusetts Bank, realizing the situation and knowing that if the business was made unduly profitable, competition would surely set in, had expanded their capital and put their rates of discount upon a reasonable basis, there is reason to doubt whether the second bank, the Union Bank, would have been started, and certainly within the next few years it would not have been found necessary to establish the large number of additional banking institutions that were brought into existence. No doubt some of these were formed for the purpose of providing official and salaried positions for the friends of certain wealthy gentlemen, but this implied that the business of discounting paper must bear the tax which these salaries imposed. If the financiers who held the key to the position at the outset had realized the value of the situation they could undoubtedly have broadened out their field of operation, increased their capital stock to the needs of the times and, by showing less solicitude in the matter of dividends, could have built up a great banking institution which would have had tar more influence than a number of smaller banks eombined, and would also have established a hanking- method by means of great institutions. It is frequently the first step that determines action, and the first step in banking in Massachusetts distinctly favored the organization of relatively small banks having their business restricted to local needs, in place of the formation of a few great monetary institutions having their headquarters in Boston, but having branches or agencies established in those parts of the State where banking capital was needed. This has been the form of development in England and France, and it is not unlikely that with more progressiveness and enterprise on the part of the original directors of the Massachusetts Bank something of the same kind might have been attempted here.

It is clear that there was a desire on the part of the people in other parts of the vState to avail themselves of banking facilities, for the charter of the Union Bank provided that one-fifth of the bank's funds should be appropriated to loans outside of Boston for the benefit of agriculture, in sums of not less than one hundred or more than one thousand dollars, secured by mortgages on real estate and having not less than one year to run. In fact the influence of the State government was specially turned to secure for the country people opportunities in the way of credits that they did not possess, and if the Boston banks of that day had shown themselves willing to undertake the work they could unquestionably have absorbed through branch establishments the larger part of the banking business of all of the New England States.

Another feature in the bank charters of that time was the subscription by the State to a certain part of the stock. As new banks were formed the Commonwealth became one of the stockholders, until at the time of the War of 1812 it was said to be the owner of nearly one-eighth of all the banking capital of Massachusetts. The reason that led to the adoption of this policy is not clear at the present time. There had been, as the foregoing history will show, a belief on the part of the agricultural classes in Massachusetts that they were in some way excluded from the benefits of a sound banking currency system, and that these inured to the benefit of the capitalists, merchants and dwellers in Boston. We can, perhaps, understand this feeling by taking into account the present hostility shown in some of the agricultural States of the West, not only against the national banking system, bnt against anything that appertains to corporate banking.

At that time it is evident that the feelings which express themselves in resolutions of Farmers' i\.lHances and granger lodges in the West were pronounced factors in the minds of the country dwellers of Massachusetts, and that bank charters could not be obtained from our Legislature in the absence of a provision which would accord to the farming inhabitants of the State special opportunities of obtaining such credit as they desired. It is a possibly happy omen that with increased experience and with growth of knowledge this suspicicjn and distrust in Massachusetts has very largely evaporated. The people of the coiintry districts of Massachusetts have realized that the banks are not their enemies, that credit can be obtained whenever reasonable groinid for giving it exists, and that there is no special advantage, except that of holding available securities upon which loans can be effected, that the capitalist has over the other members of society. The disposition on the part of the State to interest itself in banking ventures may have been due to this same distrust of moneyed institutions. If the State was a large shareholder it was assumed that it would give to it the right to regulate in some degree the conduct of the banking business, and in this way see that the favors were evenly bestowed. It was discovered later on that the connection was not one which could be wisely maintained ; that to the ordinary shareholders in the bank a partnership with the government was liable to bring about interference detrimental to the proper conduct of business, while on the part of the State it was discovered that the money of the people w-as in this way placed at risk in a manner detrimental to the public policy.

In 181'^ the Commonwealth owmed about a million dollars in the stock of these banking corporations, being at the time nearly one-eighth of the banking capital of the State. But when clearer views prevailed it was found expedient to dispo.se of all of this, and since that time, banking, like any other business, has been permitted to develop itself upon its own lines without direct State participation.

The conditions under which banking business was carried on in its earlier days were in many respects different from those of the present time. The Massachusetts Bank when it was started laid down certain stringent rules regulating the loaning of money which are interesting now rather as specimens of restriction. The Massachusetts Bank started with a paid in capital of $25o,oO(), but the maximum loan to one person at one time was $;j,()00, and no person was allowed to owe the bank more thim $"),()(»() at any one time, or be liable fen" more than $7,500 as a promisor or endorser. The renewal of notes was absolutely forbidden, and those who failed to meet their notes were not only obliged to submit to the immediate sale of their security, but were denied the privilege of having any further notes discounted for a period of eight months thereafter, unless the penalty was remitted by the unanimous vote of the directors. The rules of the bank also required that the names of delinquents should be posted in a conspicuoiis place in the bank office.

With the establishment of our national independence the ship merchants of Boston began those ventures into the fields of foreign commerce which for many years made our city the leading commercial port of the American continent. The flag of the United vStates, as well as the house flags of Boston merchants were to be found in the seaports of India and China as well as on the almost unknown waters of the Pacific Ocean. No doubt the facilities that were provided by the early banks gave to the Russells, Phillipses, Perkinises, Grays, and others, the credits they required for obtaining the large amotmts of specie which were needed to carry on what proved to be their highly profitable trade ventures.

In the early years of the century the government of the United States afforded credit opportunities which were quickly taken advantage of by our Boston merchants. For many years the rule prevailed of taking at the custom house the endorsed note of an importer for a very considerable pail of the duty levied upon imported goods. For some time the method was on importations from Europe or Asia to have one-third of the duty paid down, the other two-thirds remaining upon credit, one of these thirds for three months and the other for six months. This led to the formation in Boston of quite a number of associations where business was done upon individual account, though to all intents and purposes the two or three merchants who were asst)ciated together were partners; that is, certain importations were made in the name of Smith for the purpose of having Brown endorse the note given in payment of duties, while Brown's note for duties was endorsed by Smith. To prevent loss the government was a preferred creditor, and in cases of insolvency its claim had to be settled in full before any other creditor could share in the division of the bankrupt's assets. The effect of this system was to materially stimulate the business of importing, quite a number of merchants engaged in it having very little capital beyond that which this credit of the government accorded to them.

The disturbances that .t;-rew out of the Napoleonic wars were severely felt in Boston, causing such a demoralization in trade that real estate values declined very greatly, and for a time commerce was carried on under exceedingly precarious and profitless conditions. Non-intercourse and the embargo were followed by war, to the great discontent of all of the business interests of this city. Evasions of all kinds were attempted because they were looked upon as legitimate, and not a few of the prominent ship owners engaged in smuggling and other devices, which received at the time a local sanction, even though they were in direct violation of the national statutes.

The condition of our local currency was in the main satisfactory, but the notes of New York and Vermont banks of very doubtful solvency were spread broadcast over the country, and foimd a readier acceptance in Boston, because it seemed to be the policy of our banks at that time to keep themselves strong by refraining from the issue of bank bills. Thus, in 1813, according to the returns made to the State, the four banks of Boston had more than four and one-half millions dollars of specie in their vaults, while their aggregate circulation did not reach a million and a half dollars. It was at this time that the New England Bank was chartered, having for one of its purposes of business the collection of the notes of foreign or non-State banks on behalf of those who did business with it. The discount at which these foreign notes had previously circulated was very considerable, becau.se the question of their redemption was always an open one. But when the New England Bank undertook to charge only the actual cost of sending foreign money home to the issuing bank and obtaining specie for it, the rates of discount both on bills of Massachusetts banks out of Boston and those on reasonably sound banks out of the State, were very materially reduced.

This action on the part of the New England Bank, which in 181S was also adopted by the Suffolk Bank, created a great deal of indignation on the part of the officers of the banks whose notes were thus sent in for redemption. In 1814 three wagon loads of specie, amounting to more than $138,000, which had been collected by the New England Bank through the redemption of the bills of a number of the New York banks, was seized at Chester, by the collector of New York, while on its way to Boston. The reason given for this seizure was the alleged intention of the New England Bank to send the money to Canada; but representations made by the Legislature of Massachusetts to the president of the United States led to a restoration of the specie.

