The Online Library of Liberty

A project of Liberty Fund, Inc.

• Shorter Works of Lysander Spooner, Volume I
• The Deist’s Immortality, and an Essay On Man’s Accountability For His Belief.
• The Deist’s Immortality.
• An Essay, On Man’s Accountability For His Belief.
• Worcester Republican.—extra.
• The Deist’s Reply.
• Chapter I.: The Early Spread of Christianity.
• Chapter II.: The Nature and Character of Jesus.
• Chapter III.: The Alleged Miracles of Jesus.
• Chapter IV.: The Prophecies.
• Chapter V.: The Resurrection.
• Supreme Court of United States, January Term, 1839. } Spooner Vs. M’connell, Et, Al.
• Constitutional Law.
• Chap. I.: The Unconstitutionality of All State Laws Restraining Private Banking and the Rates of Interest.
• Chap. II.: What Bank Charters Are Unconstitutional.
• Chap. III.: What Bank Charters Are Constitutional.
• Chap. IV.: The Power of Congress Over the Currency.
• Errata.
• Poverty: Its Illegal Causes and Legal Cure. Part First.
• Chapter I.: Illegal Causes of Poverty.
• Chapter II.: Economical Propositions.
• Chapter III.: Economical Results From the Preceding Propositions
• Chapter IV.: Social, Moral, Intellectual, and Political Results From the Preceding Propositions.
• Chapter V.: The Legal Nature of Debt.
• Chapter VI.: The Legal Nature of Debt.—( Continued. )
• Who Caused the Reduction of Postage? Ought He to Be Paid?
• Illegality of the Trial of John W. Webster.
• A New System Paper of Paper Currency.
• Part First
• Note.
• Chapter I.: Outline of the System.
• Chapter II.: Advantages of the System.
• Chapter III.: Security of the System.
• Chapter IV.: Practicability of the System.
• Chapter V.: Legality of the System.
• Part Second.
• Articles of Association of a Mortgage Stock Banking Company.

PART SECOND.

ARTICLES OF ASSOCIATION OF A MORTGAGE STOCK BANKING COMPANY.

[Entered according to Act of Congress, in the year 1860, by Lysander Spooner, in the 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 Suffolk, 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.

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 Massachusetts, 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 Lysander 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 Massachusetts, 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, 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.

Said premises are hereby conveyed to said Trustees, in trust, as a part of the Capital Stock of said Boston Banking Company, to be 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———, Trustees, 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 NAprinted 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 aforenamed 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 successors and assigns, that I am lawfully seized in fee simple of the aforegranted premises; that they are free of all encumbrances; 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 first 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 be valid for interest at the rate of only six per centum per annum;]* and if interest shall ever fail to be paid on the day it shall become due, then interest shall be 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 lawfully 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 Suffolk; and in his or their own names—that is to say, the Trustees as Trustees, and their assigns as assigns—or as the attorney or attorneys of the grantor or his assigns, for that purpose by these presents duly authorized, convey the same, absolutely and in fee simple, to the purchaser or purchasers accordingly; 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 survivor 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 Trustees, and not otherwise) and their assigns, (in their individual 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.

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 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 consecutively, from one hundred and one to three hundred, inclusive, shall be the property of the said G——— G———; Three Hundred 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 thousand, 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.

ARTICLE VI.

The aforesaid one thousand shares of Stock shall be called the Productive Stock, and shall be entitled to all the dividends.

ARTICLE 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 Dollars, to be called Circulating Stock; which Circulating Stock shall be divided into shares of One Dollar each. Said shares shall be numbered consecutively from one 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 share 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.

[Entered according to Act of Congress, in the year 1880, by Lysander Spooner in the Clerk’s office of the District Court of the United States, for the District of Massachusetts]

CERTIFICATE No. 173....FIVE SHARES of CIRCULATING STOCK, numbered 151, 152, 153, 154, and 155 [respectively—or—consecutively, from 151 to 155, inclusive].* ONE DOLLAR PER SHARE.

