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A 
 
 NEW system- 
 
 paper CURRENCY. 
 
 BY LTSAUDEE, SPOONER. 
 
 BOSTON: 
 
 FEINTED BY STACY & RICHAKDSON, 
 
 Ko. 11 Milk Street. 
 
 18 6 1 . 
 
Entered according to Act of Congress, in the year 1861, 
 
 Bt LYSANDER SPOONER, 
 
 in the Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts. 
 

 CONTENTS. 
 
 PART FIRST. 
 
 
 Note, 
 
 5 
 
 Chapter I. — Outline of the System, 
 
 9 
 
 Chap. 
 
 II. — Advantages of the System, . 
 
 14 
 
 Chap. 
 
 III. — Security of the System, 
 
 21 
 
 Chap. 
 
 IV. — Practicability of the System, 
 
 27 
 
 Chap. 
 
 V. — Legality of the System, 
 
 48 
 
 PART SECOND. 
 
 Akticlbs of Association of a Mortgage Stock 
 
 Banking Company. 
 
Digitized by the Internet Archive 
 in 2016 
 
 https://archive.org/details/newsystemofpaper01spoo 
 
NOTE 
 
 The subscriber believes that the right of property in ideas, is as valid, in the 
 view both of the Common and constitutional law of this country, as is the right 
 of property in material things ; and that patent and copyright laws, instead of 
 superseding, annulling, or being a substitute for, that right, are simply aids to it. 
 
 In publishing this system of Paper Currency, he gives notice that he is the 
 inventor of it, and that he reserves to himself all the exclusive property in it, 
 which, in law, equity, or natural right, he can have ; and, especially, that he 
 reserves to himself the exclusive right to furnish the Articles of Association to 
 any Banking Companies that may adopt the system. 
 
 To secure to himself, so far as he may, this right, he has drawn up and copy- 
 righted, not only such general Articles of Association as will be needed, but also 
 such other papers as it will be necessary to use separately from the Articles. 
 
 Even should it be possible for other persons to draw up Articles of Associa- 
 tion, that would evade the subscriber’s copyright, banking companies, that may 
 adopt the system, will probably find it for their interest to adopt also the subscri- 
 ber’s Articles of Association ; for the reason that it will be important that Com- 
 panies should all have Articles precisely, legally, and verbally alike. If their 
 Articles should all be alike, any legal questions that may arise, when settled for 
 one Company, would be settled for all. 
 
 Besides, if each Company were to have Articles different from those of others, 
 no two Companies could take each other’s bills on precisely equal terms ; 
 because their legal rights, as bill holders, under each other’s Articles, would not be 
 precisely alike, and might be very materially different. 
 
 Furthermore, if each Company were to have Articles of Association peculiar 
 to itself, one Company, if it could take another’s bills at all, could not safely take 
 them until the former had thoroughly examined, and satisfactorily ascertained, 
 the legal meaning of the latter’s Articles of Association. This labor among 
 banks, if Companies should be numerous, would be intolerable and impossible. 
 The necessity of studying, understanding, and carrying in the mind, each other’s 
 different Articles of Association, would introduce universal confusion, and make 
 it impracticable for any considerable number of Companies to accept each other’s 
 bills, or to cooperate in furnishing a currency for the public. Each Company 
 would be able to get only such a circulation as it could get, without having its 
 bills received by other banks. But if all banks have precisely similar Articles of 
 
VI 
 
 NOTE. 
 
 Association, then one Company, so soon as it understands its own Articles, 
 understands those of all other Companies, and can exchange bills with them 
 readily, safely, and on precisely equal terms. 
 
 Moreover, if each separate Company were to have its peculiar Articles of 
 Association, it would be wholly impossible for the public to become acquainted 
 with them all, or even with any considerable number of them. It would, there- 
 fore, be impossible for the public to become acquainted with their legal rights, as 
 bill holders, under all the different Articles. Of course they could not safely 
 accept the currency furnished by the various Companies. But if all the Com- 
 panies should have Articles precisely alike, the public would soon understand 
 them, and could then a,ct intelligently, as to their legal rights, in accepting or 
 rejecting the currency. 
 
 The subscriber conceives that the Articles of Association, which he has drawn 
 up, and copyrighted, arc so nearly perfect, that they will never need any, unless 
 very trivial, alterations. In them he has intended to provide so fully for all 
 exigencies and details, as to supersede the necessity of By-Laws. This object 
 was important, not only for the convenience of the Companies themselves, but 
 because any power, in the holders of Productive Stock, to enact By-Laws, might 
 be used to embarrass the legal rights of the bill holders under the Articles of 
 Association. 
 
 Besides, as the holders of Productive Stock are liable to be continually 
 changing, any power, in one set of holders, to establish By-Laws, would be likely 
 to be used to the embarrassment, or even injury, of their successors. 
 
 It is obviously important to all parties, that the powers of the Trustees, and 
 the rights of all holders, both of Productive and Circulating Stock, should be 
 legally and precisely fixed by the Articles of Association, so as to be incapable 
 of modification, or interference, by any body of men less than the whole number 
 interested. 
 
 LrSANDEE SPOONEE. 
 
 Boston, 1861. 
 
PIET FIEST. 
 
A 
 
 NEW SYSTEM 
 
 O F 
 
 PAPER CURRENCY. 
 
 CHAPTER I. 
 
 OUTLINE OF THE SYSTEM. 
 
 The principle of the system is, that the currency shall repre- 
 sent an invested dollar, instead of a specie dollar. 
 
 The currency will, therefore, be redeemable by an invested 
 dollar, unless the bankers choose to redeem it with specie. 
 
 Theoretically the capital may he made up of any pi'operty 
 whatever. But, in practice, it will doubtless he necessary, in 
 order to secure public confidence in the currency, that the capital 
 should be property of a fixed and permanent nature, liable to few 
 casualties and hazards, and yielding a constant, regular, and 
 certain income, sufiicient to make the Productive Stock, here- 
 after mentioned, worth ordinarily par of specie in the market. 
 
 The best capital of all will probably be mortgages ; and they 
 may perhaps be the only capital, which it will ever be expedient 
 to use. 
 
 This capital is to be put into joint stock, held by Trustees, and 
 divided into shares, of one hundred dollars each, or any other 
 sum that may be thought best. 
 
10 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 This Stock may be called the Productive Stock, and will 
 be entitled to the dividends. 
 
 The dividends will consist of the interest on the mortgages, 
 and the profits of the banking. 
 
 Another kind of Stock, which may be called Circulating 
 Stock, will be created, precisely equal in amount to the Pro- 
 ductive Stock, and divided into shares of one dollar each. 
 
 This Circulating Stock will be represented by certificates, 
 scrip, or bills, of various denominations, like our present bank 
 bills — that is to say, representing one, two, three, jive, ten, or 
 more shares, of one dollar each. 
 
 These certificates, scrip, or bills of the Circulating Stock will 
 be issued for circulation as a currency, by discounting notes, &c., 
 as our bank bills are now. 
 
 This Circidating Stock will be entitled to no dividends : and 
 its value will consist wholly * in its title to be received, at its 
 nominal value, in payment of debts due to the bank, and to be 
 redeemed by Productive Stock, unless the bankers choose to 
 redeem it with specie. In law, the Circulating Stock will be in 
 the nature of a lien upon the Productive Stock. 
 
 Such are the general principles of the system. 
 
 The following provisions, although perhaps not essential to the 
 system, will yet serve to keep the currency at a uniform value, 
 and make the system operate without friction. 
 
 The original owners of the Productive Stock, and all who 
 hold it through purchase from them, (instead of by transfer in 
 redemption of bills,) may be called Primary Stockholders. 
 
 * With a single exception, (provided for in Artiele XXVII, of the Articles of 
 Association,) not affecting the general rule. 
 
OUTLINE OP THE SYSTEM. 
 
 11 
 
 Those, who hold Productive Stock, by transfer in redemption 
 of bills, may be called Secondary Stockholders. 
 
 All the resources of the bank — that is, the interest on the 
 mortgages, and the banking profits — should be pledged to pay 
 the Secondary Stockholders precisely six per centum per annum 
 (or such other per centum as the Articles of Association may fix 
 for them to receive) on their Stock ; no more, no less. After 
 these dividends shall have been paid to the Secondary Stock- 
 holders, the remaining dividends should be divided among the 
 Primary Stockholders — whether such dividends shall be 
 more, or less, than those received by the Secondary Stock- 
 holders. 
 
 The effect of securing to the Secondary Stockholders pre- 
 cisely six per centum (or any other given per centum) on their 
 Stock, will be to make the bills represent, to the public, either 
 invested capital, yielding precisely six per centum per annum (or 
 precisely any other per centum, which it may be designed to 
 represent) or specie ; because the bills may, at pleasure, be con- 
 verted into such capital, unless the bankers prefer to redeem 
 them with specie. 
 
 Whenever Productive Stock shall have been transferred, in 
 redemption of bills, the bankers will have the right to buy it 
 back, at pleasure, on paying its face in specie, with interest, (or 
 dividends,) at the prescribed rate, for the time it shall have been 
 in the hands of the Secondary Stockholders.* 
 
 It may be desirable, for various reasons, that the currency, 
 representing the invested dollar, should, at all times, be, as 
 nearly as may be, on a par with the specie dollar ; neither rising 
 above, nor falling below it, in value. This object, nearly enough 
 for all practical purposes, can be accomplished in this way, to wit : 
 
 The rate of dividend, secured to be paid to the Secondary 
 Stockholders, on their Productive Stock, should be fixed so 
 high as to make that Stock worth, in their hands, par of specie. 
 
 * See Article XIX, of the Articles of Association. 
 
12 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 (Under an abundant currency, such as this system would furnish, 
 six per centum would probably be sufficient for this purpose). 
 This would keep the hills uj) to par with specie ; because they 
 could, at pleasure, be converted into either Productive Stock, 
 or specie. 
 
 On the other hand, the facts, that the bankers may, if they 
 please, redeem their hills with specie, rather than hy Produc- 
 tive Stock, and that they will have the right, at any time, to 
 buy back the Productive Stock, from the Secondary Stock- 
 holders, by paying its face in specie, will generally keep the 
 bills down to par with specie.* 
 
 So long as the banking business shall yield sufficient profit to 
 pay expenses, and the Productive Stock shall remain in the 
 hands of the original owners, there will be no necessity for the 
 interest on the mortgages being paid; because what would be 
 paid in by each Stockholder as interest, would come directly back 
 to him as dividend. The payment of the interest to the hank, 
 and of the dividends (so far as they shall be made up of such 
 interest) by the bank, will therefore be merely nominal transac- 
 tions on the books of the bank, without either being actually 
 made. 
 
 If an original Stockholder should sell his Productive Stock 
 outright, it would then be necessary that he should pay his 
 interest. 
 
 * Even if the rate of dividend, fixed for the Secondary Stockholders to receive, 
 were such as to make their Stock worth more than par of specie, that would not 
 be likely to make the bills worth more than par of specie ; because a person, by 
 returning his bills for redemption, would not be sure of getting Productive 
 Stock for them. He might be paid in specie, instead of Productive Stock. 
 
 Purthermore, even if his bills should be redeemed by Productive Stock, 
 instead of specie, he would not be likely to hold it a very long time, before it 
 would be bought back by the bank, by simply paying its face in specie. 
 
 There would, therefore, be likely to be no scramble for bills (in order to get 
 Productive Stock for them) even though the rate of dividend, fixed for the 
 Secondary Stockholders to receive, should be such as to make the Productive 
 Stock worth, in their hands (supposing they conld retain it a length of time) 
 more than par of specie. 
 
OUTLINE OF THE SYSTEM. 
 
 13 
 
 If, when any Productive Stock shall have been transferred, 
 in redemption of the bills, the banking profits should not be 
 sufficient to pay the dividends, to which such transferred Stock 
 will always be entitled, it will be necessary for the original 
 Stockholders to pay interest pro rata on their mortgages, suffi- 
 cient, with the banking profits, to pay the dividends on such 
 transferred Stock. 
 
 If any original Stockholder (mortgagor) should wish, at any 
 time, to take his capital out of the bank — that is, release his 
 estate from the mortgage — he has only to request the Trustees 
 to cancel an equivalent amount of his own Productive Stock, 
 and also an equivalent amount of Circidating Stock. They can 
 then discharge his mortgage, without injustice to any one ; and 
 his rights in, and liabilities to, the bank are at an end ; he 
 having first paid all dues that may have previously accrued. 
 
 Minor details of the system will be seen in the Articles of 
 Association. 
 
 Although the banks make no absolute promise to pay specie 
 on demand, the system nevertheless affords a much better prac- 
 tical guaranty for specie payments, than our present system ; for 
 these reasons, viz. ; 
 
 1. The banks would be so universally solvent, and so univer- 
 sally known to be solvent, that no runs would ever be made upon 
 them for specie, through fear of their insolvency. They could, 
 therefore, maintain specie payments with much less amounts of 
 specie, than our present banks can. 
 
 2. In ninety-nine times in a hundred, the alternative redemp- 
 tion would probably be preferred to specie, by the bill-holders. 
 This would still further lessen the amount of specie necessary to 
 be kept on hand. 
 
 3. The banks would probably find it for their interest, as pro- 
 moting the circulation of their bills, to pay, at all times, such 
 small amounts of specie, as the public convenience might require. 
 
 4. Whenever specie should not be paid on demand, no divi- 
 dends could be paid to the bankers, until all claims for specie, 
 with interest, should have been paid in full ; that is to say, until 
 all Circidating Stock, presented for redemption, and not redeemed 
 by Productive Stock, should have been redeemed by specie ; 
 and all Productive Stock, that should have been transferred in 
 redemption of circulation, should have been repurchased, by 
 specie, and restored to the original holders. (For particulars on 
 this point, see Articles of Association, especially Articles 13, 20, 
 23, 24, 25, 26, 27, 28, and 29.) 
 
 5. If there should be any suspensions of specie payments, they 
 would be only temporary ones, by here and there a bank sepa- 
 rately, and not by all the banks simultaneously, as now. No 
 general public inconvenience would therefore be felt from that 
 
 ! cause. 
 
 N. B. In the Articles of Associatioti, the system appears 
 much, more clear, simple, and exact, than it can he made to 
 do in any brief description of it. 
 
 I 
 
14 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 CHAPTER II. 
 
 ADVANTAGES OF THE SYSTEM. 
 
 1. The system would furnish, at all times, an abundant cur- 
 rency. It would furnish currency equal to one third, or one 
 half, the value of all the real estate in the country — if so much 
 could be used. 
 
 2. The currency would be stable in value. The system is 
 capable of furnishing so much currency, that a large demand 
 could be supplied as easily as a small one, and without causing 
 any variation in the market value of the currency, or raising the 
 rate of interest. 
 
 The presence or absence of specie in the country, would have 
 no effect, either upon the amount of currency, or upon the 
 stability of its value. 
 
 The prices of property would be stable, so far as their stability 
 should depend upon the stability of the currency. 
 
 3. The currency would be solvent. It would be absolutely 
 incapable of insolvency ; for there could never be a dollar of the 
 currency in circulation, without an invested dollar (Productive 
 Stock) in bank, which must be transferred in redemption of it, 
 unless redemption he made in specie. All losses, therefore, fall 
 upon the bankers, and not upon the bill holders. If the original 
 Stockholders should all fail — that is to say, if they should be 
 compelled to transfer all their Productive Stock in redemption of 
 their circulation — the result would simply be, that the original 
 capital (Productive Stock) would pass, undiminished, into the 
 hands of a new set of holders, ^cho icould -proceed to bank upon 
 it (re-issue the bills, and redeem them, if necessary., by the 
 transfer of Productive Stock) m the same way that their pre- 
 
ADVANTAGES OF THE SYSTEM. 
 
 15 
 
 decessors had done. And if they, too, should lose all their 
 Productive Stock (capital) by the transfer of it in redemption of 
 the circulation, the Stock itself ■would pass, unincumbered and 
 unimpaired.^ into the hands of still another new set of holders, 
 who would bank upon it, as the others had done before them. 
 And this process would go on indefinitely, as often as one set of 
 bankers should fail (lose all their Productive Stock). The 
 holders of the Productive Stock, for the time being, would always 
 be the bankers, for the time being. And whenever one set of 
 bankers should have made such losses as to compel a transfer of 
 all their Productive Stock, that Stock would pass into the hands 
 of a new set of holders, and the bank, as a corporation., would 
 be just as solvent as at first. So that, however badly the banking 
 business should be conducted, and however frequently the hankers 
 might fail, (if transferring all their capital, or Productive Stock, 
 in redemption of their circulation, may be called failing,) the 
 bank itself, as a corporation, . cot<Zc? not fail. That is to say, its 
 circulation could never fail of redemption. Its capital would 
 forever remain intact ; forever equivalent to the circulation ; and 
 forever subject to a compulsory demand in redemption of the 
 circulation. In this way all losses necessarily fall upon the 
 bankers (in the loss of their Productive Stock) and not upon 
 the bill holders. (See Article XXI, of the Articles of Asso- 
 ciation.) 
 
 4. The solvency of the currency will be known by all, both 
 in the neighborhood of the place of issue, and at a distance 
 from it (if the bankers should choose to make its solvency 
 known at a distance). These results will be accomplished in this 
 way. 
 
 The mortgages, composing the capital of the bank, will be 
 matter of public record, and every body, in the neighborhood., 
 will have the means of judging for himself of the sufficiency of 
 the property holden. If the property should be insufficient, the 
 bank would be discredited at once ; for the abundance of solvent 
 currency would be so great, that no one would have any induce- 
 
16 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 ment to take that which was insolvent or doubtful. In this way 
 the credit of a bank would be established at home. 
 
 Its credit abroad would be established in this way, — 
 
 Suppose a bank, at Chicago, should wish to establish the credit 
 of its bills in New York. All that would need to be done would 
 be to make arrangements with some bank in New York to redeem 
 them.* And to induce the New York hank to redeem them, it 
 would not be necessary, as now, that the Chicago bank should 
 keep a deposit of specie in New York. All that would be neces- 
 sary would he to satisfy the New York bank of its (the Chicago 
 bank’s) solvency — • that is, of the sufficiency of the property 
 holden. This could be done by the New York bank’s sending a 
 commission to Chicago to investigate the question. And when 
 the New York bank should have once become convinced of the 
 ^solvency of the Chicago bank, the credit of the latter is estab- 
 lished forever. The New York hank would not need to be 
 continually investigating the condition of the Chicago hank ; 
 because, under this system, a bank, once solvent, is forever 
 solvent. 
 
 It would, therefore, he perfectly easy for hanks, in remote 
 parts of the country, to make their bills redeemable in the great 
 commercial centres, or any where else they might please, without 
 keeping deposits of specie at those points. 
 
 One important result, among others, of this system would he, 
 that when a merchant, from Chicago, for example, should come 
 to New York to make purchases, he would not buy on his own 
 credit ; but would get his credit, at hank, in Chicago ; bring 
 Chicago bank bills to New York, and make his purchases with 
 them. Or else the bills of New York banks would be so abun- 
 dant at Chicago, that he would there exchange his Chicago bills 
 for New York bills, and bring the latter home, and exchange 
 
 * The New Y'ork bank would not redeem them by paying specie for them, 
 but by receiving them in payment of debts, and by giving its own bills in 
 exchange. 
 
ADVANTAGES OF THE SYSTEM. 
 
 17 
 
 them for goods. Thus all the jobbing business of the country 
 would be done for cash, instead of on credit, as now. 
 
 5. The currency would be cheap (afforded at a low rate of 
 interest) and for two reasons. 1 . Because the capital costs noth- 
 ing. That is, its use as banking capital costs nothing ; because 
 its use as banking capital, does not interfere with its use for 
 other purposes. 2. The system admits of competition limited 
 only by the real property of the country. These two facts 
 would bring the rate of interest, at all times, down to the 
 lowest point, at which the simple business of banking could be 
 profitably done. 
 
 6. The basis of the currency could not, like specie, be carried 
 out of the country, so as to leave our own people destitute of a 
 currency. 
 
 7. The system stands wholly on common law principles ; 
 requiring no aid from the government, in the way of charters 
 of incorporation; and (in the United States) constitutionally 
 admits of no prohibition from the government.* 
 
 8. It gives the Stockholders all the benefits of an act of incor- 
 poration, so far as to shield them from individual liability. At 
 the same time, it avoids all necessity for privileged legislation. 
 It also avoids all injustice to, and all liability of throwing any 
 losses upon, the bill holders, because they are certain to get the 
 
 * The author does not concede the constitutional power of the State govern- 
 ments to prohibit any kind of banking, that is naturally and lawful. And he 
 fully believes all existing restraints upon private banking to be unconstitutional. 
 But, be they so, or not, it seems plain enough that government has constitution- 
 ally no more power to forbid men’s selling an invested dollar, than it has to forbid 
 the selling of a specie dollar. It has constitutionally no more power to forbid the 
 sale of a single dollar, invested in a farm, than it has to forbid the sale of the 
 whole farm. 
 
 The currency here proposed is not in the nature of a credit currency, (as the 
 word credit is now legally understood,) and could not be prohibited on that 
 ground, even if any credit currency can constitutionally be prohibited. 
 
 The currency proposed consists simply of hona fide certificates of Stock, 
 which the owners have the same right to sell, that they have to sell any other 
 Stocks. 
 
18 
 
 A NEW SYSTEM OP PAPER CURRENCY. 
 
 precise thing they bargained for ; that being set apart, and made 
 legally incapable of being applied to any other purpose. 
 
 9. The system would be a free one. That is, the right of 
 furnishing currency, instead of being made a legalized monopoly, 
 would be open equally to every man, who had the necessary 
 property. 
 
 10. The system would be adapted to distribute credit equally 
 as possible through the community. 
 
 11. Currency and bank credits would be so abundant, cheap, 
 and generally diffused, as nearly or quite to supersede all other 
 forms of temporary credit between man and man, and introduce 
 a general system of cash payments. This would be the result, 
 for this reason. The banks could generally, if not always, afford 
 credit cheaper than individuals engaged in trade. The banks 
 would be so numerous, that a man deserving of credit at all, 
 could generally obtain it at bank. And the result would soon 
 come about, that nearly all temporary credit would be obtained at 
 bank, and cash payments would be made in nearly all transactions 
 between individuals. The hazards of trade would thus be greatly 
 diminished ; every man’s business would stand on its own basis ; 
 his solvency or insolvency would be an independent matter, 
 instead of being complicated, as now, with the solvency or insol- 
 vency of so many others. 
 
 12. It would tend to diversify industry to the greatest possible 
 extent, by affording the best possible facilities, which a mere 
 currency system can furnish, for engaging in the production of 
 all new commodities as fast as they should be invented. 
 
 13. The system would liberate specie for the uses of interna- 
 tional commerce. 
 
 14. The system would greatly enhance the value of real 
 estate, not so much by reason of the banking profits derived from 
 it, as of the activity it would give to agricultural, manufacturing, 
 and commercial industry. 
 
 15. The proposed system would tend to graduate the prices of 
 property throughout the country, according to one common 
 
ADVANTAGES OF THE SYSTEM. 
 
 19 
 
 standard. To illustrate this point, we will suppose that, in 
 Massachusetts, an acre of land, which yields a net income of six 
 dollars per annum, over all charges, is worth ^100. Why is it 
 worth ^100 ? Because the rate of interest, in Massachusetts, is 
 six per centum per annum. The acre of land, therefore, yields 
 the same annual income as $100, at interest. But, in Illinois, 
 we will suppose, an acre of land, that yields $12, or $18, net 
 income per annum, (two or three times as much as the acre in 
 Massachusetts,) is worth but $100, the same as the acre in 
 Massachusetts. Why is it worth no more ? Because the rate of 
 interest, in Illinois, is twelve or eighteen per centum per annum ; 
 two or three times more than in Massachusetts. The acre of 
 land, in Illinois, therefore, although it yields two or three times 
 as much income as the acre in Massachusetts, brings only the 
 same price in the market, because it will yield no more annual 
 income than $100, at interest, in Illinois. But the proposed 
 system, by making currency abundant, and reducing the rate of 
 interest, in Illinois, to nearly or quite the same rate as in Mas- 
 sachusetts, would raise lands, in Illinois, to a price corresponding 
 with the income they yield. It would raise them to substantially 
 the same standard of price with the lands in Massachusetts ; so 
 that, if an acre of land yielded $12, or $18, net annual income, 
 the market price of the land would be $200, or $300, instead of 
 $100, as now. 
 
 In this way, this system, by making currency abundant, and 
 the rate of interest low, throughout the country, would tend to 
 graduate the prices of property by one common standard through- 
 out the country, according to the net income, or real value, of 
 the property. 
 