But the business of the New England Rank and of its rival, the Suffolk Bank, in dealing with foreign money, as it was termed, was not carried on without great friction. The plan of the Suffolk Bank, which was chartered in 1818, was that if any bank deposited with it five thousand dollars as a permanent deposit, with such further sums as would be sufficient from time to time to redeem its bills taken by the Suffolk Bank, such depositing bank should have the privilege of receiving its own bills at the same discount at which they were purchased. The competition between the New England Bank and the Suffolk Bank was a lively one, and the discount on foreign money was so far reduced as to decidedly impair the profits of both institutions. The country and non-State banks, whose notes were promptly sent back to them for redemption, considered the act to be outrageous and unwarrantable, and endeavored as far as possible to arouse public opinion against such proceedings. This had little effect, for in 183-1: all of the banks in Boston, with the exception of the New England, agreed to make the Suffolk Bank their agent for the redemption of bills of outside banks, and a fund of $300,000 was subscribed by these banks, in proportion to their respective capitals, to be used for carrying on the business. The need of this action was apparent when one takes into account, that while Boston had more than one-half of the banking capital of New England, the currency that it put out represented only about onetwenty-fifth of that which was in circulation. The system of redemption as established by the vSuffolk Bank was continued until the organization of the Bank of Mutual Redemption, which was established in 1S58 for the purpose of serving as agent of all of the New England lianks for the redemption of their bills.

The period between the close of the War of 1812 and ISoT was one highly favorable to the establishment of new banking institutions. In the last named year there were thirty-four banks in Boston, ^and in the State outside there were ninety-five. The Boston banks had a capital of $21,350,000, deposits of $0,500,000, and circulation of $4,38(1,414. The ninety-five country banks had a capital C)f $1(1, 930, 000, deposits of $1,1)07,122, and circulation of $5,886,704.

In 1837 a crisis came. On May 10 of that year the banks of New York suspended specie payments, and in obedience to the desires of a large number of business men who attended a meeting at Faneuil Hall, the banks of Boston also suspended payment on May 12, 1837. AVith quite a number of these Ixuiks tliis action was unnecessary, as they had carried on their affairs in such a ctjnservative manner that there was no reason to suppose that they would have suffered if they had continued their regular business. But others - and these the newly formed banks - were not strong enough to resist the strain put upon them even after suspending specie payments. In July the Franklin and La Fayette Banks failed; in January following, the Commonwealth Bank; and before that year was out ten more of the banks of Boston had either failed or had had their charters revoked by the Legislature.

It was in this year that the Legislature decided to create a Board of Bank Commissioners, giving to its members ample powers in tiie direction of examining and controlling the banks as a means of protecting their depositors and the holders of bank bills and preventing reckless management on the part of bank officials.

From that time up to 1857 the banking business of Boston seems to have been carried on in a safe and yet progressive manner. The banks did apparently a good business and supplied their customers with the financial means required to carry on their growing and prosperous enterprises. The part which Boston merchants took in the immense increase in ocean commerce which characterized that period was perhaps greater than that taken by the ship merchants of any other cit)- of the United States. Boston maritime ventures were found all over the world, and these obviously were supported by the aid granted by Boston banks. More than this, the period was one of great progress in cotton manufactures, in which Boston capital also played a prominent and possibly controlling part, so that the period between 1840 and IS.tT may be looked upon as one of the most satisfactory in the entire financial histcny of this city.

The financial crisis of 1857 found the banks of Boston in a better condition than they had been in twenty years before. The law of 1854 had required them to make public weekly a statement of their condition, so that there was no secrecy observed, and false suspicions of weakness - which are sometimes quite as bad as weakness it.self - could not be entertained. The suspension of specie payments which took place in the fall of 1S57 lasted for about two months, and in that crisis not a single bank failed. The suspension was said to be uncalled for, and during the time the best borrowers had no difificulty in obtaining whatever funds they needed. The panic was, however, outside of the banks an exceedingly severe one. There were in Boston alone 253 failures, with liabilities amounting to $41,000,000 - a collapse due larg-ely to the fact that too much of the floatino- capital had been sunk in permanent improvements, sucli as manufacturing- plant and railroad enterprises, and that too large an amount of business was carried on upon long credits.

With the outbreak of the Civil War the extraordinary demand for supplies produced abnormal trade conditions in Boston and led to an equally active trade with the banks. The national banking law, which was passed in 18(53, was very quickly taken advantag-e of by our local banking institutions, and by the end of IBfJS every bank in Boston had been transformed into a national bank.

The condition of these institutions since that time is brought out more fully by their own statements than it can be in any general abstract.

The progress we have made in the material conditions upon which financial prosperity depends can be best brought out in the line of comparison.

Few people have any clear idea of the rapid growth that the citv of Boston has made within a relatively few years. In 107:5 the population was about 5,000; in 1735, 10,000; in 1791, 18,038; in 1810, 33,250. Macaulay has estimated the popiilation of London to have been in 1085 about half a million, so that Boston has grown in the last two hundred years, that is, since 1085, from a population of about 5,000 to about the same size that London was two hundred years ago, or at a period when London was larger than any city of the world, except possibl)- some of the great cities of China.

Moreover, while London has in the interval increased about tenfold, Boston has grown quite one hundredfold, assuming, as is probably fair, that the effect of annexation of territory has been proportionate in both cities. Massachusetts of to-day, with its population of over two millions, has about two-fifths of the population of England in 1085. It is of course difficult to make just comparisons of the public expenditures of different periods on account of the variation in the purchasingpower of money, but after due allowance for this fact, some curious and interesting facts may be noted.

Macaulay's estimate of the annual cost of the British navy in the year 1085 was ^400,000, or $2,000,000. The city of Boston spent more than one-half of this sum, $1,130,102, on its police in the year 1890, and also spent in the same year $1,940,084 for its public schools. Surely this sho-ws a wonderful growth of resources in the little town of Boston -which two hundred years ago had but five thousand souls, that it can

The Earl of vStanhope, in' his history of Queen Anne, states the entire annual revenue of the kingxlom of Scotland, at the time of the union with England in 1714, to have been ;^inO,000, or about $800,000 - a sum almost exactly equal to the receipts of the city of Boston from liquor licenses alone for the nine months ending January 31, 1802.

The auditor's report for the nine months ending January 31, 1892, shows the annual income of the city for that period to have been more than $13,000,000, while the amount of money passing through the treasurer's books for the same period was more than $19,000,000, the latter sum including receipts from loans and other items not strictly income.

The total income of England at the time of the union with Scotland in 1714:, is stated by Earl Stanhope to have been ^5,691,803, that is $28,000,000, or only about twice as much as the present income of the city of Boston. Probably no citizen of the town of Boston in 1714 imagined that within one hundred and eighty years the little place of his residence would have a revenue half as large as that of Queen Anne.

But the present financial importance and magnitude of Boston can be even more forcibly illustrated by comparisons drawn from the present time. The entire revenue of the kingdom of Greece for the year 1885 was about $17,000,000, from which was supported among other things an army of 32,000 men and a small navy. The revenue of Denmark in the year 1887 was about $15,000,000, which supported a considerable nav}' and an army of 35,000 men. The revenue of Switzerland for the year 1887 was about $10,000,000, a sum considerably less than the revenue of Boston. The annual cost of the army of Great Britain in 1887 was almost $90,000,000; that of France in the same year was about $120,000,000; that of Germany about $90,- 000,000; so that our annual financial expenses are a considerable fraction of the annual expense of the great armies of Europe.

But, as it is well known, the assessed valuation does not exhibit the entire amount of personal propert)' of the eity, and it has been lately estimated, by very eompetent authority, that there are now in Boston from one hundred to one hundred and fifty persons the wealth of eaeh of whom is a million dollars or more - surely a great ehange from the early days.