Be it Known, That the Bearer is the Proprietor of FIVE SHARES of theCirculating Stockof the BOSTON BANKING COMPANY; which Shares, numbered as above, are of the nominal value of FIVE DOLLARS, and are entitled to be received at that value, in payment of any debts due to said Company, and also to be redeemed by the Transfer of Productive Stock, or otherwise, according to the provisions of the Articles of Association of said Company, which bear date January 1st, 1860.

Boston, March 1st, 1860.

FIVE. }

Capital $100,000, in Mortgages bearing Seven per cent. interest. Secondary Stockholders are paid Six per cent. Dividends. Productive Stock, $100 per Share.

{ FIVE.

ARTICLE XI.

No certificates, scrip, or bills of said Circulating Stock, for a greater amount, in the aggregate, than One Hundred Thousand Shares, shall ever be made and signed by the Trustees, President, 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 cancelled 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, drafts, orders, bills of exchange, or other securities, as the Trustees and Council may see fit to accept; also by purchasing 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 Company 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 Dollar per share, in payment of any debts due to said Boston Banking Company. They shall also, at all times, (except as hereinafter provided for, in Article XXIV,) when presented in even amounts of One or more Hundred Shares, be entitled to be redeemed, on demand, by the transfer of an equivalent 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 be 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 Dividends 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 dividends to the Secondary Stockholders shall have been paid, and all other liabilities and obligations of the Company shall have been cancelled—whether such dividends (to the Primary Stockholders) shall amount to more or less than six per centum per annum.

ARTICLE XVIII.

Whenever it shall be necessary to transfer a share of Productive 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 corporate 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 entireProductive 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 the hands either of Primary holders, or of the Company in its corporate 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 redemption of Circulating Stock, no dividends shall be paid to any of the then existing body of Primary holders, until such transferred 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 entireProductive Stock of said Company shall have been transferred, from the first body of Primary holders, (including, as such, the Company 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, 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 responsibilities, 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 entireProductive 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 Secondary 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 be 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 entireProductive 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 Secondaryholder, 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 surrender of his certificate or certificates as a Secondary holder.

ARTICLE XXIII.

The Trustees may accept loans from the Primary Stockholders, whenever it may be necessary or convenient, in order to save the Productive Stock from being transferred in redemption of the Circulating Stock; such loans to be repaid only in the manner, and in the order relatively to other claims, hereinafter 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 Primary Stockholder, and, before such loan shall be repaid, the entireProductive Stock of the Company shall have been transferred to Secondary holders, in redemption of Circulating Stock, as mentioned in Article XXI, such Primary Stockholder’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 hundred shares, shall be redeemed by coin or Productive Stock, on demand, shall be understood subject to this proviso, viz.: that whenever 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 certificates, 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 for redemption. And the certificates, scrip, or bills, thus deposited, 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 officers, 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 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.*

Provided, however, that if any depositor, or his representatives, 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 Circulating Stock, in even amounts of one or more hundred 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 certificates, 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.*

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 expedient, 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 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.*

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 redemption) at any time other than on a regular semi-annual dividend day, they shall give the holder of such Productive or Circulating 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 obligations, of every name and nature whatsoever, except those hereafter enumerated in this Article.

2. To the payment, in full, of all interest due on certificates, scrip, or bills of Circulating Stock, that shall have been presented, in even amounts of one or more hundred shares, for redemption, and not been redeemed.

3. To the payment, in full, of a semi-annual dividend, of six per centum per annum, on all such Productive Stock, as shall be in the hands of Secondary Stockholders.

4. To the redemption of all such certificates, scrip, or bills of the Circulating Stock, as shall have 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 compensation that may be allowed to the President of the Council.

9. To the payment of all dividends, made up exclusively of interest on the mortgages, to the Primary Stockholders.*

10. To the payment of dividends, made up 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 dividends (to Secondary Stockholders) before mentioned to be paid, shall have been paid in full; and all the Circulating Stock, 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 Company, 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 Circulating 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:

Transfer of Productive Stock in Redemption of Circulating Stock.

[Entered according to Act of Congress, in the year 1860, by Lysander Spooner, in the Clerk’s office of the District Court of the United States, for the District of Massachusetts.]

Transfer No. 115. Ten Shares.Nominal value, $1000.

From O——— O———, Primary Stockholder.

