Page:A History of Banking in the United States.djvu/65

 The next measure of this kind was the charter of the New York State Bank at Albany, which was petitioned for on the express ground that the bank already existing at Albany was federalist. This republican bank petitioned for an exclusive grant of the salt springs for sixty years. This request was not granted, but Hammond gives a description of the lobbying devices by which the charter was carried. "The company, before their petition was presented, had agreed on a dividend of stock between themselves, and reserved the surplus to be distributed among the members of the Legislature. It appears from the affidavit of Luther Rich, a member from the county of Otsego, and several other affidavits, that assurances were given that those members who voted for the bill should have stock, with a further assurance that the stock would be above par." A modified statement in regard to this, intended to excuse it, is to the effect "that the applicants founded their claim to a charter upon the ground that it should be a republican bank, and with a view, as was pretended, to insure it that character, they agreed that each republican member should be entitled to subscribe for a given number of shares, and that this privilege was secured to every republican member, whether he voted for or against the bill."

In 1804, two unincorporated partnerships doing a banking business, one in New York City and the other in Albany, tried to get charters, but the Legislature passed instead a restraining law forbidding all unincorporated companies from banking, and compelling these companies to go into liquidation. As Hammond says, this law established a monopoly of the issue of notes in the existing banks. In the following year the Merchants' Bank, one of the above-mentioned companies, renewed their application for a charter. They were opposed by the persons interested in the banks already chartered, some of whom, as DeWitt Clinton, John Taylor, and Judge Spencer, were among the most powerful politicians in the State. One of the strongest grounds of opposition which they openly alleged was that "the granting of the application would be injurious to the republican party." The petitioners were denounced as federalists and tories. They thereupon had recourse to lobbying and bribery. The whole affair constituted a great political scandal.

The charter of the Bank of America, in 1812, was an occasion of bribery and corruption. John Martin, a preacher and sub-agent of the bank, was convicted of attempting to bribe members of the Legislature, and was sentenced to confinement in the State prison. There was a Legislative investigation and a great political scandal. In April, 3, certain bank charters were extended until June, 1832. Among them was that of the Bank of New York. Certain colleges were allowed to subscribe a specified amount of stock in these banks, at the original price. The trustees of Hamilton College sold to the Bank of New York their right of subscription at $126 per share.