There are undoubtedly one hundred families in Boston to-day whose annual expenses are more than the total eost of maintaining the entire town government in 17!)7, when !|j;4i),()61.5U was spent. The aggregate personal property of the citizens of Boston probably amounts to quite $1,(1(10,00(1,(100.

Note. - In the column of annual, actual total expenditures the figures previous to 1863 are the best that can be obtained, although not absolutely correct, on account of the manner in which the accounts were kept at that time.

The following table, prepared by Me.s.sns. Carroll D. Wright and Horace G. Wadlin, in their article on the indu.stries of the last hnndred years, published in the Memorial History of Boston in 1881, shows the actual and estimated value of the annual products of the industries of vSutfolk county, present territory, for the first year of each decade from 1780 to 1880:

The same writers elsewhere in their article say: " The Boston of 1780, producing between |:3, 000,000 and $4,000,000 worth of goods, has grown to the Boston of 1880, producing, according to the best estimates, $150,000,(100 worth of goods within her own territorial limits, while in fact the manufactures dependent upon Boston capital, if their value could be ascertained, would reach $300,000,000 per annum." The national census of 1880 .stated the product of the indiLstries of Boston in that year to be $130,531,993, or somewhat less than the estimate of Messrs. AVright and Wadlin for the same year, though many persons would prefer to accept the intelligent estimate of the last named gentlemen rather than the general census enumeration.

The Massachusetts State census of 1885 placed the industrial product of Boston at $149, "281, 727, while the national census of 1890 fixed it at $208,104,683, showing-a gain of $70,000,000 for the decade as compared with the census of 1880.

If, as seems just, we can ikjw estimate the annual produet of the manufactures dependent upon Boston capital as at least equal to $4(10,- 000,000 a year, it is about one hundred times as large as was the production of Boston in 1780. But taking merely the increase in the product within the territorial limits of Boston, the present product is about sixty times more than it was in 1780, though the population is only a little more than thirty times as much as it was then.

The growth of the water-borne commerce of Boston has also been very great. The progress of the early years after the settlement of Boston is thus stated in the historical description of Boston by Charles Shaw, published in 1816:

"(1G42) The following memorable order was passed in favor of the Massachusetts colony by the Commons; 'That for the better advancement of the planters, to proceed in this undertaking of merchandising goods that by any person or persons whatsoever shall be exported out of this kingdom into New England, to be spent or by the growth of that kingdom shall be from thence imported thither, shall be free from paying any custom or duty for the same.' "

"(1(339) We hear but little of trade for the first seven years except a small traffic with the natives by bartering toys and utensils for furs and skins. The middle and lower classes had but sufficient to provide subsistence and construct comfortable dwellings, and the wealthy were chiefly country gentlemen unacquainted with commerce. In a few years, however, the land produced more than was necessary for home consumption and the overplus was sent to the West Indies and the Wine Islands. Those who could be spared from husbandry were employed in fisheries, sorting boards, splitting staves, shingles and hoops, and as many as were capable in building vessels."

From 1055 to KJOO trade was in a very flourishing state, free admission being allowed to all nations, and the importation of no commodity whatever being under any clog or restraint. From KJCG to 1G7() trade was greatly extended. No custom house was established, and the Acts 12 and 15 of Charles II were little observed. In 1G(35 the number of vessels was about eighty, from twenty to forty tons, about forty from forty to one hundred tons, and a dozen ships about one hundred tons, according to the report delivered to the commissioners of Charles II.

Hutchinson, who was well qualified to judge upon the subject, said of the trade of this colony (Massachusetts, which in a commercial view respected Boston only) from lGi.)2 to 174!), that the other governments of New England imported no English goods, or next to none, directly from England. They were supplied by the Massachusetts traders. Again, in another page of the same work, it is said: "The increase of trade was so great that from Christmas, 1747, to Christmas, 17-18, five hundred vessels cleared from the port of Boston to foreign ports, and four hundred and thirty were entered inw'ard, besides coasting and fishing vessels, both of which were very numerous."

Till a few years before the Revolution the business of shipbuilding was carried on here to a great extent. Vessels were sometimes built on commission, but more commonly constructed by the merchants of the town on their own account, these loading them with the produce of the country, naval stores, fish, fish oil, lumber, etc., and sending them on trading voyages to Spain, Portugal and the Mediterranean, where, having disposed of their cargoes, the)- made what the}- could by freight until they could sell the vessels to advantage. The proceeds they generally received in commercial bills on London.

These statistics are interesting;- as showing the considerable commerce of the town just before the war of 1812, its prostration chirinsj the war. and its rapid recovery after the close of the war. They also illustrate the truth that trade flows in channels like a river, which may be diverted or diminished by artificial obstacles of unwise legislation or war, but promptly .seeks its wonted course as soon as the obstacles are removed.

If fostering legislation shotild in ISIK! nurture again the shipping interests of the United States, so that our immense commerce inight be conducted, in part at least, under our own flag, is it not certain that these interests would again spring into vigorotis life as did our cominerce of 1810? And how can any American read of the enterprise of the early merchants of Boston without indignation at the narrowminded policy which has driven our flag from the seas?

The work of Mr. Shaw also shows that the early prosperity of Boston sprung from its commerce and the trading instincts of its people, and that this writer of 181(1 was fully in accord with the tariff views of 1892 as affecting commerce.

It is not propo.sed to dwell at length in this article upon the commerce of Boston, because the article of Mr. Hamilton A. Hill in this history deals exhaustively with that subject ; but the writers wish to quote from the report of the Massachusetts Harbor and Land Commis- sions for the year 1801, to show in a concise way the present amount of Boston commerce as compared with that of 181(J. The Board was directed by the Legislature to report upon the feasibility of a bridge to East Boston over the upper part of Boston harbor, and whether such a structure could be tolerated with due regard to the commerce of the port. It was claimed by the advocates of the bridge that the growth ' of the population of East Boston since 1808, when a similar project had been defeated, was such as to warrant a reversal of the decision and the building of the bridge. The commissioners answered this claim on page 32 ct scq. of their report, as follows :

This argviment has no force unless it is further shown that population has grown faster than commerce. Facilities for suburban travel are not, to say the least, a greater public necessit}- than facilities for commerce. The fact that Boston is the business and commercial center, is what makes suburban travel.

We propose to show, on the other hand, that commerce has grown faster than population, and that the demands of suburban travel, instead of being greater, are relatively less than they were in 1868.

We shall also prove that the commerce of Boston has grown faster tlian its valuation, and is therefore a more important factor relatively to capital and wcaltli than it was in 1868.

The growth in population and valuation as a whole, and of the district of East Boston, from 1870 to 1890 - the census years nearest the beginning and end of the period under cimnparison - is shown in the following table:

The largest percentage of increase shown in the table is 79 per cent., and tlie smallest 30.4 per cent. ; and the average increase of population and valuation, for both Boston and East Boston, is about 55 per cent.

We are indebted to the courtesy of the ]>resent collector of the port of Boston for the following statistics of the foreign commerce of the port for two periods of five years each, ending respectively with the years 1868 and 1891, the years in which the former and the present bridge projects have been under discussion.

Of Five Years Each, Ending 1868 And 1891

The import trade of Boston, then, has increased 81 per cent, in the last twentythree years, and the export trade (a most gratifying exhibit) 275 per cent., and both together 145 per cent. Population and valuation have grown meantime, as before shown, about 55 per cent. In other words, the foreign commerce has grown nearly three tunes as fast as its population and valuation.

The domestic trade and navigation of the port of Boston have increased in a still larger ratio. There is no corresponding official record to show this, but it is proved by established or admitted facts.

While the tonnage of both foreign and domestic vessels is from two to threefold greater than twenty-three years ago, the number of vessels engaged in both kinds of commerce has largely mcreased. This must he due to the greater expansion of domestic trade and shipping.