 16. It would benefit the condition of poor men in various 
 ways, to wit : First, those who should labor for wages, would 
 receive their wages promptly, and in money (currency). They 
 would thereby be enabled to make their purchases with cash, and 
 thus make them more advantageously than now. Secondly, 
 there would be no stagnations in business, by which they would 
 
20 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 be thrown out of employment, and compelled to consume their 
 accumulations, and perhaps fall in debt. Thirdly, there would 
 be a much greater diversity of industry than now, and as a con- 
 sequence, all labor would be better paid than now. Fourthly, 
 those who should wish to hire capital, and establish themselves in 
 business of their own, would be much better able to do so than 
 now, because when all traffic should be done for cash, it would be 
 much more safe to loan capital to a poor man, than it is now, 
 when he is obliged to give, as well as to get, credit. Fifthly, 
 men of wealth would retire, earlier than now, from active busi- 
 ness, and make way for, and loan their capital to, younger men : 
 because they could certainly loan their capital more safely than 
 now, and probably more advantageously. By loaning their 
 capital first on mortgage, and thus getting one income from it ; 
 and then converting the mortgages into bank capital, and thus 
 getting another income from it, they would probably do better 
 with their capital, than to remain in business. At any rate, the 
 management of their capital would thus be attended with less 
 anxiety and risk, than if they were to remain in business them- 
 selves. 
 
 17. As a standard o'f value, the currency would be much 
 more uniform than it is now, because a dollar, invested for twenty 
 or thirty years, where it is sure to yield, say, six per cent, income 
 each year — never more, and never less — would obviously main- 
 tain a more uniform value than the dollar now does, which 
 brings, say, four per cent, income this year, and ten, fifteen, or 
 twenty next year. 
 
SECURITY OF THE SYSTEM. 
 
 21 
 
 CHAPTER III. 
 
 SECURITY OF THE SYSTEM. 
 
 SupposiNU the property mortgaged to be ample, the system, as 
 a system, is absolutely secure. That is to say, the currency is 
 absolutely sure of redemption. The capital cannot, in any 
 possible event, he reduced below the amount necessary for the 
 redemption of the entire circulation. 
 
 The only question, then, is — what assurances have the public, 
 that the property mortgaged will always be ample ? 
 
 The answer is, that they have abundant assurances, as follows : 
 
 1. The mortgages will all be on record, where any body 
 interested can examine them, and judge for himself whether the 
 property holden is sufficient. 
 
 2. Each bank will find it expedient to print a large number of 
 copies of its Articles of Association, including copies of its 
 mortgages. Appended to these copies, may be copies of the 
 certificates of appraisers, as to the value of the property. These 
 certificates, if they come from men of known character and 
 judgment, will be entitled to confidence. Certificates also of the 
 assessed value of the property, on the tax lists of the town, may 
 be appended; and these, coming from disinterested and honest 
 men of good judgment, as the assessors of taxes usually are, will 
 he worthy of reliance. 
 
 Copies of the Articles of Association, with these certificates 
 appended, will be sent, by the bank, to other banks, and given to 
 individuals, with whom the bank wishes to establish its credit. 
 
 3. The Trustees of a bank will be generally known as men of 
 character and judgment — for otherwise a bank Avould be dis- 
 credited at once. If they are thus known, their acceptance of 
 
22 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 the office of Trustees, will be a reasonable guaranty for the 
 sufficiency of the property bolden ; for such men would not be 
 likely to become Trustees, except for a solvent bank. 
 
 4. The abundance of undoubted currency would be such, that 
 the public would be under no necessity to take doubtful currency ; 
 and therefore doubtful currency could get no circulation at all. 
 
 5. Mortgages upon the real property of the Country, at one 
 third, or one half, its value, would probably furnish a great deal 
 more currency than could be used. No one company, therefore, 
 could expect to get out a circulation of more than one third, or 
 one half, the value of the property mortgaged. It would be of 
 no use for them, therefore, to mortgage their property for more 
 than that amount. If they should mortgage their property for 
 more, and attempt to get out more circulation, they would thereby 
 discredit their bank, and thus either fail of getting any circula- 
 tion at all, or certainly fail of getting as much circulation as they 
 might have got, if their property had been mortgaged only for a 
 proper amount. It, therefore, would not be for the interest of a 
 banking company to mortgage their property at a higher rate 
 than one third, or one half, its value. And at this rate, the 
 mortgages Avould be safe for a long series of years, (unless in 
 very extraordinary cases,) because, under a system of abundant 
 currency, real estate would always be rising in value, rather than 
 falling. The mortgages, therefore, would be growing better all 
 the while, instead of growing worse. 
 
 6. By the Articles of Association, all the mortgages, which 
 make up the capital of a bank, are made mutually responsible for 
 each other; because, (see Articles XXIX and XXXVII,) if 
 any one mortgage proves insufficient, no dividend can afterwards 
 be paid to any Primary Stockholder, until that deficiency has 
 been made good by the company. The effect of this provision 
 will be, to make all the founders of a bank look carefully to the 
 sufficiency of each other’s mortgages ; because no man will be 
 willing to put in a good mortgage of his own, on equal teims 
 with a bad mortgage of another man’s, when he knows that his 
 
SECURITY OF THE SYSTEM. 
 
 23 
 
 own mortgage will have to contribute to make good any deficiency 
 of the other. The result will be that the mortgages, that go to 
 make up the capital of any one bank, will be either all good, or 
 all bad. If they are all good, the solvency of the bank will be 
 apparent to all in the vicinity ; and the credit of the bank will 
 at once be established, at home. If the mortgages are all bad, 
 that fact also will be apparent to every body in the vicinity ; and 
 the bank is at once discredited, at home. 
 
 From all the foregoing considerations, it is evident that nothing 
 is easier than for a good bank to establish its credit, at home ; 
 and that nothing is more certain than that a bad bank would be 
 discredited, at home, from the outset, and get no circulation 
 at all. 
 
 It is also evident that a bank, that has no credit at home, could 
 get none abroad. There is, therefore, no danger of the public 
 being swindled by bad banks. 
 
 7. It would be easy for a good bank to establish its credit 
 abroad — for it could do it by establishing its credit with other 
 banks. This it could do, partly by means of its credit at home, 
 and partly by making arrangements with other banks to redeem 
 its bills. In order to do this, it must be at the necessary expense 
 and trouble of satisfying these other banks of its solvency — that 
 is, by furnishing them satisfactory evidence of the sufficiency of 
 the mortgaged property ; a thing, that is obviously very easy to 
 be done, if the mortgaged property be really sufficient. 
 
 8. In addition to the security of each individual mortgage, 
 and of the mutual responsibility of the mortgages for each other, 
 there is the still further security of all the debts due to the 
 banks; debts a little more than equivalent (by the amount of 
 interest on the loans) to the amount of bills in circulation. * 
 
 In this connexion it may be added, that under the system 
 proposed, the banking business will be a much safer business than 
 it is now ; and consequently the debts due to the bank will be a 
 much better security for the solvency of the bank, than such 
 debts now are ; because, under a system, which furnishes, at all 
 
24 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 times, a constant and ample supply of currency, industry and 
 trade will be subject to none of those revulsions and stagnations, 
 Avhich cause extensive or general bankruptcies ; the debtors of 
 banks will all make their sales for cash, instead of giving 
 credit. For these reasons the credits, given by. the banks, 
 will obviously be much more uniformly safe than they now 
 are ; and consequently the debts, due the banks, will afford a 
 much better security, than they now do, for the solvency of the 
 banks themselves. 
 
 9. , The banks themselves would act as guardians to the public 
 against frauds by each other. This would be done in this way. 
 Bank A (a solvent bank) would not receive the bills of bank B, 
 unless bank B had first satisfied bank A of its solvency. And 
 bank A would be satisfied only by personal examination of the 
 mortgages of bank B. In this way any unsound bank would be 
 discredited by the surrounding banks, and thus discredited in 
 the eyes of the community. 
 
 But it has been said that under the New York free banking 
 law, mortgages are deposited with the State Comptroller, (or 
 Superintendent of Banks,) as security for the redemption of the 
 currency ; and that when these mortgages come to be sold, the 
 lands often fail to bring the amount of the mortgage. And the 
 question has been asked, whether, under the system here pro- 
 posed, the mortgaged property might not prove insufficient, as 
 well as in New York? 
 
 The answer is, that the mortgages in New York may have 
 proved insufficient for either or both of two reasons. 
 
 1. They may have proved insufficient, because the lands, being 
 sold for specie^ at a time when specie had mostly left the 
 country^ could not bring what was not to he had — that is, 
 specie. But this is no proof that the lands were not, in ordi- 
 nary times, and under an abundant currency, a sufficient secur- 
 ity ; but only that, when specie has gone out of the country, 
 lands are affected like all other property, and will not, any more 
 than other property, bring their true value m specie. 
 
SECURITY OP THE SYSTEM. 
 
 25 
 
 But under the system proposed, the absence of specie would 
 occasion no contraction of the currency, and no depression in the 
 price of lands. And therefore a mortgage, that was sufficient at 
 one time, would be sufficient at all times. No forced sales 
 would he made; but the mortgages would run (if only the 
 interest were paid) until the final winding up of the bank. If 
 the interest were not paid, the bank would take possession, and 
 apply the rents to the payment of the interest. Or, at worst, 
 they would sell the property. And it could always be sold 
 advantageously, because, there never being a scarcity of currency, 
 property in general would never be depressed. 
 
 2. The other reason, for the failure of the Hew York mortga- 
 ges, may have hQQn frandident appraisals. 
 
 The facilities for fraudulent appraisals are much greater under 
 the Hew York system, than they would be under the system 
 proposed, and for these reasons. 
 
 Under the Hew York system, all that is necessary to get a 
 bank in operation, is, that" mortgages, satisfactory to the State 
 Comptroller, or Superintendent of Banks, should be deposited 
 with him. And he accepts the mortgages on the simple appraisal 
 of men, appointed by himself, or satisfactory to himself. This 
 being done, the currency is then issued, and the public receive it, 
 because the State has thus virtually certified that it is well 
 secured. 
 
 How, it is evident that all that is necessary to get up a 
 swindling bank, under this system, is simply to secure the 
 approval of oiie man — the Comptroller, (or Superintendent of 
 Banks,) who knows nothing of the land himself — to the ap- 
 praisal of the land mortgaged. If but this one man can either 
 be cheated, or be induced to become himself a cheat, all the 
 other consequences follow ; because the currency is then issued 
 under his authority, and is received by the public, on the strength 
 of his virtual indorsement. 
 
 How, as it cannot be a very difficult matter to cheat this one 
 man^ or perhaps to induce him to become himself a cheat, in 
 4 
 
26 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 such a case as this, it is evident that the system atFords little 
 security for the sufficiency of the mortgages. 
 
 But under the system proposed, no such facilities for fraud 
 would exist, because the credit of the bank would not rest upon 
 the certificate of any one man, nor upon any indorsement of the 
 State. The State would not indorse the currency at all, any 
 more than it now indorses the notes or mortgages of private 
 persons. Each bank would, therefore, have to stand on its own 
 merits, subject to the scrutiny of the whole community. 
 
PRACTICABILITY OP THE SYSTEM. 
 
 2T 
 
 CHAPTER IV. 
 
 PRACTICABILITY OP THE SYSTEM. 
 
 .The system is plainly practicable, provided the currency 
 will pass. 
 
 The only question, then, is, whether the currency will pass ? 
 Whether men, if left to do as they please, will buy and sell it, 
 in exchange for other commodities, as they now buy and sell gold 
 and silver coin, and bank notes, in exchange for other com- 
 modities ? 
 
 To answer this question, it is necessary to ascertain what it is, 
 that makes any thmg pass as a currency. 
 
 What, for example, is it, that makes gold and silver coin pass 
 as a currency ? 
 
 The answer is, that_^i7e conditions are necessary to make any 
 thing pass readily as a currency. First, that the thing should 
 have much value, and yet be of small bulk and weight ; secondly, 
 that it should be divisible into small parcels ; thirdly, that the 
 quantity and quality of each of these parcels should be accurately 
 measured, and then reliably marked upon the parcels themselves ; 
 fourthly, that these parcels should be convenient for being manip- 
 ulated, counted, transported, &c. ; fifthly, that the currency 
 should have a publicly known market value.* 
 
 These are the only conditions, that are necessary to make any 
 thing pass readily as a currency. 
 
 The paper currency proposed — the mortgage stock currency — 
 fulfils all these conditions. First, it would have much value in 
 small bulk and weight. Secondly, it would be conveniently 
 
 * Diamonds would not answer well as a currency, because, although they 
 have a market value, that value is known only to a few. 
 
28 
 
 A NEW SYSTEM OP PAPER CURRENCY. 
 
 divisible into small parcels, that is, parcels as small as one dollar. 
 Thirdly, the quantity and quality of these parcels would be 
 accurately measured, and reliably marked upon the parcels them- 
 selves. Fourthly, the parcels would be convenient for being 
 manipulated, counted, transported, &c. And, Fifthly, the 
 currency would have a ymhlichj known market value. Its 
 market value, in comparison with other commodities, would cer- 
 tainly be as well known, as is the market value of gold and silver 
 coins, or bank notes. 
 
 There is no reason, then, why it should not pass, as a cur- 
 rency — at its market value — Avhatever that may be. 
 
 Its market value may be greater or less than' that of gold and 
 silver ; but this would not prevent its passing, at its market 
 value. Indeed the market value of any thing is only that value, 
 at which the thing will sell readily in the market. So that, to 
 say that a thing has a market value — a publicly known market 
 value — is equivalent to saying that it will pass as a currency, 
 provided it be convenient in all other respects. 
 
 Secondly. 
 
 But would this paper currency be as much in demand, in the 
 market, as gold and silver coins now are ? That is, would it sell 
 as readily as the coins now do, in exchange for other com- 
 modities ? 
 
 To answer this question, we must ascertain why it is that the 
 coins are in demand at all, as currency ; why it is that they have 
 a market value ; ^vhy it is that every man will accept them in 
 exchange for any thing he has to sell. 
 
 The solution of these queries is, that the original, jirimal 
 source of all the demand for them, as currency — the essential 
 reason why they have a market value, and sell so readily in ex- 
 change for all other commodities — is because they are wanted, to 
 he taken out of circulation, and converted into plate, jewelry, 
 and other articles of use. 
 
PRACTICABILITY OF THE SYSTEM. 
 
 29 
 
 If they were not wanted, io he taken out of circulation^ and 
 wrought into articles of use, they could not circulate at all, as a 
 currency. No one would have any motive to buy them ; and no 
 one would give any thing of value in exchange for them. 
 
 The reason of this is, that gold and silver, in the state of coin, 
 cannot be used.* Consequently, in the state of coin, they 
 duce nothing to the ovmer. A man cannot alford to keep them, 
 as an investment, because that would be equivalent to losing the 
 use of his capital. He must, therefore, either exchange them for 
 something that he can use — something that will be productive — 
 yield an income ; or else he must convert them into plate, jewelry, 
 &c., in which form he can use them, and thus get an income 
 from them. ' 
 
 It is, therefore, only when gold and silver coins have been 
 wrought up into plate, jewelry, &c., that they can be said to be 
 invested ; because it is only in that form, that they can be used, 
 be productive, or yield an income. 
 
 The income, which they yield, as investments — that is, the 
 income, which they yield, when used in the form of plate, 
 jewelry, &c., — is yielded mostly in the shape of luxurious 
 pleasure — the pleasure of gratified fancy, vanity, or pride. 
 
 The amount of this income we will suppose to be six per 
 centum per annum, on their whole value. That is to say, a 
 person, who is able, and has tastes that ivay, will give six dollars 
 a year for the simple pleasure of using one hundi-ed dollars 
 worth of plate, jewelry, &c. 
 
 This six dollars worth of pleasure, then, or six dollars worth 
 of gratified fancy, vanity, or pride, is the annual income from 
 an investment of one hundred dollars in gold and silver plate, 
 jewelry, &c. 
 
 This, be it noticed, is the only income, that gold and silver 
 are capable of yielding ; because plate, jewelry, &c., are the only 
 forms, in which they can be iised. So long as they remain 
 
 * The sale of them, as a currency, is not a use of them ; any more than the 
 sale of a horse is a use of the horse. 
 
30 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 in coin, they cannot be used^ and therefore cannot yield an 
 income. 
 
 It is, then, only this six per centum annual income — this six 
 dollars worth of pleasure — Ayhich gold and silver yield, as 
 investments, that is really the cause of all the demand for them, 
 in the market, and consequently of their passing as a currency. 
 
 This fact may now be assumed to be established, viz. : that the 
 origin of all the demand for gold and silver, as a currency — 
 the essential reason why they have a market value, and sell so 
 readily in exchange for other commodities — is because they are 
 wanted, to be taken out of circulation, and converted into 
 plate, jewelry , 6^'c., in which form only they are capable of being 
 used, or of yielding an income. 
 
 By this it is not meant that every man, who takes a gold or 
 silver coin, as currency, takes it because he himself wants a 
 piece of gold or silver plate, or jewelry ; nor because he himself 
 intends or wishes to work it into plate or jewelry ; for such is not 
 the case, probably, with one man in a thousand, or perhaps one 
 man in ten thousand, of those who take the coin. Each man 
 takes it, as currency, simply because he can sell it again. But 
 he can sell it again solely because some other man wants it. or 
 because some other man will want it, in order to convert it into 
 articles /o?’ use. He can sell it, solely because the goldsmith, 
 the silversmith, the dentist, &c., will sometime come along and 
 buy it, take it out of circulation, and work it up into some 
 article for consumption — that is, for use. 
 
 This f?tal consumption, or use, thenj is the mainspring that 
 sets the coins in circulation, and keeps them in circulation, as a 
 currency. 
 
 It is solely the consumption, or use, of them, in other articles 
 than currency, that creates any demand for them, in the mai'ket, 
 as currency. 
 
 It is, then, only the value, which gold and silver have, as 
 productive investments, in articles of use, in plate, jewelry, 
 4*c., that creates any demand for them, and enables them to pass, 
 as a currency. 
 
PRACTICABILITY OP THE SYSTEM. 
 
 31 
 
 This fact, then, being established, the following proposition is 
 an inevitable deduction from it, viz. : that the activity of the 
 demand for gold and silver coins, as a currency^ depends wholly 
 upon the activity of the demand for them, to be taken out of 
 circulation^ and converted into plate, jewelry, &c. 
 
 To illustrate this point, let us suppose a community of one 
 million of people, shut out from the rest of the world, having 
 • among them one million dollars of gold and silver coins, and 
 having no gold or silver among them, except in coins. If but 
 one dollar of these coins were to be taken out of circulation each 
 year, and converted into plate, jewelry, or other articles of use, 
 the demand for all the remaining coins, as a currency, would 
 wholly, or substantially, cease. And why? Solely because the 
 stock of coins on hand, (or the stock of gold and silver on hand,) 
 would be equal to a million years’ consumption. The consequence 
 obviously would be that gold and silver would have no value in 
 the market ; any more than cotton or iron would have a value in 
 the market, if there were a million years’ stock on hand. 
 
 But if, instead of one dollar, an hundred thousand dollars 
 were annually taken out of circulation, and converted into plate, 
 jewelry, or other articles of use, (even though their place were 
 annually supplied by an equal amount taken from the mines,) 
 this demand for the coins, to be taken out of circulation, would 
 create a corresponding demand for them, as a currency. And 
 why ? Solely because the stock of gold and silver on hand, 
 would be equivalent only to ten years’ consumption. This would 
 give them a value, where before they had none ; and enable them 
 to circulate, as a currency, where before they could not. 
 
 Thus it is evident that the whole demand for gold and silver, 
 as a currency, depends upon the demand for them for consump- 
 tion, as plate, jewelry, Spc. And consequently the activity of 
 the demand for them, as a currency, depends upon the activity 
 of the demand for them, for consumption. In other words, the 
 activity of the demand for the coins, as a currency, depends 
 upon the activity of the demand for them as investments, in 
 articles of use. 
 
32 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 And what is true of the coins, would be true also of the paper 
 currency proposed. The activity of the demand for the Circu- 
 lating Stock, as currency, would be just in proportion to the 
 demand for the mortgages, or Productive Stock, as investments. 
 As the coins would be in demand, as a currency, solely in pro- 
 portion to the demand for them, to be invested in plate, jeAvelry, 
 &c., so the paper currency would be in demand, as currency, 
 solely in proportion to the demand for it, to be invested in • 
 mortgao-es, or Productive Stock. The demand for these two 
 different kinds of investments, would govern the demand for the 
 two different kinds of currency. 
 
 Now, in order to determine whether the paper currency pro- 
 posed woidd he in as much demand, in the market, as the gold 
 and silver coins circulating in competition with it, we have only 
 to determine whether the community at large would wish to make 
 annually as many investments, in the mortgages proposed, as 
 they tvoidd in plate, jewelry, <^'c. Or, perhaps, rather, the true 
 question is, whether as large a proportion of the whole stock of 
 paper currency, in the market, would be annually taken out of 
 circulation, and invested in the mortgages, as of the gold and 
 silver coin in plate, jewelry, &c. If such would be the case, 
 then one kind of currency would he just as much in demand as 
 the other. 
 
 To illustrate this point, suppose that, in this country, one 
 hundred millions of coin, and one hundred millions of the pro- 
 posed paper currency, were in circulation, in competition with 
 each other. And suppose that ten millions of the coin — that is, 
 ten per centum of the whole stock of coin — were annually 
 wanted to be taken out of circulation, and invested in plate, 
 jewelry, ^’c. ; and that ten millions also of the papier currency — 
 that is, ten per centum of the whole stock of paper currency — 
 were annually wanted, to be taken out of circulation, and in- 
 vested in the mortgages, the market demand for these two kinds 
 of currency would be precisely alike. 
 
 Or suppose that 07 ie hundred millions of coin, and Jive 
 
PRACTICABILITY OF THE SYSTEM. 
 
 33 
 
 hundred millions of the paper currency, were in circulation, in 
 competition with each other ; and that ten millions of the coin 
 (ten per centum of the whole stock of coin) were annually 
 wanted, to be taken out of circulation, and invested in plate, 
 jewelry, &c., and that fifty millions of the paper currency (ten 
 per centum on the whole stock of paper currency "J were annually 
 wanted, to be taken out of circulation, and invested in mortgages, 
 the demand, in the market, for each of the two kinds of currency 
 would still be precisely equal, in point of activity. That is to 
 say, one kind of currency would circulate just as readily as the 
 other. 
 
 On this theory, it is very easy to settle the question of the 
 comparative demand for the two different kinds of currency ; for, 
 although the amount of paper currency might perhaps be fifty or 
 an hundred times greater than the amount of gold and silver, yet 
 the demand for the mortgages (Productive Stock) as invest- 
 ments, would probably be fifty or an hundred times greater than 
 the demand for plate, jewelry, &c., as investments. 
 
 The reason, why there would be this greater demand for the 
 mortgages, as investments, is, that they would yield their income, 
 in money, or currency, which could be appropriated to the sup- 
 ply of any and all the various necessaries, wants, comforts, and 
 pleasures, which money can buy ; while the plate, jewelry, &c., 
 as investments, yield their income mostly in the shape of a 
 luxurious pleasure, which most persons do not highly appreciate, 
 and which few persons can indulge in, to any considerable extent, 
 without being compelled to pinch themselves in the matter of 
 common necessaries and comforts. 
 
 Mankind, therefore, desire to have the great bulk of their 
 property invested so as to yield an income in money ; and only a 
 very small portion of it in such articles of fancy as plate, 
 jewelry, &c. 
 
 Under these circumstances, it is probable that if the paper 
 currency were in circulation in competition with the coin, in the 
 proportion of fifty or an hundred to one, the paper would be just 
 5 
 
34 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 as acceptable a currency as the coin ; would be just as much in 
 demand ; would exchange just as readily for other commodities ; 
 and would equally well maintain its value in the market. 
 
 Thirdly. 
 
 Would the mortgages, or Productive Stock, be so desirable a 
 form of investment, as to invite capital into it, and thus create a 
 demand for the currency, with a view to having it redeemed by 
 Productive Stock ? 
 
 The answer is, that the Productive Stock would be a desirable 
 investment, for the various reasons of security, profit, and con- 
 venience. 
 
 1. As regards security, no kind of investment would exceed it. 
 
 2. As regards profit, the Productive Stock would pay two 
 different dividends — one to Primary holders, and the other to 
 Secondary holders. 
 
 The dividends to Primary Stockholders would be made up of 
 the interest on the mortgages, and the profits of the banking. 
 The rate of these dividends, therefore, will depend upon the 
 rate of interest on the mortgages, and the amount of banking 
 profits. 
 
 Probably the best rate of interest for the mortgages to bear, 
 would be seven per centum. This would probably be sufficient 
 to make the Productive Stock, in the hands of Primary 
 holders, worth more than par of specie, even though there 
 should be no profits at all from the banking business. But if 
 there should be profits from the banking business, they would go 
 to swell the dividends. So that the dividends to Primary 
 Stockholders would never be less than seven per cent, so long as 
 the banking business should simply pay expenses; and they 
 would rise above that rate just in proportion to the banking 
 profits. There can, therefore, be no doubt of the desirable char- 
 acter of the Productive Stock, as investments, in the hands of 
 Primary holders. 
 
