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Convention to Amend the Constitution.
ONE HUNDRED AND TWENTY-SIXTH DAY.
TUESDAY, June 24, 1873. Mr. FUNCK. Mr. President: I conceive The Convention met at nine o'clock A. it important that the rate of interest M., Hon. John H. Walker, President pro should be fixed by this Convention. An tem., in the chair.
immense number of “shaving shopg” are Prayer by Rev. Jas. W. Curry.
daily springing up over the country, and The Journal of yesterday's proceedings they are oppressing the business of the was read and approved.
country very greatly. If there is any
source from which the community at LEAVE OF ABSENCE.
large suffers, it is from this extortion ; Mr. MANTOR asked and obtained leave and if this Convention will adopt some of absence for Mr. Craig on account of ill method by which they can get relief, it health.
will be a great blessing. Banks of issue, CORPORATIONS.
regularly chartered, in consequence of the Mr. STANTON. I move that the Con- pressure which has been brought to bear vention proceed to the consideration of upon them by these "shaving shops,” the article reported from the Committee have entered the money market and all on Private Corporations, report No. 21. of them have become borrowers; and in
The motion was agreed to, and the Con- consequence of the course which they are vention resumed the consideration or pursuing, all the money of the community second reading of the article on corpora
finds its way into their vaults. Tbere it tions.
is held. No business man any longer is The PRESIDENT pro tem. When the
oro tem. When the able to go to his neighbor and borrow Convention adiourned yesterday the money at six per cent. or five per cent. question was on the eighth section. It interest as was customary heretofore ; but will be read.
every man who goes into business withThe CLERK read as follows:
out having capital enough of his own to SECTION 8. No banking or other corpo- carry it on is obliged to submit to a shave ration shall receive or pay directly or in- in order to prosecute it. directly a greater rate of interest than is These banks first make money scarce, allowed by law to individuals.
and afterwards take advantage of that Mr. FUNCK. I move to strike out all scarci y to run up the rate of interest, and after the word "section" and insert the consequently no new enterprises are following:
springing up in the State; no forges, «The legal rate of interest shall be six manufactories or other industries are per cent. per annum; and banks of issue built and prosecuted, because of the scarshall not be allowed to pay interest on de- city of money. Real estate is selling beposits."
low its actual value because there is no The PRESIDENT pro tem. The question desire for it. If a man wants to buy a is on the amendment.
farm and has two-thirds of the money ne
cessary he cannot buy it, because he does this State from this day henceforth. We not know where to get the balance of the are putting here into the organic law a money; consequently the business com- proposition that no delegate on this floor munity is impoverished through this sys. can begin to comprehend the final results tem ; and when we reach the proper stage of. It is in my judgment the worst speof our deliberations I shall offer a section cies of legislation. It has no business in to the report now before the Convention, the Constitution; and if we were in the calling upon the Legislature to annul the Legislature it would be an article of very charters that have heretofore been issued exceptional propriety. to these "shaving shops,”in such manner, For these and for other reasons I hope however, that no injury to the corporators the Convention will vote down this proposhall be done, and to prevent the Legis- sition. And if anything of this nature is lature hereafter from granting like privi- needed, let it be done by law that can be leges to corporations of that character. I repealed if found to work disastrously believe they are an unmitigated nuisance, to the best interests of the people. from which the country desires to be de Mr. BROOMALL. Mr. President: I am livered. If individuals seek to engage in not so much opposed to the amendment business of this kind, let them do it as I am opposed to its taking the place of on their individual responsibility, be- the section, which, as it reads now, is to cause it is a business utterly selfish in its my mind a most valuable one and one character. The community derives no that ought to have a place in the organic benetit from it. If it were some manufac- law. The gentleman who has just taken turing or productive industry that was to his seat says that if this section is passed be advanced, by which laborers were to be as it stands, no corporation will be enaemployed and the community benefited, bled to live in effect and make its improveit would be different, but it is a privilege ments. I want him to tell me why. If it to individuals only for their exclusive ben- is true, it is because at present they are etit, to the detriment of the community enabled to sweep the money market and For this reason I hope the Convention will no individual is allowed to compete with think favorably of the amendment I have them. If it is true, it is because the rates offered and adopt it.
