None of these seems actually to have set up any branch office of discount and deposit before 1800; the Bank of Richmond never got under way, and the others were sufficiently prosperous without risking this extension.

State participation in banking was not carried far until the nineteenth century, although the reservation of a certain number of shares for state subscription was inserted in many charters, beginning with that of the Bank of the United States in 1791. The noteworthy examples were the $254,000 subscription of the Confederation government under Robert Morris to the Bank of North America in 1782;1 the $2,000,000 subscription of the federal government to the Bank of the United States in 1791, supplemented by smaller subscriptions by several states; the $1,000,000 subscription of the state of Pennsylvania to the Bank of Pennsylvania in 1793; and the Massachusetts subscription of $400,000 to the Union Bank in 1793 and 1795. Except in these instances the reservations usually constituted quite a small fraction of the total stock, and usually the option was not exercised. However, New York in January, 1792, authorized subscription to one hundred shares ($50,000) in the Bank of New York, and in 1797 $20,000 to the Bank of Albany;3 and in December, 1792, the New Hampshire legislature voted to subscribe twenty-six shares ($10,400) to the New Hampshire Bank, subject to repayment in three years with six per cent interest if the legislature should so request. These are the outstanding if not the only instances of such stock ownership prior to 1800. The options reserved in the Manhattan Company (1799) and Bank of Columbia (1793) were exercised some time after 1800 to the extent of $50,000 and $20,000 respectively.5 Only in 1803 did Connecticut subscribe to the Hartford Bank (1792) and Maryland to the Bank of Baltimore (1795).o

1 Lewis, Bank of N. A., 41.

2 New York owned one hundred and fifty-two shares ($60,800) in 1811: Assembly Minutes, 1811, p. 85.

N. Y. Laws (ed. 1887), iii, 261-262; Assembly Minutes, 1811, p. 85.

'N. H. State Papers, xxii, 621, 682–683. Cf. ibid., 385, 446, 475-476, for defeat a year earlier.

Assembly Minutes, 1811, pp. 79-80, 85.

6 Bryan, State Banking in Md., 28, 30. Two hundred and twenty shares ($66,000) out of six hundred reserved were paid up.

State participation in profits without stock ownership was mooted when the Boston Tontine Association sought its charter in 1792,1 and again in 1795 when the Bank of Baltimore was getting its act.2 In no case was it adopted.

Altogether there can be no question that the banks were the most important and the most successful of the eighteenth century business corporations. Somewhat belated in appearing, they established themselves on a solid footing in a surprisingly short time. Despite violent criticism, arising largely from prejudice or misconceptions, but in some measure from unwholesome secrecy and practices, they gained and held a deservedly high place in the business world and were respected by the mass of the town population. It is reasonable to infer that their experience tended definitely to promote experiments with the corporate form in other fields, and that the availability of banking resources indirectly aided such extension.

1 Columbian Centinel, Feb. 29, 1792: a proposal of one per cent on capital if profits should exceed six per cent — like such a provision in certain canal charters of Pennsylvania, where, however, the profit limit was much higher before participation should occur.

2 Bryan, State Banking in Md., 31: the proposal was that half the profits beyond ten per cent should go to the state.

CHAPTER III

CORPORATIONS FOR IMPROVING INLAND NAVIGATION

THE development of transportation facilities is always of large importance in a young country. This is especially the case after the first stage of infancy has passed and the stage of adolescence has been reached: for by selection of sites and utilization of unimproved natural highways serious difficulties may often be evaded in the earliest years; but when the population has increased and extended beyond the first choices, when a measure of intensity of cultivation, of economic specialization has arisen, there appears the imperative necessity for artificial highways or artificial improvements of natural highways. Such a need had of course appeared in the American colonies before 1776, and numerous efforts had been made to bridge streams, build roads, provide regular ferries, etc., though invariably on a small scale and usually as merely local enterprises. The Revolution directed attention to this need, partly by reason of the military requirements, but quite as much by the intellectual awakening to economic needs which sprang from the intercourse of the country's ablest men and their concentration on national conditions and opportunities as contrasted with those merely local.

