Articles of Association of the Merchants’ Bank1
[New York, April 7, 1803]
To all to whom these Presents shall come, or in any wise concern. Be it known and made manifest, that we, the Subscribers, have formed a Company or limited Partnership, and do hereby associate and agree with each other, to conduct business in the manner hereinafter specified and described, by and under the name and style of the “Merchants’ Bank,” and we do hereby mutually covenant, declare and agree, that the following are and shall be the fundamental Articles of this our Association and agreement with each other, by which we and all persons who at any time hereafter may transact business with the said Company, shall be bound and concluded.
I. The Capital Stock of the said Company shall consist of One Million Two Hundred and Fifty Thousand Dollars, in Money of the United States. The said Capital Stock shall be divided into Shares of Fifty Dollars each: two Dollars and fifty Cents on each Share shall be paid at the time of subscribing, and the remainder shall be paid at such times, and in such proportions as the board of Directors shall order and appoint, under pain of forfeiting to the said Company the said Shares, and all previous payments thereon: but no payment shall be required, unless by a notice to be published for at least fifteen days, in two newspapers printed in the City of New-York.
II. The affairs of the said company, shall be conducted by sixteen Directors, who shall elect one of their number to be the president thereof, and nine of the Directors shall form a board or quorum for transacting all the business of the company, except ordinary discounts, which it shall be in the power of any five of the Directors to perform, of whom the President shall always be one, except in case of his sickness or necessary absence, when his place may be supplied by any other Director, whom he by writing under his hand, shall nominate for that purpose; and until the second Tuesday in June, one thousand eight hundred and four, Oliver Wolcott, Richard Varick,2 Peter Jay Munro,3 Joshua Sands,4 Thomas Storm,5 William W. Woolsey,6 John Hone,7 John Kane,8 Joshua Jones,9 Robert Gilchrist,10 Wynant Van Zandt, Jun.,11 Isaac Bronson,12 James Roosevelt,13 John Swartwout,14 Henry I. Wyckoff,15 and Isaac Hicks16 shall be Directors of the said Company; the Directors from and after that period, shall be elected for one year by the Stockholders, for the time being, and each Director shall be a Stockholder at the time of his election, and shall cease to be a Director if he should cease to be a Stockholder: and the number of votes which each Stockholder shall be entitled to, shall be equal to the number of shares which he shall have held on the books of the company, for at least sixty days prior to the election; and all stockholders shall vote at elections by ballot, either personally or by proxy; to be made in such form as the board of Directors may appoint.
III. A General Meeting of the Stockholders of the Company shall be holden upon the first Tuesday of June, in every year, (excepting in June now next ensuing) at such place as the Board of Directors shall appoint, by notice, to be published in two newspapers printed in the City of New-York, at least fifteen days previous to such meeting, for the purpose of electing Directors for the ensuing year, who shall take their seats at the Board on the second Tuesday in the same month of June and immediately proceed to elect the President.
IV. The board of Directors, are hereby fully empowered to make, revise, and alter or amend, all such rules, bye laws, and regulations, for the government of the company, and that of their officers, servants and affairs, as they, or a majority of them, shall from time to time think expedient, not inconsistent with law, or these articles of association; and to use, employ, and dispose of the joint stock, funds or property of the said Company (subject only to the restrictions hereinafter contained) as to them, or a majority of them, shall seem expedient.
V. All bills, bonds, notes, and every contract and engagement on behalf of the Company, shall be signed by the president; and countersigned or attested, by the cashier of the company; and the funds of the company shall in no case be held responsible for any contract or engagement whatever, unless the same shall be so signed and countersigned, or attested as aforesaid.
VI. The books, papers, correspondence and funds of the company, shall at all times, be subject to the inspection of the directors.
VII. The said board of Directors, shall have power to appoint a cashier, and all other officers and servants, for executing the business of the company; and to establish the compensations to be paid to the president and all other officers and servants of the company respectively; all which, together with all other necessary expenses, shall be defrayed out of the funds of the company.
VIII. A majority of the Directors, shall have power to call a general meeting of the Stockholders, for purposes relative to the concerns of the Company; giving at least thirty days notice, in two of the public Newspapers printed in the city of New-York, and specifying in such notice the object or objects of such meeting.
IX. The Shares of Capital Stock, at any time owned by any individual Stockholder, shall be transferable on the books of the Company, according to such rules, as conformable to law, may be established in that behalf, by the Board of Directors; but all debts actually due and payable to the Company, by a Stockholder requesting a transfer, must be satisfied before such transfer shall be made, unless the Board of Directors shall direct to the contrary.