of money by the laws of trade are at this Mr. NILES. Mr. President: I am op- time higher than individuals are allowed posed to the amendment and to the sec to give openly; and if he wants this kind tion. I would have had no particular ob- of favoritism for the corporations, either jection to the section if the Convention public or private, to be continued, I am vesterday had put the word "private” in perfectly willing that he should be albefore the word “corporation;" but if we lowed to cast his vote for that unrightadopt this section as it is pending to-day, eous discrimination. it will be utterly impossible for any mu I do not want corporations to be denicipal corporation in this State to erect prived of a fair chance in the money marany public buildings or to borrow money ket. What I want is that they should to build school houses or anything of that not have all the chance. What I want is kind. Now, sir, if we are to limit any that individuals should have a fair chance corporations whatever in this State—I am with them. If you want to make the speaking particularly about municipal community rise in a mass and by revolucorporations—if they are to be limited to tion put down these giant bodies that six per cent., it will either prevent the have so long ruled them with an iron loaning of a dollar by one of these corpo- hand, only keepon discriminating in their rations, or it will succeed, as the delegate favor; only continue the process by wbich from Columbia told us yesterday, in forc. I, if I want to borrow, must sneak into ing the rate of interest up to a point that the money market at the back door and will satisfy all the corporate bodies of the deal with the first scamp who chooses to State. That is just exactly what this pro- ask me an extortionate rate, while the position is to result in, to force up the le- agents of corporations can go in boldly at gal rate of interest to a point that will be the front door and take money at the acceptable to the corporations, or else it rate which the laws of trade tix,and sneer will prevent the building of additional at me because I cannot compete with improvements in the State from this day them. henceforth. I, sir, am unwilling to go up Sir, this unfair discrimination has exon the record as voting for this proposi- isted too long. In my county such a tion. It is to tie up all the industries of thing as borrowing upon mortgage by a
private individual at the rates at which lowed to get money at the market rates ofprivate individuals can deal by law is a ten at half the price which I am compelled thing of the past; it is heard of no longer. I to give. I hope the section will pass as grant that the farmers there get money, it is. some of them must get it or be broken up, Mr. Cochran. Mr. President: The but they get it how? They get it at an enor- question now before the Convention is mous shave; they get it at twelve per not at all that which has been discussed by cont. and from that down to eight, and the gentleman from Tioga, (Mr. Niles,) sometimes up to fifteen, while the corpo- as I understand it, and especially not that rations, with no better security, can get it which has been discussed by the gentlefor seven or eight; and why is this dif- man from Delaware (Mr. Broomall.) It ference ? Because the corporations are is simply whether this amendment shall allowed to go in at the front door and be substituted for the original section or openly bid, while we must sneak in at not. Now, sir, it seems to ine that the arthe back door and deal with those who gument which was well stated by the are dishonest enough to take advantage gentleman from Lebanon (Mr. Funck) of our unfortunate situation.
ought to prevail. What is the object of Now, sir, let this section go in; and this amendinent? The object of the what will be the result? Not that corpo- amendment is to prevent corporations rations will be crippled unless, indeed, from forestalling the money market just they are afraid of the competition of in- as you would prevent people from fore. dividuals, unless, indeed, they want all stalling any other market. They go to the capital of the country and are not work and draw into their vortex the willing to let individuals come in and get money of the country; and having it their share. That I do not myself believe. there, whan individuals coine to borrow I believe they would be satisfied with from them they have to pay exorbitant their share, though they have an unfair rates of interest in some form or other by advantage as the matter how stands, be- which the provisions of the law as it excause undoubtedly if individuals are al- ists are evaded or violated. Now, the lowed to deal openly, they will get no object of this amendment is to leave the more than their share of the money of the corporation and the individual on the country. But what will happen if we put same footing at the legal rate of interest this in ? Simply that the corporations and no other, and not to allow the indiwhich have, as gentlemen say,.controlled vidual borrower to be put at a disadthe Legislature, will force the money vantage. market open for us as well as for them. Mr. President, this is opposed by the selves, and the laws of trade will regulate gentleman from Tioga, as I understand, the rates of money; and why not? This on the ground that it would prevent masection does not say that corporations nicipal corporations from obtaining the shall be limited; it only says that corpo- funds necessary to enable them to make rations shall be limited if individuals are.. their improvements. Such has not been This section puts no clog upon the opera- my experience or observation in the tions of corporations; it only says that section of the State from which I come. individuals shall not be clogged unless Municipal corporations in our section corporations are. This section does not of the State have always been able forbid corporations from borrowing; it to get money at the legal rate of interonly says that if you shut the money mar- est. . They have got it heretofore; they ket to me, you shut it to all the world. I can get it to-day; and the reason is, demand the right to buy in the markets because the people have confidence in of the world at such rates as are allowed the security that is offered to them, to others. I deny your right to say that I and they will take the bonds of the must not buy flour when flour gets to county of York, or the obligations of eight dollars a bariel, but that the rich the borough of York, and lend money on corporations shall still live. I deny your them at six per cent. Why, sir, the right to say that I must violate the law if county of York is indebted in the sum of I can get money at more than six per nearly $300,000, on its own bonds, and on cent., and hence must pay for the risk of that sum, as I understand, it pays no that violation of the law in one way or more than the rate of six per cent. interar other; and yet that the gentleman's est, and it always has been able, except in favorite corporations, about which he cases when there was suspicion thrown seems to be so particular, should be al. upon it, to obtain money at that rate :