being required by the act, the associates found no difficulty in obtaining immediate subscriptions to the stock as fast as required. The water works were begun in the spring of 1799, and a bank of discount and deposit was established in the city of New York. The operations commenced in September, 1799, on a capital of $500,000. In December following an instalment of $100,000 was added, and in the course of the succeeding winter and spring, $400,000 more, which increased the capital stock to a million of dollars. Subsequently farther instalments were called in on the stock, and by the 1st of October, 1801, the payments required from subscribers completed the remaining million, and the whole capital of two millions was filled up. Of the high value placed on the stock by the public, we have evidence in the assurance of one of the early stockholders, now living, [see note, p. 200,] that about the year 1802, he disposed of a number of his shares at a premium of 28 per cent.

The affairs of the company are managed by a board of 13 directors, of whom the Recorder of the city of New York is one ex officio. A supplement to the act of incorporation was passed in the year 1808, authorizing the company to sell or lease to the corporation of New York, their real estate and water works, and water privileges, and in that case to employ their whole capital as they could their surplus capital.

The duration of the original charter is unlimited, as already stated; but by the act of 1808, it is provided that the charter of the bank shall cease thirty years from the date of the said sale or lease to the corporation of the city of New York; and by the same enactment it was declared that the state should be entitled to subscribe for one thousand shares of the stock of the company-equal, at fifty dollars each, to fifty thousand dollars-which was accordingly done; and thus the capital was increased to two millions and fifty thousand dollars, on which amount dividends have since been made. The imperfect character of the water works and the insufficient supply of water, as well as the inferior quality of the same, furnished by the company, offered no inducements to the corporation of the city to purchase the water rights of the Manhattan company, even if the latter had been willing to accede to a limit to their charter instead of the unlimited duration granted them by the original act and the directors have always been cautious with regard to any concessions which might impair their rights and extraordinary powers.

In addition to their banking operations, and the construction of water works, the company, in the early stages of its existence, attempted to amuse or interest the public mind by introducing the business of insuring lives and granting annuities on lives. In an account of the company published in 1802, we find the following notice to the public:

"The President and Directors of the Manhattan Company, anxious to employ their surplus capital to purposes useful to the public, as well as profitable to the company, have resolved to open an office for granting annuities on lives, either single or by survivorship, and also for insuring lives."

Although the rates of insurance as published with the above notice, were moderate, it appears that the novelty of Life Insurance in this country at that time, prevented the business from going into operation, and

thus this scheme, which was supposed by some to have been devised by Col. Burr, to divert public attention from the banking operations of the company, (which being carried on by powers insidiously obtained, were deemed odious by many,) was soon abandoned.

Although the charter authorized the company to take possession, and control the streams of Westchester County, or in any other place or places where they should judge proper, sufficient to carry out their professed object of supplying the city with pure and wholesome water, the directors chose a more ready and cheaper mode of complying with the terms required by the act of incorporation, thus preventing the absorption of their capital, and allowing the greater portion of it to be used for banking purposes. It should be remembered, that when the population of the city above the Park where the City Hall now stands, was sparse, and the grounds but little occupied with buildings, the water obtained from open springs and by sinking wells was comparatively pure, and although hard and unsuitable for washing, was palatable and therefore could well be used for drinking and cooking purposes. The Manhattan Company therefore decided to obtain water for the supply of the citizens, by sinking wells in Reade Street, a few rods north of the Park, and the water works erected by the company are thus described in an account of them by Noah Webster, published in 1802:

"The water works were begun in the spring of 1799, and at the close of the year 1801, conduit pipes, consisting of bored logs, had been laid within the city to the extent of twenty miles. These penetrate the most populous streets, and supply about 1400 houses. In certain places the pipes are constructed for the convenience of supplying the fire engines in case of emergency. Hitherto the pipes have been supplied with water by means of pumps worked by horses. But a large stone reservoir* is completed, and the machinery for raising the water by steam, which will greatly abridge the expenses of the operation. The water is taken from wells or pits in the rear of the Alms House, and not far from the fresh water pond, (the collect.")

The water works of the company for the supply of water to the citizens have, it is understood, proved a burthen to the Institution, the revenue therefrom never producing an income for a series of years equal to the annual expenditures and interest on that part of the capital invested in the water works. Thus the water works, viz., wells, reservoirs, engines, 25 miles of wooden pipes, and 14 miles of iron pipes, with the buildings attached to the works, were in 1840 offered to the corporation of the city of New York, at $384,700, and the water expenditure by the company was stated at $41,303, while the revenue was stated at only $1,910.

The profits of the company from their banking operations have been large: their dividends commencing in July, 1800, and terminating in January, 1840, varying from seven to ten per cent. per annum, and amounting to $7,082,530, or about 3 times the capital in a term of forty years. In consequence of the lax and injudicious management of the concerns of the company by the officers on whom the charge devolved,

*Now standing in Chambers Street.

principally from 1830 to 1840, particularly in loaning the funds of the company on stocks and insufficient security, it was ascertained, in 1840, that great losses had been sustained by the institution, and in February, 1840, a commission (consisting of Messrs. James G. King, Robert H. Morris, and James Boorman, who selected Francis W. Edmonds as secretary,) was appointed by the stockholders, for the purpose of investigating the concerns of the company. These commissioners, after a full investigation of the funds, assets, and liabilities of the company, made a full report of the concerns to the stockholders, without however submitting an estimate of the probable loss by bad debts, over drafts, and depreciated stocks. We understand however, that the estimated loss from the above causes, according to the best judgment of the commissioners at that time, was equal to about 25 per cent. on the capital of the company, or over half a million of dollars. Subsequent events and experience show that this estimate was much under the mark.

