that the president and directors apply to the New York legislature for a charter of incorporation and file separate petitions seeking laws that would make “Fraud or Embezzlement” a crime and “punish the Counterfeiters of Bank Notes and Checks” as they thought “necessary and proper for the Security of the Stockholders and the Public.”50 This was not to be a bank that existed separately from the state. Rather, it depended on government for corporate privileges and statutory regulations that would allow it to function more effectively in the marketplace. The bank was asking the state for recognition and inviting it to expand its involvement in the local and regional economy by regulating transactions and banking activities.
Similarly, Robert Livingston’s outline for the Bank of the State of New York had called for state “officers of the government” to “inspect [the bank’s] books” and “examine their mortgages,” in exchange for the bank serving as the “receptacle of public money” and having its “notes taken in taxes.” In other words, the bank would welcome the intrusion of inspection if it was granted the privilege of being the official state bank and the repository of public funds.51 New York’s bank promoters therefore not only knew that the state legislature would be involved in their institution if they were granted a charter, they were counting on it; state-imposed regulations would be a necessity, as would the drafting of new laws to define and protect the bank’s operations. These expansions of state power were explicitly sought by bank promoters.52
The Bank of New-York’s petition was submitted to New York lawmakers on 12 March—three days before a shareholder meeting “officially” ordered them sent. Nearly a month had passed since Robert Livingston and the landbank proprietors had submitted a petition for the exclusive incorporation of their institution. A state assembly committee had already drafted legislation to charter the land bank and give it exclusive privileges for two years, a law that would have prevented any rival banks from opening in the state during that time. The Bank of New-York’s promoters therefore not only had to win a privilege for themselves; they also had to defeat a legislative process already underway.53
Former Sons of Liberty leader and merchant Jacobus Van Zandt—an advocate of specie-based money and a speculator in Tory-forfeited lands—was the first signer of record on the bank’s petition. Conveniently, his nephew Peter P. Van Zandt was a newly elected member of the state assembly from New York City.54 There were other connections, too, as Alexander McDougall was a leader in the Bank of New-York and a state senator, and Isaac Roosevelt was a city merchant and one of the bank’s newly chosen directors. With the exception of Alexander Hamilton, the new board of directors was composed entirely of merchants. Bank president Alexander McDougall, more than any merchant in the state, had unassailable patriotic credentials. Two other directors—Thomas Randall and Comfort Sands—were merchants who had tried to run for political office in the recent past and had been opposed by the city’s more working-class mechanics.
Yet these figures were far less controversial than three other men in the group: onetime Loyalists Joshua Waddington and Daniel McCormack, both of whom were bank directors, and William Seton, another Loyalist who was to be the new bank’s cashier, conducting its day-to-day affairs. The new bank seemed to have become a vehicle for urban coalition building among Whigs and Tories, garnering its support from former Loyalists, subtle varietals of “hotheaded” and moderate Whigs, established merchants and ambitious upstarts, onetime land-bank supporters, and even some of the city’s mechanics.55
The capacity to create common interests among onetime enemies and potential rivals had been one of the Bank of New-York’s earliest and most important assets, making converts among those who might have otherwise opposed it more forcefully. Alexander Hamilton, for example, might not have wanted to undermine this burgeoning coalition in Manhattan, knowing that in Philadelphia a new bank had become a “coalition bank” composed of once-“violent Whigs” and “violent Tories.”56 Land-bank supporters, too, recognized that the Bank of New-York—more so than their own proposed bank—was an effective tool to advance Tory-Whig cooperation. Even Robert Livingston’s brother-in-law Thomas Tillotson acknowledged as much when, after critiquing anti-Tory legislation, he reassured Livingston, “I wish you to understand that I mean not to adopt Genl. McDougal[l]’s plan, but mean that they should get [Senator Abraham Yates] out of the Senate.” Tillotson therefore viewed the Bank of New-York and Alexander McDougall’s leadership of it as evidence of its potential to advance Tory-Whig reconciliation and to frustrate Yates.57
In their harshest critiques aimed at each other, advocates of both the land and money banks hesitated to openly question the loyalty or motives of their rivals; public letters that can be traced back to the banks’ promoters during the first months of 1784 focus almost exclusively on the merits of their respective proposals, suggesting that these were not rhetorical attacks but efforts to persuade. The land- and money-bank coalitions each believed their charter applications would be strengthened if they could expand their appeal by attracting supporters and investors from the rival cohort or by offering concessions that would consolidate the two proposed institutions into a single pro-bank effort. Even though Alexander Hamilton thought the land bank was “a wild and impracticable scheme” and had worked to array “all the mercantile and monied influence … against it,” he did not take to the city’s newspapers to attack Livingston and his allies.58 Instead, he directly solicited the land bankers’ support by carving out room for their interests within the Bank of New-York. According to notes kept by Hamilton concerning the bank’s charter application, he and his colleagues considered allowing one-fifth of their bank’s capital—up to $200,000—to consist of mortgaged properties.59
Robert Livingston’s critiques were tempered by a reluctance to have the land bank seen as a divisive counterweight to the Bank of New-York. He rejected the claim that “a monied interest and a landed interest of Merchants and Farmers” were necessarily “opposed to each other, when common sense must dictate that they are members of the same body, and mutually support each other.” “The Merchant” he stressed, “could not exist without the Farmer, and the Farmer without the Merchant would be a dissocial solitary animal.”60 Livingston acknowledged that the land bank could be more solicitous of “monied persons” in the future and lauded Alexander Hamilton for “sh[owing] what appears to me faulty in the constitution of the Land Bank.” The quality of mortgaged lands could be improved, he conceded, and it was unfair to ask merchants to “[draw] too much of their stock from trade to vest it in lands” in order to buy shares in the land bank.61 Livingston, therefore, exhaustively highlighted the advantages and shortcomings of both the Bank of New-York and his own land-bank proposal in the weeks when both were being considered before the legislature.
Even writing under a cloak of anonymity, Livingston’s harshest criticisms of the Bank of New-York addressed only the propriety of having merchants serve as bank directors. In the process of pointing this out, Livingston showed that he envisioned a significant public role for his proposed land bank. The land bank, he said, could someday hold state government deposits, something that likely would enable it to multiply the amount of credit it offered to its clients. This prompted the chancellor to ask whether “the Government [could] lodge their money with those who afford them no security but their good characters” in a commercial bank. Could a “careful Guardian leave the money of his Ward with a Bank whose Directors must change every year,” especially when it “circulates more than its capital” and its credit “depend[ed] on the opinion the world entertain of Directors who, from being in trade, are always liable to strong temptations to aid each other?” He warned that the temptations of banking would drive some “Merchants [to] change their profession and become Stockholders.” Merchants, he argued, could not be trusted to oversee a stable and publicly useful bank.62
Both bank cohorts, then, recognized that the petitioning and charter-application process was a dynamic one. Although they did not consider combining their proposals, both offered compromises to attract new supporters and build a more persuasive case for incorporation. The petitioning process therefore not only aggregated financial capital but