X. No transfer of Stock in this Company, shall be considered as binding upon the Company, unless made in a book or books, to be kept for that purpose by the Company. And it is hereby further expressly agreed and declared, that any Stockholder, who shall transfer in manner aforesaid, all his Stock or Shares in this Company, to any other person or persons whatever, shall ipso facto cease to be a member of this Company; and that any person or persons whatever, who shall accept a transfer of any Stock or Share in this Company, shall ipso facto become and be a member of this Company, according to these articles of association.
XI. It is hereby expressly and explicitly declared, to be the object and intention of the persons who associate under the style or firm of the “Merchants’ Bank,” that the joint stock or property of the said Company (exclusive of dividends to be made in the manner hereinafter mentioned) shall alone be responsible for the Debts and engagements of the said Company. And that no person, who shall or may deal with this Company, or to whom they shall or may become in anywise indebted, shall on any pretence whatever have recourse against the separate property of any present or future member of this Company, or against their persons, further than may be necessary to secure the faithful application of the Funds thereof, to the purposes to which by these presents they are liable. But all persons accepting any Bond, Bill, Note or other Contract of this Company, signed by the President, and countersigned or attested by the Cashier of the Company, for the time being, or dealing with it in any other manner whatsoever, thereby respectively give credit to the said joint stock or property of the said Company, and thereby respectively disavow having recourse, on any pretence whatever, to the person or separate property of any present or future member of this Company, except as above mentioned. And all suits to be brought against this Company, (if any shall be) shall be brought against the President for the time being; and in case of his death or removal from office, pending any such suit against him, measures shall be taken at the expense of the Company for substituting his successor in office as a defendant; so that persons having demands upon the Company, may not be prejudiced or delayed by that event, or if the persons suing, shall go on against the person first named as defendant, (notwithstanding his death or removal from office) this Company shall take no advantage by writ of error, or otherwise, of such proceeding, on that account; and all recoveries had in manner aforesaid, shall be conclusive upon the Company, so far as to render the company’s said joint stock or property liable thereby, and no further; and the Company shall immediately pay the amount of such recovery out of their joint stock, but not otherwise. And in case of any suit at law, the President shall sign his appearance upon the writ, or file common bail thereto; it being expressly understood and declared, that all persons dealing with the said Company, agree to these terms, and are to be bound thereby.
XII. Dividends of the profits of the Company, or of so much of the said profits as shall be deemed expedient and proper, shall be declared and paid half yearly during the months of May and November in every year, and shall from time to time be determined by a majority of the said Directors, at a meeting to be held for that purpose, and shall in no case exceed the amount of the net profits actually acquired by the Company; so that the Capital Stock of the Company shall never be impaired by Dividends; and at the expiration of every three years, from the first Tuesday of June next, a dividend of surplus profits shall be made, but the Directors shall be at liberty to retain at least one per cent upon the capital, as a fund for future contingencies.
XIII. If the said Directors shall at any time, wilfully and knowingly, make or declare, any dividend which shall impair the said Capital Stock, all the Directors present at the making or declaring such dividend, and consenting thereto, shall be liable, in their individual capacities, to the Company, for the amount or proportion of the said Capital Stock, so divided by the said Directors. And each Director who shall be present at the making or declaring of such dividend, shall be deemed to have consented thereto, unless he shall immediately enter, in writing, his dissent, on the minutes of the proceedings of the Board, and give public notice to the Stockholders, that such dividend has been declared.
XIV. These Articles of Agreement shall be published in at least three newspapers, printed in the City of New-York, for one month; and for the further information of all persons, who may transact business with, or in any manner give Credit to this Company, every Bond, Bill, Note, or other instrument or contract, by the effect or terms of which, the Company may be charged or held liable, for the payment of money, shall specially declare, in such form as the board of directors shall prescribe, that payment shall be made out of the joint funds of the Merchants’ Bank, according to the present articles of association, and not otherwise; and a copy of the eleventh article of this association, shall be inserted in the bank book of every person depositing money, or other valuable property, with the Company, for safe custody, or a printed copy shall be delivered to every such person, before any such deposit shall be received from him. And it is hereby expressly declared, that no engagement can be legally made in the name of the said Company, unless it contain a limitation or restriction, to the effect above recited. And the Company hereby expressly disavow all responsibility, for any debt or engagement, which may be made in their name, not containing a limitation or restriction to the effect aforesaid.