It will be seen that our banking .sy.stem represents the growth of one hundred and eight years, or a period equal to two con.secutive lives of fifty-four years each, and that a man now living at ninety years of age has witnessed most of its expansion. The capital of the Massachusetts Bank when it was issued in 1784 was $253,500, and represented the entire banking capital of the town. To-day there are in the Boston Clearing House Association, fifty-two national banks, with an aggregate capital of $52,700,000, with a surplus of $14,649,600, with loans of $1(10,00(1,000. In addition tlierc arc national banks, not members of the Clearing House Association, with an aggregate capital and surplus of $3,S'.)7,500, and ten trust companies or State banks with an aggregate capital and surplus of $10,1-^0,005.71. The total capital invested in the banking Inisiness of Boston is therefore about $87,000,000. Moreover these figures do not in any sense show the magnitude of the business done daily by the banks of Boston. The aggregate amount of the transactions of the clearing house daily represent the sum of $l(i,000.000, and if we add to this sum the daily business of these associated banks which does not pass through the clearing house, and which is at least $3,300,000, we shall see that the aggregate yearly transactions of the clearing house banks are not less than $4,000,000,000. In addition to this are the daily transactions of the trust companies and banks and members of the clearing hou.se, $6,000,000,000. Several of the large banks carry on a business which represents daily transactions of more than a million and a half of dollars. The following table exhibits the increase in business in the Boston Clearing House Association ;

The financial growth of Boston, which is found in railroads, has a twofold aspect. First, its relation to railroads having their terminals in Boston, and as such a part of itself; second, its relation to railroad enterprises in other communities which simply represent investments of Boston capital. The marvelous growth of all of these enterprises has taken place within the period of sixty years, so that many men who are still in active life have seen the entire development of the railroad systems of this country. Whether any of the gloomy prophets of 1833 who then seriously opposed railroads, for the reason that they did not believe they would succeed, or if they did, that horses would cease to have any value after railroads should be built, still exist, it is impos- sible to say; but if they are livinj; they must recall their prophecies with satisfaction when they view the elevated railroad built through the air over the streets of New York, or read of the sale of a single stallion for more than $100,000.

The most instructive fact for our guidance in considering the effect of railroads is, that nobody who projected these enterprises could realize in the faintest degree their importance for the future of Boston. We, however, who look back to this beginning after only six decades have passed, can see that the financial history of Boston since 18;i4 is largely the history of its railroad system. To the projectors in 1834 of the Boston system of railroads, the ends had in view were to extend their lines to Lowell, Worcester, Providence, and possibly to Albany. Extensions much beyond these points hardly seemed possible. To us the present railroad systems, which have their terminals here, appears as part of 170,000 miles of railroad running over every part of the United States and connecting us with Canada, Mexico, and the Pacific Ocean.

As early as 1080 a bank was established in Boston. No account of its operations, however, has survived. It had an ephemeral existence, not probably extending beyond 1089. In 171-4 a project for the establishment of a bank was presented to the Legislature, but a charter was refused. Notwithstanding this official negative, a meeting was held and notice was given that "there will be attendance at the .Sim Tavern of Boston weekly to complete the subscriptions for entering into partnership." Within two months from the publication of this notice, directors of the bank were chosen and circulating bills issued to the amount of _('l(l(),0()(). Almost as little is known of this bank as of its predecessor, but during its brief existence it was the source of considerable embarrassment and trouble to the colony. ^

In 1733 sundry merchants and others of Boston, in order to supply the deficiency of a circulating medium, and to counteract the circulation of a large issue of Rhode Island colonial bills in Boston, formed a pri-

*' A Vindication of the Bank of Credit Projected in Boston from the Aspersions of Paul Dudley, Esqr. In a letter directed to John Burril, Esqr., Late Speaker of the House of Representatives for the Province of Massachusetts Bay in New England. Printed in the year 1714."

" Sir." the letter begins, " Mr. Attorney General, by his letter of the Twenty Second of October last past to your Self as Speaker of the House of Representatives for this Province, having most unaccountably, with an uncommon Freedom, taken upon him to Insult and Arraign a Considerable Company of Gentlemen Merchants &c. (as he is pleased to entitle them) Projectors of the Bank of Credit and call them to the Bar of that Honorable House, charging them with the many Hif^h Climes and Misdemeanors following : " One was that the project would " invalidate and break in upon the Prerogative of the Crown : " another that it would " be in effect the setting up of an Absolute Independent Government." It seems "that two or three Gentlemen in the Town of Boston discoursing of the Difficulties that Trade labored under for want of a Medium of E.KChange, the Silver being sent home for England, and the Bills of Credits on the several Provinces daily called in by the Funds on which they are emitted, thought it proper to consult some other Friends and to meet together and consider of a Suitable Remedy for the Present and growing Inconveniences and Difficulties."

The letter is dated at Boston and signed on behalf of the partnership by Samuel Lynde, E. Lynde, John Colman. Elisha Cooke, jr., J. Oulton, Timothy Thornton, Oliver Noyes, William Pain and Math. Oliver.

The Boston merchants of 1714 were not behind those of the present in generous plans for the public welfare. The projectors of the Bank of Credit proposed to give out of the " neet profits " of vate bank and issued paper to the nominal value of _£'110,()l)(i, redeemable in ten years with silver at nineteen shillings an ounce. A committee of the Legislature reported that " the merchants' notes emitted by Boston gentlemen should be backed with greater security." The notes, however, continued to circulate, and were rated at thirty-three and one-third per cent, higher than the currency issued by the Province. Still another attempt at banking was made in 1739-40. There were then outstanding bills of credit to the amount of over ^200,000, which were under royal instructions to be redeemed during the j^ear 1741. The trea.sury being empty, there was no way of effecting the redemption of the notes except by a direct tax, which was not expected to yield more than ;^40,000 annually at the utmost. Specie was extremely scarce, and as a measure of relief it was proposed to establish "The Land Bank." This was carried into effect in 1740 by the association of between four hundred and eight himdred persons. The stock was paid by mortgages of real estate at three per cent, per annum, or, in case of a mechanic, in notes for not over ;^100 with two sureties. The bank was to issue ^150,000 in bills to be circulated as lawful money, and every note of £1 was to be equal to three ounces of silver. Loans were to be secured by mortgages of real estate and to be payable in provincial produce or manufactures at such prices as the directors might from time to time determine. The scheme was violentl}^ opposed by Governor Belcher, and the Land Bank was soon compelled by an act of Parliament to wind tip its affairs, and a right of action was given to each holder of it§ bills against any individual partner for the amount of the bills held and interest. Many years elapsed before the affairs of the Land Bank were finally wound up, and its stockholders suffered severely in their estates on account of their liability. Another bank, called the Specie Bank, which went into operation about the same time, shared the -same fate. It was to issue ;^130,000 of notes redeemable in fifteen years in silver at twenty shillings per ounce.

The first regularly established bank in Boston, however, was a branch of the Bank of North America, which was incorporated by the Legisthe bank " Four Hundred Pounds per Annum to the Use of an Hospital or Charity School for the Support and Education of the Poor Children in the Town of Boston."

" Twenty Pounds per Annum toward the further support of a Publick Grammar School in each county now in the Province of the Massachusetts Bay in New England."

lature of Massachusetts in compliance with an act of the general sovernment, March 8, 1782, or only about two weeks after the parent institution was projected and founded in Philadelphia by Robert Morris, at that time superintendent of finance, an office corresponding to that of secretary of the treasury. By its charter no other bank was to be incorporated during the war with Great Britain, and its notes were to be received for taxes or dues for or on account of the United States. Forgery, counterfeiting and embezzlement committed against this bank were made punishable by death without benefit of clergy, but this penalty was subsequently modified. Unfortunately little record remains of the operations of the Bank of North America at Boston. But it proved so beneficial that two years later, in 1784, the Massachusetts Rank was founded, being the first purely local bank established in the State and the second in the United States. '' It was the first institution of its kind," says Felt in his History of Massachusetts Currency, "promoted solely by the inhabitants of our commonwealth, since that of the silver scheme and still more unfortunate Land Bank. While these were pressed into operation under the burden of legislative displeasure and were doomed to resistance in almost every direction, this was received with public and private favor and extensively encouraged as the instrument of promoting the interests of trade and commerce. "

