The first meeting of the Mechanics' Institute was held on December 11, 1854 and the organization was formed as a stock company. Any person could become a proprietary member by purchasing stock at $25.00 per share and by paying $3.00 quarterly dues. Subscribing members could pay $5.00 plus $3.00 quarterly dues, but they had no interest in the property and no voting rights. The Institute was incorporated on April 24, 1855 and this date is considered its founding date. The constitution of the Institute set forth "the establishment of a library and reading room" as an objective. In its early days, the Mechanics' Institute was an important center for adult education in the city, and the hub for social and cultural activities. Six months after the initial meeting, the Institute's first location was established in a $25-per-month room on the fourth floor of the Express Building (pictured to the left) on the northeast corner of Montgomery and California Streets. The Institute's highest priorities were: increasing membership, accumulating a book collection, planning classes for mechanics and supplying technical education at the lowest possible cost, discussing projects for the promotion of industries, and obtaining a building of its own. At the first annual meeting of the Institute in March 1856, the president reported on the success of the lecture series on technical and cultural subjects and the viability of the debating society among institute members. It was announced that there were 487 volumes in the Library collection and cash on hand amounted to $21.49. In 1857, all quarterly dues were reduced from $3.00 to $1.50.
In spring 1858, the Institute moved to larger quarters on Montgomery Street between California and Pine. By this time, there were 900 well used books in the collection and the vocational classes were well attended. If the fair produced a profit, the funds were applied to support the educational activities of the Institute. For its first annual fair, the Institute had $300 to begin the project. In 1859, the discovery of silver in Nevada was good news for San Francisco. The city became the supplier of goods of every kind for the mines and towns. The Civil War encouraged the establishment or expansion of industries in San Francisco. This was because San Francisco's normal communications with the East were interrupted, the state population was growing, shipping rates and risks increased on account of raiding vessels of the South that were off the California coast. The economic expansion led to greater need for the education of mechani