PRACTICABILITY OP THE SYSTEM. 
 
 35 
 
 In the hands of Secondary holders, the Productive Stock 
 would pay an unvai’jing rate of dividend, fixed by the Articles 
 of Association. 
 
 The currency would represent the Prodiictive Stock, in the 
 hands of Secondary holders, and not in the hands of Primary 
 holders ; because the holders of the currency, by returning it for 
 redemption, could generally expect to make themselves only 
 Secondary holders of the Productive Stock. They could rarely 
 expect to become Pi imary holders : and, therefore, would not 
 return the currency for redemption, with that view. 
 
 Probably six per centum would be the best rate of dividend, to 
 be fixed for the Secondary Stockholders to receive ; for that is 
 probably the rate, that would put the currency most nearly on a 
 par with specie. If the rate were fixed at seven per cent., the 
 Productive Stock, in the hands of Secondary holders, would be 
 worth more than par of specie ; and the consequence would be, 
 that the currency would he returned for redemption, in the hope 
 to get Productive Stock, rather than specie. And thus the 
 currency could not be kept in circulation. On the other hand, if 
 the rate of dividend, for the Secondary Stockholders, were fixed 
 at o'tAy five per cent., that might prove insufficient to make the 
 currency worth par of specie. Therefore six per cent, is likely 
 to prove a better rate than either five or seven. 
 
 Supposing, then, the rate of dividend, for Secondary Stock- 
 holders to receive, to be fixed at six per cent., the investment 
 would be sufficiently inviting to make the currency worth par of 
 specie. It would certainly be sufficient to attract much capital, 
 as every day’s observation attests. As a six per cent, stock, it 
 would stand on a par with United States stocks, and State stocks, 
 (hearing six per cent, interest,) which are, at nearly all times, 
 worth par of specie, and oftentimes more than par of specie, in 
 the market. 
 
 3. As regards convenience, the Productive Stock would be 
 equal to any in the market ; especially in the hands of Secondary 
 holders. It being in shares of, say, one hundred dollars each, 
 
36 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 and its income (in the hands of Secondary holders) being pre- 
 cisely fixed, its value is precisely known. The stock is, there- 
 fore, in as merchantable form as capital can be invested in. It is 
 in as merchantable form as United States stocks, or State stocks, 
 (bearing fixed rates of interest,) which are nearly or quite as 
 merchantable as bank bills themselves. 
 
 The objections, heretofore entertained against mortgages, as an 
 investment, have no application whatever to stocks of this kind. 
 Those objections have been as follows : 
 
 1. The inconvenience of raakinor the investment, owing to the 
 necessity of investigating titles, making valuations, &c., all of 
 which processes are attended with delay, and with some danger of 
 mistakes or frauds. In these bank stock mortgages, these delays 
 and dangers would all be avoided ; because the soundness of the 
 titles, and the moderation of the valuations, would be notorious. 
 It would be a necessity, on the part of the banks, to make them 
 so, as a condition precedent to the banks’ getting any circulation 
 for their currency. 
 
 2. A second objection, to mortgages heretofore, has been, that 
 each mortgage was in bulk, and could not be broken. It was, 
 therefore, in a great degree, an unmerchantable article ; because 
 it was not always, nor even often, an easy thing to find a person 
 wishing to make an investment of that particular amount. This 
 objection, too, which was really a very serious one, is entirely 
 obviated in the case of the Productive Stock ; for here the 
 mortgages are divided into shares of $100, or any other amount 
 that may be desired ; and thus put in as merchantable form, as 
 any investment can possibly be in. 
 
 3. A third objection, to mortgages heretofore, has been, that 
 neither the interest nor the principal of the investment could be 
 realized from them (unless the debtor should choose to pay) 
 without a tedious delay ; taking possession of the premises ; 
 looking after rents and profits ; giving the mortgagor time (per- 
 haps a long time) for redemption ; or incurring delay, expense, 
 and trouble in advertising the premises, and selling them. In 
 
PRACTICABILITY OF THE SYSTEM. 
 
 37 
 
 the case of the Secondary holders of Productive Stocky every 
 objection of this kind is obviated, for substantially the whole 
 resources of the bank (which are morally certain to be ample) 
 are pledged to the payment of the dividends promptly. And 
 even as to the Primary holders, they are not likely to be per- 
 sonally troubled in the matter, for the Trustees attend to all 
 business matters in relation to the mortgages. The only one, of 
 the inconveniences just mentioned, that the Primary Stock- 
 holders are ever likely to be subjected to, is a delay in receiving 
 some portion of their dividends, if the mortgagors should not be 
 prompt in the payment of interest. But this would so rarely 
 occur as to prove a very slight objection, if any, to the invest- 
 ment. 
 
 The result, then, obviously would be, that these stocks would 
 be of the very first class, as investments. Their safety, their 
 profit, and their merchantable character, would all conspire to 
 make them preeminently desirable. And the consequence would 
 be that the demand for them would be sufficient to make the 
 currency constantly in demand, as a means of obtaining them. 
 
 Under an abundant currency, such as the system would fur- 
 nish, and under the low rates of interest that would follow, the 
 Productive Stock would probably be much more in demand than 
 stocks, paying similar dividends, now are ; because now, a very 
 large amount of loanable capital is kept invested in promissory 
 notes, and other personal securities, on account of their paying a 
 better interest than stocks. But under the system proposed, the 
 banks would be so numerous, and the rate of interest at them so 
 low, that temporary loans would all be obtained at the banks, 
 rather than in the street ; and the capital, which is now loaned 
 in the street, would then, as the best alternative, seek investment 
 in bank stocks. 
 
A NEW SYSTEM OF PAPER CURRENCY. 
 
 Fourthly. 
 
 The next question is, would the paper currency proposed, 
 maintain a par value with specie ? 
 
 This question has already been discussed somewhat; but a few 
 more words need to be said. 
 
 We have already seen that the paper would cii’culate, at its 
 true value, xvhatever that might he. It is, nevertheless, an 
 important question, whether its value, in the market, would be 
 equal to that of specie ? 
 
 The answer is, that if the rate of dividend, paid to Secondary 
 holders of Productive Stock, should be six per cent., that would 
 be sufficient to make the currency, at most times, if not at all 
 times, worth par of specie. If it should not be at all times, it 
 would be because the market value of specie would fluctuate 
 more than that of the paper ; thereby proving that the paper was 
 the most uniform standard of value. 
 
 The paper currency could never rise above the value of specie ; 
 because the banks would have the right to redeem theii’ circula- 
 tion with specie, if they should so please. 
 
 If, therefore, there should ever be a difierence .between the 
 value of the paper, and that of specie, it must be either because 
 the specie would stand constantly above the paper, or because it 
 would occasionally rise above it. 
 
 Whether the value of specie would stand constantly above 
 that of the paper, would depend upon the rate of dividend 
 secured to the Secondary holders of the Productive Stock. If 
 this rate should be six per centum, that would certainly be suffi- 
 cient to make the currency worth as much as specie, at times ; 
 because there are times, when there is plenty of specie to be 
 loaned at that rate. 
 
 The only remaining question, then, is, whether the specie 
 would occasionally rise in value above the paper ? The answer 
 is, that it would very rarely, if ever ; and for this reason, viz. : 
 
PRACTICABILITY OP THE SYSTEM. 
 
 39 
 
 that the supply of paper would always be so abundant and con- 
 stant, that it is probable, if not certain, that none of those 
 scarcities or contractions, in the currency, which alone cause a 
 rise in the price of specie, would ever occur. And if they never 
 should occur, the paper would always be on a par with specie. 
 If, however, the specie should ever stand above the paper, that 
 would only prove, not that the paper had fallen, but that the 
 specie had risen. In other words, it would prove that the fluctu- 
 ation was in the specie, and not in the paper ; and, consequently, 
 that the paper was the least variable standard of value. 
 
 Under these circumstances, the paper would constitute nearly 
 all the currency in circulation (unless for sums below one dollar). 
 It would be the only currency loaned by the banks. It would be 
 a legal tender in payment of all debts due the banks. And it 
 would be sufficient for all cash purchases and sales between man 
 and man. And if an individual should want specie for any 
 extraordinary purpose — as, for exportation, for example — he 
 would buy the specie as merchandize, paying the difference 
 between that and the paper. 
 
 Still, specie would probably, at all times, be more abundant, 
 as a currency, in proportion to the demand, than it is now ; 
 because it would be so much less needed. The supply would be 
 greater, in proportion to the demand, than now, because the 
 greater supply of paper would supersede the necessity for, and 
 the use of, specie, as a currency. 
 
 If the proposed paper currency should be introduced through- 
 out the world, (as it sooner or later would be, if found to be 
 essentially better than any other system.) the coins would become 
 superabundant, unless a greater proportion of them should be 
 consumed in the arts, than now. And gold and silver, whether 
 in coin or not, if they now stand above their value for uses in the 
 arts, would fall to that value, and there remain, as they ought. 
 
40 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 Fifthly. 
 
 Could the proposed system be introduced in competition with 
 the existing system ? 
 
 Yes, for various reasons, as follows-: — 
 
 1. The proposed sj'stem would meet with no material opposi- 
 tion from any quarter, unless from the stockholders in the 
 existing banks. Would it from them? No; because it would 
 probably subserve the interests of four fifths, or nine tenths, of 
 them, better even than the existing system. Let us see. 
 
 The stockholders of the present banks are made up of two 
 classes, viz. : those who hold their stock in order to lend money, 
 and those who hold it in order to borrow money. 
 
 Both of these classes would jv'obabhj be benefitted, rather than 
 injured, by the adoption of the new system. 
 
 Those, who have money to lend, could probably do better with 
 it, by investing it first in a mortgage, and thus getting one income 
 from it ; and then using the mortgage as hank capital, and thus 
 getting another income from it. 
 
 Their capital would thus be more safely invested than it is 
 now ; and would probably yield a larger income. 
 
 Those, who own bank stock, in order to borrow more than they 
 lend, would probably do better than they do now, because, first, 
 they would keep their own capital wholly in their own business ; 
 and, secondly, if they needed more, wmuld easily, borrow it (if 
 worthy of credit) on account of the abundance of banks, that 
 would be seeking borrowers. Thus they would be as well sup- 
 plied with capital as now, and with less risk and trouble ; because 
 they would borrow only Avhat they needed over and above their 
 own capital ; and this they would do directly, and without com- 
 plicating their business, as now, with that of a bank, by becoming 
 stockholders, and being compelled to look after, and take the 
 risks of, all the business of the bank. 
 
PRACTICABILITY OF THE SYSTEM. 
 
 41 
 
 Another reason, why the stockholders in the present banks 
 would be benefitted by the new system, is, that very many of 
 tlfese stockholders are large owners of real estate. The new 
 system, by enabling the owners of real estate to get an income 
 from it, as banking capital, and still more by furnishing increased 
 facilities for agriculture, manufactures, and commerce, would 
 greatly inctease the value of real estate in general. This in- 
 creased value, given to real estate, would be of more importance 
 to the owners thereof, than any income or advantage, derived by 
 them from the present system of banking, over those to be 
 derived from the proposed system. 
 
 The opposition to the new systetn, then, (if any there should 
 be,) on the part of stockholders in the present banks, would be 
 an opposition of prejudice, and not of interest; for there are few 
 or no stockholders in the present banks, who would not derive 
 greater advantages from the new system, than from the present 
 one. 
 
 2. The new currency could be introduced (brought into circu- 
 lation) in competition with the existing paper currency, for the 
 further reason, that, if the existing banks should receive the 
 currency of the new banks, at par, the currency of the new 
 banks would thus be enabled to circulate, in the community, on a 
 par with that of the present banks. On the other hand, if the 
 present banks should not receive, at par, the currency of the 
 new banks, the new banks and their friends would systematically, 
 and to the extent of their ability, run upon the existing banks 
 for specie ; and thus compel them to suspend payments in specie. 
 And when the existing banks should have suspended payment in 
 specie, the new banks would stand better than the present ones, 
 in the estimation of the community ; because the existing banks 
 would then offer no redemption of their bills, except by receiving 
 them in payment of debts ; whereas the new banks would not 
 only offer that redemption, but also a farther redemption in 
 Productive Stock. 
 
 If the new banks, and their friends, should systematically run 
 
 6 
 
42 
 
 A NEW SYSTEM OP PAPER CURRENCy, 
 
 upon the existing banks for specie, the existing banks could not 
 retaliate ; because the new banks could redeem with Productive 
 Stock, instead of specie, if they should so choose. 
 
 Thus the new banks, by drawing specie from the existing 
 banks, could pay specie, to the ’public, as long as the existing 
 banks could pay it ; and thus the new banks would put them- 
 selves on a par with the existing banks, so far as paying specie, 
 to the j)ublic, should be concerned. But the difference between 
 them would be, that the present banks would be compelled to pay 
 specie to the new banks ; but the new banks would not be com- 
 pelled to pay specie to the existing banks. 
 
 This advantage, which the new banks would have over the 
 existing ones, would enable the new banks to coerce the existing 
 ones, either into a suspension of specie payments, (when the new 
 ones would stand better than their rivals,) or else into receiving 
 the currency of the new banks at par — in which case the new 
 banks would stand at least as well as the existing ones. 
 
 3. The new banks would have an advantage over the existing 
 ones, in introducing their currency into circulation, by reason of 
 the fact that, inasmuch as their capital would cost them nothing, 
 (they not being obliged to keep any considerable amount of specie 
 on hand,) they would be able to lend money at a lower rate of 
 interest. 
 
 4. The currency of the new banks would go into circulation, 
 for the further reason, that every body would prefer it, (the cur- 
 rency,) on account of its superior safety, convenience, and 
 merchantable character, to the credit of private persons. This 
 preference would be sufficient to bring it into use in substantially 
 all those purchases and sales, which are now made on credit. 
 And if the currency were to go into use only to that extent, it 
 would be a success. But if it were to go into use to that extent, 
 it would obviously go into use to a still greater extent, and super- 
 sede, wholly or partially, the existing currency, even in those 
 purchases and sales, which are now made for cash. 
 
 Doubtless nine tenths, and perhaps nineteen twentieths, of all 
 
PRACTICABILITY OP THE SYSTEM. 
 
 43 
 
 the persons, who now get credit, get it elsewhere than at the 
 banks ; in fact, never go to a bank for credit. Yet these persons 
 are worthy of credit, as is proved by the fact that they get it of 
 private persons, by purchasing commodities on credit. It would 
 be far better for them to get their credit at bank, and make their 
 purchases for cash, for they would then make them much more 
 advantageously. All this class of persons, therefore, could be 
 relied on to introduce the new currency. And they would have 
 no difficulty in introducing it — that is, in making their purchases 
 with it — because it would be preferred to their private credit, 
 even by those who now give them ci’edit. 
 
 5. Under the existing system, when the banks suspend specie 
 payments, we see that their bills not only continue to circulate, 
 but that they maintain a value, in the market, very nearly on a 
 par with specie. Why is this ? It is principally, if not solely, 
 because the bills of each bank are a legal tender in payment of 
 any debts due to that bank. Inasmuch as the public always owe 
 a bank more (by the amount of interest on loans) than the bank 
 owes the public, there is sure to be a demand for all the outstand- 
 ing bills of a bank, to pay the debts due to the bank — provided 
 the debts due to the bank be solvent. It is this fact, that keeps 
 the bills of the bank so nearly on a par with specie. That is, the 
 bills are worth very nearly dollar for dollar, because they will 
 pay debts to the banks, dollar for dollar, vdiich icould other- 
 wise have to be paid in specie. 
 
 This fact, in regard to the circulation of the bills of suspended 
 banks, under the existing system, sufficiently demonstrates that 
 the paper currency now proposed, would not only circulate, but 
 that it would maintain a value very nearly, if not quite, on a par 
 with specie ; because it would not only be a legal tender, dollar 
 for dollar, for all debts due to the banks, but would also be 
 redeemable in Productive Stock, which would always maintain, 
 very nearly or quite, a par value with specie, in the market. In 
 this latter respect (of being redeemable by Productive Stock') 
 the proposed currency would have a clear, and very important, 
 
44 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 advantage over the bills of suspended banks, wbich now circulate, 
 and maintain their value nearly on a par with specie. There is, 
 therefore, no ground for saying that the new currency would not 
 circulate, if it were offered, when we see that a far less safe, less 
 redeemable, and less desirable currency, to wit, the hills of sus- 
 pended banks, under the present system, do not only circulate, 
 but maintain their value so nearly on a par with specie. 
 
 6. It may be supposed, at first view, that merchants, especially 
 importers, might reasonably object to the proposed currency, on 
 the ground that their interests require that the currency of a 
 nation be such as can be converted into specie, whenever they 
 (the merchants) may have occasion to export specie. 
 
 Admitting, for the sake of the argument, that the merchants 
 might suffer some inconvenience of this kind, the effect would 
 only be to make them more careful to keep the imports within 
 the exports of the country. And this benefit to the country 
 would counterbalance a thousand fold any inconvenience to the 
 merchants. 
 
 The merchants have no claim that the whole country shall 
 depend, for a currency, upon a commodity, or commodities, like 
 gold and silver, which the merchants can at pleasure carry out of 
 the country, leaving the nation destitute of a currency. And it 
 is nothing but suicide for a people to depend upon such commodi- 
 ties for a currency. 
 
 Under the present system, whenever the balance of trade is 
 much against us, the merchants export specie in such quantities 
 as to cause sudden and severe contractions in the currency, a 
 great reduction in the price of commodities relatively to specie, 
 (that is, a great rise in the price of specie,) general bankruptcy 
 among persons in debt, general stagnation in industry and trade, 
 and immense distress and ruin on every hand. This state of 
 things checks importations for a while, until the balance of trade 
 turns in our favor ; when the specie returns, currency expands, 
 credit revives, industry and trade become active, and, for a time, 
 we have what we call prosperity. But in a few years, the 
 
PRACTICABILITY OF THE SYSTEM. 
 
 45 
 
 merchants again export the specie, and the same catastrophe is 
 acted over again. And such must continue to he our experience, 
 until our present vicious system of currency and credit shall be 
 corrected. This no one seems to doubt. 
 
 Certainly such evils are not to be endured by a whole nation, 
 from no motive but to maintain a currency, which the merchants 
 can export, whenever they shall have imported more goods than 
 the legitimate exports of the country will pay for. 
 
 It is the proper fnijction of merchants to conform their business 
 to the interests of the people, in the matter of currency, as much 
 as in the commodities bought and sold with and for it. And it 
 would be as legitimate for the merchants, instead of supplying 
 the people with such commodities as the latter desire, to dictate 
 to them what they may, and may not, buy, as it is for them (the 
 merchants) to dictate to the people what currency the latter 
 shall use. 
 
 It is the legitimate function of merchants to buy such com- 
 modities as the people have to sell, and to sell such as the people 
 wish to buy. So far as merchants do this, they are a useful 
 class. And the principle applies as well to the currency, that is 
 to be bought and sold, as to any other commodities. And, as 
 matter of fact, whatever this principle requires of merchants, 
 they readily acquiesce in. They adapt themselves at once to any 
 system of currency, that happens to prevail for the time being. 
 And certainly no class will more eagerly welcome any system of 
 banking, that will furnish them, at all times, with abundant 
 credit, and abundant currency, and cash payments in trade ; for 
 such a system would be a guaranty, to them, of a safe, constant, 
 and profitable trafiic, in the place of the present fitful, chaotic, 
 and perilous one, in which so many of their number are being 
 continually wrecked. 
 
 So far as the export of specie is concerned, probably not one 
 merchant in a hundred — perhaps not one in a thousand — has 
 the least interest in it. A currency, that will pay their bank 
 notes, is substantially all that, as a class, they demand, or desire. 
 
46 
 
 A NEW SYSTEM OF PAPEB CURRENCY. 
 
 But, in truth, the system would favor, instead of injuring, the 
 interests even of those few merchants who occasionally do export 
 specie ; for it would put at their disposal nearly all the gold and 
 silver of the country, for exportation, or any other purpose. 
 That is to say, the merchants could export nearly all the gold 
 and silver, without affecting our home currency ; and conse- 
 quently without disturbing industry and trade. And this is one 
 of the great merits of the system. The presence or absence of 
 specie in the country would not be known by its effects upon the 
 general body of currency. 
 
 If the paper currency, now proposed, were introduced through- 
 out the world, gold and silver would enter very little into the 
 internal commerce of nations. They would go back and forth 
 between nations, to settle balances ; and would be found, in large 
 quantities, in seaports as merchandize. And merchants would 
 purchase them for export, as they would any other commodities. 
 
 7. The system proposed would obviously tend to the concen- 
 tration of specie, in large quantities, in the seaports. This would 
 enable the banks, in the seaports, to pay specie, if it should be 
 at all necessary. And this would enable the banks, in the 
 seaports, to furnish a specie paying currency for the interior of 
 the country^ when the banks themselves, in the interior, would 
 not pay it. The advantage of circulation, which the seaport 
 banks might thus obtain over the banks of the interior, would be 
 great enough to compensate for any little trouble it might be for 
 the former to pay specie. In fact, this interior circulation might 
 very probably become so extensive, as to be a source of great 
 profit to the seaport banks. 
 
 If the seaport banks should send their currency, in large 
 quantities, into the interior, the banks of the interior would have 
 little need to redeem their currency with specie. It would be 
 sufficient for them to redeem it with the seaport currency. 
 
 8. The system is practicable for the further reason, that it can 
 be introduced without the aid of hank charters, or special legisla- 
 tion of any kind. It stands wholly on common law principles ; 
 
PRACTICABILITY OF THE SYSTEM. 
 
 47 
 
 and companies can go into business under it — as they go 
 into mercantile, manufacturing, or any other business — when it 
 suits their interest or pleasure, without asking the consent of a 
 body of ignorant, conceited, tyrannical legislators, who assume to 
 know what business it is, and what business it is not, best for men 
 to engage in ; instead of leaving the wants of mankind to give 
 direction to their industry and capital. 
 
 The banks, too, when established, would be free of all special 
 control, oversight, taxation, or interference by the government. 
 As the banks would ask no favors of the government, in the way 
 of charters, monopolies, or otherwise, the government would have 
 no more excuse for specially taxing them, or for sending Com- 
 missioners to pry into, investigate, or report their aflfairs, than it 
 now has for specially taxing the capital, or for sending Commis- 
 sioners to pry into, investigate, or report the affairs, of merchants, 
 manufacturers, or any other class of persons. 
 
 The fact, that the existing system requires special legislation 
 in favor of the banks, (in the shape of charters and monopolies,) 
 and special legislation against them, (in the shape of restrictions 
 of various kinds, the espionage of Commissioners, &c., &c.,) — in 
 short, the fact, that the banking business cannot be left subject 
 only to those general laws, which are applicable to all other kinds 
 of business, is sufficient evidence that the system is a vicious one, 
 and ought to be abolished. 
 
48 
 
 A NEW SYSTEM OP PAPER CURRENCY. 
 
 CHAPTER V. 
 
 LEGALITY OF THE SYSTEM. 
 
 Admitting, for the sake of the argument — what is not true 
 in fact — that the State governments have constitutional power to 
 forbid private banking, their statutes for that purpose, being 
 contrary to natural right, must be construed to the letter ; and 
 the letter of few, if any, of them is such as to prohibit the 
 system here proposed. 
 
 Thus Maine prohibits “ any drafts, bills, or promissory notes, 
 or other evidences of debt.” 
 
 New Hampshire prohibits “ bills, notes, checks, drafts, or 
 obligations.” 
 
 Massachusetts prohibits “any note, bill, order, or check.” 
 Rhode Island prohibits “any note, bill, order, or check.” 
 Connecticut prohibits “any bill of credit, bond, promissory 
 writing, or note, bill of exchange, or order.” 
 
 New York prohibits “notes, or other evidences of debt.” 
 
 New Jersey prohibits “bills, notes, or other evidences of 
 debt.” 
 
 Pennsylvania prohibits “ any promissory note, ticket or engage- 
 ment of credit in the nature of a bank note.” 
 
 Ohio prohibits “any note, bill, or other evidence of debt.” 
 Michigan prohibits “any bills, notes, due bills, drafts, or other 
 evidences of debt.” 
 
 Illinois prohibits “any note, or bill.” 
 
 Wisconsin pi’ohibits “any bills, or promissory notes, or other 
 evidences of debt.” 
 
 Mississippi prohibits “notes, bills, certificates of deposit, or 
 evidences of debt.” 
 
LEGALITY OP THE SYSTEM. 
 
 49 
 
 Georgia prohibits “ any bills, or promissory notes of private 
 bankers.” 
 
