State Expenditures. 93 



enterprise, but it did aid it materially in making banks subscribe 

 to the stock of the corporation. In 1824, the Mechanics' Bank in 

 New Haven was incorporated. One of the conditions of its charter 

 was that it must subscribe one hundred thousand dollars to the 

 capital stock of the Farmington Canal Corporation and an addi- 

 tional one hundred thousand dollars if the directors of the canal 

 should call for it. The directors did demand it and the bank sub- 

 scribed the entire two hundred thousand dollars. In return for the 

 subscription, the capital stock of the bank was forever exempted 

 from all taxation.^ In 1826 the Farmington Canal Company and 

 the Hampshire and Hampden Canal Company united their stock. 

 The work of constructing a canal from New Haven to Northampton, 

 Massachusetts, was now under way, but in 1827 the funds from the 

 stock subscription were exhausted and only the courage of the 

 managers kept the enterprise alive at this time.^ The city of New 

 Haven came to their relief in 1829 with a subscription of one hundred 

 thousand dollars to the stock of the canal and in 1831 the City Bank 

 of New Haven was chartered on condition that it subscribe the 

 same amount to the stock of the Hampshire and Hampden canal 

 corporation. The capital stock of the bank was to be free from taxa- 

 tion until the tolls of the canal were yielding a- dividend of six per 

 cent on the capital stock of the canal corporation.^ Still another 

 bank was directed by its charter, granted in 1834, to further the con- 

 struction of the canal. This was the New Haven County Bank. Within 

 a year from the time of its organization this bank was to pay to 

 the Hampshire and Hampden Canal Company the sum of two thou- 

 sand dollars and was also to pay one thousand dollars annually during 

 the three following years.* In 1836 the condition of the two companies 

 was so bad that they were wound up at a loss of over one million 

 dollars and a new company, called the New Haven and Northampton 

 Company, was formed in their place.^ The canal continued to be 

 run at a loss and in 1839 the city of New Haven issued to the com- 

 pany as a loan, twenty thousand dollars worth of bonds, secured 

 by mortgage of the canal. The city offered one hundred thousand 

 dollars; but in 1840, when the company asked for the remaining 

 eighty thousand dollars, the city refused to make the loan. It agreed. 



1 Private Laws, 1789—1836, pp. 104—107, sec. 10. 

 ^ Atwater's History of City of New Haven, chap. 22, p. 359. 

 3 Public Acts, 1831, chap. 50, sec. 10. 

 * Pubhc Acts, 1834, chap. 39. 



^ Account of Farmington, Hampshire and Hampden, and New Haven 

 and Northampton Canal Companies, 1850, T. J. Stafford, Printer. 