The losses of the company at the time of the suspension of dividends in 1810, were finally ascertained to amount to about a million of dollars, or fifty per cent. of the capital, all of which was made up by prudent management of the board of directors in power from 1840 to 1846-a period of six years-consequently the stockholders lost the dividends of those six years only, which, at an average of 8 per cent. per annum, would amount to 48 per cent. on the capital. Much credit is due to the direction since 1840, for their excellent management of the concerns of the company, by which the capital was restored after severe losses, and the institution placed on the list of banks paying regular semi-annual dividends.

The legislature having passed an act requiring incorporated banks to register their bills of circulation at the Comptroller's office at Albany, the Manhattan company no longer issue their own notes, but use in their business the bills of other banks.

MANHATTAN COMPANY, NEW YORK, commenced business, 1799.

In October term, 1830, the attorney general of the state of New York filed an information in the nature of a quo warranto, in the supreme court of the state, against the Manhattan Company, charging them with using without lawful warrant or charter the franchise of being a body politic and corporate, and of carrying on banking operations without being authorized so to do. The information charged the usurpation in different forms: as that the defendants were interested in an association or company for the purpose of receiving deposits, making discounts, issuing notes, &c.; in a bank for the like purposes; that they claimed the privilege of employing a part of their effects in, &c.; to keep an office for the purpose, &c., to issue bills and notes as private bankers, and to carry on banking operations, such as are usually employed and carried on by incorporated banks.

The defendants pleaded that by the act of incorporation passed by the legislature of the state, April 2, 1799, among other things, it was enacted that it should and might be lawful for the company to employ all such surplus capital as might belong or accrue to them, in the purchase of public or other stock, or in any other monied transactions or operations, not inconsistent with the constitution and laws of this state, or of the United States: also that the legislature, by acts passed March 25th, 1808, April 17th, 1816, April 21, 1818, March, 27, 1821, April 24, 1823, and by a provision in the revised statutes, the Manhattan Company had been recognized by the state as a bank.

The cause was argued at Albany, in October term, 1832, by Benjamin F. Butler and Samuel A. Talcott, for the defendants, and by Greene C. Bronson and David B. Ogden, for the people.

The court decided, that the act incorporating the Manhattan Company, having been passed previous to any restraining act rendering illegal banking by individuals, or by corporations not specially created for banking purposes, the Manhattan Company has the right to carry on banking bus

iness.

That the restraining acts prohibiting incorporated companies not expressly authorized to carry on banking business, do not affect this corporation; the legislature having in the same session, viz. in 1804, in which the first restraining act was passed, expressly excepted this company from its operation, which saving clause has never been repealed; the act of 1818 containing a proviso that nothing therein contained shall be construed to abridge or affect any rights theretofore granted, and the provisions of the revised statutes, not applying to pre-existing corporations unaffected by the previous restraining acts.

That the implied powers of a corporation are as much beyond the control of subsequent legislation, as powers expressly granted.

That a forfeiture incurred by a corporation, by non-compliance with the terms of a condition contained in its charter, may be waived by the legislature, by subsequent legislative acts recognizing the continued existence of the corporation.

The doctrine of waiver, however, is not applicable, where by the terms of a grant or charter the estate or franchise absolutely determines upon failure to perform a condition.-Wendell's Reports, Vol. 9, p. 351.

BILLS OF EXCHANGE.

ARE BILLS AT SIGHT ENTITLED TO DAYS OF GRACE?

Communicated for the Bankers' Magazine.

A LATE decision in Louisiana, that bills payable at sight are entitled to days of grace, appears to have occasioned some surprise. Yet such is, it seems, the general rule of the commercial law.

Chitty, in his treatise on bills of exchange, (p. 409 of 9th American edition,) says: "With respect to bills payable at sight, though, from the very language of the instrument, it should seem that payment ought to be made immediately on presentment, this does not appear to be so settled." After mentioning the law of France and Spain in this particular, and referring to some of the old elementary writers on mercantile law, who expressed the opinion that days of grace ought not to be allowed, he adds, "but it appears now to be considered as settled that days of grace are to be allowed."

Judge Bayley, in his work, (Bayley on Bills, 2d American edition, p. 233-see also notes 53 and 55 on same page,) lays down the rule as to days of grace as follows: "A note or bill payable within a limited time after a certain event, or on a given future day, or at sight, is not in fact payable until two days after the expiration of that time; nor, unless the third be a day of public rest, until three."

Byles, in his treatise, states the rule less positively. He says, (Byles on Bills, p. 152, Law Library for July, 1848,) "Whether days of grace are allowed on bills payable at sight, seems yet undecided. The weight of authority has been considered to incline in favor of such an allowance."

Judge Story, in his work on bills of exchange, section 342, lays down the rule very distinctly. "In England," he says, "days of grace are allowed on all bills, whether they are payable at a certain time after date, or after sight, or even at sight. As to the latter, (bills payable at sight,) there was some diversity of opinion among the profession, as well as among the elementary writers. But the doctrine seems now well established, both in England and America, that days of grace are allowable on bills payable at sight." The same rule is laid down by him in section 228 of the same work, and in section 224 of his work on promissory notes.

"The three days of grace," says Chancellor Kent, (3 Kent's Commentaries, p. 102,) "apply equally to bills payable at sight;" and in a note to this passage, he adds, that "the weight of authority would seem greatly to preponderate in favor of the rule as laid down in the text, though it cannot be considered as a point entirely settled."

The concurrence of all the approved elementary writers on the subject, to which may be added the decision in Louisiana, will then authorize us to assume, as the general rule of commercial law, that days of grace ought to be allowed on bills payable at sight. In relation to a rule