 The currency proposed — the Circulating Stock — comes 
 within the letter of none of these prohibitions. It consists 
 neither of “notes,” “promissory notes,” “orders,” “checks,” 
 “drafts,” “bonds,” “certificates of deposit,” “bills of credit,” 
 “ bills of exchange,” “due bills,” nor “tickets or engagements 
 of credit in the nature of bank notes.” 
 
 Although, if it should come into circulation, it may, very 
 likely, in common parlance, and from motives of convenience, 
 be denominated “bills,” yet it is not “bills,” in any legal sense, 
 in which that word was used at the times these statutes were 
 enacted. 
 
 It cannot be called “evidences of debt” — that is, of personal 
 indebtedness — in the sense, in which this description is evidently 
 used in these statutes. 
 
 It is not an “ obligation,” in the sense, in which that word is 
 legally used. That is to say, it is not a personal “obligation,” 
 in the nature of a debt, as the term debt is now understood. 
 
 It is, in law, simply hona fide certificates of bona fide stocks ; 
 as really so as are any certificates of railroad stocks, or of any 
 other stocks whatever. It is bona fide certificates of, or evidences 
 of title to, veritable property in land, as really so, as are deeds, 
 mortgages, leases, or any other written instruments for the 
 conveyance of title to, or rights in, real estate. As such, it 
 obviously comes within the letter of none of the preceding 
 prohibitions. The holders of the certificates are the bona fide 
 owners of the stocks, or property represented ; and in selling the 
 stocks themselves, they pass the certificates, or evidences of title. 
 And this is the whole matter, in a legal point of view. 
 
 The statutes, however, of some of the States are in somewhat 
 different terms from those already cited. 
 
 Thus Vermont prohibits “ any bill of credit, bond, promissory 
 writing or note, bill of exchange, order, or other paper?'' 
 
 Whether this prohibition of “ any other paper as a currency, 
 
 7 
 
60 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 can, in law, be held to prohibit the sale of bona fide stocks, or 
 property in land, and passing the certificates thereof, or the titles 
 thereto, is, to say the least, very doubtful. 
 
 New Jersey, in addition to the preceding prohibition of “bills, 
 notes, or other evidences of debt,” prohibits “ any ticket of any 
 denomination whatever, intended to circulate for the payment of 
 debts, dues, or demands, in lieu of, or as a substitute for, bank 
 notes or bills, or other lawful currency of the State.” 
 
 What may be the legal meaning of a “ ticket we will not 
 now undertake to settle ; nor whether this prohibition interdicts 
 the sale of bona fide stocks, and the transfer of the paper titles 
 thereto. 
 
 Virginia prohibits “any note, or other security, purporting 
 that money or other thing of value is payable by, or on behalf 
 of, such person” (the person issuing). 
 
 This statute clearly would not interdict the currency proposed. 
 
 The letter of the statutes of Missouri, Kentucky, Tennessee, 
 Alabama, North Carolina, and of the constitution of Texas, is, 
 perhaps, comprehensive enough to prohibit the proposed cur- 
 rency. 
 
 In the statutes of Indiana, Iowa, Arkansas, Maryland, and 
 Delaware, I have found nothing, that seemed to me to prohibit 
 the proposed currency. 
 
 If this currency should evade the interdict of these statutes 
 against private banking, it would also evade the interdict of the 
 State laws against usury ; for the issue of the currency by the 
 banks, in exchange for the promissory notes of individuals, is, in 
 law, a mere sale of bona fide stocks, or property, on credit, like 
 the sale of any other stocks, or property, on credit, and at a 
 price agreed on. And if these stocks should happen to sell for 
 more than their nominal value, that would be a matter of no 
 more legal importance than for railroad shares to sell for more 
 than their par or nominal value. 
 
 But; admitting that the language of all the foregoing prohibi- 
 tions are suflBciently comprehensive to embrace the currency 
 
LEGALITY OE THE SYSTEM. 
 
 51 
 
 proposed, the statutes themselves, so far as they should be applied 
 to that currency, would nearly all of them he unconstitutional 
 and void, as being in conflict with the “natural right to acquire 
 and dispose of property ; ” a right, that is either expressly or 
 impliedly recognized and guaranteed by most, or all, of the 
 State constitutions, and bills of rights. This “natural right to 
 acquire and dispose of property,” includes a right to buy and 
 sell, as well as to produce and give away, property. The issuing 
 of the currency proposed, and the passing of it, from hand to 
 band, as a currency, would, in law, be merely a buying and 
 selling of the property it should represent — that is to say, the 
 buying and selling of hona fide property in land — like any 
 other property. The only difierence between it and other prop- 
 erty, would be, that it would be bought and sold more frequently 
 than other property. 
 
 But not only all these State laws against private banking, but 
 all State laws against usury, and all other laws whatsoever, that 
 assume either to prohibit, invalidate, or impair any contract what- 
 soever, that is naturally just and obligatory, are unconstitutional 
 and void, as being in conflict with that provision of the constitu- 
 tion of the United States, which declares that “no State shall 
 pass any law impairing the obligation of contracts.” 
 
 This provision does not designate what contracts have, and 
 what have not, an “ obligation.” It leaves that point to be ascer- 
 tained, as it necessarily must be, by the judicial tribunals, in the 
 case of each contract that comes before them. But it clearly 
 implies that there are contracts that have an “ obligation.” Any 
 State law, therefore, which declares that such contracts shall have 
 no obligation^ is plainly in conflict with this provision of the 
 constitution of the United States. 
 
 This provision also, by implying that there are contracts, that 
 have an “ obligation,” implies that men have a right to enter into 
 them ; for if men had no right to enter into the contracts, the 
 contracts themselves would have no obligation. 
 
 This provision, then, of the constitution of the United States, 
 
52 
 
 A NEW SYSTEM OF PAPEB CURRENCY. 
 
 not only implies that certain contracts have an obligation, but it 
 also implies that the people have the right to enter into all such 
 contracts, and have the benefit of them. And any State laY", 
 conflicting with either of these implications, is necessarily uncon- 
 stitutional and void. 
 
 Furthermore, the language of this provision of the constitution, 
 to wit: “the obligation [singular] of contracts” [plural], implies 
 that there is one and the same obligation'’'’ to all ’■'■con- 
 tracts ” whatsoever^ that have any legal obligation at all. 
 And there obviously must be some one principle, that gives 
 validity to all contracts alike, that have any validity. 
 
 The law, then, of this whole country, as established by the 
 constitution of the United States, is, that all contracts, in which 
 this one principle of validity or “obligation ” is found, shall he 
 held valid ; and that the States shall impose no restraints upon 
 the people’s entering into all such contracts. 
 
 All, therefore, which courts have to do, in order to determine 
 whether any particular contract, or class of contracts, are valid, 
 and whether the people have a right to enter into them, is simply 
 to determine whether the contracts themselves have, or have not, 
 this one principle of validity, or obligation, which the constitu- 
 tion of the United States declares shall not be impaired. 
 
 State legislation can obviously have nothing whatever to do 
 with the solution of this question. It can neither create, nor 
 destroy, that “obligation of contracts,” which the constitution 
 forbids it to impair. It can neither give, nor take away, the 
 right to enter into any contract whatever, that has that “ obliga- 
 tion.” 
 
 But here a formidable difficulty arises. It is no less a one 
 than this, viz. : that neither legislatures, lawyers, nor coufts, 
 know, nor even pretend to know, what “the obligation of con- 
 tracts” is. That is to say, there is no one 2^rinciple, known or 
 recognized among them, by reference to which the validity or 
 invalidity of all contracts is determined. Consequently it is not 
 known, in the case of any single contract whatever, that is either 
 
LEGALITY OF THE SYSTEM. 
 
 53 
 
 enforced or annulled, in a court of justice, whether the adjudica- 
 tion has really been in accordance with “the obligation”, of the 
 contract, or not. Startling, and almost terrifying, as this state- 
 ment is, in view of the number and importance of the contracts, 
 in which men’s rights are involved, and which courts are con- 
 tinually annulling or enforcing, the statement is nevertheless 
 true. 
 
 The question — what is “the obligation of contracts?” has 
 been several times before the Supreme Court of the United 
 States ; but has never received any satisfactory answer. The 
 last time (so far as I know) that it was brought before that court, 
 was in 1827, in the case of Ogden vs. Saunders (12 Wheaton, 
 213). Several among the most eminent lawyers in the country, 
 to wit: Webster, Wirt, Wheaton, Livingston, Ogden, Jones, and 
 Sampson, were engaged in the cause. But they all failed to 
 enlighten the court. 
 
 The court consisted, at that time, of seven judges. Among 
 these 5e^Je?^ judges, /o^^r different opinions prevailed as to what 
 “ the obligation of contracts ” was. Three of the judges said it 
 was one thing ; two of them said it was another ; one said it was 
 another; and one said it was another. No one opinion com- 
 manded the assent even of a majority of the court. And thus 
 the court virtually confessed that, as a court, they did not know 
 what “the obligation of contracts ” was. 
 
 The reasonable presumption is, that no one of these opinions 
 was correct ; for if either had been correct, it would have been 
 likely to secure the assent of the whole court, or at least of a 
 majority. 
 
 But, although the court could not agree as to what the obliga- 
 tion of contracts was, four of the justices did agree in declaring 
 that the insolvent law of New York did not impair the obligation 
 of any contracts, that were made, in New York, subsequently to 
 the passage of the law. To appreciate the farcical character of 
 this conclusion, we have only to consider that, among these four 
 justices, three different opinions prevailed as to what “the obli- 
 
54 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 gation” was, which they said the law did not impair. And from 
 that time until now, this ridiculous opinion of these four justices, 
 who virtually confessed that they knew nothing of the question 
 they assumed to decide, has stood as law throughout the country, 
 and been received, by legislatures and courts, as sufficient 
 authority for the State legislatures to fix, prescribe, alter, nullify, 
 or impair, at their discretion, the obligation of any and all con- 
 tracts entered into subsequently to the passage of their laws. 
 This fact is sufficient to show that the ignorance of the Supreme 
 Court of the United States, as to the obligation of contracts, is 
 abundantly participated in by the legislatures and couids of the 
 States. 
 
 The writer of this will not attempt, at this time — although he 
 may, perhaps, at some future time — to define this constitutional 
 “obligation of contracts,” any further than to say that it must 
 necessarily be the natural obligation. That is, it must be the 
 obligation, which contracts have, on principles of natural law, 
 and natural right, as distinguished from any arbitrary, partial, or 
 conditional obligation, which legislatures may assume to create, 
 and attach to contracts. 
 
 This constitutional prohibition upon any law hnpairing the 
 obligation of contracts, is analogous to those provisions, in both 
 the State and National constitutions, which forbid any laws 
 infringing “the freedom of speech or the press,” “the free 
 exercise of religion,” and “the right to keep and bear arms.” 
 
 “The freedom of speech and the press,” which is here forbid- 
 den to be infringed, is not any merely arbitrary freedom, which 
 legislatures may assume to create and define by statute. But it 
 is the natural freedom ; or that freedom, to which all mankind 
 are entitled of natural right. In other words, it is such as each 
 and every man can exercise, without invading the rights of 
 others, and consistently with an equal freedom on the part of 
 others. 
 
 If “ the freedom,” here forbidden to be infringed, were only 
 such freedom as legislatures might, in their pleasure or discretion. 
 
LEGALITY OF THE SYSTEM. 
 
 55 
 
 see fit to institute, the prohibition, instead of protecting any 
 “freedom of speech or the press,” would of itself imply an 
 authority for the entire destruction of all such “freedom.” 
 
 The same is true of “ the free exercise of religion,” and “the 
 right to keep and hear arms.” If the rights, which, under these 
 names, are constitutionally protected, instead of being the natural 
 rights, which belong to all mankind, were only such rights as 
 legislatures, in their pleasure or discretion, might assume to 
 create, and grant to the people, the prohibitions themselves would 
 impliedly authorize legislatures to destroy those very rights, 
 which they now are commanded to hold sacred. 
 
 So, too, “the obligation of contracts,” which the States are 
 forbidden to impair, is the natural obligation ; that obligation, 
 which contracts have of natural right, and in conformity with 
 natural justice ; and not any merely arbitrary, fantastic, absurd, 
 or unjust obligation, which ignorant, corrupt, or tyrannical legis- 
 latures may assume to create, and attach to contracts. Otherwise 
 this very prohibition against “any law impairing the obligation 
 of contracts,” would allow legislatures, in their pleasure or dis- 
 cretion, to destroy the obligation of all contracts whatsoever. 
 
 That this constitutional “obligation of contracts” is the 
 natw'al obligation, is proved by the language of the provision 
 itself, which, as has already been said, implies that “the obliga- 
 tion [singular] of contracts ” [plural] is one and the same 
 obligation for all contracts ^chatsoever, that have any legal 
 obligation at all. This obligation, which is the same in all 
 obligatory contracts, must necessarily be the natural obligation, 
 and not any artificial one prescribed by legislatures ; because it 
 would obviously be impossible for legislatures to create any one 
 obligation, different from the natural one, and prescribe it for, or 
 attach it to, all contracts whatsoever. Certainly no such thing 
 was ever attempted, or thought of 
 
 This obligation, which the States are forbidden to impair, is 
 proved to be the natural one, by still another fact, viz. : that it 
 is, and necessarily must be, the same in every State in the 
 
56 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 Union ; forasmuch as the prohibition mentions but one obliga- 
 tion, which the States are forbidden to impair; and the prohibi- 
 tion to impair that one obligation is imposed alike upon all the 
 States. If this “obligation” were an artificial one, to be created 
 bj State legislatures, it would be liable to be different in every 
 State, since the constitution does not authorize any one State, 
 nor even Congress, to create any one artificial obligation, and 
 prescribe it as a rule for all the States. 
 
 This obligation, which the States are forbidden to impair, must 
 be the natural one, for the still further reason, that otherwise that 
 large class of contracts — by far the largest part of all the con- 
 tracts, which men enter into, and which courts recognize as valid, 
 but in regard to which no special “obligation” has ever been 
 prescribed by legislation — would, in the view of the constitution, 
 have no validity or obligation at all. 
 
 Still further. Inasmuch as the natural obligation is necessarily 
 the only real obligation, ■which, in the nature of things, contracts 
 can possibly have ; and inasmuch as all artificial or unnatural 
 obligations are inevitably spurious, false, and unjust, that para- 
 mount rule of legal interpretation, which requires that a meaning 
 favorable to justice, rather than injustice, shall be given to the 
 words of all instruments, that will bear such a meaning, requires 
 that “ the obligation,” which the constitution forbids to be im- 
 paired, should be held to be the natural and true obligation, 
 rather than any one of those innumerable false obligations, which 
 legislatures are in the habit of prescribing in its stead. 
 
 Finally. Inasmuch as the artificial obligations of contracts 
 are innumerable ; and inasmuch as this constitutional provision 
 does not particularly describe the obligation it designs to protect, 
 that obligation must be presumed to be the natural one, or else 
 the provision itself, on account of its indefiniteness, must utterly 
 fail of protecting any obligation at all. 
 
 The natural obligation of a contract, then, being the only one, 
 which courts are at liberty to regard, their first duty, on this 
 subject, obviously is to ascertain what the natural obligation of 
 
LEGALITY OE THE SYSTEM. 
 
 57 
 
 contracts is. When they shall have done this, they Mill have 
 discovered an universal law for all contracts ; a laM, that must 
 hullify all those State laws — absurd, vexatious, tyrannical, and 
 unjust — Mith which the statute books of the States are filled, 
 having for their objects to destroy or impair men’s natural right 
 of making obligatory contracts, and to prescribe what obligations, 
 different from the natural and true one, men’s contracts shall 
 have. 
 
 Strictly speaking, courts have no rightful authority either to 
 enforce or annul a single contract, of any name or nature what- 
 ever, until they shall have ascertained what this constitutional, or 
 natural^ obligation of contracts is. But, if they will continue 
 to do so, it is manifestly sheer mendacity, or sheer stupidity, for 
 them to declare that the contracts of private bankers, and con- 
 tracts now termed usurious — contracts naturally obligatory 
 as any that men ever enter into, or as any that courts ever 
 enforce — have no obligation ; or that anybody can be lawfully 
 punished for entering into such contracts. 
 
 Furthermore, if the natural obligation of contracts is the only 
 obligation, which courts are at liberty to regard, they are bound 
 to disregard all those State laws, or acts of incorporation, of any 
 and every kind, whether for banking purposes or any other, 
 which attempt to limit the liability of stockholders to any thing 
 less than the natural obligation of their contracts. 
 
 In short, the only constitutional power, now existing in this 
 country, to prohibit any contract whatever, that is naturally 
 obligatory, or to impair the natural obligation of any contract 
 whatever, is the single power given to Congress “ to establish 
 uniform laws on the subject of bankruptcies, throughout the 
 United States.” * 
 
 * Independently of the injustice of all laws impairing the natural “obligation 
 of contracts,” there was a very weighty reason why the Slates should have no 
 power to enact bankrupt laws. If they had this power, each State might have 
 the motive to pass such a law for the purpose of liberating her own citizens fiom 
 their obligations to the citizens of other States ; when, if the law were to operate 
 8 
 
58 
 
 A NEW SYSTEM OF PAPER CURRENCY. 
 
 There is, therefore, no legal obstacle in the way of the imme- 
 diate adoption of the banking system now proposed ; nor any 
 occasion to consult the State legislatures, or ask their permission,' 
 in the matter. Nor, in loaning the currency, will there be any 
 occasion to pay any regard to usury laws. 
 
 only as between her own citizens, she might not choose to pass the law. This 
 power of passing bankrupt laws was, therefore, confided solely to the general 
 government ; and its laws were required to be “ uniform throughout the United 
 States.” 
 
 In this connection, it may not be impertinent for the writer to say, that, if the 
 natural “ obligation of contracts ” were known, he apprehends there would be no 
 occasion for any bankrupt or insolvent laws at all. He apprehends there is a 
 natural limit to the obligation of contracts ; that, in the case of ordinary credit 
 contracts, time is an essential element of the contracts ; that, if there be no other 
 limit to the natural obligation of such contracts, the principle, that the law 
 requires impossibilities of no one, fixes such a limit; and that, therefore, the 
 most that the law can require, in the way of the fulfilment of a time contract, is 
 that the debtor shall exercise due integrity and diligence during the time his 
 contract has to run ; and that, if he do this, he can absolve himself from the 
 obligation of his contract, by paying to the extent of his ability, when the contract 
 becomes due. 
 
 This writer apprehends, however, that a more precise definition, even than 
 this, may be given of the obligation of a contract. But this is not the place to 
 attempt it. 
 
PART SECOND. 
 
ARTICLES OF ASSOCIATION 
 
 OP A 
 
 MORTGAGE STOCK 
 
 BANKING COMPANY. 
 
 [Entered according to Act of Congress, in the year 1860 , by Ltsandee Spoonbe, 
 in tlie Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 ARTICLE I. 
 
 This Association shall be called the Boston Banking 
 Company. 
 
 ARTICLE II. 
 
 The Banking House of said Company shall always be in 
 the City of Boston, in the County of Suppolk, in the State 
 of Massachusetts. 
 
 ARTICLE III. 
 
 The Trustees of the Capital of said Association shall be 
 
 A A , B B , and C C , all of said 
 
 Boston, the survivors and survivor of them, and their successors 
 appointed as hereinafter prescribed. 
 
2 
 
 ARTICLES OP ASSOCIATION OF 
 
 ARTICLE IV. 
 
 The Capital Stock of said Company shall consist of four 
 several mortgages, for the aggregate amount of One Hundred 
 Thousand Dollars, and interest, made to said Trustees, as 
 
 follows, to wit; One mortgage, made by F F , for the 
 
 sum of Ten Thousand Dollars and interest ; one mortgage, 
 
 made by G G , for Twenty Thousand Dollars and 
 
 interest ; one mortgage, made by H H , for Thirty 
 
 Thousand Dollars and interest ; and one mortgage, made by 
 I I , for Forty Thousand Dollars and interest. 
 
 Said mortgages were all entered for record, in the Registry 
 OF Deeds for said County of Suffolk, in the State of Massa- 
 chusetts, on this first day of January, in the year eighteen 
 hundred and sixty, and the following are copies thereof, to wit : 
 
 STOCK MORTGAGE. 
 
 [Entered according to Act of Congress, in the year 1860, by Ltsander Spooner, 
 in the Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Know all Men by these Presents, That I, F F , 
 
 of Boston, in the County of Suffolk, in the State of Massa- 
 chusetts, in consideration of one dollar paid me by A 
 
 A , B B , and C C , all of said Boston, 
 
 Trustees of the Boston Banking Company, the receipt of 
 which is acknowledged, do hereby give, grant, sell, and convey 
 
 unto the said A A , B B , and C C , 
 
 in their capacities as Trustees of said Boston Banking Company, 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 3 
 
 and to the survivors and survivor of them, and to their successors 
 in the like capacities, and to their assigns, the following described 
 premises, to wit. 
 
 [Here insert a description of the premises.] 
 
 Said premises are hereby conveyed to said Trustees, in trust, 
 as a part of the Capital Stock of said Boston Banking 
 Company, to he held, used, and disposed of by them, and their 
 successors in the office of Trustees, in accordance, and only in 
 accordance, with the terms of this mortgage, and the Articles 
 of Association of said Boston Banking Company ; which 
 Articles have been this day agreed upon, by and between the 
 said A A , B B , and C C , Trus- 
 tees, on the one hand, and me, the said F F , and 
 
 G ^ G , and H H- , and I I , on the 
 
 other hand. 
 
 Said Articles of Association consist of printed pages, each 
 
 one of which is signed, at the bottom, by the said A A , 
 
 B B , and C C , Trustees, and also by me the 
 
 grantor, and the said G G , H H , and I 
 
 I . And nine copies thereof have been made and signed as 
 
 aforesaid, and one copy thereof delivered to each of all the afore- 
 named parties ; and one copy is deposited with Lysander Spooner, 
 of said Boston. Said Trustees are also to cause said Articles of 
 Association, signed on the bottom of each page as aforesaid, to be 
 immediately recorded in the Registry of Deeds for said County 
 of Suffolk ; and the copy, from which the record shall be made, 
 shall forever remain on file in said Registry. 
 
 To have and to hold the aforegranted premises to the said 
 
 A A , B B , and C C , Trustees as 
 
 aforesaid, and to the survivors and survivor of them, and their 
 successors in office, in trust as aforesaid, and to their assigns 
 forever. 
 
 And I the said F F , for myself, my heirs, executors, 
 
 and administrators, do covenant with the said grantees and their 
 
4 
 
 ARTICLES OF ASSOCIATION OF 
 
 successors and assigns, that I am lawfully seized in fee simple of 
 the aforegranted premises ; that they are free of all encum- 
 lirances ; that I have good right to sell and convey the same to 
 the said grantees, their successors and assigns as aforesaid ; and 
 that I will, and my heirs, executors, and administrators shall, 
 warrant and defend the same to the said grantees, their successors 
 and assigns forever, against the lawful claims and demands of all 
 persons. 
 
 Provided, Nevertheless, That if the said F F , 
 
 his heirs, executors, administrators, or assigns, shall pay to the 
 
 said A A , B— — B , and C C , Trustees, 
 
 the survivors or survivor of them, their successors, or assigns, 
 the sum of Ten Thousand Dollars, within one year after 
 demand therefor, in writing, on or after the fii'st day of January, 
 in the year Eighteen Hundred and Eighty ; and shall also 
 pay interest semi-annually on said ten thousand dollars, from and 
 after this first day of January, in the year Eighteen Hundred 
 AND Sixty, at the rate of Seven per centum per annum ; said 
 interest to be paid on the first days of July and January, in each 
 and every year ; and whenever either of said days shall fall on 
 Sunday, the interest to be paid on the Saturday next preceding ; 
 [and if it shall ever be fully, finally, and judicially determined 
 that interest at the rate of seven per centum per annum cannot 
 be lawfully claimed upon this contract, then this contract shall he 
 valid for interest at the rate of only six per centum per annum :]* 
 
 * The provision in brackets need be inserted only in those States where the 
 laws forbid a higher rate of interest than six per cent. Although such laws are 
 unconstitutional in all the States, yet as it is perhaps uncertain how the courts 
 will decide the question, it may be best to guard against any possible conse- 
 quences of an usurious contract, by making the rate conditional on the decision 
 of the courts. 
 
 The object of fixing the rate of interest at seven per cent., instead of six, is 
 that the stock may be certain to pay a six per cent, dividend, after deducting all 
 expenses of the company, even though no profit at all should be made by the 
 banking. 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 5 
 
 and if interest shall ever fail to be paid on the day it shall become 
 due, then interest shall he paid on interest, at the rate of six per 
 centum per annum ; and shall also repay to said Trustees, the 
 survivors and survivor of them, their successors and assigns, all 
 such sums, with interest, (at the rate of six per centum per 
 annum,) as they may laiyfully expend, in pursuance of said 
 Articles of Association, for, and on account of, taxes, and 
 insurance upon, and sale of, the mortgaged premises, or any part 
 thereof ; then this deed shall be void to all intents and purposes. 
 
