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GENERAL LAWS FOR CORPORATIONS.- DAVIS-CHAPIN — GRAY.

benefit of the whole people of the Commonwealth, and not for the few?

In my judgment, Mr. President, if we had not been trammelled by these special acts, which are calculated to cripple, to break down and destroy individual enterprise, the population of Massachusetts, instead of being a million, would have now been a million and a half; and instead of the property of the Commonwealth amounting to six hundred millions, it would have amounted to a thousand millions of dollars. What has made fifty-five thousand of the native citizens of Massachusetts emigrate into the State of New York, where they can live under general laws, and where there is a fair competition in all these branches of business?

Yes, Sir, fifty-five thousand of our native-born citizens have gone out from Massachusetts, as is shown by the last census; and they have gone into New York to get a livelihood, simply because they were trammelled here, and all competition was broken down by these corporations. Take an illustration. At first, individuals in this Commonwealth set up establishments for the manufacturing of railroad-cars, and they did well, and were prosperous. By and by it was discovered to be a prosperous business, and people petitioned the legislature, and got an act of incorporation. By the combination of capital they succeeded in putting down prices, and they endeavored to crush every individual who was in the business. They accomplished this, and failed every individual in the Commonwealth who was engaged in this business; and in the effort to do this, they failed themselves. If gentlemen will look into the history of these special corporations, they will perceive for it is obvious on the face of it-what these special acts are desired for. It is because those who ask for them want special privileges. What are these special privileges for? They are to enable them to gain an advantage over the masses of the people; that is all the reason why they come to the legislature for these special acts. But, says the gentleman, this is to open the door too wide, you are going to make more corporations, if you have such a general law. But when this general law comes before the legislature, I have confidence enough in the representatives of the people, to believe that a general law, which is to affect the whole people, will be guarded, so that men cannot get, under a general law, what they get under special laws, where they come into the legislature and have hundreds of petitions for special acts piled up on the table of the House, and, by a system of log-rolling, secure the passage of an act giving special and exclusive privileges.

Mr. CHAPIN. I wish to inquire of my colleague, who is to decide whether the object of the corporation can be attained under general laws or

not.

Mr. DAVIS. The legislature will judge as to that matter.

Mr. CHAPIN. I suppose that the legislature, under this general law, could pass a special law, declaring that, in their opinion, the cbject was not attainable under general laws, and should therefore be chartered. I will also ask the gentleman another question: whether, in his opinion, the legislature can pass a general railroad corporation act?

Mr. DAVIS. There are general laws relative to railroads. I admit that railroads should never be

permitted without some action on the part of the legislature; but yet there may be general laws that will affect the whole. The principle is substantially that which has been adopted in other States. It has been adopted in the State of New York, and it has operated well there. If gentlemen will look at the last census, and see the tide of population which has gone into that State, they will see how much this system has operated for her advancement, and they will see one of the causes which has driven energetic young men from this State. This leaves it in the power of the legislature to determine the matter. Take, for instance, the banking law of Massachusetts. The general banking law now upon the statute book is much more stringent than these special laws, which have been given to these individuals; and that is the reason that the bank men do not like it. Under the present system they can issue any amount of money they please, without anything to redeem it, in direct violation of the Constitution of the United States, in my judgment. The Constitution of the United States establishes the fact that gold and silver shall be the standard by which we are to estimate the value of our goods, lands, wares, and merchandise; and yet we have another standard here in Massachusetts. Ten millions of bank capital are created in a single year, and everything is raised in value, not comparing it by the gold and silver standard, but by the paper standard, which is not a representation of specie, because, by the last returns of the banks there is not ten cents on a dollar to redeem their circulation and deposits. Why are all these ups and downs in trade, commerce, and manufactures, except from the constant change and variation of the amount of this paper circulation? And this is done for the benefit of the few, who wring their thousands from the masses. But if these ten millions of bank capital had been created under a general law, instead of being created under special acts last winter, it would have had a material effect upon the prosperity of this whole Commonwealth. The man who sits in State Street has the control of more than seventy millions of dollars-the control of all the paper circulation in New England. Every gentleman knows very well that all the banks pay tribute there. No bank can go into operation in New England, until it pays tribute to State Street; and whenever they see fit to put on the screws there, and to make money scarce by curtailing the circulation ten millions, they can do it, and what is the consequence? The farmer's produce falls, and the manufacturer's produce falls in valueall the products of labor fall, and the knowing ones can take the advantage and buy up what they want. The screw is raised, money is plenty, prices increase, and the knowing ones reap the harvest; and the people suffer, and are defrauded in that way. Their honest earnings are taken up in this manner; whereas, if all this business had been entered into under this general banking law, which stands upon your statute book, they could only issue so far as they have the money to redeem their paper with, and every bill-holder would have been safe with his bills. But no! they go on passing these charters, these special acts to give privileges to the few at the expense of the many. I think there is a sufficient guard, if the legislature should pass a general act, for they will do it with vastly more care than they exercise in granting a special act. It is impossible for them

