interest rate. There would be one thousand shares of stock for sale, priced at $500 each—half of what land-bank shares would cost a merchant. Shareholders would be expected to pay the first half of their stock subscription at the bank’s first meeting; they would have to pay the second half six months before being eligible to receive the bank’s promised twice-yearly dividends. The bank’s officers—a president, twelve directors, and a cashier—would be chosen by a plurality of votes cast by shareholders in elections designed to favor smaller investors. Each shareholder would receive one vote per share for their first four shares, shareholders with six shares would command five votes, those with eight would have six, and those with ten or more could cast seven. Therefore, no shareholder could cast more than seven votes no matter how large their investment. With a twelve-member board of directors (twice as many as the land bank), an electoral system that maximized the influence of smaller investors, and a set interest rate, the bank’s structure explicitly discouraged the hoarding of shares by people trying to take over the institution or seek special, more favorable borrowing terms.45
In these ways, the Bank of New-York was designed to answer the perceived financial flaws in the proposed land bank and the elite dominance of the Church-Wadsworth private commercial bank. Although any bank that backed its paper with specie would naturally be more oriented toward mercantile interests, the Bank of New-York promised credit to a wider community of less wealthy, newly established merchants than those who dominated the city’s older transatlantic trading houses. Each of the six men who co-signed the advertisement announcing the bank’s details were “merchants,” a label that seems superficial when one considers the varieties of political experience they brought to bear in making their proposal. Most had held public office in the provisional state government or had served on local committees during the Revolution; one was a sitting city alderman. A person who wanted to subscribe for Bank of New-York stock would have a choice to do so at John Alsop’s law office, Robert Bowne’s printing and stationery shop, or Nicholas Low’s mercantile firm. On the whole, these promoters were younger, more directly engaged in politics, and less economically secure than many of their social and economic betters, also called “merchants”; only one of the six was established enough to have been a member of the city’s Chamber of Commerce before the war—the remaining five were still climbing toward that status. The Bank of New-York was therefore a political mobilization led by political entrepreneurs seeking state support for a financial institution capable of representing the interests of a broad spectrum of the city’s commercial sector.
Two interests of that commercial sector in Manhattan were Tory-Whig reconciliation and revolutionary settlement. The bank supporters’ selection of Alexander McDougall as their nominal leader was meaningful on this front. He had been one of the most radical merchants in the state before war, and now at the age of fifty-two was one of the city’s senior statesmen and its current state senator. McDougall therefore had political clout. More important, he had been one of the foremost advocates for postwar reconciliation in the city.
When elections were held in the fall of 1783 to choose the members of a provisional state-level government that would transition the city from British occupation to American independence, a broadside was printed to target the city’s working-class mechanics—among them, blacksmiths, silversmiths, and hatters. The author, using the name “Cincinnatus,” had cautioned that a hostile climate for Tories would ricochet back on the people creating it, injuring their own commercial and financial prospects and sowing chaos. “The[se] [Tory] families,” Cincinnatus warned, “will go to neighbouring states, and we can expect none to come amongst us, but adventurers who delight more in tumult and anarchy, than in order and good government.” Envisioning a distinctly urban collaboration between laboring mechanics and commercial merchants, the author of the broadside urged mechanics to vote for merchants in special legislative elections to be held several weeks in the future. In London, “the largest and richest city in Europe, made so by Commerce,” voters had “chosen for her Representatives, Merchants, men well versed in the practical knowledge of trade.” New Yorkers, Cincinnatus concluded, would be wise to follow suit by remembering that their city was no island. “Our local situation, on what the city of New-York has to rely, not only for her own existence but for that of the adjacent country” could be succinctly summarized “in one word,” he wrote, before plainly declaring: “It is Commerce.” The broadside was not an empty call for unity; rather, the author wanted mechanics to temporarily set aside dissatisfactions they had with merchants just long enough to elect them to office.46
Given the nom de plume “Cincinnatus,” the broadside’s author was probably Alexander McDougall. His plea, however, met with fierce dissent. One reply authored by “a battered soldier” shouted that, of all the groups in the city, merchants were the least patriotic or fit for office. Candidates “who profess themselves to be your Friends” and were “of good natured Dispositions” were plainly too ambitious to be trusted. Moreover, merchants had shown themselves to be too forgiving of Loyalists’ misdeeds. “From their natural Timidity, Want of Firmness, and [the] intimate Connexions, by the Ties of Consanguinity, or Marriage” to Tories, the writer warned, merchants would naturally “feel disposed to pardon the most obnoxious Tories.” “If you [mechanics] fail” to elect candidates who will firmly punish Tories, he predicted that “you may depend on it that you and your Children will soon become Hewers of Wood, and Drawers of Water, to the Tories in this State.” In other words, either the Tories had to be defeated or the state’s patriots would once again find themselves under British domination.47
Consolidating Forces
Alexander Hamilton did not attend the first meeting to organize the Bank of New-York. In steering Manhattan merchants away from the land bank, he had hoped to drive them into the arms of a Church–Wadsworth bank, but they showed little desire to trade one form of financial domination for another. Hamilton knew, moreover, that it would become harder to establish a bank for Church and Wadsworth once the Bank of New-York was organized. The shares, he explained to John Church, had “been taken up by the broad footing of the whole body of the Merchants” in the city. Under those circumstances, he continued, “it never would be your interest to persue a distinct project in opposition to theirs.” Though it “embarrassed” him, Hamilton therefore “concluded it best to fall in with” the Bank of New-York before it was too late. By “employ[ing] [Church and Wadsworth’s] money” to make them “purchaser[s] in the general bank,” Hamilton hoped “to induce” the bank promoters “to put the business upon … a footing” that would “enable” Church and Wadsworth “[to combine] interests with theirs.”48
The bank’s promoters were more than willing to accept Hamilton’s involvement in their institution. Even though he had no fortune of his own and would never own more than one symbolic share of the bank’s stock, Hamilton’s name was added to the would-be board of directors.49 In conversations with the bank’s “most influential characters,” Hamilton set about convincing them to relax their restrictions on shareholder voting. Originally, he explained, “no stockholder” of “whatever amount” could cast “more than seven votes.” But Hamilton convinced them to allow shareholders one additional vote for every five shares they owned in excess of ten. This, he reported to Church, was as far as the Bank of New-York’s promoters would “depart” from their original limits. The change, however, gave Church and Wadsworth a greater voice within the institution and how it distributed credit. Therefore, even before the “Constitution for the said Bank” was drafted, Hamilton had made substantive changes to the institution’s design.
Although Hamilton is often credited with being the bank constitution’s author, the true extent of his contributions is unclear; the copy of the document found in his files was not in his own hand. It does, however, bear his intellectual fingerprints: subtle but substantial alterations to strengthen shareholder governance and security beyond what was outlined in the bank’s original plan. These changes included adding one more seat to the board of directors to make it a tie-proof cabinet of thirteen, which would, in future elections, directly choose bank officers by majority votes. The new compact empowered directors to expand