 And provided also that, at any time after four months’ 
 continuance of any breach of any of the foregoing conditions, the 
 grantees, the survivors or survivor of them, their successors or 
 assigns, may sell and dispose of the granted premises, with all 
 improvements that may be thereon, at public auction ; such sale 
 to be in said City of Boston, without further notice or demand, 
 except giving notice of the time and place of sale, by properly 
 advertising the same in each of the six weeks next preceding the 
 sale, in at least three newspapers printed in said County of 
 SulFolk ; and in his or their own names — that is. to saj^, the 
 Trustees as Trustees, and their assigns as assigns — or as the 
 attorney or attorneys of the grantor or his assigns, for that pur- 
 pose by these presents duly authorized, convey the same, abso- 
 lutely and in fee simple, to the purchaser or purchasers accord- 
 ingly ; and out of the money arising from such sale, to retain all 
 sums, principal and interest, then secured by this deed, (whether 
 then or thereafter payable,) together with all costs and expenses, 
 including all sums paid by said grantees, the survivors and sur- 
 vivor of them, their successors or assigns, for or on account of 
 taxes and insurance on the premises ; Paying the surplus, if 
 any, to the said grantor or his assigns, or to the court ordering 
 or confirming such sale ; And such sale shall forever bar the 
 said grantor, and all persons claiming by or under him, from all 
 right and interest in the premises, either at law or in equity. It 
 being mutually agreed that the said Trustees, the survivors and 
 survivor of them, and their successors (in their capacities as 
 
6 
 
 ARTICLES OF ASSOCIATION OF 
 
 Trustees, and not otherwise) and their assigns, (in their indi- 
 vidual capacity,) may purchase at said sale, and that no other 
 purchaser shall be answerable for the application of the purchase 
 money. 
 
 And provided further. That until default of the payment 
 of the said Ten Thousand Dollars, or interest, or other sum 
 herein secured to be paid, neither the grantees, nor either of 
 them, nor their successors nor assigns shall have any right to 
 enter and take possession of the premises. 
 
 In Witness Whereof, I, the said F F , and 
 
 I, C F , wife of said grantor, who, for the consideration 
 
 aforesaid, and of one dollar to me paid by said grantees, the 
 receipt of which is hereby acknowledged, do hereby release to 
 said grantees, the survivors and survivor of them, and to their 
 successors and assigns forever, all my right of or to a homestead 
 in or out of said real estate, and also all my right and title of or 
 to dower in the granted premises, have hereunto set our hands 
 and seals, this first day of January, in the year Eighteen 
 Hundred and Sixty. 
 
 Signed, sealed, and delivered, ) 
 in presence of \ 
 
 R R . \ 
 
 S S . J 
 
 [Here insert copies of the other Mortgages.] 
 
 F F . [SEAL.] 
 
 C F . [SEAL.] 
 
 ARTICLE V. 
 
 Said Capital Stock shall be divided into One Thousand 
 Shares, of One Hundred Dollars each. These shares shall 
 be numbered consecutively, from one to one thousand, inclusive. 
 They are hereby declared to be the property of the aforesaid 
 mortgagors, and shall be apportioned among them, according to 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 7 
 
 the amounts of their respective mortgages aforesaid, as follows, 
 to wit ; One Hundred Shares, numbered consecutively, from 
 one to one hundred, inclusive, shall be the property of the said 
 F F ; Two Hundred Shares, numbered consecu- 
 
 tively, from one hundred and one to three hundred, inclusive, 
 shall be the property of the said G G ; Three Hun- 
 
 dred Shares, numbered consecutively from three hundred and 
 one to six hundred, inclusive, shall be the property of the said 
 
 H H ; and the remaining Four Hundred Shares, 
 
 numbered consecutively from six hundred and one to one thou- 
 sand, inclusive, shall be the property of the said I I . 
 
 And the aforesaid stock shall be entered upon the books of the 
 
 Trustees as the property of the said F F , G 
 
 G , H H , and I I , according to the 
 
 apportionment aforesaid. 
 
 AKTICLE VI. 
 
 The aforesaid one thousand shares of Stock shall be called the 
 Productive Stock, and shall be entitled to all the dividends. 
 
 AKTICLE VII. 
 
 The dividends shall consist of the interest on said mortgages, 
 and the profits of the banking, and of any other business, done 
 by said Company. 
 
 ARTICLE VIII. 
 
 In addition to the said Productive Stock, the said Trustees 
 shall create another Stock, to the amount of One Hundred 
 Thousand Hollars, to be called Circulating Stock ; which 
 Circulating Stock shall be divided into shares of One Hollar 
 BACH. Said shares shall be numbered consecutively from one 
 
8 
 
 ARTICLES OF ASSOCIATION OP 
 
 to one hundred thousand, inclusive ; and certificates, scrip, or 
 bills thereof, transferable by delivery, and making and declaring 
 said Circulating Stock to be the property of the bearers or 
 holders of said certificates, scrip, or bills, shall be made and 
 signed by the Trustees, and countersigned by the President of 
 the Council, and by the Cashier. 
 
 ARTICLE IX. 
 
 Said Circulating Stock shall be entitled to no dividends ; and 
 its value will consist wholly in its title to be received in payment 
 of any debts due to said Boston Banking Company, and in its 
 title to be otherwise redeemed, as is hereinafter provided for. In 
 law, it shall be in the nature of a lien upon the Productive 
 Stock. 
 
 ARTICLE X. 
 
 The said certificates, scrip, or bills of said Circulating Stock 
 may be of various denominations ; that is to say, for any number 
 of shares, from one to one hundred ; and each certificate, scrip, 
 or bill shall not only express the aggregate number of shares 
 it represents, but also the particular number borne by each shai’e 
 represented.* 
 
 All certificates, scrip, or bills of said Circulating Stock shall 
 be in the following form, (names and dates being changed when 
 necessary, and the numbers also being made to correspond with 
 the aggregate number of shares, and the particular number of 
 each share, represented in each certificate,) to wit. 
 
 * As a means of detecting counterfeits, over-issues, &c., it will be useful to 
 have each certificate of Circulating Stock express the particular numbers borne 
 by the shares it represents. 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 9 
 
 • Where a Certificate represents but a single Share, the words In brackets may be left out. 
 
10 
 
 ARTICLES OF ASSOCIATION OF 
 
 ARTICLE XI. 
 
 No certificates, scrip, or bills of said Circulating Stocky for a 
 greater amount, in the aggregate, than One Hundred Thousand 
 Shares, shall ever be made and signed by the Trustees, Presi- 
 dent, or Cashier, so as to be in existence at any one time ; but if 
 any of said certificates, scrip, or bills shall, at any time, be can- 
 celled or destroyed, either by the Trustees, or any other persons, 
 new certificates, scrip, or bills may be substituted therefor, except 
 when a corresponding amount of Productive Stock shall also 
 have been cancelled, as hereinafter authorized. 
 
 CHAPTER XII. 
 
 The Trustees (subject to the conditions hereinafter prescribed) 
 may issue said certificates, scrip, or bills of the Circulating 
 Stock, for circulation as a Currency, by discounting therewith, or 
 exchanging them for, such promissory notes, checks, di’afts, 
 orders, bills of exchange, or other securities, as the Trustees and 
 Council may see fit to accept : also by jmrchasing therewith such 
 furniture, books, and other personal property as said Company 
 may need to purchase, for the purposes of its business as a 
 banking company ; also by paying any debts that may at any 
 time be due by said Company, and any expenses that said Com- 
 pany may lawfully incur, in the course and prosecution of its 
 said business. 
 
 ARTICLE XIII. 
 
 The said certificates, scrip, or bills of said Circulating Stock, 
 shall, at all times, be a lawful tender, at its nominal value of One 
 Hollar per share, in payment of any debts due to said Boston 
 Banking Company. They shall also, at all times, (except as 
 
A MOETGAGE STOCK BANKING COMPANY. 
 
 11 
 
 hereinafter provided for, in Article XXIY,) when presented 
 IN EVEN AMOUNTS OF OnE OR MORE HUNDRED SHARES, be 
 entitled to be redeemed, on demand, by the transfer of an equiv- 
 alent nominal amount of Productive Stock, unless redeemed 
 by the payment of gold or silver coin of equivalent nominal 
 value. 
 
 ARTICLE XIV. 
 
 The original holders of the Productive Stock, to wit : the 
 
 aforesaid F F , G G , H H , and 
 
 I I , shall he termed Primary Stockholders. 
 
 ARTICLE XV. 
 
 All persons, who shall hold Productive Stock by transfer, 
 in redemption of Circulating Stock, shall be called Secondary 
 Stockholders ; that is to say, unless and until they shall become 
 Primary Stockholders, in the manner hereinafter provided for 
 in Article XXI. 
 
 ARTICLE XVI. 
 
 The Secondary Stockholders shall be entitled to receive Divi- 
 dends on their stock, at the rate of six per centum per 
 ANNUM — NO MORE, NO LESS — payable semi-annually, on the 
 regular dividend days, at the Banking House of said Company. 
 
 ARTICLE XVII. 
 
 The Primary Stockholders shall be entitled to receive 
 whatever dividends may remain to be distributed, after the divi- 
 dends to the Secondary Stockholders shall have been paid, and 
 all other liahilities and obligations of the Company shall have 
 been cancelled — whether such dividends (to the Primary Stock- 
 holders) shall amount to more or less than six per centum per 
 
 annum. 
 
12 
 
 ARTICLES OF ASSOCIATION OF 
 
 ARTICLE XVIII. 
 
 Whenever it shall he necessary to transfer a share of Pro- 
 ductive Stock, in redemption of Circulating Stock, the share 
 to be transferred shall be selected, by the Trustees, from such 
 shares (if any there shall be) as shall have been taken, by said 
 Company, in payment of debts of delinquent stockholders, or be 
 otherwise owned by said Company, in its cox'porate capacity. 
 
 But if, at any time, when it shall be necessary to transfer 
 Productive Stock, in redemption of Circulating Stock, there 
 shall be no Productive Stock owned by the Company, in its 
 corporate capacity, a selection of the stock to be transferred, shall 
 be made, by the Trustees, from among the stock of the several 
 Primary holders, in the most impartial and equitable manner 
 practicable, taking stock, in the first instance, from the largest 
 Primary holders, rather than from the smallest, and afterwards 
 apportioning the stock, taken for such purposes, equitably as may 
 be, among the several Primary holders, according to the 
 amounts of their stock respectively.* And no Productive 
 Stock, holden by a Secondary holder, shall ever be transferred 
 in redemption of Circulating Stock. 
 
 ARTICLE XIX. 
 
 Whenever any Productive Stock, less than the entire Pro- 
 ductive Stock of the Company, shall have been transferred, 
 in redemption of Circulating Stock- — that is to say, so long 
 as any portion of the Productive Stock shall remain in 
 
 * A Primary Stockholder can have no serious objection to the transfer 
 of his Productive Stock, in redemption of the Circulation ; because no divi- 
 dends can be paid to any of the then existing body of Primary holders, until 
 his transferred stock shall have been repurchased by the Company, and restored 
 to him, when it will stand on the same footing, in regard to dividends, as if it 
 had never been transferred. See Article XX. 
 
A MORT&AGB STOCK BANKING COMPANY. 
 
 13 
 
 the hands either of Primary holders, or of the Company in its 
 corpoi’ate capacity — said Company shall have the right to buy 
 back, from the Secondary holder or holders, any and all such 
 transferred stock, by paying therefor, at the banking house of 
 the Company, gold or silver coin of equivalent nominal value, 
 and interest or dividends thereon, at the rate of six per centum 
 per annum, from the time said stock was thus transferred. And, 
 for this purpose, any dividend, that may have been paid to the 
 Secondary holder, since the transfer of the stock to him, and 
 previous to the re-purchase of it from him, shall be accounted 
 the same as if paid at the time of such re-purchase. 
 
 ARTICLE XX. 
 
 Whenever any Productive Stock, belonging to a Primary 
 HOLDER, shall have been transferred by the Company, in redemp- 
 tion of Circulating Stock, no dividends shall be paid to any of 
 the then existing body of Primary holders, until such trans- 
 ferred stock shall have been bought back by the Company, and 
 restored to the Primary holder, from whom it shall have been 
 taken, or to his representatives, and placed on the same footing, 
 in regard to dividends, with all the other Productive Stock of 
 the Primary holders. 
 
 ARTICLE XXI. 
 
 Whenever, if ever, it shall happen that the entire Productive 
 Stock of said Company shall have been transferred, from the 
 first body of Primary holders, (including, as such, the Com- 
 pany in its corporate capacity,) in redemption of Circulating 
 Stock, all the rights of the then existing body of Primary 
 HOLDERS, and especially their right to buy back such transferred 
 stock, from the Secondary holders, shall at once cease and become 
 extinct ; and the then existing body of Secondary holders shall, 
 
14 
 
 ARTICLES OE ASSOCIATION OF 
 
 each and all, by reason, and in virtue, of that event, succeed at 
 once to all the rights, and come at once under all the responsi- 
 bilities, of Primary Stockholders ; and shall be deemed to be 
 Primary Stockholders, both in law, and in fact. And the 
 business of the Company shall then proceed as at first. And if 
 it shall ever happen that the entire Productive Stock of said 
 Company shall be transferred from this second body of Primary 
 Stockholders, in redemption of Circulating Stock, all the rights 
 of said second body of Primary Stockholders shall at once 
 cease and become extinct ; and the then existing (second) body 
 of Secondarg Stockholders shall, each and all, by reason, and in 
 virtue, of that event, succeed at once to all the rights, and come 
 at once under all the liabilities, of Primary Stockholders ; 
 and shall he deemed to be Primary Stockholders, both in law, 
 and in fact. And the same transfer of rights and liabilities, from 
 one body of Primary Stockholders, to the then existing body 
 of Secondary Stockholders, shall take place so often as, and 
 whenever, the entire Productive Stock of said Company shall 
 have been transferred in redemption of the Circulating Stock.* 
 
 ARTICLE XXII. 
 
 Whenever a body of Secondary Stockholders shall have become 
 Primary holders, in the manner provided for in Article XXI, 
 no dividend shall be paid to any one of them, until he shall have 
 surrendered his certificate or certificates of stock as a Secondary 
 
 * Of course no body of Primary Stockholders will ever suffer the entire 
 Productive Stock of the Company to be transferred, in redemption of Circu- 
 lation, in the manner provided for in this Article, until they shall become utterly 
 bankrupt ; that is, until all the resources of the bank, that belong to the Primary 
 Stockholders — such, for example, as debts due the bank — shall be utterly 
 exhausted ; because, by doing so, they would forfeit those resources. They will 
 therefore hold on to some of the Productive Stock, (though it be but a single 
 share,) as long as they hold on to any of the property of the Company. 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 15 
 
 holder, and accepted a new certificate, or new certificates, of 
 stock, as a Primary holder. And such new certificate or 
 certificates shall be granted to him on demand, and on the sur- 
 render of his certificate or certificates as a Secondary holder. 
 
 ARTICLE XXIII. 
 
 The Trustees may accept loans from the Primary Stock- 
 holders, whenever it may be necessary or convenient, in order 
 to save the Productive Stock from being transferred in redemp- 
 tion of the Circulating Stock ; such loans to be repaid only in 
 the manner, and in the order relatively to other claims, herein- 
 after provided for in Article XXIX. 
 
 And if any Primary holder or holders of Productive 
 Stock shall loan, to the Company, his or their just proportion of 
 the amount necessary to save all the Productive Stock from 
 being transferred in redemption of the Circulating Stock, his or 
 their own Productive Stock shall be exempted from such 
 transfer, so long as it can be, consistently with the rights of the 
 holders of Circulating Stock. 
 
 But if a loan shall ever be made to the Company, by a Pri- 
 mary Stockholder, and, before such loan shall be repaid, the 
 entire Productive Stock of the Company shall have been 
 transferred to Secondary holders, in redemption of Circulating 
 Stock, as mentioned in Article XXI, such Primary Stock- 
 holder’s claim to have his loan repaid to him, shall be forfeited.* 
 
 ARTICLE XXIV. 
 
 The requirement, in Article XIII, that certificates, scrip, or 
 bills of Circulating Stock, in even amounts of one or more hun- 
 dred shares, shall be redeemed by coin or Productive Stock, 
 
 * This provision is necessary, for otherwise the Productive Stock would 
 pass into the hands of the new holders, subject to an encumbrance, and therefore 
 not at its par value. 
 
16 
 
 AKTICLES OF ASSOCIATION OF 
 
 on demand, shall be understood subject to this proviso, viz. : that 
 wheuever any certificates, scrip, or bills of Circulating Stock, in 
 even amounts of one or more hundred shares, shall be presented 
 by the holder thereof, to the Company, for redemption, and the 
 Company shall elect to pay interest on them semi-annually, at 
 the banking house of the Company, on the regular dividend days, 
 at the rate of six per centum per annum, rather than redeem 
 them by coin or Productive Stock, they shall be at liberty to 
 do so. But if said Company shall at any time fail to pay said 
 semi-annual interest, on the day it shall become due, the holder 
 of said certificates, scrip, or bills may at once demand their 
 redemption, either in gold or silver coin, or in Productive 
 Stock, at the option of the Company; and the interest, that 
 shall have accrued, shall be due and payable at once, in gold and 
 silver coin. 
 
 Provided, however, that unless the presentation of said certifi- 
 cates, scrip, or bills for redemption, shall have been made at least 
 four months prior to the next succeeding dividend day, the interest, 
 which shall have accrued on such certificates, scrip, or bills, on 
 the first dividend day next after their presentation, shall not be 
 payable, except at the option of the Company, until the second 
 dividend day next after their presentation. 
 
 ARTICLE XXV. 
 
 Whenever certificates, scrip, or bills of Circulating Stock, in 
 even amounts of one or more hundred dollars, shall have been 
 presented for redemption, and the Company shall have elected to 
 pay interest on them, as provided for in Article XXIV, rather 
 than redeem them by coin or Productive Stock, the holder 
 thereof shall have the right to deposit his said certificates, scrip, 
 or bills with said Company, and to demand a proper voucher 
 therefor, specifying the amount and date of the deposit, and 
 acknowledging that said certificates, scrip, or bills were presented 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 17 
 
 for redemption. And the certificates, scrip, or bills, thus depos- 
 ited, shall be immediately sealed up in a secure envelope, upon 
 ■which the name of the depositor, and the amount, date, and 
 purpose of the deposit (that is, for redemption) shall be endorsed 
 by said Company. And the seal of said envelope shall not be 
 broken by said Company, nor any of its oflBcers, without the 
 consent of said depositor, or his representatives, given in writing, 
 until said Company shall have made a tender of redemption and 
 interest, as provided for in Articles XIII and XXIV. And the 
 Company shall be responsible to said depositor, and his represen- 
 tatives, for the safe keeping of said deposit against all accidents, 
 trespasses, and contingencies, of every name and nature what- 
 soever, until they shall have made the tender aforesaid.* 
 
 Provided, however, that if any depositor, or his representa- 
 tives, shall withdraw his or their deposit at any time prior to the 
 day on which interest thereon would become payable, neither he 
 nor they shall have any claim for interest during the time of 
 the deposit. 
 
 ARTICLE XXVI. 
 
 If, when the holder of certificates, scrip, or bills of Circidating 
 Stock, in even amounts of one or more hxmdred shares, shall 
 have presented them for redemption, and the Company shall have 
 elected to pay interest on them, as mentioned in Article XXIV, 
 he shall prefer to retain them in his own custody, rather than 
 deposit them with said Company, he shall be at liberty to do so, 
 without affecting his rights, as provided for in said Article, 
 except that the Company shall not be responsible for the safe 
 keeping of said certificates, scrip, or bills. And he shall have a 
 right to demand of said Company that they seal up said certifi- 
 
 * It is necessary that bills deposited for redemption, should be sealed up, for 
 otherwise it would be in the power of the Company to re-issue them. If re- 
 issued, before they had been redeemed, they would require a double redemption ; 
 and there would not be enough Pkoductive Stock to redeem them. 
 
 3 
 
18 
 
 ARTICLES OF ASSOCIATION OF 
 
 cates, scrip, or bills, in a secure envelope, and endorse thereon 
 the amount of said certificates, scrip, or bills, and the date and 
 purpose of their presentation, (that is, for redemption,) and the 
 name of the owner thereof, and then return to himself the parcel 
 so sealed up and endorsed. And he shall also have the right to 
 demand of said Company a separate and proper voucher of the 
 amount of said certificates, scrip, or bills, and the date and 
 purpose of their presentation. 
 
 Provided^ however^ that if, when a sealed parcel of certificates, 
 scrip, or bills shall have been presented for redemption, and then 
 sealed up, and returned to the owner, he or his representatives 
 shall break the seal of said parcel, so as to admit of his or their 
 having taken out or used any of the certificates, scrip, or bills, 
 he and they shall thereby forfeit all claim to interest on the 
 whole parcel.* 
 
 * Articles XXIV, XXV, and XXVI, may be left out, if it should be thought 
 best; but it will probably he expedient to retain them, to prevent the too frequent 
 transfer and re-purchase of Peoductive Stock. 
 
 A holder of certificates, scrip, or bills of Circvlating Stock, who shall have 
 presented them for redemption, can have no reasonable objection to the non- 
 redemption of them, by the transfer of Peoddctive Stock, so long as interest 
 upon them is paid semi-annually; because theykeing in the meantime Sealed 
 up, cannot be put in circulation by the bank, so as to increase the liabilities of 
 the bank, or endanger their own final redemption. All he loses by the non- 
 immediate redemption of them, by the transfer of Peoductive Stock, is, that 
 he cannot have the rights of a holder of Peoductive Stock, to vote for Coun- 
 cillors, and to be himself a Councillor. But he is amply compensated for this 
 deprivation, by the fact that the Company are bound (Article XXIX) to pay 
 him interest, in. full, on his bills, (presented for redemption,) before any dividend 
 at all can be paid on the very Peoductive Stock itself, which would be trans- 
 ferred to him, in redemption of his bills, if he were to insist on their immediate 
 redemption. 
 
 He also has the assurance that the Company will redeem his bills soon as 
 reasonably may be, either by coin or Peoductive Stock ; because, until they 
 do so, the bank must pay interest on them, and the bills remain sealed up, and 
 the bank lose the benefit of putting them in circulation.. 
 
 The reason, why the Company may not wish, at all times, to transfer Peo- 
 ductive Stock, in redemption of bills, immediately on their being presented 
 for redemption, is, that it might be very troublesome to be continually changing 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 19 
 
 ARTICLE XXVII. 
 
 Certificates, scrip, or bills of Circulating Stock, in less 
 amounts than one hundred dollars, besides being receivable in 
 payment of debts due to the Company, may be redeemed by gold 
 and silver coin, on demand, if the Trustees shall deem it expe- 
 dient, and if there shall be no other claims having a preference, 
 by virtue of Article XXIX. But if there shall be any delay in 
 the redemption, whether it shall be caused by the Trustees 
 deeming it inexpedient to redeem in gold or silver on demand, or 
 by there being other claims having a preference, by virtue of 
 Article XXIX, then interest, at the rate of six per centum per 
 annum, shall be paid, at the banking house of the Company, on 
 all amounts of fifty shares and upwards, from and after one month 
 after the day of presentation ; said interest to be payable only at 
 the time of redemption of the principal, unless by consent of the 
 Company. But amounts of less than fifty shares, shall be entitled 
 to no interest. 
 
 the ownership of the Productiv.e Stock, by transferring it in redemption of 
 bills, and then re-purchasing it in a short time afterwards. The Company would, 
 therefore, wish to transfer Productive Stock, in redemption of bills, only 
 when it was likely to be a considerable time before they could re-purchase it. 
 
 The ordinary, if not the only, motive, the Company would have for not 
 redeeming bills immediately on presentation, by the transfer of Productive 
 Stock, would be, that they would prefer, and would expect soon to be able, to 
 redeem them with coin. And as the bills, sealed up, and drawing interest, would 
 be just as valuable and productive to the holder, as the same amount of Pro- 
 ductive Stock (held by a Secondary holder) would be, there is no good reason 
 for compelling the Company to transfer Productive Stock, when they would 
 have a right, and would most likely very soon wish, and be able, to re-purchase it. 
 
 Unless the banking business were badly conducted, — that is, unless the bank 
 should discount long paper, or bad paper, — there would probably never be a 
 necessity for the transfer of any Productive Stock at all, in redemption of the 
 Circulation. But the redemption (when not made by receiving the bills in pay- 
 ment of debts due the bank) would take place in coin, either immediately on the 
 presentation of the bills, or very soon after, with interest for the delay. 
 
20 
 
 ARTICLES OF ASSOCIATION OF 
 
 The amounts thus presented for redemption, in order to be 
 entitled either to interest, or to redemption in gold or silver, shall 
 be deposited with the Company, and a proper voucher therefor 
 given by the- Company. And if the deposit shall be withdrawn 
 before redemption, all interest thereon shall be forfeited. 
 