To P——— P———, Secondary 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 us [or me] by the Articles of Association of said Company, dated January 1st, 1860, do hereby transfer, and have hereby transferred, Ten shares of the Productive Stock of said Company, from O——— O———, 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 Circulating Stock of said Company. Said shares are numbered 101, 102, 103, 104, 105, 106, 107, 108, 109, and 110 respectively, [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-convey any or all of said shares to the said O——— O———, or his representatives, 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.

E——— E———, Cashier.

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 Company, 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, 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:

Re-conveyance of Productive Stock from a Secondary to a Primary Stockholder.

[Entered according to Act of Congress, in the year 1860, by Lysander Spooner, in the Clerk’s office of the District Court of the United States, for the District of Massachusetts.]

Re-conveyance No. 28. Six Shares.Nominal value, $600.

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 Company, from P——— P———, a Secondary holder thereof, to O——— O———, the Primary holder thereof; having tendered [or paid] 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 O——— O———, to said P——— P———, on the ——— day of ———, 1860, in redemption of Circulating Stock.

Dated at Boston, this ——— day of———, 1860.

E——— E———, Cashier.

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 representatives, the proper debit shall be entered against the original credit.

ARTICLE XXXIII.

The Trustees shall grant to each and every Primary Stockholder, 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:

Primary Stockholder’s Certificate of Productive Stock OF THE FOLLOWING NAMED MORTGAGE STOCK BANKING COMPANY.

[Entered according to Act of Congress, in the year 1860, by Lysander Spooner, in the Clerk’s office of the District Court of the United States, for the Distric of Massachusetts.]

Capital Stock, $100,000:

In Mortgages bearing Seven per Cent. Interest.

Productive Stock, $100 per Share.

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 Banking 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 provisions 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 the Company, and the surrender of this certificate, when a new one will be issued.

Dated at said Boston, this tenth day of August, 1860.

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:

Primary Stockholder’s Sale of Productibe Stock OF THE FOLLOWING NAMED MORTGAGE STOCK BANKING COMPANY.

[Entered according to Act of Congress, in the year 1860, by Lysander 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 bearing Seven per Cent. Interest.

Productive Stock, $100 per Share.

———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 of the Boston Banking 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, 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.

seal.

Boston, ———, 18—. Recorded 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 Stockholder 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:

Secondary Stockholder’s Certificate of Productive Stock OF THE FOLLOWING NAMED MORTGAGE STOCK BANKING COMPANY.

[Entered according to Act of Congress, in the year 1860, by Lysander 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 bearing Seven per Cent. Interest.

Productive Stock, $100 per Share.

Secondary Stockholders are paid Dividends of Six per cent. per annum.

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 numbered 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, 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 Company, and the surrender of this certificate, when a new one will be issued.

Dated at said Boston, this 20th day of March, 1860.

E——— E———, Cashier.

To the above certificate shall be added a blank conveyance in the following form, to wit:

Secondary Stockholder’s Sale of Productive Stock OF THE FOLLOWING NAMED MORTGAGE STOCK BANKING COMPANY.

[Entered according to Act of Congress, in the year 1860, by Lysander 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 bearing Seven per Cent. Interest.

Productive Stock, $100 per Share.

Secondary Stockholders are paid Dividends of Six per cent. per annum.

——— Shares.Nominal value, $———.

Be it Known, That I, ———, of ———, in the County of ———, in the State of ———, being the true owner, and a Secondary holder of —— share of Productive Stock of the Boston Banking 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 ———, ——heirs 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 my hand and seal, this ——— day of ———, in the year 18—.

Witness.

seal.

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 Stockholder, 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 their right and claim to have it re-purchased and restored to him or them by the Company, the conveyance of such right, property, and claim shall be made in the following form, (names, dates, and numbers being made to correspond with the facts in each case,) to wit:

Sale, by a Primary Stockholder, OF HIS RIGHT TO PRODUCTIVE STOCK IN THE HANDS OF A SECONDARY STOCKHOLDER.

[Entered according to Act of Congress, in the year 1860, by Lysander 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 bearing Seven per Cent. Interest.

Productive Stock, $100 per Share.