Massachusetts National Bank

The project of the establishment of a bank of deposit and issue had been much discussed by leading merchants of Boston during the winter of KSIS-SI. On December 18, 1783, the following advertisement appeared in the Independent Chronicle: "The utility of a bank, established on right principles, being generally known and acknowledged, a plan has been projected and is now ready for the patronage of those gentlemen who wish to derive the many public and private advantages which have resulted from such institutions in other countries. Copies of the plans are lodged with, and subscriptions received by William Phillips, Isaac vSmith, Jonathan Mason, Thomas Russell, John Lowell, and Stephen Higginson, and at the offices of Edward Payne, John Hurd and M. M. Hays." Like all the banks established in the State for the next seventy years, it was incorporated by special act of the Legislature. Its charter was granted February 7, 1781, with an authorized

The charter of the Massachusetts Bank provided that the bank mi^ht hold real estate to the amount of ^oO,()00, and *' monies, j^^oods, chattels and effects to the amount of five hundred pounds and no more. " Neither the bank nor any person for it, was to employ its funds in trade or commerce, and the Legislature might employ a person to examine its affairs. By an act passed March 1(>, of the same year, heavy penalties were provided for the crime of counterfeiting, embezzlement and other frauds committed against the bank. By virtue of the authority vested in them by the act, William Phillips, Isaac Smith, and Jonathan Mason called a meeting for organization, to be held March 18, 1784, at which time the stockholders elected the following officers: James Bowdoin, "president; Samuel Breck, George Cabot, Stephen Higginson, remaining Directors it shall be necessary to fill up such Vacancies before the Period for a general Election, they shall call a general Meeting of the Stockholders for that purpose. The Directors shall at their first Meeting after every general Election choose one from among them for President.

VI. That there be a Meeting of the Directors quarterly, for the Purpose of regulating the Affairs of the Bank, any five of the Directors to make a Board, and that the Board have Power to adjourn from time to time and to meet at any other time, when they may think it necessary.

Vn. That the Boariiof Directors determine the Manner of doing Business, and the Rules and Forms to be pursued ; appoint and pay the various Officers, which they may find necessary, and dispose of the Money and Credit of the Bank for the Interest and Benefit of the Proprietors ; and make from Time to Time such Dividends out of the Profits as they may think proper, provided they shall in no Instance do any Act contrary to the Regulations made by the Stockholders.

VIIT. That the Board shall be empowered from Time to Time to open new Subscriptions for the purpose of encreasing the Capital of the Bank, on such Terms and Conditions as they shall think proper.

IX. That the Board shall at every Quarterly Meeting choose three Directors to inspect the Business of the Bank for the ensuing three Months.

X. That the Inspectors so chosen shall on the Evening of every Day, Sundays excepted, examine into the State of the Cash Account, and of the Notes issued and received, and shall see that those Accounts are regularly balanced, and the Balances transferred.

XI. That any Person especially appointed by the Legislature of this State for that Purpose, shall have a right to examine into the Affairs of the Bank, and shall at all times have access to the Bank Books.

XII. That Application be made to the Legislature to incorporate the Subscribers under the Name of the President. Directors and Company of the Bank of and to pass Laws to secure the Bank Notes from being counterfeited, and also to prevent any President, Director, Inspector, Ofl^cer or Servant of the Bank from converting any Property, Money or Credit of said Bank to his own use.

XIII. That any Director or Officer of the Bank who shall commit any Fraud or Embezzlement, touching the Money or Property of the Bank, shall forfeit all his Share or Stock to the Company.

XIV. That none of the Directors shall be intitled to any pecuniary Advantage for his Attendance on the Duties of his Office as Director, or as President or Inspector, unless the Profits arising from the Rank Stock shall exceed 6 per Cent, per Annum, and an Alteration in this respect shall hereafter be made by the Consent of a Majority of Stockholders.

XV. That as soon as Two Hundred Shares shall be subscribed, and the Subscriptions /««/, the said ll^iliiavt rhillips, Isaac Svntk and Jonathan M/zsoti. Esq'rs, shall appoint a Day for the Choice of Directors, and notify the Stockholders in two of the Boston^ and such other Papers as they may think necessary, to meet for the Purpose, to whom, when chosen, they shall deliver over the Money by them received.

John Lowell, Jonathan Mason, Satiiuel A. Otis, Edward Payne, William Phillips, Thomas Russell, Isaac Smith, and Oliver Wendell, directors. Subsequently the directors elected Edward Payne cashier. The bank commenced business with a paid in capital of $253,500, on July 5, 1784, and on that day its discounts amounted to |;l9,r)4-5.

The bank first occupied the building known in colonial da3's as the Manufactory House, with 135 feet of land fronting on Common (now Tremont) street, and 335 feet on the east side of what is now Hamilton Place. On a map of Tremont street published about that time is a picture of the building, which somewhat resembled the "Old Feather Store," once at the junction of Ann and Union streets, with its quaint roof with gable or triangular ends. This property, to-day valued nt upwards of $5,000,000, the bank purchased for $4,000.

The rules adopted for the management of the bank were of the most stringent character, and were " not to be deviated from in the smallest instance, nor on any pretense whatever." Offerings for discount were required to be sealed up and left at the bank, directed to the cashier, between the hoiirs of ten and one o'clock on Mondays. The rate of discount was one-half of one per cent, per month, and no discounts were to be made for a longer period than sixty days upon merchandise, bullion or other securities as collateral, nor for more than thirty days on personal obligations with two sureties. No loan was to be made for a smaller sum than $100, nor for a larger sum than $3,000 to any person at the same time, nor beyond $5,000 to any one borrower in the aggregate, nor beyond $7,500 to any one person as promisor and indorser. No person was allowed to renew his note on any terms, and in case of nonpayment the security was to be sold, and the borrower was not to be allowed any discount for eight months thereafter, unless restored to credit by a unanimous vote of the directors, and the names of delinquents were to be posted in a conspicuous place in the bank. This would be called hard treatment in these days and other of the conditions named would be found impracticable, but under these stringent, prudential regulations the bank became very successful, its dividends increasing from nine per cent, in 1785, two per cent, in 1780, and six and one-half per cent, in 1787, to fifteen and one-half per cent, in 1791, and sixteen and one-half per cent, in 1703. .Subsequent dividends were, however, reduced, owing to competition of other banks.

During the earlier years of its existence, before the United States began its coinage, fractional silver of any kind was very scarce and the

Massachusetts Bank issued notes (if the denomination of $1.50, $3.50, $3.50, $4.50, and also of $(j, $7, $8, $9, $15, $25, $30, $35, and $40 each, specimens of which are still preserved. In 1793, to check the issue of small bills, which threatened to drive specie out of circulation, the Legislature passed an act prohibiting the Massachusetts Bank from issuing- any notes of a less denomination than $5, and the total amount of all its promissory notes, together with the money loaned by it, by a credit on its books, or otherwise, was limited to twice the amount of its paid up capital, and in case of any excess, the directors, under whose administration it occurred, were made personally liable for any demand against the bank, unless, ia case of their absence or dissent from the act creating such excess, they forthwith gave notice of the fact to the supreme executive of the Commonwealth. This was the commencement of that war upon small bills which was kept up by the State government of Massachusetts until 1805.

It is generally believed that the fibre paper used by the government for its notes and bills, to prevent coimterf citing, is patented. This, however, is erroneous. The principle has long been in ixse. The Massachusetts Bank more than fifty years ago printed its notes on paper through which fibres of silk were liberally distributed, paper similar to that now used by the printers of the United States currency at Washington.

The Massachusetts Bank being for some years the only institution of its kind in New England, its president was naturally a personage of considerable importance in such a place as Boston. At the reception given to Lafayette in 1784, among the list of dignitaries who dined with him were the governor, lieutenant-governor and Council, the president of the Senate, the speaker of the House, and the president of the bank. On all public occasions he was one of the central figures.