 The Circulating Stock, thus deposited for redemption, shall 
 neither be loaned, nor re-issued, by the Company, until it shall 
 have been redeemed. But it shall be sealed up in a secure 
 envelope, and the amount, date, and purpose of the deposit, (that 
 is, for redemption,) with the name of the depositor, endorsed 
 thereon. And the seal of the envelope shall not be broken by 
 the Company, until they shall have tendered redemption in gold 
 or silver coin, of equivalent nominal value, with interest where 
 interest shall be due. And the Company shall be responsible to 
 said depositor, and his representatives, for the safe keeping of 
 said deposit, against all accidents, trespasses, and contingencies, 
 of every name and nature whatsoever, until they shall have made 
 the tender aforesaid. And said deposit shall be redeemed, in the 
 order in which it stands, relatively to other claims, in Article 
 XXIX.* 
 
 * This Article is, perhaps, not very important. Its object is to make it for 
 the interest of the holders of Circulating Stock, in less amounts than one hundred 
 shares (dollars), to dispose of it in the course of business, and let it come back to 
 the bank, either in payment of debts due to the bank, or in even amounts of one or 
 more hundred shares (dollars), so as to give the Company an opportunity to redeem 
 it with Productive Stock, rather than coin, if they shall choose to do so. 
 Such would be the common course of things without this provision. Yet as it 
 may sometimes happen that it would be for the interest of a holder of Circulating 
 Stock, of a less amount than one hundred shares (dollars), to return it for redemp- 
 tion in gold or silver, rather than dispose of it in the course of business, it is 
 perhaps proper that a redemption, in gold and silver, should be provided. This 
 Article, therefore, provides a redemption, but one a little less favorable than 
 where the amount is one or more hundreds. 
 
 Where a bank is prosperous, and above the necessity of transferring Produc- 
 tive Stock at all, in redemption of their Circulation, it will be for their interest 
 (as promoting the reputation of the bank) to redeem their Circulation at once, 
 with gold and silver, when presefited in amounts less than SlOO, rather than 
 receive it on deposit and pay interest. 
 
A MOKTGAGE STOCK BANKING COMPANY. 
 
 21 
 
 ARTICLE XXVIII. 
 
 Productive Stock may be bought back from the Secondary 
 holders, and Circulating Stock (presented and waiting for 
 redemption) may be redeemed, by the Company, on the regular 
 semi-annual dividend days, without giving any previous notice to 
 the holders of such stock. 
 
 But if the Company shall ever buy back Productive Stock 
 from the Secondary holders, or shall ever redeem Circulating 
 Stock (that shall have been presented, and be waiting for I’edemp- 
 tion) at any time other than on a regular semi-annual dividend 
 day, they shall give the holder of such Productive or Circida- 
 ting Stock reasonable notice thereof beforehand, if he or his 
 known attorney, shall be a resident of the State of Massachusetts, 
 to the end that he or his attorney may have opportunity to be 
 present, and receive the money for his stock at the time it shall 
 be tendered. 
 
 ARTICLE XXIX. 
 
 All the resources of said Company (including the interest on 
 the mortgages) shall be applied in, and only in, the following 
 manner, giving preference to each of the several classes of claims, 
 liabilities, and obligations, in the order in which they are here 
 enumerated, to wit : 
 
 1. To the payment, in full, of all the necessary and current 
 expenses of the Company, and any and all liabilities and obliga- 
 tions, of every name and nature whatsoever, except those here- 
 after enumerated in this Article. 
 
 2. To the payment, in full, of all interest due on certificates, 
 scrip, or bills of Circidating Stock, that shall have been pre- 
 sented, in even amounts of one or more hundred shares, for 
 redemption, and not been redeemed. 
 
ARTICLES OF ASSOCIATION OF 
 
 22 
 
 3. To the payment, in full, of a semi-annual dividend, of six 
 per centum per annum, on all such Productive Stock, as shall 
 he in the hands of Secondary Stockholders. 
 
 4. To the redemption of all such certificates, scrip, or bills of 
 the Circulating Stock., as shall havfe been presented, in even 
 amounts of one or more hundred shares, and be waiting for 
 redemption. 
 
 5. To the redemption of all Circulating Stock, presented and 
 waiting for redemption, in amounts less than one hundred 
 shares ; with interest where interest shall be due. 
 
 6. To the re-purchase of all such Productive Stock, as 
 shall be in the hands of Secondary holders. 
 
 7. To the payment of all loans made to the Company by the 
 Primary Stockholders, with interest on the same, at a rate 
 agreed on, not exceeding six per centum per annum. 
 
 8. To the payment of the regular salaries of the Trustees, 
 (independently of their share of the profits,) and any compensa- 
 tion that may be allowed to the President of the Council. 
 
 9. To the payment of all dividends, made ttp exclusively of 
 interest on the mortgages, to the Primary Stockholders.* 
 
 10. To the payment of dividends, made %ip exclusively of 
 profits, to the Primary Stockholders, and to the Trustees 
 their proportion of the profits.* 
 
 And especially no dividends, made up either of interest or 
 profits, shall ever be paid to the Primary Stockholders, until 
 all the other expenses, liabilities, obligations, interest, and divi- 
 dends (to Secondary Stockholders') before mentioned to be paid, 
 
 * It is necessary that a distinction should be made between dividends, made 
 up of interest, and those made up of profits, at least so long as any Pboductite 
 Stock shall remain in the hands of the original mortgagors, or their assigns 
 (holders of the mortgaged estates) as Peijiart holders; because the actual 
 payment, by them, of interest, wliich is to be at once returned to them as divi- 
 dends, will be unnecessary (see Article XLII). The Company may also wish 
 the profits to accumulate as a reserved fund, instead of being distributed ; when 
 they might not be willing actually to pay interest (not otherwise needed) simply 
 to create a reserved fund. 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 23 
 
 shall have been paid in full ; and all the Circulating Stocky 
 presented and waiting for redemption, shall have been redeemed ; 
 and all Productive Stock, in the hands of Secondary holders, 
 shall have been re-purchased, and restored to its Primary 
 holders. 
 
 ARTICLE XXX. 
 
 The Trustees, or any two of them, or the sole Trustee, if at 
 any time there should be but one, of said Boston Banking Com- 
 pany, are and is hereby authorized and empowered to transfer so 
 much Productive Stock of the Primary Stockholders, in 
 redemption of the Circulating Stock of said Company, as it may 
 become necessary or proper to transfer for that purpose. 
 
 And whenever Productive Stock is to be thus transferred, 
 from a Primary Stockholder, in redemption of Circidating 
 Stock, the transfer shall be made upon a book kept for that 
 purpose, and in the form following, (names, dates, and numbers 
 being made to correspond with the facts in each case,) to wit : 
 
 Cransfer of ^robuctik Stork iit |lri)cmjition of 
 Circulating Stock. 
 
 [Entered according to Act of Congress, in the year 1860 , by Lvsander Spooner, 
 in the Clerk’s office of the District Court of the United" States, for the District 
 of Massachusetts.] 
 
 Boston,} BOSTON BANKING COMPANY. 1 
 
 Massachusetts. 
 
 Transfer No. 115. Ten Shares. Nominal value, ^1000. 
 
 From 0 0 , Primary Stockholder. 
 
 T o P P , Seco! dtiry Stockholder. 
 
 Know all Men, That we, A A . B B , 
 
 and C C , Trustees [or I, A A , sole Trustee] 
 
 of the Boston Banking Company, by virtue of the power granted 
 
24 
 
 ARTICLES OF ASSOCIATION OF 
 
 US [or me] by the Articles of Association of said Company, dated 
 January 1st, 1860, do hereby transfer, and have hereby trans- 
 ferred, Ten shares of the Productive Stock of said Company, 
 
 from 0 0 , the Primary holder thereof, to P 
 
 P , of -, in the County of , in the State of , 
 
 in redemption of an equivalent nominal amount of the Cir- 
 culating Stock of said Company. Said shares are numbered 
 101, 102, 103, 104, 105, 106, 107, 108, 109, and 110 respect- 
 ively, [or — consecutively from 101 to 110 inclusive,] and are to 
 
 be holden by said P P , as a Secondary Stockholder, 
 
 and subject to the provisions of said Articles of Association, and 
 especially subject to the right of said Company to re-con vey any 
 or all of said shares to the said 0 0 , or his representa- 
 
 tives, whenever said Company shall have tendered or paid to said 
 
 P P , or his representatives, in gold or silver coin, the 
 
 full nominal value of the share or shares to be so re-conveyed, 
 with all such interest and dividends thereon as shall be due at 
 the time of such re-conveyance. 
 
 Dated at Boston, this day of , 1860. 
 
 Trustees of the 
 Boston Banking 
 Company. 
 
 E E , Cashier. 
 
 A A 
 
 B B 
 
 C C- 
 
 ARTICLE XXXI. 
 
 The Trustees, or any two of them, or the sole Trustee, if at 
 any time there shall be but one, of said Boston Banking Com- 
 pany, are and is hereby authorized and empowered to re-convey 
 any and all Productive Stock of the Secondary Stockholders, 
 to the Primary holders, from whom it shall have been taken, 
 or to their representatives, upon paying or tendering to said 
 Secondary Stockholders, at the banking house of said Company, 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 25 
 
 in gold or silver coin, the full nominal value of the Productive 
 Stock so re-conveyed, with all such interest or dividends thereon 
 as may be due at the time of such re-conveyance. 
 
 And whenever Productive Stock is to be re-conveyed from 
 a Secondary Stockholder to the Primary Stockholder, from 
 whom it shall have been taken, or to his representatives, the 
 re-conveyance shall be made upon a book kept for that purpose, 
 and in the form following, (names, dates, and numbers being 
 made to correspond with the facts in each case,) to wit : 
 
 le-toirfifpnfe of ^robuftik Stock from a Scconkrg 
 to a Irimarg 
 
 [Entered according to Act of Congress, in the year 1860, by Lysandee Spooner, 
 in the Clerk’s ofiBce of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Boston,} BOSTON BANKING COMPANY. { 3Iassacbu3ett3. 
 Re-conveyance No. 28. Six Shares. Nominal vahie, i600. 
 
 From P P , Secondary Stockholder. 
 
 To 0 O , Primary Stocrholdee. 
 
 Know all Men, That we, A A , B B , 
 
 and C C , Trustees [or I, A A , sole Trustee] 
 
 of the Boston Banking Company, by virtue of the power granted 
 us [or me] by the Articles of Association of said Company, dated 
 January 1st, 1860, do hereby re-convey, and have hereby re- 
 conveyed, Six shares of the Productive Stock of said Com- 
 pany, from P P , a Secondary holder thereof, to 0 
 
 0 , the Primary holder thereof; having tendered [or paid] 
 
 4 
 
AKTICLES OP ASSOCIATION OP 
 
 L>6 
 
 to said P P , in gold or silver coin, the full nominal 
 
 value of said Six shares, and all interest and dividends due 
 thereon, up to this date. Said shares are numbered 101, 102, 
 103, 104, 105, and 106, respectively, [or — consecutively from 
 
 101 to 106 inclusive,] and were transferred from said 0 
 
 0 to said P P , on the day of , 
 
 1860, in redemption of Circulating Stock. 
 
 Dated at Boston, this day of , 1860. 
 
 Trustees of the 
 Boston Banking 
 Company. 
 
 E E , Cashier. 
 
 A A 
 
 B B 
 
 C C- 
 
 ARTICLE XXXII. 
 
 Whenever Productive Stock shall be transferred, by the 
 Trustees, in redemption of Circulating Stock, credit for the 
 same shall be given, in a book kept for that purpose, to the 
 Primary Stockholder, from whom it shall have been taken. 
 And when such Productive Stock, or any part thereof, shall 
 be re-conveyed to such Primary Stockholder, or to his repre- 
 sentatives, the proper debit shall be entered against the original 
 credit. 
 
 ARTICLE XXXIII. 
 
 The Trustees shall grant to each and every Primary Stock- 
 holder, a certificate, or certificates, for his or her Productive 
 Stock, in the following form, (names, dates, and numbers being 
 made to correspond with the facts in each case,) to wit ; 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 27 
 
 ^rimarg StucWjokr's fctifeate of ^^rokdik Stock 
 
 OF THE FOLLOWING NAMED 
 
 MORTGAGE STOCK BANKING COMPANY. 
 
 [Entered according to Act of Congress, in the year 1860 , by Ltsander Spooner, 
 in the Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Capital Stock, $ 100,000: 
 
 In Mortgages hearing Seven per Cent. Interest. 
 
 Productive Stock, $100 per Share. 
 
 Boston,} BOSTON BANKING COMPANY. I MTachfseSs^' 
 
 Certificate No. 64. Seven Shares. Nominal value, $700. 
 
 Be it Known, That F F , of Boston, in the County 
 
 of Suffolk, in the State of Massachusetts, is the proprietor, and a 
 Primary holder, of Seven Shares of the Productive Stock 
 of the Boston Banking Company : a Mortgage Stock Bank- 
 ing Company, having their Banking House at Boston,* in the 
 County of Suffolk, in the State of Massachusetts ; which shares 
 are numbered 91, 92, 93, 94, 95, 96, and 97, respectively [or — 
 consecutively from 91 to 97 inclusive], and are of the nominal 
 value of Seven Hundred Dollars, and are holden by said 
 F F , as a Primary holder, and subject to the pro- 
 
 visions of the Articles of Association of said Boston Banking 
 Company, dated January 1st, 1860 ; and are transferable only 
 by written assignment, of the form subjoined ; the transfer to be 
 complete only on the assignment being recorded in the books of 
 
28 
 
 ARTICLES OF ASSOCIATION OF 
 
 the Company, and the surrender of this certificate, when a new 
 one will he issued. 
 
 Dated at said Boston, this tenth day of August, 1860. 
 
 [SEAL.] 
 
 Trustees of the 
 Boston Banking 
 Company. 
 
 E E , Cashier. 
 
 To the above certificate shall be added a blank conveyance, in 
 the following form, (names, dates, and numbers being made to 
 correspond with the facts in each case,) to wit : 
 
 Irimarg SWljolkf s Sale of Sroburtibe Stock 
 
 OF THE FOLLOWING NAMED 
 
 MORTGAGE STOCK BANKING COMPANY. 
 
 [Entered according to Act of Congress, in the year 1860 , by Ltsandee Spooner, 
 in the Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Capital Stock, $100,000: 
 
 In Mortgages hearing Seven per Cent. Interest. 
 Productive Stock, $100 per Share. 
 
 Boston,} BOSTON BANKING COMPANY. 
 
 Shares. Nominal value, $ . 
 
 Know all Men, That I, , of , in the County 
 
 of , in the State of , being the true owner, and a 
 
 Primary holder of Share of the Productive Stock 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 29 
 
 of the Boston Banking Company : a Mortgage Stock Bank- 
 ing Company, having its Banking House in Boston, in the 
 County of Suffolk, in the State of Massachusetts ; which share , 
 
 numbered respectively, [or — consecutively from 
 
 to inclusive,] for value received, have given, granted, sold, 
 
 and assigned, and do hereby give, grant, sell, and assign to , 
 
 of , in the County of , in the State of , 
 
 heirs and assigns forever, the said share of Productive 
 
 Stock, and all my right, title, interest, and property in and to 
 
 the same. To have and to hold the same to the said , 
 
 heirs and assigns, as Primary holders thereof, to their 
 
 sole use and benefit, subject only to the Articles of Association 
 of said Company ; which Articles are dated January 1st, 1860. 
 
 Witness my hand and seal, this day of 
 
 in the year 18 — . 
 
 Witness. 
 
 Boston, , 18 — . Kecorded in the book of Sales of 
 
 Productive Stock by Primary Stockholders, No. , 
 
 Page . 
 
 E E , Cashier. 
 
 ARTICLE XXXIV. 
 
 The Trustees shall grant to each and every Secondary Stock- 
 holder a certificate, or certificates, for his or her Productive 
 Stock, in the following form, (names, dates, and numbers being 
 made to correspond with the facts in each case,) to wit : 
 
30 
 
 ARTICLES OF ASSOCIATION OF 
 
 Bwontori Cn“ti&atc ijf |r0ljadilji ^tork 
 
 OF THE FOLLOWING NAMED 
 
 MORTGAGE STOCK BANKING COMPANY. 
 
 [Entered according to Act of Congress, in the year 1860, by Ltsandee Spoonee, 
 in the Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Capital Stock, $100,000: 
 
 In Mortgages bearing Seven lier Cent. Interest. 
 
 Productive Stock, $100 per Share. 
 
 Secondary Stockholders are paid Dividends of Six per cent, 
 per annum. 
 
 Boston,) BOSTON BANKING COMPANY. ) 
 
 Massachiisetts. 
 
 Certificate No. 25. Nine Shares. Nominal value, $900. 
 
 Be IT Known, That L L , of Roxbury, in the 
 
 County of Norfolk, in the State of Massachusetts, is a Secondary 
 holder of Nine Shares of the Productive Stock of the 
 Boston Banking Company : a Mortgage Stock Banking 
 Company, which has its Banking House at Boston, in the County 
 of Suffolk, in the State of Massachusetts ; which shares are num- 
 bered 31, 32, 33, 34, 35, 36, 37, 38, and 39, respectively, [or — 
 consecutively from 31 to 39 inclusive,] and are of the nominal 
 value of Nine Hundred Dollars; and are holden by said 
 
 L L , as a Secondary holder, subject to the provisions 
 
 of the Articles of Association of said Boston Banking Company, 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 31 
 
 dated January 1st, 1860 ; and are transferable only by a written 
 assignment of the form subjoined ; the transfer to be complete 
 only on the assignment being recorded in the books of the Com- 
 pany, and the surrender of this certificate, when a new one will 
 be issued. 
 
 Dated at said Boston^ this 2i)th day of March^ 1860. 
 
 • ') Trustees of the 
 
 [seal.] B B . V Boston Banking 
 
 C C . 1 Company, 
 
 E E , Cashier. 
 
 To the above certificate shall be added a blank conveyance in 
 the following form, to wit : 
 
 OF THE FOLLOWING NAMED 
 
 MORTGAGE STOCK BANKING COMPANY. 
 
 [Entered according to Act of Congress, in the year 1860, by Ltsander Spooner, 
 in the Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Capital Stock, ^100,000: 
 hi Mortgages hearing Seven joer Cent. Interest. 
 Productive Stock, $100 per Share. 
 
 Secondary Stockholders are paid Dividends of Six per cent, 
 per annum. 
 
 Boston,} BOSTON BANKING COMPANY. 
 
 Shares. Nominal value,, $ . 
 
 Be it Known, That I, , of , in the County 
 
 of , in the State of , being the true owner, and a 
 
82 
 
 ARTICLES OF ASSOCIATION OF 
 
 Secondary holder of share of Productive Stock of the 
 
 Boston Bankinu Company : a Mortgage Stock Banking 
 Company, having its Banking House in Boston, in the County 
 
 of Suffolk, in the State of Massachusetts ; which share , 
 
 numbered respectively, [or — consecutively from to 
 
 inclusive] for value received, do hereby give, grant, sell, 
 
 and assign, and have hereby given, granted, sold, and assigned, 
 
 to , of , in the County of , in the State 
 
 of , all my right, title, interest, and property in and to 
 
 the said share of Productive Stock. 
 
 To have and to hold the same to the said , heii’s 
 
 and assigns, as- Secondary holders, and not otherwise, to their 
 sole use and benefit, subject only to the Articles of Association 
 of said Boston Banking Company ; which Articles are dated 
 January 1st, 1860. 
 
 Witness niy hand and seal, this day of , hi 
 
 the year 18 — . 
 
 Witness. 
 
 Boston, , 18 — . Recorded in the book of Sales 
 
 of Productive Stock by Secondary Stockholders, No. , 
 
 Page 
 
 E E , Cashier. 
 
 ARTICLE XXXV. 
 
 Whenever Productive Stock of said Company shall have 
 been transferred to, and be in the hands of, a Secondary Stock- 
 holder, and the Primary Stockholder, from whom it shall 
 have been taken, or his representatives, shall wish to convey all 
 his or their right and property in it, and all his or theii' right 
 and claim to have it re-purchased and restored to him or them by 
 
 § BEAL. 0 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 33 
 
 the Company, the conveyance of such right, property, and claim 
 shall he made in the following form, (names, dates, and numbers 
 being made to correspond with the facts in each case,) to wit ; 
 
 OF ms RIGHT TO PRODUCTIVE STOCK IN THE HANDS OF A 
 
 [Entered according to Act of Congress, in the year 1860 , by Ltsander Spooner, 
 in the Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Boston,} BOSTON BANKING COMPANY. l^aTcMseS^.' 
 
 Twelve Shares. Nominal value, $1,200. 
 
 Whereas, on or before the tenth day of September, 1860, 
 Twelve Shares of the Productive Stock of the Boston Bank- 
 ing Company, (a Mortgage Stock Banking Company, having 
 its Banking House in Boston, in the County of Suffolk, and State 
 
 of Massachusetts,) being then the property of F F , 
 
 of , in the County of , in the State of , as 
 
 a Primary holder thereof, and being numbered 63, 64, 65, 66, 
 67, 68, 69, 70, 71, 72, 73, and 74, respectively, [or — consecu- 
 tively from 63 to 74 inclusive,] were transferred, by the Trustees 
 
 of said ' Company, from said F F , to K K , 
 
 of , in the County of , in the State of , in 
 
 redemption of Circulating Stock ; and are now holden by said 
 
 SECONDARY STOCKHOLDER. 
 
 Capital Stock, $100,000; 
 
 In Mortgages hearing Seven -per Cent. Interest. 
 
 Productive Stock, $100 per Share. 
 
84 
 
 ARTICLES OF ASSOCIATION OF 
 
 K K , his heirs or assigns, as Secondary holder or 
 
 holders thereof. 
 
 And whereas said Company are hound by the Articles of 
 Association of said Company, (dated January 1st, I860,) to 
 re-purchase said shares of Productive Stock, and restore them 
 
 to said P F , or his representatives, if the resources of 
 
 said Company will enable them to do so consistently with said 
 Articles of Association. 
 
 And whereas, as will appear by the records of said Company, 
 
 I, M M , of , in the County of , in 
 
 the State of , now have, hold, and possess, all the 
 
 rights in said shares of Productive Stock, which he, the 
 
 said F F , or his representatives can have, hold, or 
 
 possess, to wit, — the right and claim to have said shares re-pur- 
 chased by said Company, and restored to the Primary holder 
 thereof, his heirs or assigns, provided such re-purchase can be 
 made consistently with said Articles of Association. 
 
 Now, therefore, be it known that I, the said M M , 
 
 for value received, have given, granted, sold, and assigned, and 
 
 do hereby give, grant, sell, and assign to S S , of 
 
 , in the County of , in the State of , all my right, 
 
 title, and interest in said Twelve Shares of Productive Stock, 
 III and all my right and claim to have the same re-purchased and 
 restored to me by said Company. And I hereby request, author- 
 ize, and require the Trustees of said Boston Banking Com- 
 pany, whenever (if ever) they shall re-purchase said shares, or 
 any of them, from the Secondary holder thereof, to convey the 
 
 same to the .said S S ,’ his heirs or assigns, instead of 
 
 restoring them to myself, my heirs or assigns. To have and to 
 
 hold the same to the said S S , his heirs and assisns 
 
 forever, as Primary holders thereof. 
 
 Witness my hand and seal, this 
 the year 18 — . 
 
 day of 
 
 M- 
 
 M- 
 
 Witness Y- 
 
 
 § SEAL, p 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 35 
 
 Boston, October 10, 18 — . Recorded in the book of Sales 
 bj Primary Stockholders, of their Right to Productive 
 
 Stock in the hands of Secondary Stockholders, No. , 
 
 Page . 
 
 E E , Cashier.* 
 
 And such sale shall not be complete until the above Deed shall 
 be recorded by the Company, in a book kept by them for that 
 purpose. Nor shall any dividend be paid to the grantee, named 
 in said Deed, until the Deed shall have been recorded as afore- 
 said, and a new certificate or certificates for the stock issued to 
 him. 
 
 ARTICLE XXXVI. 
 
 The Trustees are hereby authorized, and if, in their judgment, 
 it shall he necessary or expedient, they are required, to pay the 
 taxes on any or all the mortgaged estates before mentioned, and 
 to keep all buildings and fixtures on each of said estates, insured, 
 at the expense of each estate respectively, for the benefit of said 
 Company. And the amount of such taxes, and the expense of 
 such insurance, and all necessary and proper expenses, incurred 
 by the Company, in and about such insurance, and in recovering 
 the amount insured (having been first paid or assumed by the 
 Company), shall be payable to the Company, by the mortgagor, 
 or his representatives (the holders of the mortgaged estate) with 
 interest (at the rate of six per centum per annum) on the day on 
 which his or their next semi-annual interest on the mortgage shall 
 become due. 
 