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 Banking 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—consecutively 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 K——— K———, his heirs or assigns, as Secondary holder or holders thereof.

And whereas said Company are bound by the Articles of Association of said Company, (dated January 1st, 1860,) to re-purchase said shares of Productive Stock, and restore them to said F——— 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-purchased 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 ——, he County of ——, in the State of ——, all my right, title, and interest in said Twelve Shares of Productive Stock, and all my right and claim to have the same re-purchased and restored to me by said Company. And I hereby request, authorize, and require the Trustees of said Boston Banking Company, 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 assigns forever, as Primary holders thereof.

Witness my hand and seal, this ——— day of ———, in the year 18—.

M——— M———. seal.

Witness Y——— Y———.

Boston, October 10, 18—. Recorded in the book of Sales by 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 aforesaid, 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 be 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:

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, with interest on all such sums from the time they were paid.

2. To the payment of any interest that may be due, and remaining 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 be 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 especially 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 fractional 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 future expenses for, or on account of, the insurance of the property mortgaged; or the Trustees may, if they deem it expedient, accept it as the equivalent of another share of Productive 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 be 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 property, 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.

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 rom 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 aforesaid, the loss shall fall on the Company.*

Whenever any Productive Stock shall be cancelled, in pursuance of this Article, an equivalent nominal amount of Circulating Stock shall also be cancelled.

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 Primary 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 Productive Stock.

And whenever any Productive Stock shall be cancelled, in pursuance of this Article, an equivalent nominal amount of Circulating 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 particular numbers borne by such shares respectively.

ARTICLE XL.

The regular semi-annual dividend days shall be the first 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 XLI.

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.

Nor shall any dividends, of profits, (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 Productive 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 XLIII.

Accumulated profits of the Company may be loaned by the Company.

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 be liable thereon, be sold or transferred by said Company, until after it shall have become due.*

ARTICLE XLV.

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 appoint an additional Councillor.†

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 succeeding the one on which they shall be chosen. The Stockholders, named in this provision, shall be furnished, by the Trustees, 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.

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 pecuniary 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 Stockholders. 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 Circulating Stock, and safe and proper for the best pecuniary interests of the Company.*

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 the 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 ——— dollars per annum, without the consent of the Council.

9. The Trustees shall always 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 books) 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 ——— dollars 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 Council, 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 individually.

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:

Trustee’s Bond.

[Entered according to Act of Congress, in the year 1860, by Lysander 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———, W——— 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 Suffolk, 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 Circulating Stock of said Company. To the which payment, well and truly to be made, we hereby bind ourselves, our heirs, executors, and administrators, firmly 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 consented 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 Stockholders of said Company, both collectively and individually—that is to say, towards all the holders both of the Productive and the Circulating Stock of said Company; and shall make good to said Company collectively, and to all Stockholders therein individually, (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.

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 judgment, 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 undoubted debts or obligations, due by the Company and requiring 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 Stockholders be the holder or holders of either Productive or Circulating 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 recovered by the Council, in such suit or suits, shall be paid over, by them, to the Stockholder or Stockholders entitled thereto.

Provided, however, that the right of any Stockholder or Stockholders 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 bringing suit in his or their own name or names, if he or they shall so choose, against any or all the Trustees. And any judgment recovered in such suit, by such Stockholder or Stockholders, if not otherwise paid, shall, on demand by said Stockholder 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 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 XLVIII.

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 by him otherwise than in his capacity as Trustee, he shall be liable to be removed 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 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 be 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.

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:

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.

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 correspond with the facts in each case,) to wit:

Trust Deed.

[Entered according to Act of Congress, in the year 1860, by Lysander Spooner, in the Clerk’s office 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, whose 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 consideration of the premises, and of one dollar, to us paid by the said R——— R———, the receipt of which is hereby acknowledged, 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 office, one third of all our respective rights and property in and to the Capital 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 R——— R———, 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 Circulating Stock of said Company; and to be holden and administered 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 ———.

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, describing it, with the page].

D——— D———, Pres’t. 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 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 be recorded in the Registry of Deeds for the County of Suffolk.

ARTICLE LII.