It was formerly the custom of the Boston banks to celebrate commencement Day at Harvard College. The custom came about in this way. When William Phillips was president of the Massachusetts Bank, the meetings of the faculty were held in a hall of the bank building, Mr. Phillips being a member of that body. It was the only bank in Boston, andbeing thus doubly connected, Mr. Phillips observed the day, which was likewise honored by the other attaches of the bank. Subsequent banks emulated the example of their venerated predecessor, and the custom was continued until 1805. In that year Decoration Day became a legal holida)', and as the annual day of commencement was changed from September to July, the two hohdays so elose were eonsidered more than the banks could afford. So they relinquished the observance of Commencement Da)^, and have substituted that of Decoration Day.

The original building in which the Massachusetts Bank began business was sold in 180(!, when the bank, having purchased the old American Coffee House on State street, erected on its site a building for its use, where it remained for more than sixty years. After the great fire of 1873 the bank removed to Post-Oiitice Square, where it continued until 1892, when it removed to the more spacious quarters now occupied in the Exchange Building. The original capital of the bank was reduced in 1780 to $100,000; increased to $200,000 in June, 1792: to $400,- 000 in July, 1792; to $800,000 in June, 1807, and to $l,(iOO,000 in Jime, 1810. In April, 1821, its capital was reduced to $800,000, at which figure it still remains.

For the first fifty years of its existence this bank never suspended its specie payments. During the one hundred and eight years which have elapsed since its establishment, it has omitted to pay dividends but twice, first at the close of the War of 1812, and second during the financial crisis of 1836. But after it was converted into a national association it compensated for these omissions by declaring an extra dividend of ten per cent. In the eighty-one years of its existence as a State bank, from 1784 to 1805, the whole amount of circulating notes issued by it was $4,674,177, of which the amount lost or not presented for redemption was $22,111, or not quite one-half of one per cent.

Following is a list of the presidents of this bank from 1 784 to the present time in order of service: James Bowdoin, William Phillips, Jonathan Mason, Samuel Eliot, William Phillips, jr., William Parsons, Jonathan Phillips, J. L. Gardner, J. J. Dixwell, H. A. Rice, A. O. Bigelow and William A. French. The present board of directors.

elected in January, 1892, is composed of William A. French, luhvard Whitney, Arthur T. Lyman, Nathaniel G. Chapin, Alexander H. Rice, Edward T. Russell, George Munroe Endicott, Robert D. Evans, Charles A. Sinclair and James T. Furber.

James Bowdoin, the first president of the bank, a descendant of Pierre Bowdoin, who came to New England in 1687, was born in Boston, August 7, 172(1, and in 1745 graduated from Harvard College. He entered into political life in 1753 as one of the four representatives of Boston in the Provincial Legislature of Massachusetts, and remained a member of the House for three years. In 1757 he was elected a member of the Council, to which he was annually elected to the year 1774. During this long period of service he was among the foremost spirits on the part of the colonies in the memorable fights between the legislative and the executive authorities, which grew in their intensity until the last British governor was driven from our shores. He strongly urged retaliation for the arbitrary taxes imposed by Great Britain, and was styled by the English in authority at the time as the "principal supporter of the opposition to the government." In 1775 he was elected a member of the Provincial Congress to organize the first regular government, and was made president of the Council. He was reelected to the Council in 1770 and 1777, and continued to serve as its presiding officer whenever his health permitted until the summer of 1777, when he resigned. In 1770, on the receipt of the news of the Declaration of Independence, he was made chairman of the committee to direct and personally superintend its proclamation from the balcony of the Old State House in Boston. In 1779 he was elected a delegate from Boston to the convention which framed the Constitution of Massachusetts, of which convention he was the president. In 1785, there being no choice by the people, the Legislature elected Bowdoin governor, and he was re-elected by a large majority of the popular vote in 1787. He was long connected with the government of Harvard College, and always manifested deep interest in educational projects. The "Bowdoin Prizes" were established by his will. He was one of the founders of the American Academy of Arts and Sciences and was its president from its first organization to his death, which occurred November 0, 1700. His eulogist, Judge Lowell, has said of him: " It may be said that our country has produced many men of as much genius ; many men of as much learning and knowledge ; many of as much zeal for the liberties of their country; and many of as great piety

Some of the officers of the Massachusetts Bank have served for very long periods. Mr. James Dodd served the longest, having been accountant and cashier for fifty-four years. J. J. Dixwell was a director for thirty-six years, during twenty-seven of which he was president. Henry K. Frothingham was also connected with the bank in an official capacity for many years. The Phillips family has been long and ably represented in the bank. William Phillips, one of the faculty of Harvard College, was president from 1786 to 1797. His son, William Phillips, jr., was president from 1804 to 1829. His grandson, Jonathan Phillip.s, was president from 1830 to 1840.

The record of the Massachusetts Bank is remarkable in many respects. Co-extensive with the administration of Washington, it has outlived all that followed to the present day. It has withstood the shocks of wars and financial fevers for more than one hundred years. It has marked the rise, decline and fall of hundreds of similar institutions in our States and the widespread distress which their mismanagement or misfortune occasioned among all classes. Shaken but not shattered, it has breasted the waves of each recurring national or financial calamity, and lias been aniong New England banks like the Constitution among our navy, the oldest and most glorious survivor on the list. The hopes it raised were never disappointed. No crimes or blunders sully its long record. Those eminent men who in turn presided over its destinies, while they conferred distinction on its name, received by the association more honor than they conferred. It has been a boon to the public and a model for the brotherhood of banks. By its steady adherence to a plan founded in prudence and pursued with skill, it has proved alike an example and defence of the banking system, a standard and confidence at home, and an assurance of American honor abroad.

The condition of the Massachusetts National Bank as reported to the comptroller of the currency at the close of business March G, 189o, was as follows:

Banking Institutions United States Bank

The idea of a United States Bank, which should be somewhat similar in character to the Bank of England, originated with Alexander Hamilton, the first secretary of the treasury. It was established in Philadelphia in 1791, and its charter expired in 1812, but was revived in 1810 and finally dissolved in 1836. In 1792 a branch of the United States Bank was established in Boston. William Gray was the first president, and Peter Roe Dalton the first cashier. The directors, who were appointed by the parent bank at Philadelphia, were Joseph Barrett, John Codman, Caleb Davis, Christopher Gore, John Coffin Jones, John Lowell, Theodore Lyman, Jonathan Mason, jr., Joseph Russell, jr., David Sears, Israel Thorndike and William Wetmore. Business was commenced in an old two-story wooden house which stood upon the site of Brazer's binlding-. In 17il8 a bank buildino- was erected on the site of the present Exchange Building, which bore on its front an American eagle with its wings outstretched, as if in the act of swooping down upon the bulls and bears of the street. The next Icjcation of the bank was in Congress street, on the west side, and not far from State street. Here the bank erected a building, the corner stone of which was laid July 4, 18iJ4-, the parent bank appropriating one hundred thousand dollars for the building.^ At this time the capital of the Boston branch was $1,500,000, and the officers of the bank were : Gardiner Greene, president; vSamuel Frothingham, cashier; Gardiner Greene, Thomas H. Perkins, John Welles, John Parker, Daniel Pinckney Parker, Nathaniel Silsbee, David Sears, Daniel Webster, George Blake, Resin Davis Shepard, Harry Gardner Rice and Horace Gray, directors. In 1810 George Cabot was serving as president of this bank. He was a prominent leader of the Massachusetts Federalists. He was a very successful merchant, and had a great reputation as a financier. While in the United States .Senate in II'DI-OG, Hamilton, the founder of our financial system, often conferred with him. He incurred great odium by his connection with the Hartford Convention in 1814, of which body he was president. Aaron Burr once said of him, that "he never spoke but light followed him."

The attempt to permanently establish a bank under government control, like the Bank of England, proved a failure, as is well known. The renioval of the deposits by General Jackson affected the Boston branch but little. In 1836 Congress revived the charter, but Jackson vetoed it.