 Any moneys recovered by the Company on the insurance of 
 any mortgaged estate before mentioned, shall be applied in the 
 following manner, to wit : 
 
 * The form of the above Deed is somewhat awkward, owing to the fact that 
 it was necessary to adapt it to the cases of all sales, whether by the Primary 
 Stockholder himself, (from whom the stock should have been transferred,) or 
 by his heirs or assigns. Had it been necessary to adapt the form only to the first 
 of these cases, it might have been made a little more simple. 
 
36 
 
 ARTICLES OF ASSOCIATION OF 
 
 1. To the payment of all expenses, incurred by the Company, 
 for, or on account of, such insurance, or in recovering the amount 
 insured ; and also the amount paid as taxes, iv ith interest on all 
 such sums from the time they were paid. 
 
 2. To the payment of any interest that may be due, and re- 
 maining unpaid, upon the mortgage of said estate. 
 
 Of the sum, if any, then remaining of said insurance money, 
 one or more of the following dispositions shall he made, at the 
 discretion of the Trustees, to wit : 
 
 3. If the then present holder or holders of the mortgaged estate, 
 shall be a Primary holder or holders of any Productive 
 Stock, the Trustees may cancel the same, and pay over to him 
 or them an equivalent nominal amount of the insurance money, 
 provided they can do so without injustice to any one, and es- 
 pecially without throwing any unjust or unequal burdens upon 
 the other Primary holders. 
 
 And if any profits or dividends shall be equitably due, on the 
 Productive Stock thus cancelled, they shall be paid. 
 
 4. Or the said insurance money may be appropriated to the 
 use of the Company, and in consideration thereof the Company 
 shall incur the obligation to cancel an equivalent nominal amount 
 of Productive Stock. And if they shall be able to purchase 
 the Productive Stock to be cancelled, by paying less than its 
 nominal value, the profit shall belong to the Company. But if, 
 in order to get the necessary amount of Productive Stock, to 
 be cancelled, it shall be necessary for them to pay more than its 
 nominal value, the loss shall fall upon the Company. 
 
 5. And if the amount of said insurance money shall not be 
 precisely equal, in nominal amount, to the nominal value of any 
 number of shares of Productive Stock, the remainder, or frac- 
 tional part of the nominal value of one share of Productive 
 Stock, shall either be paid over to the holder of the mortgaged 
 estate, and no reduction in the mortgage be made on account of 
 such remainder, or fractional part ; or it shall be retained by the 
 Trustees, and applied to the payment of any future interest on 
 the mortgage, or taxes on the mortgaged property, or of any 
 
A MOKT&AGB STOCK BANKING COMPANY. 
 
 37 
 
 future expenses for, or on account of, the insurance of the prop- 
 erty mortgaged ; or the Trustees may, if they deem it expedient, 
 accept it as the equivalent of another share of Peoductive 
 Stock, which share shall be cancelled at the expense of the 
 Company. 
 
 And whenever any Productive Stock shall be cancelled, as 
 provided for in this Article, an equivalent nominal amount of 
 Circulating Stock shall also be cancelled. And the mortgage 
 on the estate shall also he released, in whole, or in part, as the 
 case may require. 
 
 ARTICLE XXXVII. 
 
 If ever the interest on any of the aforesaid mortgages, or the 
 money paid by the Company for taxes, (with interest on the 
 same,) or for, or on account of, insurance on any of the mortgaged 
 property, (with interest on the same,) shall not be paid when it 
 shall become due, the Trustees may, in their discretion, proceed 
 in any one or more of the following modes, to wit : 
 
 1. The Trustees may take possession of the mortgaged prop- 
 erty, and apply the rents and profits thereof to the payment of 
 the interest due on the mortgage, and the money due for taxes, 
 or for, or on account of, insurance, and all expense and trouble 
 incurred by the Trustees in managing said mortgaged estate. 
 
 2. If the owner or owners of the mortgaged property shall be, 
 at the time, a Primary holder or holders of any Productive 
 Stock of the Company, the Trustees, if they can do so without 
 injustice to any one, and without throwing any unjust or unequal 
 burden upon other Primary Stockholders, may cancel any 
 amount of such Productive Stock, not exceeding the nominal 
 amount of the mortgage, and then release the mortgage for a 
 corresponding amount. But such Productive Stock shall not 
 be thus cancelled, without giving the holder or holders thereof at 
 
 least months’ notice that it will be cancelled, unless payment 
 
 be made. 
 
38 
 
 ARTICLES OF ASSOCIATION OF 
 
 3. If any of the conditions of the mortgage shall remain 
 
 unfulfilled for the space of months, the Trustees may sell 
 
 the mortgaged estate, at public auction, after having properly 
 
 advertised the same for sale, at least once in each of the 
 
 successive weeks next preceding the sale, in newspapers in 
 
 the county, where the estate is situated. Out of the proceeds of 
 the sale, the Trustees shall first pay all expenses of said sale, and 
 all interest due on the mortgage, and all money remaining unpaid, 
 that shall have been expended by the Company, for taxes, and 
 for or on account of insurance, on said mortgaged property, with 
 interest on the same. 
 
 Out of the amount then remaining from the proceeds of the 
 sale, a sum equal to the nominal amount of the mortgage, (if so 
 much there shall be,) shall go into the treasury of the Company; 
 and the excess, if any there shall be, shall be paid over to the 
 mortgagor, or his representatives (the holders of the mortgaged 
 estate). 
 
 And in consideration of the sum, that shall thus have gone 
 into the treasury of the Company, (even though it shall be less 
 than the nominal amount of the mortgage,) the Company shall 
 incur the obligation to cancel an amount of Productive Stock 
 nominally equal in value to the nominal amount of the mortgage. 
 And if they shall be able to purchase and cancel the necessary 
 amount of Productive Stock, by paying a less sum for it than 
 that which shall have gone into the treasury of the Company as 
 aforesaid, the profit shall belong to the Company. But if, in 
 order to get the necessary amount of Productive Stock to be 
 cancelled, they shall be compelled to pay more than the amount 
 that shall have gone into the treasury of the Company as afore- 
 said, the loss shall fall on the Company.* 
 
 Whenever any Productive Stock shall be cancelled, in pur- 
 suance of this Article, an equivalent nominal amount of Circu- 
 lating Stock shall also be cancelled. 
 
 * This provision makes the mortgages mutually responsible for the solvency 
 or sufficiency of each other. 
 
A MORTGAGE STOCK BANKETO COMPANY. 
 
 89 
 
 ARTICLE XXXVIII. 
 
 If any holder or holders of any of the before-named mortgaged 
 estates shall, at any time, 'wish to have his or their estate released 
 from the mortgage, and shall also be, at the same time, a Pri- 
 mary HOLDER or HOLDERS of PRODUCTIVE Stock, the Trustees, 
 with the consent of the Council, may cancel such stock, and 
 release the mortgage for a corresponding amount, provided it can 
 be done without injustice to any one, and without throwing any 
 unjust or unequal burden upon other Primary holders of Pro- 
 ductive Stock. 
 
 And whenever any Productive Stock shall be cancelled, in 
 pursuance of this Article, an equivalent nominal amount of Cir- 
 culating Stock shall also be cancelled. 
 
 ARTICLE XXXIX. 
 
 Whenever any shares of either, Productive or Circulating 
 Stock shall be cancelled, a record shall be preserved of the par- 
 ticular numbers borne by such shares respectively. 
 
 ARTICLE XL. 
 
 The regular semi-annual dividend days shall be the fii'st days 
 of January and July, annually. Provided, however, that when 
 either of those days shall fall on a Sunday, the Monday next 
 succeeding shall be the dividend day. 
 
 ARTICLE XL I. 
 
 No dividends shall ever be paid to any of the Primary Stock- 
 holders, except from interest, that shall actually have accrued 
 on the mortgages, and bona fide profits already realized by the 
 Company. 
 
40 
 
 ARTICLES OP ASSOCIATION OP 
 
 Nor shall any dividends, of jJrqfits, (independently of interest 
 on the mortgages,) ever be paid to the Primary Stockholders, 
 except with the consent of the Council.* 
 
 ARTICLE XLII. 
 
 Whenever the owner of any of the before-named mortgaged 
 estates shall be a Primary holder of any Productive Stock, 
 the actual payment of no more interest shall be required of him, 
 than shall be needed (and be due from him as his proportion) to 
 meet the obligations of the Company. But the remainder shall 
 be credited to him, as having been paid by him, and then debited 
 to him as dividend paid, the same as if it had actually been paid 
 by him as interest, and then actually repaid to him as dividend.! 
 
 And whenever the Trustees shall foresee that the liabilities of 
 the Company are likely to render it necessary that a mortgagor, 
 (or owner of mortgaged estate,) and Primary holder of Pro- 
 ductive Stock, shall make an actual payment of the whole, or 
 any part, of the interest on his mortgage, at the next semi-annual 
 period, at which such interest will become due, they shall give 
 him notice of such necessity, as soon as it shall become evident 
 to them that such necessity is likely to exist. 
 
 ARTICLE XLII I. 
 
 Accumulated profits of the Company may be loaned by the 
 Company. 
 
 * See Note to Article XXIX, page 22. 
 
 t So long as the bank is prosperous, and the Peodtjctite Stock shall 
 remain in the hands of the mortgagors, or the owners of the mortgaged estates, 
 there will, of course, he no need that the interest be paid at all ; because, if 
 actually paid in as interest, it would have to he immediately paid back to the 
 same persons as dividend. All that will be necessary, therefore, will be, that the 
 interest be simply credited as interest, and then debited as dividend, to the same 
 persons, without any actual payment being made of either interest or dividend. 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 41 
 
 ARTICLE XLIV. 
 
 No promissory note, or other evidence of debt, discounted by, 
 and running to, said Boston Banking Company, shall ever, unless 
 with the written consent of all makers and indorsers, who shall 
 he liable thereon, be sold or transferred by said Company, until 
 after it shall have become due.* 
 
 ARTICLE XL V. 
 
 1. Any person who shall be a holder (whether Primary, or 
 Secondary^ or both) of Twenty Shares of the Productive 
 Stock of said Company, may, for the time being, either be a 
 Councillor, or appoint one in his stead, at his election. And for 
 every additional Twenty Shares, so owned by him, he may ap- 
 point an additional Councillor, f 
 
 * The purpose of this Article is to furnish a guaranty to borrowers of Circu- 
 lating Stock, that they will be able to pay their debts to the bank in the same 
 currency, which they receive of the bank. If the bank could transfer a note, 
 which it had discounted, the maker might be compelled to pay it with specie. 
 The Article will be beneficial to the bank itself, because it gives the public a 
 guaranty that the bills of the bank will all be wanted to pay debts due the bank. 
 It thus tends to give to the bills the same value as gold and silver, in the estima- 
 tion of the public, and thus promote their circulation. 
 
 The Article also tends to put it out of the power of the officers of the bank to 
 embezzle its funds. 
 
 The argument, that it might sometimes be advantageous for the bank to 
 transfer a doubtful note, before it should become due, is of little weight. If a 
 debt be bad, the loss of it may as well fall upon the bank as upon any body else. 
 And the knowledge that this must be the case, will make the bank more cautious 
 as to its loans. Besides, a case would but rarely happen, where the bank would 
 be benefitted by transferring a note. And then the gain would be less than the 
 loss arising to the credit of the bills of the bank, in consequence of any uncer- 
 tainty as to their being wanted to pay debts due the bank. 
 
 The right of the bank to transfer a note, after it shall have become due, 
 is the only right that the bank really needs, or that it would be expedient to 
 exercise. 
 
 t As the powers of the Councillors are mostly advisory, rather than authori- 
 tative, the name of Councillors is more appropi iate than that of Directors. 
 
 6 
 
42 
 
 ARTICLES OP ASSOCIATION OP 
 
 2. All persons, who shall be respectively holders (whether 
 Primary, or Secondary^ or both) of less than Twenty Shares of 
 Productive Stock, may unite to choose, by ballot, so many 
 Councillors as their Productive Stock may entitle them to 
 choose, choosing one Councillor for every Twenty Shares. In 
 thus choosing Councillors, each Stockholder shall be entitled to 
 one vote for each share of his Productive Stock. These 
 Councillors shall be chosen on each of the semi-annual dividend 
 days, and shall hold their offices until the dividend day next suc- 
 ceeding the one on which they shall be chosen. The Stock- 
 holders, named in this provision, shall be furnished, by the Trus- 
 tees, with suitable accommodations for their meetings (for the 
 choice of Councillors), in the banking house of the Company. 
 
 3. The Board of Councillors may, by ballot, choose their 
 President. He shall hold his office only until the dividend day 
 next after his election. But he may be re-elected. Whenever 
 there shall be no President, in office, by election, the largest 
 holder of Productive Stock, who shall be a member of the 
 Council, shall, for the time being, be the President. 
 
 4. The Councillors shall keep a record of their proceedings ; 
 may choose their own Secretary, and fix his salary ; except that 
 
 it shall not exceed dollars per annum, unless with the 
 
 consent of the Trustees. 
 
 5. The Councillors, by a majority vote of their whole number, 
 may fix their regular times of meeting, and the number that shall 
 constitute a quorum for business. 
 
 6. The Councillors shall, at all reasonable times, have access 
 (so far as it shall be necessary for purposes of investigation) to 
 all the books and papers of the Company ; and shall be entitled 
 to be informed of all the business affairs of the Company. The 
 Council, or a Committee thereof, appointed for the purpose, shall 
 also be consulted beforehand, by the Trustees, on all important 
 transactions, if circumstances will reasonably admit of it. 
 
 7. The Council, or a Committee thereof, appointed for the 
 purpose, shall have a veto upon any and all loans or discounts 
 proposed to be made by the Trustees. 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 43 
 
 8. The Councillors shall receive no salaries for their services. 
 
 But the President of the Council may, by vote of the Council, 
 receive a salary not exceeding dollars for six months. 
 
 9. The Councillors shall have suitable accommodations for 
 their meetings furnished to them, by the Trustees, in the banking 
 house of the Company. 
 
 ARTICLE XLVI. 
 
 1. The Trustees shall keep books fully showing the pecuniary 
 standing, and all the pecuniaiy transactions, of the Company. 
 
 2. The Trustees shall have two seals ; with one of which they 
 shall seal all certificates of Productive Stock granted to 
 Primary Stockholders, and with- the other all certificates of 
 Productive Stock granted to Secondary Stockholdejs. They 
 may also, if they deem it expedient, and have the consent of the 
 Council, have a third seal, and with it seal any or all certificates 
 of Circulating Stock. 
 
 3. The Trustees shall consult the Council, or a Committee 
 thereof, appointed for the purpose, in all important matters, when 
 reasonably practicable, and shall conform to their advice so far as 
 they can consistently with their (the Trustees’) opinion of what 
 is just to all holders of either Productive or Circidating 
 Stock, and safe and proper for the best pecuniary interests of the 
 Company.* 
 
 * It would not be proper to make the power of the Councillors authoritative 
 over the Trustees, because the very nature of the system makes the Trustees the 
 attorneys of three different classes of Stockholders, to wit ; the Pbimaet and 
 Secondary holders of PnontrCTivE £tock, and the holders of Circulating Stock. 
 Legally speaking, the individuals composing one of these classes, are as much 
 Stockholders as either of the others. The holders of the Circulating Stock have 
 rights iu the Company, which are as strictly legal as those of the Pkimaet or 
 Secondary holders of Peoductite Stock. Yet they have no voice in choosing 
 the Council ; and no voice in the affairs of the Company, except through the 
 Trustees. If, therefore, the Trustees were controllable by the Council, who repre- 
 
44 
 
 ARTICLES OE ASSOCIATION OP 
 
 4. The Trustees shall make no loans or discounts, without the 
 consent of the Council, or of a Committee thereof, appointed for 
 that purpose ; and shall make none against their own judgments 
 of expediency or right, even though the consent of the Council 
 be given. 
 
 5. They shall make no loans, directly or indirectly, to either 
 or all of themselves ; shall never, as individuals, become either 
 debtors or creditors (except for their salaries) to the Company ; 
 and never be holders of either Productive or Circulating 
 Stock of the Company.* 
 
 6. They shall employ a Cashier, and, if need be, other clerks 
 and servants (except a solicitor or attorney) ; may take suitable 
 bonds, and shall also be themselves personally responsible for the 
 fidelity of such cashier, clerks, and servants.! 
 
 7. The Trustees may fix Uie salaries of the Cashier and other 
 clerks and servants, except that the aggregate salaries of the 
 Cashier and all other clerks and servants (except solicitor or 
 
 attorney) shall not exceed dollars per annum, without 
 
 the consent of the Council. 
 
 8. The Trustees, with the consent of the Council, may employ 
 a standing solicitor, or attorney, whose salary shall not exceed 
 
 sent only the holders of Productive Stock, the rights of the holders of 
 Circulating Stock might be sacrificed to the holders of Productive Stock. It 
 is important, therefore, that the Trustees should stand in an independent and im- 
 partial position towards all classes of Stockholders, and be directly and legally 
 responsible to each and every Stockholder, of the three several kinds. 
 
 The prohibition upon the Trustees’ making any loans, except with the consent 
 of the Council, who represent the holders (both Primary and Secondary) of 
 Productive Stock, is a sufficient security, to those Stockholders, that their 
 interests will not be sacrificed by imprudent loans. 
 
 * This provision may, at first view, appear unnecessarily stringent ; but, on 
 reflection, it wilt probably be seen that its value, as a precaution against embez- 
 zlement, and against the various sinister influences, that might otherwise operate 
 upon the Trustees, is such as to outweigh any inconvenience. 
 
 t As the Trustees have power to appoint their own Cashier and other ser- 
 vants, without the consent of the Council, they should be held responsible for 
 their fidelity. 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 45 
 
 dollars per annum, -without the consent of the 
 
 Council. 
 
 9. The Trustees shall al-ways have the banking house of the 
 
 Company open for business, at least hours, most suitable for 
 
 the convenience of customers, on every day, except Sundays, 
 holidays, and other extraordinary occasions. 
 
 10. The Trustees shall take no lease of a banking house for a 
 
 longer term than years, nor pay a rent of more than 
 
 dollars per annum, -without the consent of the Council. 
 
 Nor shall they invest more than dollars in furniture 
 
 (independently of the necessary hooks) for their banking house, 
 -without the consent of the Council. 
 
 ARTICLE XLVII. 
 
 1. The Trustees, before entering on the duties of their trust, 
 
 shall either give a joint bond, in the sum of dollars, or 
 
 several bonds, in the sum of dollai-s each, -with at least 
 
 three separate and adequate sureties for each Trustee, for their 
 fidelity as Trustees. Such bond or bonds shall run to the Coun- 
 cil, and their successors in that office, for and on behalf of all the 
 Stockholders in said Company — (that is to say, all holders both 
 of Productive and Circulating Stock) collectively and indi- 
 vidually. 
 
 2. Such bond or bonds shall be in the following form, (names, 
 dates, and sums being made to correspond with the facts in each 
 case,) to wit : 
 
46 
 
 ARTICLES OE ASSOCIATION OP 
 
 ®ru0tee’0 Bonb. 
 
 [Entered according to Act of Congress, in the year 1860, by Ltsandee Spooner, 
 in the Clerk’s office of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Know all Men, That we, A A , as principal, and 
 
 H I , J K , and L M — — , as sureties, 
 
 are holden, and firmly bound and obliged, in the full and just 
 
 sum of Sixty Thousand Dollars — that is to say, the said A 
 
 A in the whole sum of Sixty Thousand Dollars, and the 
 
 said sureties in the sum of Twenty Thousand Dollars each — 
 
 unto Z A , Y B , X C , 
 
 D , [and others, naming them,] now constituting the Council 
 
 of the Boston Banking Company (a Mortgage Stock Banking 
 Company, having its Banking House in Boston, in the County of 
 Sufiblk, in the State of Massachusetts, and whose Articles of 
 Association bear date January 1st, 1860) and to their successors 
 in said office, for and in behalf of all the Stockholders of said 
 Company, both collectively and individually; that is to say, for 
 and in behalf of all holders both of the Productive and Circii- 
 lating Stock of said Company. To the which payment, well and 
 truly to be made, we hereby bind ourselves, our heirs, executors, 
 and administrators, fii’mly by these presents. Sealed with our 
 Seals. Dated at said Boston, this day of , 1860. 
 
 The Condition of this Obligation is such that, whereas 
 
 the said A A has been appointed one of the Trustees 
 
 of the Capital of said Boston Banking Company, and has con- 
 sented to accept said trust. 
 
 Now, therefore, if he, the said A A shall, at all 
 
 times, faithfully, vigilantly, and honestly perform and fulfil all 
 the duties of said trust, towards all the Stockholdei's of said 
 
A MORTGAaE STOCK BANKING COMPANY. 
 
 47 
 
 Company, both collectively and individually — that is to say, 
 towards all the holders both of the Prodtjcttv^b and the Circu- 
 lating Stock of said Company; and shall make good to said 
 Company collectively, and to all Stockholders therein individ- 
 ually, (whether holders of Productive or Circulating Stock,) 
 all losses suffered by, or caused to, it or them, by, or by reason 
 
 of, any fraud, fault, or neglect of said A A , in his said 
 
 office of Trustee ; and shall also pay and satisfy all judgments, 
 
 which may be recovered against said A A , both in 
 
 private suits by any individual Stockholder or Stockholders, and 
 in suits by the Council of said Company, for losses or wrongs 
 suffered by such Stockholder or Stockholders, individually or 
 collectively, by, or by reason of, any fraud, fault, or neglect of 
 
 said A A , as Trustee as aforesaid, then this obligation 
 
 shall be void ; otherwise it shall remain in full force. 
 
 Signed, sealed, and delivered, 
 in presence of 
 
 3. And if it shall ever reasonably appear to a majority (of a 
 quorum) of the Council, that any loss or losses have fallen upon 
 the Company, in its collective capacity^ through any fraud, 
 fault, or neglect of either or all of the Trustees, it shall be the 
 duty of the Council to bring appropriate suit or suits (at the 
 expense of the Company) on the- bond or bonds of such Trustee 
 or Trustees. And any sum or sums, recovered in such suit or 
 suits, shall be holden in trust by the Council until, in their judg- 
 ment, such sum or sums can be safely and properly delivered 
 over to some one or more of the Trustees of the Company. Or, 
 if such sum or sums cannot, in the judgment of the Council, and 
 within a reasonable time, be safely or properly delivered over to 
 any Trustee or Trustees of the Company, the Council may, in 
 their discretion, apply such sum or sums to the payment of any 
 
 A A . [seal.] 
 
 H I . [seal.] 
 
 J K . [SEAL.] 
 
 L M . [SEAL.] 
 
48 
 
 ARTICLES OP ASSOCIATION OF 
 
 undoubted debts or obligations, due by the Company and requir- 
 ing immediate payment. 
 
 4. And if it shall ever be made reasonably to appear to a 
 majority (of a quorum) of the Council, that any loss or losses 
 have fallen upon, or that any wrongs have been suffered by, any 
 individual Stockholder, or any number of Stockholders less than 
 the whole, of said Company (whether such Stockholder or Stock- 
 holders be the holder or holders of either Productive or Circu- 
 lating Stock) by, or by reason of, any fraud, fault, or neglect of 
 either or all of the Trustees, it shall be the duty of the Council, 
 on the request of such Stockholder or Stockholders, to bring 
 appropriate suit or suits (at the expense of the Company) on the 
 bond or bonds of such Trustee or Trustees, for and on behalf of 
 such Stockholder or Stockholders. And any sum or sums re- 
 covered by the Council, in such suit or suits, shall be paid- over, 
 by them, to the Stockholder or Stockholders entitled thereto. 
 
 Px’ovided, however, that the right of any Stockholder or Stock- 
 holders to have suit brought for, or in behalf of, himself or 
 themselves, by the Council, and at the expense of the Company, 
 as aforesaid, shall not preclude such Stockholder or Stockholders 
 from brino-ino: suit in his or their own name or names, if he or 
 
 O O i 
 
 they shall so choose, against any or all the Trustees. And any 
 judgment recovered in such suit, by such Stockholder or Stock- 
 holders, if not otherwise paid, shall, on demand by said Stock- 
 holder or Stockholders, be enforced, by the Council, by suit 
 against such Trustee or Trustees, and his and their sureties, at 
 the expense of the Company. 
 
 5. Whenever a bond or bonds, as hereinbefore provided for, 
 shall have been given by any Trustee, or Trustees, no renewal 
 thereof shall be claimed by the Council, oftener than once in five 
 years, unless in case of the death or bankruptcy of a surety, or 
 of his removal of his residence from the State of Massachusetts. 
 