1. The regular salaries of the Trustees shall be 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 Company. The votes, for this purpose, shall be given by the necessary number of Stockholders subscribing, upon some book of the bank, kept by the Trustees, a declaration substantially in the following form, to wit:

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.

This vote shall be given only at some time within the six months next preceding the day, when the increased salary is to commence.

3. In addition to their regular salaries, each Trustee shall have five 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 be 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 entireProductive Stock of the Company shall be transferred, from any one body of Primary 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.

ARTICLE 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, certificate, 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 principal, or surety, such indebtedness shall operate as a lien upon his Productive Stock, unless a written contract to the contrary be entered into.

ARTICLE LV.

The Company may receive the Circulating Stock of the Company, on deposit, without 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 authorized Committee thereof, may allow money and currency, other than the Circulating Stock of the Company, to be 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.*

ARTICLE LVII.

Whenever the consent of the Council, or any Committee thereof, shall be necessary to any general, 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 redemption, and not been redeemed—shall be entitled, at all reasonable times, to all necessary and proper information, from the Trustees, as to the affairs of the Company, and to access to 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 Productive 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 authorized Committee thereof, may make such contracts with banks and 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 reasonably may be, 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 concerned); 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 Circulating 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 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, distribute 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 of 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.

[* ] 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 consequences 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.

[* ] 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.

[* ] Where a Certificate represents but a single Share, the words in brackets may be left out.

[* ] A Primary Stockholder can have no serious objection to the transfer of his Productive Stock, in redemption of the Circulation; because no dividends 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.

[* ] Of course no body of Primary Stockholders will ever suffer the entireProductive Stock of the Company to be transferred, in redemption of Circulation, 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.

[* ] 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.

[* ] 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 reissued, before they had been redeemed, they would require a double redemption; and there would not be enough Productive Stock to redeem them.

[* ] Articles XXIV, XXV, and XXVI, may be left out, if it should be thought best; but it will probably be expedient to retain them, to prevent the too frequent transfer and re-purchase of Productive Stock.

A holder of certificates, scrip, or bills of Circulating Stock, who shall have presented them for redemption, can have no reasonable objection to the non-redemption of them, by the transfer of Productive Stock, so long as interest upon them is paid semi-annually; because they being 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 Productive Stock, is, that he cannot have the rights of a holder of Productive Stock, to vote for Councillors, 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 Productive Stock itself, which would be transferred 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 Productive 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 Productive Stock, in redemption of bills, immediately on their being presented for redemption, is, that it might be very troublesome to be continually changing the ownership of the Productive 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 Productive 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 payment 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.

[* ] 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 redemption 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 Productive 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 presented in amounts less than $100, rather than receive it on deposit and pay interest.

[* ] 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 Productive Stock shall remain in the hands of the original mortgagors, or their assigns (holders of the mortgaged estates) as Primary holders; because the actual payment, by them, of interest, which is to be at once returned to them as dividends, 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.

[* ] 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.

[* ] This provision makes the mortgages mutually responsible for the solvency or sufficiency of each other.

[* ] See Note to Article XXIX, page 22.

[† ] So long as the bank is prosperous, and the Productive Stock shall remain in the hands of the mortgagors, or the owners of the mortgaged estates, there will, of course, be no need that the interest be paid at all; because, if actually paid in as interest, it would have to be 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.

[* ] The purpose of this Article is to furnish a guaranty to borrowers of Circulating 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 estimation 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 uncertainty 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.

[† ] As the powers of the Councillors are mostly advisory, rather than authoritative, the name of Councillors is more appropriate than that of Directors.

[* ] 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 Primary and Secondary holders of Productive Stock, 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 in the Company, which are as strictly legal as those of the Primary or Secondary holders of Productive 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 represent 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 impartial 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 will probably be seen that its value, as a precaution against embezzlement, and against the various sinister influences, that might otherwise operate upon the Trustees, is such as to outweigh any inconvenience.

[† ] As the Trustees have power to appoint their own Cashier and other servants, without the consent of the Council, they should be held responsible for their fidelity.

[* ] 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 therefore not at its full nominal value.

[* ] 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 necessity, therefore, for loaning deposits, will be superseded. 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.