National Union Bank

' The building committee, " for the information of futurity," gave the following facts in relation to the erection of this edifice ; *' The appropriation for the building of this bank by the parent institution was one hundred thousand dollars, of which sum fifty-four thousand, eight hundred and fifty dollars was paid for the land, and it is the hope of the building committee that the whole sum disbursed will not exceed the appropriation. The pillars, under one of which this document is placed, were quarried in Chelmsford in this State, being the first granite shafts of these dimensions ever erected in this country. Their dimensions are twenty-four feet in length, four feet in diameter at the base, and three feet at the head. The cost of them, delivered at the spot where they were quarried, was nine hundred dollars each, and the expense of bringing them here about five hundred dollars each. They were brought separately, by land, and drawn by thirty-four yoke of oxen. The stone of the walls ot the bank was worked principally at the State Prisons at Charlestown, Massachusetts and Concord, New Hampshire." This document was signed by Solomon Williard, architect; Gridley Bryant, master workman ; James McAllaster, master carpenter; Gardiner Greene, John Welles. Thomas H. Perkins, Daniel P. Parker and J Parker, building committee, and attested November 30, 1824, by Samuel Frothingham, cashier.

when the Branch Bank of North America was in operation. The success of the Massachusetts Bank led in the latter year to the establishment of a rival, the Union Bank. The act incorporating this institution was passed by the Legislature June 22, 1792, and was to continue to 1802. David Cobb was the speaker of the House, and Samuel Phillips, president of the Senate. The act was approved and signed by Governor John Hancock on June 25, T702. The incorporators named in the act were Stephen Hig-ginson, Caleb Davis, William Tudor, Oliver Wendell, Nathaniel Fellows, Joseph Coolidge, William Smith, Joseph Blake, Frederick William Geyer, Daniel Hubbard and David Green. The capital stock of the corporation was to consist of not less than $100,000, nor more than $800,000 in specie, and should be divided into 100,000 shares. The State was to have the right to be interested in the bank to the amount of one-third of its whole capital.

The Union Bank was the first of a series of banks organized under peculiar charter provisions. It was not to issue bills of less denomination than $5.00, nor to owe more than twice its capital in addition to its deposits ; the directors to be personalh' liable in case of an}- excess. One-fifth of its fimds was to be always appropriated to loans out of Boston, made exclusively for the benefit of the agricultural interest, in sums of not less than $100 nor more than $1,000, secured by mortgage of real estate, and to run for a term of not less than one year. This questionable provision does not appear in any other bank charter granted previous to 1802. But from that time to ISlC nearly every bank charter contained a requirement to appropriate a certain proportion of the bank's funds to such loans. In common with the Massachusetts, the Union Bank was not to vest, use or improve its funds in trade or commerce. No one but a citizen of Massachusetts, and no director of any other bank could be a director, and any director accepting an office in any other bank, thereby vacated his office of director in the Union Bank. No stockholder was allowed to have more than ten votes, those owning over $100 of stock having only one vote for each additional $200. The directors were to make half yearly dividends of all the profits of the bank, while a loan not exceeding $100,000 was to be made to the State at five per cent, interest. Provision was made for attaching the shares of its stockholders, and for the examination by a legislative committee, and, if on the report of such committee and a hearing theron, it should appear that the corporation had exceeded the powers granted in the charter, or failed to comply with its provisions,

The few names above given are selected at random from a host of suggestive names, some of which have been familiar in Boston's history for more than a century, and many of which are prominent in the records of other public institutions, from that day to this, and in the nomenclature of our streets, wharves, shipping, etc. ; as for instance Moses Gill, the first president of the bank, and afterwards governor of the State; Benjamin Bussey, the munificent donor of the Bussey Farm ; Josiah Quihcy, a director in 1800, president of Harvard College, and grandfather of the present Josiah Quincy; John Welles, a director in 1803, resident in Summer street, and one of the wealthiest citizens of Boston at that day; Peter C. Brooks, at whose residence, corner of High and Summer streets, Daniel Webster dwelt for years ; and Gardiner Greene, whose grand estate on Pemberton Hill covered more than the square now occupied by Pemberton Square, and was the largest and most beautiful private domain in the city, as he was its most opulent citizen; while the names of Wendell, Winthrop, Bigelow, Codman, Joy, Davis, Parkman, Eliot, Brimmer, Amory, Peter O. Thacher, Thomas H. Perkins, Lynde, Walter, Wainwright, Coolidge, and numerous others, who were at various earl}' periods directors or stockholders in the bank, are identified with the political, financial and commercial history of the city and State, and as Webster said of Lafayette, " Have come down to us from a former generation," illustrious for public spirit and noble actions which created and founded for all time the aims and character of Massachusetts.

then and fur many \'ears afterward the leading fashionable resort for festive and other assemblages. The original officers and directors chosen in 1793 were as follows: President, Moses Gill; cashier, Alexander Hodgden; directors, Benjamin Greene, Moses Gill, Samuel Brown, Nathaniel Fellows, William Smith, Joseph Blake, Samuel Blodgett, jr., Perez Morton, David Greene, Samuel .Sewell, Samuel Phillips, and vSamuel Salisbury. The bank began operations at its rooms on State street near its present location, 40 State street, on the first day of October, 1792, one hundred years ago. In March, 1793, the Commonwealth subscribed $200,000 to the capital stock of the bank, and subsequently $200,000 more, making the capital $1,200,000. In 1813 the stock owned by the State was assigned to the bank, thus leaving the capital as before, $800,000. This amount was on October 1, 1850, increased $200,000, making the capital $1,000, 000, at which amount it has since remained.

Lemuel Gulliver was connected with the bank as discount clerk and cashier for thirty-five years, at the end of which time he resigned, when he was succeeded by Almarin Trowbridge, whose total period of serv- ice in tlie bank as assistant clerk, bookkeeper and cashier covered the long terra of fifty-four years. Charles W. Gulliver, who died February 15, 18'J3, was connected with the bank fur twenty-five years, and George H. Perkins has served as teller and cashier for the same period. There have been only these bookkeepers in this bank during its century of existence. Nathaniel Nevins, who is still living, served in this capacity for fifty-six years.

The Union Bank was changed from a State bank by the adoption of the national bank system in 1805, since which it has been known as the National Union Bank. During the whole one hundred years of its existence, including several wars and various financial panics, its total losses have been quite an insignificant sum, when we consider the large amount of its transactions and the crises through which it has passed. But few forgeries have been committed against it, and these were only for moderate amounts. It has never suspended specie payments except on those few occasions when all other American banks were compelled temporarily to suspend The most remarkable thing, however, during its existence is the fact that it has never passed a semi-annual dividend, having regular!}' paid two dividends each year for the whole period, a very rare if not an unequaled record in the history of banking institutions. For the first fifty years it averaged about b% per cent. ; up to 1870 a fraction over Gy^ per cent., and since 18(i5 as a national bank its dividends have averaged a little over 8 per cent, on the par value of its stock.

The directors of the Union Bank for 1892 in order of length of service are as follows : Charles L. Young, George Dexter, Charles L. Peirson, George Whitney, president, Samuel B. Dana, Joseph S. Kendall, Amory A. Lawrence, Nathaniel H. Emmons, and Edward W. Hooper.