 6. In case of any disagreement between any Trustee or 
 Trustees and the Council, as to the suitableness and sufficiency of 
 any surety offered by such Trustee or Trustees, such Trustee or 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 49 
 
 Trustees shall select one of the holders of Productive Stock 
 of the Company; and the Council shall select another such 
 holder ; and the two so selected shall select another person, who 
 is a holder of neither Productive nor Circulating Stock of the 
 Company; and the three, so selected, shall investigate the 
 subject, and report thereon, in writing, to the Council ; and the 
 joint report of any two of them shall decide the question. But 
 the Council shall not be required to accept, as a surety, any 
 person not a resident of the State of Massachusetts. 
 
 ARTICLE XL VIII. 
 
 If any Trustee shall be finally convicted, in any court of 
 justice, of any embezzlement or other crime, committed in his 
 office as a Trustee, all his rights and powers, as a Trustee, shall 
 from that moment, cease and determine, and his place as Trustee 
 be vacant, and liable to be filled by another. 
 
 ARTICLE XLIX. 
 
 If any Trustee shall be finally convicted, in any court of 
 justice, of any infamous crime, committed hy him otherwise 
 than in his capacity as Trustee^ he shall be liable to be re- 
 moved from his office of Trustee, by votes representing a majority 
 of the Productive Stock of the Company, whether held by 
 Primary or Secondary Stockholders. Said votes shall be given 
 in the following manner, to wit : The necessary number of 
 Stockholders shall subscribe, upon a book kept by the Trustees, 
 a declaration, fully setting forth the cause of the removal, and 
 their wish and determination that he be removed. And such 
 declaration, so subscribed, shall, from that moment, operate to 
 7 
 
50 
 
 ARTICLES OF ASSOCIATION OP 
 
 extinguish all his rights and powers as a Trustee, and to make 
 his place vacant, and liable to be filled by another. 
 
 And each subscriber to this declaration shall affix, to his 
 signature, the true date thereof, and the number of shares of 
 Productive Stock, of which he shall be, at the time, the 
 holder and owner ; and shall also designate himself as being 
 either a Primary or Secondary holder, as the case may be. 
 
 ARTICLE L. 
 
 If any Trustee shall, at any time, have become so permanently 
 sick, insane, or unable to perform the duties of his office of 
 Trustee, or shall be so negligent of those duties, as to make it 
 necessary or proper that his place should he declared vacant, and be 
 filled by another, and the fact shall have been ascertained to the 
 satisfaction of not less than four fifths, in number, of all the 
 holders of Productive Stock, they being, at the same time, 
 holders and true owners of not less than four fifths, in quantity, 
 of all the Productive Stock of the Company (whether such 
 holders be Primary, or Secondary^ or both) and a permanent 
 record thereof, and of the wish and determination of such holders 
 that he be removed, shall have been made on the books of the 
 bank, and personally subscribed by such holders, such record 
 shall, from the moment of its being so subscribed, operate to 
 cancel all his rights and powers as Trustee, and vacate his place 
 as Trustee, and make it liable to be filled by another. 
 
 And each subscriber to such record shall affix, to his signature, 
 the true date thereof, and the number of shares of Productive 
 Stock, of which he shall be, at the time, the holder and owner ; 
 and shall also designate himself as being either a Primary or 
 Secondary holder, as the case may be. 
 
A MOKTGAGE STOCK BANKING COMPANY. 
 
 51 
 
 ARTICLE LI. 
 
 Whenever a vacancy shall occur in the office of Trustee, it 
 shall be filled by the votes of not less than four fifths, in number, 
 of all the holders of Productive Stock, they being, at the same 
 time, holders of not less than four fifths, in quantity, of all the 
 Productive Stock of the Company. And the election shall be 
 made by the necessary number of Stockholders subscribing, upon 
 a book of the bank, a declaration substantially in the following 
 form, to wit : 
 
 “We, the subscribers, being the holders and true owners of 
 the number of shares of Productive Stock of the Boston 
 Banking Company set against our names respectively, hereby 
 
 declare that T T , of , in the County of , 
 
 in the State of , is our choice for the office of Trustee of 
 
 said Company, in the place of W W , removed 
 
 [resigned, or deceased, as the case may be].” 
 
 And each subscriber to this declaration shall affix, to his signa- 
 ture, the true date thereof, and the number of shares of Produc- 
 tive Stock, of which he shall be at the time the holder and 
 owner ; and shall also designate himself as being either a Pri- 
 mary or Secondary holder, as the case may be. 
 
 And when the person, so appointed, shall have given the 
 requisite bonds to the Council, for his fidelity as a Trustee, the 
 other Trustees [or Trustee, if there shall be but one] shall convey 
 to him his appropriate property and rights in and over the Capital 
 Stock and other property of said Company, by a deed in the 
 following form, (names, dates, and numbers being made to corres- 
 pond with the facts in each case,) to wit : 
 
52 
 
 ARTICLES OF ASSOCIATION OP 
 
 ® rus t H5 ee5 . 
 
 [Entered according to Act of Congress, in the year 1860, by Ltsander Spooner, 
 in the Clerk’s ofKce of the District Court of the United States, for the District 
 of Massachusetts.] 
 
 Whereas R R , of , in the County 
 
 of , in the State of , has been duly appointed 
 
 one of the Trustees of the Capital of the Boston Banking 
 Company : a Mortgage Stock Banking Company, ivhose Articles 
 of Association are dated January 1st, 1860, and whose Banking 
 House is in said Boston. 
 
 And Whereas, We, A A , and B 
 
 B , both of said Boston, are now the only Trustees of said 
 
 Boston Banking Company. 
 
 And Whereas, By reason of the appointment aforesaid, it 
 
 has become our legal duty to convey to said R R 
 
 an equal right and property, with ourselves respectively, in the 
 Capital Stock, and all other property, of said Boston Banking 
 Company. 
 
 Now, Therefore, Be it known, that we, the said A 
 
 A , and B B , Trustees as aforesaid, in con- 
 
 sideration of the premises, and of one dollar, to us paid by the 
 said R R , the receipt of which is hereby acknowl- 
 edged, and for the purpose of investing him, the said R 
 
 R with equal powers and rights with ourselves respectively 
 
 in the control of the Capital Stock and all other property of said 
 Boston Banking Company, do hereby give, grant, sell, assign, 
 and convey, and have hereby given, granted, sold, assigned, and 
 
 conveyed, unto the said R R , in his capacity of 
 
 Trustee as aforesaid, and to his successors in said olEce, one third 
 of all our respective rights and property in and to the Capital 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 53 
 
 Stock, and all other property, of said Boston Banking Company, 
 without any reservation or qualification whatever. 
 
 To Have and to Hold the same to the said B K , 
 
 in his capacity of Trustee as aforesaid, and not otherwise, and to 
 his successors in said office forever, jointly with ourselves and our 
 successors, in trust for the holders of the Productive and Cir- 
 culating Stock of said Company ; and to be holden and adminis- 
 tered in accordance with the said Articles of Association of said 
 Company, and not otherwise. 
 
 In Witness Whereof, We, the said A A , 
 
 and B B , have hereunto set our hands and seals 
 
 this day of , in the year eighteen hundred 
 
 and . 
 
 Signed, sealed, and delivered, '] ^ [SEAL.] 
 
 in presence of | 3 3 _ 
 
 D G . j 
 
 F H . J 
 
 Boston, October 1st, 18 — . Recorded in the Journal [or 
 Records] of the Council of the Boston Banking Company for 
 this date [or in some particular book kept by the Council, de- 
 scribing it, with the page]. 
 
 I D H , Pi'csH. of Council. 
 
 [or S B , Sec'y of Council.^ 
 
 Boston, October 2d, 18 — . Recorded in the Books of the 
 Trustees of said Boston Banking Company, to wit, in [here 
 describe the book, whatever it may be] page — . 
 
 A A , Trustee. 
 
 [or E E , Cashier. \ 
 
 And said Deed, before being delivered to the newly appointed 
 Trustee, shall be recorded in appropriate books, both of the 
 Council, and of the Trustees, and proper certificates of such 
 records, substantially in the forms aforesaid, shall be made upon 
 
54 
 
 AKTICLBS OF ASSOCIATION OF 
 
 the Deed itself. And the Deed shall then be delivered to the 
 newly appointed Trustee; and such delivery shall operate to 
 invest him with equal rights, as Trustee, with any and all his 
 associate Trustees. And he shall then immediately cause said 
 Deed to he recorded in the Registry of Deeds for the County of 
 Suffolk. 
 
 ARTICLE LII. 
 
 1. The regular salaries of the Trustees shall he at the rate of 
 
 dollars each per annum, payable semi-annually, on the 
 
 regular dividend days. 
 
 2. The regular salaries of the Trustees may be increased, for 
 definite periods, not exceeding five years each, by the votes of not 
 less than four fifths, in number, of all the holders of Productive 
 Stock, they being, at the time, holders of not less than four 
 fifths, in quantity, of all the Productive Stock of the Com- 
 pany. The votes, for this purpose, shall be given by the neces- 
 sary number of Stockholders subscribing, upon some book of the 
 bank, kept by the Trustees, a declaration substantially in the 
 following form, to wit : 
 
 “We, the subscribers, being the holders and true owners of 
 the number of shares of the Productive Stock of the Boston 
 Banking Company, set against our names respectively, hereby 
 give our vote that the regular salaries of each of the three 
 Trustees of said Company be increased, by the sum of one 
 hundred dollars each per annum, for the term of three years, 
 from and after the first day of July, 1861.” 
 
 And each subscriber to this declaration shall affix, to his signa- 
 ture, the true date thereof, and the number of shares of Produc- 
 tive Stock, of which he shall be, at the time, the holder and 
 owner ; and shall also designate himself as being either a Pri- 
 mary or Secondary holder, as the case may be. 
 
 This vote shall be given only at some time within the six 
 months next preceding the day, when the increased salary is to 
 
 commence. 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 55 
 
 3. In addition to their regular salaries, each Trustee shall 
 have_^re per centum of all the clear profits of the business done 
 by the Company, (independently of the interest on the mortgages,) 
 the same to- be payable only at the same times with the dividends, 
 of profits^ to the Primary Stockholders. 
 
 4. Neither the salaries of the Trustees, nor their portion of 
 the profits, shall ever he paid to them, except in the order, 
 relatively to other claims, in which they stand in Article XXIX. 
 And if it shall ever happen that the entire Productive Stock 
 of the Company shall be transferred, from any one body of Pri- 
 mary Stockholders, in redemption of the Circulating Stock, 
 any arrearages, either of salaries or profits, due, at the time, to 
 any of the Trustees, shall be forfeited by them.* 
 
 5. In case of the death or resignation of a Trustee, or of his 
 removal for any other cause than crime committed in his office of 
 Trustee, his proportion of any accumulated profits shall be paid 
 to him, his heirs, executors, administrators, or assigns, within 
 three months after such death, resignation, or removal. In case 
 of his office ceasing by reason of crime committed by him in his 
 office of Trustee, his proportion of any accumulated profits shall 
 be paid to him, his heirs, executors, administrators, or assigns, 
 within six months thereafter, unless it shall be found necessary or 
 proper to retain them as an indemnity for his crime. 
 
 AKTICLE LIII. 
 
 The Trustees may, with the consent of the Council, (or an 
 authorized Committee thereof,) take Productive Stock, or any 
 other real or personal property, and especially the bills, certifi- 
 
 * This provision is proper, because it is proper that the Trustees should have 
 some personal motive to vigilance in the management of the bank. It is also 
 necessary, because otherwise the Productive Stock would pass into the hands 
 of the new body of Primary holders, subject to an incumbrance, and there.- 
 fore not at its full nominal value. 
 
56 
 
 ARTICLES OF ASSOCIATION OF 
 
 cates, or scrip of other banks, in satisfaction of debts due to the 
 Company. And when such stock or other property shall have 
 been taken, it shall, with the consent of the Council (or an 
 authorized Committee thereof) be disposed of, by auction or 
 otherwise, soon as it can be advantageously for the interests of 
 the Company. 
 
 ARTICLE LIV. 
 
 If any holder, either Primary or Secondary, of Productive 
 Stock, shall become indebted to the Company, either as princi- 
 pal, or surety, such indebtedness shall operate as a lien upon 
 his Productive Stock, unless a written contract to the contrary 
 be entered into. 
 
 ARTICLE L V. 
 
 The Company may receive the Circulating Stock of the 
 Company, on deposit, wuthout interest, and be responsible for its 
 safe keeping ; but such Stock shall not be loaned, nor re-issued, 
 by the Company, until it shall have been redeemed. 
 
 ARTICLE LVI. 
 
 The Trustees, with the consent of the Council, or an author- 
 ized Committee thereof, may allow money and currency, other 
 than the Circulating Stock of the Company, to he deposited 
 in the vaults or safes of the Company, without compensation ; 
 but they shall not make the Company in any way responsible for 
 its safe keeping ; and shall not loan nor re-issue the same, for, or 
 on behalf of, the Company, nor on securities running to the 
 Company.* 
 
 * The reason for this Article is this. If this system of banking should be 
 generally adopted, the number of banks would be so great, that they would be 
 able to supply all demands for a currency, without issuing their deposits. All 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 57 
 
 AETICLE LVII. 
 
 Whenever the consent of the Council, or any Committee 
 thereof, shall be necessary to any genei’al, or any particular, 
 action of the Trustees, such consent, if the Trustees require it, 
 shall be expressed by a resolution or memorandum, entered upon 
 the records of the Council, and a certified copy thereof furnished 
 to the Trustees ; said certified copy to be -written in a book kept 
 by the Trustees, if they shall desire it. 
 
 ARTICLE LVIII. 
 
 All holders of Productive Stock — and also all holders of 
 Circulating Stock, which shall have been presented for redemp- 
 tion, and not been redeemed — shall be entitled, at all reasonable 
 times, to all necessary and proper information, from the Trustees, 
 as to the afiairs of the Company, and to access 4o the books of 
 the Company, so far as such access shall be necessary for the 
 purpose of investigating the pecuniary condition of the Company. 
 And all holders, whether Primary or Secondary, of Produc- 
 tive Stock, shall be entitled to a printed copy of the Company’s 
 Articles of Association. 
 
 ARTICLE LIX. 
 
 The Trustees, with the consent of the Council, or an author- 
 ized Committee thereof, may make such contracts with banks and 
 
 necessity, therefore, for loaning deposits, will be snperseded. By loaning their 
 deposits, the banks would incur a liability to their depositors, which is foreign to 
 the nature of the system, and which, for obvious reasons, ought to be avoided. 
 The power to loan deposits would be practically useless to the banks ; because 
 the banks, by reason of their number, would be unable to keep out all their own 
 Circulating Stock, to say nothing of their deposits. 
 
 8 
 
58 
 
 ARTICLES OP ASSOCIATION OP 
 
 individuals, for the redemption of the currency of the Company, 
 in such towns and cities, other than Boston, as may be thought 
 expedient, with a view to promote the circulation of the currency. 
 
 ARTICLE LX. 
 
 Neither the Trustees, as such, nor the Company, by any of its 
 servants or agents, shall ever contract any indebtedness, except 
 for rents, salaries, and such other necessary and proper expenses, 
 as are necessarily implied in taking care of the Company's 
 capital, and carrying on its business as a Banking Company, in 
 the manner hereinbefore specified. 
 
 ARTICLE LXI. 
 
 At such time, on or after the first day of January in the year 
 Eighteen Hundred and Eighty, as the Council may appoint, 
 the Trustees shall cease to grant loans, and to issue the Circulating 
 Stock of the Company ; and shall, as soon thereafter as reason- 
 ably may he, collect all debts due the Company ; compel payment 
 of the mortgages (having given the holders of the mortgaged 
 estates one year’s notice of the demand, and allowing them to 
 offset Productive Stock in payment of their mortgages, so far 
 as that can be done consistently with justice towards all con- 
 cerned) ; redeem all the Circulating Stock of the Company ; 
 and do whatever may be necessary to close up the affairs of the 
 Company, and dissolve the Company itself. But the mortgages 
 shall not be discharged, nor the Company dissolved, until all the 
 liabilities of the Company shall be cancelled ; all its Circulating 
 Stock redeemed; all holders of Productive Stock paid for 
 their Stock ; and all certificates of both Productive and Circu- 
 lating Stock cancelled or destroyed. 
 
 Provided, however, that if, after the Trustees shall have given 
 due notice to the public to return the Circulating Stock of the 
 
A MORTGAGE STOCK BANKING COMPANY. 
 
 59 
 
 Company for redemption, and after ample time shall have elapsed 
 for the purpose of returning such Stock for redemption, any 
 
 small amounts thereof, not exceeding dollars, in the 
 
 aggregate, shall still be outstanding, and it shall be believed, by 
 the Trustees, that such Circulating Stock shall have been either 
 lost, or destroyed, or that it is not likely soon to be returned for 
 redemption, they shall proceed to dissolve the Company, dis- 
 tribute its capital to the individual owners, reserving in their own 
 hands, out of the funds of the Company, enough gold or silver 
 coin to redeem all the still outstanding Circulating Stock. 
 And if such Circulating Stock, or any portion thereof, shall be 
 returned to said Trustees for redemption, at any time within 
 three years thereafter, it shall be redeemed by them. But if any 
 portion of said outstanding Circulating Stock shall not be 
 returned for redemption within the said three years, it shall be 
 presumed to have been lost or destroyed, and the fund reserved 
 for its redemption shall be paid over to its rightful owners. 
 
 In Witness op all which. We, the said F F , 
 
 G G , H H , and I I , mortgagors 
 
 aforesaid, and Primary holders of all the Productive Stock 
 
 of said Company, and also we, the said A A , B 
 
 B , and C C , Trustees hereinbefore named, in 
 
 token of our acceptance of said trust, have set our hands and 
 seals to nine copies of these Articles of Association (consisting of 
 fifty-nine printed pages) and have also set our names at the 
 bottom of each and all the said fifty-nine pages, this first day of 
 January, in the year Eighteen Hundred and Sixty. 
 
 Nine Copies Signed and Sealed, 
 and One Copy Delivered to 
 Each of the Parties Signing 
 the same, in presence of us. 
 
 A D . 
 
 B E . 
 
 C F . 
 
 D G . 
 
 F F . [seal.] 
 
 G G . [seal.] 
 
 H H . [seal.] 
 
 I I . [seal.] 
 
 A A . [seal.] 
 
 B B . [seal.] 
 
 C C . [seal.] 
 
I 1st D E X 
 
 T O 
 
 ARTICLES OF ASSOCIATION. 
 
 Art. 1. 
 Art. 2. 
 Art. 3. 
 Art. 4. 
 Art. 5. 
 
 Art. 6. 
 Art. 7. 
 Art. 8. 
 Art. 9. 
 Art. 10. 
 Art. 11. 
 
 Art. 12. 
 
 Art. 13. 
 Art. 14. 
 
 Art. 15. 
 Art. 16. 
 
 Name of Company. 
 
 Place of Business. 
 
 Names of Trustees. 
 
 Capital Stock. Copies of Mortgages. 
 
 Shares $100 each. — Original owners of the Stock. — 
 How the Stock is apportioned among them. 
 Productive Stock — entitled to Dividends. 
 
 AYhat the Dividends shall consist of. 
 
 Circulating Stock — amount, &c. 
 
 Circulating Stock — what it is. 
 
 Form of Certificates of Circulating Stock. 
 Certificates of Circulating Stock not to exceed 
 100,000 Shares. 
 
 Circulating Stock — how issued for Circulation as 
 Currency. 
 
 Circulating Stock — how redeemed. 
 
 Original holders of Productive Stock shall be termed 
 Primary Stockholders. 
 
 Secondary Stockholders — who shall be so called. 
 Dividends to Secondary Stockholders. 
 
62 
 
 INDEX TO ARTICLES OF ASSOCIATION. 
 
 Art. 17. 
 Art. 18. 
 
 Art. 19. 
 
 Art. 20. 
 
 Art. 21. 
 
 Art. 22. 
 
 Art. 23. 
 Arts. 24, 
 
 Art. 27. 
 Art. 28. 
 
 Art. 29. 
 
 Dividends to Primary Stockholders. 
 
 Productive Stock — how selected — to be transferred 
 in redemption of Circulating Stock. 
 
 Pi'oductive Stock, transferred in redemption of Circu- 
 lating Stock, may be re-purchased by the Company. 
 
 On what terms Productive Stock, transferred and 
 re-purchased, shall be restored to its Primary 
 holders. 
 
 When the entire Productive Stock shall have been 
 transferred, in redemption of Circulating Stock, 
 the right to re-purchase shall become extinct, 
 and the Secondary Stockholders become Primary 
 holders. 
 
 Secondary Stockholders, on becoming Primary hold- 
 ers, shall receive no dividends until new certifi- 
 cates shall be issued to them. 
 
 On what conditions the Trustees may accept loans 
 from Primary Stockholders. 
 
 25, and 26. Company may, on certain conditions, 
 elect to pay interest on Circulating Stock, pre- 
 sented for redemption, rather than redeem it on 
 demand. 
 
 How Circulating Stock, in less amounts than $100, 
 may be redeemed. 
 
 Productive Stock may be re-purchased, and Circu- 
 lating Stock redeemed, on regular dividend days, 
 without notice, at other times with notice, to 
 holders. 
 
 In what order the resources of the Company shall be 
 applied to the payment of expenses, the redemp- 
 tion of Circulating Stock, the payment of divi- 
 dends, salaries, &c. 
 
INDEX TO ARTICLES OF ASSOCIATION. 
 
 63 
 
 Art. 30. 
 Art. 31. 
 Art. 32. 
 
 Art. 33. 
 
 Art. 34. 
 
 Art. 35. 
 
 Art. 36. 
 
 Art. 37. 
 Art. 38. 
 Art. 39. 
 
 Art. 40. 
 Art. 41. 
 
 Form of “ Transfer of Productive Stock, in Redemp- 
 tion of Circulating Stock.” 
 
 Form of “ Re-conveyance of Productive Stock from a 
 Secondary to a Primary Stockholder.” 
 
 Productive Stock, transferred in redemption of Cir- 
 culating Stock, to be credited, and when re-pur- 
 chased, to be debited, to the Primary holder. 
 
 Primary Stockholders entitled to Certificates of Pro- 
 ductive Stock. — Form of Certificates. — Also, 
 form of “ Primary Stockholder's Sale of Produc- 
 tive Stock.” 
 
 Secondary Stockholders entitled to Certificates of 
 Productive Stock. — Form of Certificates. — Also, 
 form of “ Secondary Stockholder’s Sale of Pro- 
 ductive Stock.” 
 
 Form of “ Sale, by a Primary Stockholder, of his 
 Right to Productive Stock, in the hands of a 
 Secondary Stockholder.” 
 
 Trustees authorized to pay taxes on the mortgaged 
 estates, keep buildings and fixtures insured. — 
 How insurance money, recovered, may be applied. 
 
 Power of Trustees over the mortgaged estates, when 
 interest, &c., is not paid. 
 
 Terms, on which mortgaged estates may be released 
 from the mortgages. 
 
 Records to be preserved of the particular numbers of 
 any Shares of either Productive or Circulating 
 Stock, that may be cancelled. 
 
 What days shall be dividend days. 
 
 No dividends to be paid, except from interest actually 
 accrued, and do?ia fide profits already realized. — 
 Consent of Council required to the payment of 
 dividends of profits to Primary Stockholders. 
 
64 
 
 INDEX TO AETICLES OP ASSOCIATION. 
 
 Art. 42. 
 
 Art. 43. 
 Art. 44. 
 
 Art. 45. 
 Art. 46. 
 Art. 47. 
 
 Arts. 48, 
 
 Art. 51. 
 
 Art. 52. 
 Art. 53. 
 
 Art. 54. 
 
 Arts. 55 
 Art. 57. 
 
 Art. 58. 
 
 Art. 59. 
 
 Art. 60. 
 Art. 61. 
 
 Actual payment of no more interest to be required 
 of Primary Stockholders than necessary. 
 
 Accumulated profits may he loaned. 
 
 Notes, &c., not to be transferred, until after they 
 become due, unless with consent of makers and 
 indorsers. 
 
 Councillors — how chosen — their powers, &c. 
 
 Trustees — • their powers, duties, &c. 
 
 Trustees to give Bonds. — Form of their Bonds. — 
 How sued on their Bonds. 
 
 49, and 50. How Trustees may forfeit, or be re- 
 moved from, their offices. 
 
 How vacancies in the office of Trustee may be filled. — 
 Form of “Trust Deed.” 
 
 Salaries of Trustees. 
 
 What property may be taken in payment of debts due 
 the Company. 
 
 Indebtedness of holders of Productive Stock shall 
 operate as a lien on their Stock. 
 
 and 56. Deposits. 
 
 Consent of Council to acts of Trustees, to be ex- 
 pressed by resolution, or memorandum, &c. 
 
 Stockholders to be entitled to information, and to 
 access to books of the Company. 
 
 Contracts may be made for redemption of the cur- 
 rency at other places than Boston. 
 
 Company to contract no debts, except, &c. 
 
 When and how the Company may be dissolved. 
 
4 
 
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