Haverford College financial records

In 1830, a committee of Friends proposed the establishment of the Friends Central School and devised a charter to secure funding through the sale of stock. Differences within the Society of Friends led to problems receiving a charter from the Commonwealth of Pennsylvania using this name, and it was not until the name was changed to the Haverford School Association that the charter was finally approved on April 4, 1833. Article II of the charter stated, “The stock of the company shall consist of 400 shares of one hundred dollars each…” and Article XVI stated, “The net profit of the school shall be divided among the contributors, provided it does not exceed five per cent per annum on the capital stock.” This “sale” (subscription) was offered in October, 1830 only to members of the Society of Friends, and on November 18, 1830, the committee reported that 120 Friends had pledged $43,500 of initial capital. This led the committee to recommend increasing the goal to $60,000, and by 1836 the total stock subscribed had reached $64,300. It was proposed that the school would be located in the vicinity of Philadelphia, and three-quarters of the subscribers were members of the Philadelphia Yearly Meeting. (A History of Haverford College for the First Sixty Years of Its Existence, prepared by a committee of the Alumni Association, 1892, pp. 63-68, 72.)

Haverford professor Rufus Jones commented that “…the original group of founders encouraged the members of the Society of Friends to subscribe to the stock of the Association on the inducement that they were likely to get good dividends on their stock subscriptions! This faith in subsequent financial returns on the stock was bona fide. There was no conscious deceit in the proposal. It was only naïve and unsophisticated.” By the time the stock subscription had reached $64,300 in 1836, “…there was some disillusionment and the hope of dividends had grown somewhat thin.” (Rufus M. Jones, Haverford College: A History and an Interpretation, 1933, p. 5.) Indeed, on September 19, 1878, “…by decree of the Court of Common Pleas of Delaware County, the charter of the Haverford College Corporation was so amended as to abolish the system of stock ownership, this action having been brought about by the application of the stockholders and by the surrender of 804 shares of stock which had been issued in 302 holdings.” (First Sixty Years, pp. 440-441) Thus the Corporation was changed from a stock company with transferable shares to a non-stock (not-for-profit) corporation.

(Adapted from a report by G. Richard Wynn, Emeritus Vice President of Finance and Administration)