The condition of the Union National Bank, as reported to the comptroller of the currency, at the close of business, March 6, 1893, was as follows :

Old Boston National Bank

The Old Bcston National Bank was incorporated a.s the The Bo.ston Bank, March 5, 1803, the charter being' signed by Governor Caleb Strong. The incorporators named in the act were John Codman, Theodore Lj-man, James Lloyd, jr., Thomas H. Perkins, Thomas C. Amory and their associates. When the stibscription books were closed upwards of $3,000,000 had been stibscribed, and the stock was at once cpioted at 110. The capital was $1,800,000, the Commonwealth of Massachusetts being a stockholder for $600,000. It was stipulated that one-eighth part be appropriated to loans to be made to citizens of this Commonwealth, not residents of Boston, and that the directors should loan this suin wholly upon farms, which loans should be made in sums not less than $100, nor more than $500, npon the personal bond of the borrowers with collateral security by a mortgage of real estate. The treasurer of the Commonwealth was to be an cx-officio director of the bank. During the organization of the bank the following were the officers: Jonathan Jackson, president; Peleg Coffin, cashier; Thomas C. Amory, Samuel P. Gardner, Joseph Hall, Peter C. Brooks, John Codman, Thomas K. Jones, James Lloyd, jr., Jaines Perkins, Daniel Sargent, jr., Jonathan Mason, Adam Babcock, Jonathan Jackson, directors. These men ranked among the most prominent in the community at the time for respectability and business capacity; and the bank, conservative from the first in its character, has continued in its

The bank was authorized to commence business June 1, 180;S, the charter to continue until the first Monda)' in October, 1812. The board of directors chosen June 1, 1803, were: Thomas C. Amory, Peter C. Brooks, Isaac P. Davis, Thomas K. Jones, Nathaniel O. Lee, James Lloyd, jr., Daniel Sargent, jr., William Sullivan, Stephen Higginson, jr., James Perkins, Jonathan Jackson, Adam Babcock. In February, 1817, the bank purchased the State's interest ($000,000), and reduced the capital to $1,200,000. The par value of the shares was originally $100, but in April, 1817, twenty-five per cent, was paid to the stockholders, reducing the capital to $900,000, in shares of $75 each. April 1, 1830, one-third more was returned to the stockholders, making the capital $000,000, par $50. June 15, 1857, $300,000 was added to the capital, making it again $900,000, the present amount. In 1888 the par value of the shares was fixed at $100. The bank was re-chartered in October, 1812, and converted into a national bank in May, 1805. At that time the National Bank of Boston becoming a national banking institution, had taken the name of the Boston National Bank. The Boston Bank of 1803, to which the above name (Boston National) rightfully belonged, was under the circumstances obliged to take its present name, The Old Boston National Bank. The presidents of the bank, with their term of service, have been as follows: Jonathan Jackson, 1803 to 1810; John I. Apthorp, 1810 to 1829; Phineas Upham, 1829 to 1830; Robert T. Shaw, 1836 to 1841; Robert Hooper, 1841 to 180C; James C. Wild, 1860 to 1870; H. W. Pickering, 1870 to 1891; Horatio G. Curtis, 1891 to present time. The cashiers have been Peleg Coffin, 1S03, who during the same year was succeeded by Joseph Chapman, who served until 1831. Succeeding Chapman have been the following, with term of service: James C. Wild, 1831 to 1800; Joseph G. Gunderson, 1800 to 1809; Frederick L. Church, 1869 to 1887; Chester L. Stoddard, 1887 to present time. Robert Lash was the oldest officer of the bank at the time of his death, October 7, 1803, at the age of eightyfour. He had served the bank for over sixty years, commencing as messenger in 1803. He was chosen cashier in 1831, but declined the office. Joseph Chapman was officially connected with the bank for twenty-eight years, and James C. Wild was in service for fifty-six years, having been chosen bookkeeper in 1820, cashier 1831, and president in 1800. Among" the directors at different times, besides the original

When the Boston Bank went into operation in 1803 it was located in the building then held by the old United States Branch Bank in State street, now occupied by the Exchange Building. In July, 1803, the Boston Bank purchased the estate of Christopher Marshall, in vState street, now numbered 50 State street, and there erected its first building, and moved into it in September, 1804. Here it has, with short intervals for rebuilding, been located ever since.

The condition of the Old Boston National Bank, as made to the comptroller of the currency at the close of bu.siness, March li, 18'.i3, was as follows;

State National Bank

The State Bank had its oritfin in parti.san predilections, to a con.sidable degree. We have already seen that the first bank of the United States founded in 1791 under the auspices of Alexander Hamilton, Federalist, had been sustained by his adherents and opposed by followers of Jefferson, whose Democratic influence prevented its re-charter. Durinj,'- the three years of 1810, 1811 and 1812, after the winding up of the United States Bank, forty-one new State banks were chartered, and of these the vState Bank of Boston was one. Its anti-Federalist supporters claimed its existence was necessary as Democrats could not get proper accommodations at the older banks of Boston.

The charter of the State Bank was granted by the Massachusetts General Court and approved by the governor Jime 27, 1811. The first section of the charter provided that William Gray, Henry Dearborn, David Tilden, Russell Sturgis, John Brazer, David Townsend and their associates, .should be created a corporation by the name of the President, Directors and Company of the State Bank, to so eontinue for twenty years from October 1, 1811. The provisions of its charter were very rigid, and especially so in regard to specie payments. It was on the eve of that trying period when specie payments were almo.st imiversally suspended throughout the country and when even the most tempting offers from the general government proved no match for the political predjudices of many eastern capitalists. Part}' animosity proved stronger than motives of pecuniary interest, a fact which recalls a saucy political distich in vogue in those days:.

The original capital of the State Bank was $3,00(),()0() divided into 30,000 shares of $100 each. Among the original subscribers to this stock, with number of shares taken, were:

On Thursday August 29, ISll, the stockholders of the State Bank met in the United States Court Rooms (in the Old Cotirt House), when the following committee was chosen to establish regulations, by-laws, etc., for the bank: William Gray, Henry Dearborn, David Tilden, Russell Sturgis, John Brazer, David Townsend, Perez Morton, Samuel Dana, James Prince, Aaron Hill, Jesse Putman, George Blake, Benjamin Austin, Capt. Amos Binney, Major Amasa Stetson, Nathan Willis, Merrill Rice, Thomas Shepherd and Moses Carleton. At a subsequent meeting, held September 23, the following officers were elected: President, William Gray; cashier, John P. Clarke; directors: William Gray, Henry Dearborn, Jesse Putman, Mathew Bridge, James Prince, David Tilden, William Ward, George Blake, David Townsend, vSamuel Dana, Amasa .Stetson and William Munroe.

The State Bank began operations November 11, 1811, in the building owned by the Branch Bank of the United States. In vSeptembcr, 1S12, the bank bought this property for $4:0,r)()0. The original building erected, for the State Bank stood on this estate. It is the site now occupied by the present Excliange Building between Congress and Kilby streets, on the south side of State street. A small and well executed cut of the old structure is in existence and shows a pretty two story edifice, a clapboarded frame building. It had seven front windows and three central entrances from State street. It had two onestory wings, each of which had a broad gateway for carriages, and leading to a spacious courtyard in the rear. The building was surrounded by a balustrade around the roof and had a mammoth American eagle and shield at the center of the front roof. The vacant land after the building was taken down about fifty j'ears ago was used for a test trial of fire proof safes, then beginning to come into use.

The history of the State Bank has been fraught with features of peculiar interest, not the least of which was the great and timely support it gave, with its unusually large capital of $3,000,000, to the Federal government during the troubled times and great distress throughout, and for some years after, the War of 1813. The following interesting letter bearing upon this subject, during the early period of the war, was written by William Gray, president of the State Bank, and then the prince of Boston merchants and ship owners, to Albert Gallatin, secretary of the treasury at Washington:

SiK, - I had the honor of receiving your letter of the 4th instant, and laid the same Ijefore the board of directors of this institution for advisement. They instruct me to reply that they are willing to advance the amount of $500,000, which they had assented to loan to the United States du'ectly, and pass the same to the credit of the treasurer, and to his depositure at this bank ; to be reimbursed on half of tlie amount loaned at the expiration of one, and the residue at the expiration of two years, from the time this property may be accepted and the money advanced. The interest to be paid quarterly. Although the period of reimbursements are fixed, yet the board of directors wish it may be understood that, should the government desire, and the funds of the institution permit, an extension of credit shall be afforded at either of the periods of reimbursement.

Subsequent to this first loan mentioned in Mr. Gray's letter, frequent loans were made to the government within the next two or three years. By the 12th of August, 1814, from a report made by a committee to consider the affairs of the bank relative to its connection with the

United States treasurer, it appears that the total amount the bank had loaned the government reached the large sum of $4,000,0()(). These loans were made when the government was in niuch distress for money. The collection of these liberal grants on the part of the bank, however, was a source of much trouble, and covered a period of several years, during which the bank was unjustly made to suffer. Its liberal and patriotic purpose at a critical period of our national history was treated with undeserved ingratitude.