Between 1760 and 1775- after the Revolution in the broader sense had begun, but some years yet before resort was had to arms — several moves were made in the direction of improving communication by water. On March 4, 1761, the Pennsylvania legislature appointed commissioners to make the Schuylkill

1 For English attention to river improvements and canals, see esp. Edwin A. Pratt, A History of Inland Transport and Communication in England (New York, 1915), chaps. 14, 15. The first statutes appear in the fifteenth century. After the middle of the eighteenth century numerous canal ventures were authorized, most of them in corporate form.

navigable, collecting for and applying to this purpose the sums which individuals already had raised and others which should be voluntarily subscribed; and to this object a £1500 appropriation from the provincial Treasury was made.1 "Philadelphus," writing in the Pennsylvania Chronicle for 1768, urged the construction of sixteen £6000 dams to improve the navigation of the Schuylkill and Susquehanna, and proposed an incorporated company as the instrument of its accomplishment.2 In 1769 the American Philosophical Society was induced to order a survey for a canal to connect the Delaware and Chesapeake bays; and its committee, "William Smith, D.D., the Provost of the college of Philadelphia, John Lukens, Esquire, Surveyor General of the province. and John Sellers,

Esquire," favorably reported both on this and on a canal between the Quitapahilla and Tulpehocken to unite the Schuylkill and Susquehanna. This latter route, reported the company which later undertook the work in 1795,

"was afterwards examined and levelled, under legislative sanction, by sundry skilful persons, and among others by the celebrated philosopher and mechanic David Rittenhouse, Esquire, LL.D. his brother Benjamin Rittenhouse, Timothy Matlack, John Adlum, Esquires, and others, all agreeing in the results of their work."

There were commissioners appointed under the act of Feb. 26, 1773, for making the Schuylkill navigable. Several broadsides favoring canals in these two quarters were published in Philadelphia between 1768 and 1772.4

1 Pa. Stats. at Large, vi, 93-100, 117. Cf. "T. G.," in the American Daily Advertiser, Jan. 2, 1792: “A water communication between Susquehanna and Schuylkill was thirty years ago, talked of as a kind of possible possibility." I do not find evidence to support the statement of C. F. Carter (When Railroads were New, New York, 1910, p. 5) that Pennsylvania citizens applied for a charter for this purpose in 1762. The statement has been made that William Penn suggested this canal, but his language does not clearly warrant this construction: Hazard, Register of Pa., i, 400 (1828).

2 Quoted in Hazard, Register of Pa., viii, 99-100 (1831).

* See An Historical Account of the Rise, Progress, and Present State of the Canal Navigation in Pennsylvania (Philadelphia, 1795), 67; George W. Smith, quoted in Hazard, Register of Pa., i, 409-410 (1828); William Barton, Memoirs of the Life of David Rittenhouse. (Philadelphia, 1813), 236; Pa. Stats. at Large, viii, 327–

330.

• Titles in Evans, American Bibliography, iv, 124, 299, 337 (Nos. 10854, 12246, 12580).

In Maryland and Virginia, as well as in Pennsylvania, there was activity in this field before the war. About 1767-68 Thomas Gilpin made surveys and estimates for a canal to connect the Chesapeake at Duck Creek with the Delaware at Chester.1 Interest was chiefly centered, however, upon projects for improving the navigation of the Potomac. These were discussed throughout the sixties, if not earlier. Members of the Ohio Company2 were especially interested in such an enterprise, as well as landowners and merchants on the lower Potomac.

In the first definite project the initiative seems to have been taken by Thomas Johnson (later governor) and his brother of Frederick, Md., who were large landowners. George Washington, however, was consulted at the start and may have made the original suggestion. At a meeting held in Frederick, probably in May, 1770, six Virginians and eleven Marylanders were chosen managers and two treasurers appointed to raise funds by voluntary subscription and with these to undertake the opening of the navigation. Among the managers were George Mason, treasurer of the Ohio Company, and Thomas Cresap, a leading member, while George Mercer, son of its secretary, was a treasurer. Neither incorporation nor authority to take toll seems to have been contemplated; as in most of the colonial schemes for local improvements, the promoters looked for financial support to those whose private interests would be advanced by the proposed work and others who possessed means and a generous public spirit. On this score Washington criticised the plan, upon being acquainted with what had been done. He doubted if there were many disinterested persons "that will contribute anything worth while to the work;" he was not sanguine of getting the provinces to undertake it at public expense; and he urged the advantage of getting legislative authority for vesting the navigation in the subscribers and securing reimbursement for "their first advances with a high interest thereon, by a certain easy toll on all craft in proportion

1 J. Thomas Scharf, History of Maryland . . . (Baltimore, 1879), ii, 523. On this company, formed in 1749, see Essay I, 96-97.

Jonathan Boucher, in his letter of April 2, 1770, quoted below, refers to the scheme as "your proposed Improvemts."