XV. The Company shall in no case be owners of any ships or vessels, or directly or indirectly concerned in trade, or the importation or exportation, purchase or sale of any goods, wares, or merchandise whatever (bullion only excepted) unless by selling such goods, wares, and merchandise, as shall be truly pledged to them, by way of security for debts due to the said company.
XVI. If a vacancy shall at any time happen among the Directors, by death, resignation, or otherwise, the residue of the Directors, for the time being, shall immediately elect a Director, to fill the said vacancy, until the next election of Directors, to be made according to the second article of these presents.
XVII. This association shall continue until the first Tuesday of June, one thousand eight hundred and fifteen, and no longer; but the proprietors of two thirds of the capital stock of the Company, may by their concurring votes, at a general meeting to be called for that express purpose, dissolve the same at any prior period; provided, that notice of such meeting, and of its object, shall be published in at least three newspapers, to be printed in the City of New-York, for at least six months previous to the time appointed for such meeting.
XVIII. Immediately on any dissolution of this association, effectual measures shall be taken by the Directors then existing, for closing all the concerns of the Company, and for dividing the capital and profits, which may remain, among the Stockholders, in proportion to their respective interests.
In Witness Whereof, we have hereunto set our names or firms the Seventh Day of April, one thousand eight hundred and three.
Merchant’s Bank Stockholders 1803 (n.p., n.d.).
1. Although no manuscript of the document printed above has been found, historians have generally agreed that H was its author (JCHW description begins John C. Hamilton, ed., The Works of Alexander Hamilton (New York, 1851–1856). description ends , VII, 838–44; I. N. Phelps Stokes, The Iconography of Manhattan Island, V [New York, 1926], 1405; Philip G. Hubert, Jr., The Merchants’ National Bank of the City of New York [New York, 1903], 2; Bray Hammond, Banks and Politics in America from the Revolution to the Civil War [Princeton, 1957], 142–43; John C. Miller, Alexander Hamilton: Portrait in Paradox [New York, 1959], 546).
In addition H and Richard Harison served as attorneys for the new bank. See Isaac Bronson’s account with the New York branch of the Bank of the United States in his account book under the dates of March 21, 25, 1803 (AD, Bronson Papers, MS Division, New York Public Library). See also New-York Evening Post, April 8, 1803.
On April 30, 1803, fourteen men (to whom two more were subsequently added from the board of directors) organized the bank with Oliver Wolcott, Jr., as president. During 1803 three hundred and ninety-one subscribers bought shares in the bank. The bank opened for business on June 3, 1803, with a capital of $1,246,250. On November 30 the bank paid a dividend of three percent—totaling $30,960.31—to all subscribers (Hubert, Merchants’ Bank, 1, 2, 8, 22–23; Merchant’s Bank Stockholders 1803).
During its first two years the bank operated without a charter from the legislature.
2. Varick, a veteran of the American Revolution, served as George Washington’s recording secretary from 1781 to 1783. In 1784 he became recorder of the City of New York, and in 1786 he and Samuel Jones were appointed to codify New York State laws. He was speaker of the New York Assembly in 1787 and 1788, attorney general in 1788 and 1789, and mayor of New York City from 1789 to 1801.
3. Munro was a New York City lawyer.
4. Sands, a veteran of the American Revolution, a Federalist, and a New York City merchant, was a member of the New York Senate from 1792 to 1799 and collector of customs for the District of New York from 1797 to 1802.
5. Storm, a New York City merchant, held numerous municipal offices and served as a member of the Assembly from 1798 to 1802.
6. Woolsey was a New York City merchant and sugar refiner.
7. Hone, a merchant and auctioneer in New York City, was a partner with his brother Philip in the firm of J. and P. Hone.
8. Kane, a merchant, was head of the firm of Kane and Company in New York City.
9. Jones was a New York City merchant.
10. Gilchrist was a resident of Westchester County, New York.
11. Van Zandt, a New York City merchant, held a variety of municipal offices and was an alderman representing the First Ward from 1802 to 1807.
12. Bronson was a New York City merchant and moneylender.
13. Roosevelt was a New York City merchant.
14. Swartwout, a close political associate of Aaron Burr, was a member of the New York Assembly from 1798 to 1801. In 1802 Thomas Jefferson appointed him United States marshal for the District of New York.
15. Wyckoff was a New York City merchant.
16. Hicks, a New York City merchant, owned a store at 239 Water Street.