[July 20th.

to review all these special acts with much care, as numerous as they are. Nobody knows the law with regard to these special acts. You may ask the best lawyer in this Convention about any particular charter, and he could not tell you unless he had happened to have occasion to examine it, and thus to become familiar with its provisions. But if we had a general law, every lawyer would understand it. Now, the simple proposition is to bring these special acts under a general law. Why, Sir, they have become so numerous in this Commonwealth, that-as gentlemen will see if they turn to document No. 37-it takes ninety pages, to enumerate these special acts! Here is a return made by the Secretary of State, filling ninety pages, just to name these special acts. We have gone to the extreme of any State in the Union. If gentlemen will look at the special acts of other States, they will find nothing to be compared with it. Now, Sir, I ask for this simple provision; it leaves it for the legislature to judge whether these corporations require a special act, as each case presents itself. I know, that under different legislatures, there might be different decisions. There is a certain set of gentlemen who think that it is proper to legislate for the few at the expense of the many, and they would judge that it was best to grant a special act; but whenever you have a legislature who believe that they ought to legislate for the many, and not for the few, then they would give them a general law.

I see no objection to it, nor do I see why it does not obviate the objection of the gentleman from Boston, (Mr. Schouler,) entirely; that it leaves it with the legislature to determine; so that either a railway, or other corporation, can obtain full privileges to carry forward any needful enterprise. But to give privileges to any corporation, that will tend to crush individual enterprise; to all that class of corporations I am opposed. If they are placed under a general law, then there is no special privilege, and they will do no harm.

Mr. GRAY, of Boston. It appears to me, and I think it will so appear to most gentlemen, who look coolly at the question, that there are, in fact, two questions before us; and I certainly thinkwith all respect to some of the gentlemen who have preceded me-that these two questions have been confounded. These two questions are, first, that corporations-and, I will add, a great number of corporations-are an evil; that it is an evil to have this system of carrying on business by means of joint stock companies. Then, Sir, the next question is-suppose that it is not an evil, but a benefit upon the whole, at any rate a thing not to be prohibited-how shall these corporations be created? What is the most convenient and proper way of doing it? Now, I think, that these two ideas have been confounded by gentlemen in their arguments. We are told of millions of capital being locked up in corporations; we are told that the legislature favor a few among the many; and we are farther told, that these corporations destroy individual competition. That is one branch of the question. And if all these arguments are true to the extent to which gentlemen have maintained them, what would be the course which we ought to take? Why, Sir, I think that an unbiased observer would naturally say that your course is to have no more of them, and to put an end, as far as you can legally, to all that you have got-if not on a principle of immediate abolition, at least, on one of gradual

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abolition of these joint stock companies.

GENERAL LAWS FOR CORPORATIONS.-GRAY.

But,

Sir, nothing of the kind is proposed here. I can admit every word uttered by the gentleman from Worcester, (Mr. Davis,) and those who have taken the other side of the argument, and then I would ask them, what do you intend to propose ? Do you make one corporation less? Not one. What then? Why, you give them a different origin. You change their birth-place, but their nature is the same.

Now, the gentleman talks about three hundred millions of capital being locked up in corporations, and says that in this you have been legislating for the benefit of the few, to the disadvantage of the many; and yet, Sir, if these corporations are such a great evil as gentlemen would fain make the people believe, they would open the door, and let every-body come in, and by this process increase the evil to an indefinite extent. I tell the gentleman from Worcester, that by adopting this course, he will legislate for the few after all, for these three hundred millions of property are held not by a very few, absolutely speaking; but, considering that those engaged in business corporations are confined to a few spots, and considering that the great masses of the rural and laboring population-considering that these great masses are not owners in joint stock companies, and cannot well be-you still leave a very large majority of the people without the limits of corporations.

Gen

Now, Sir, I have no objection to a system of joint stock companies, always bearing in mind that I reserve a control over them; I have no objection in that sense to legislate for the few, provided we benefit the few without injuring the just rights of the many. If we benefit the few directly, and the many more than they were benefited before; if we take away no man's privilege by giving a privilege to a few because they want such privilege, where is the harm? tlemen say that this is a monopoly. I think it is not. If gentlemen want to be incorporated, and they come to the legislature for such purpose, the legislature having investigated the matter, and feeling assured that no party is to be injured by such grant will, as a matter of course, as it is a matter of duty, give them a special act of incorporation. But if they do not want to be incorporated, if the people generally think that these corporations are a great and crushing evil, then the will of the people will reach the legislature, and the legislature will take pains not to let everybody be incorporated, but will endeavor to diminish such corporations as we have.

Sir, the distinction which the gentleman makes, reminds me of a law formerly existing in some of the petit German States, and which, for anything I know, may exist now. In England, and most other countries in which they have orders of nobility, the king or sovereign ennobles whom he pleases; but in these German States, baronies could be bought; every man might have a barony who could pay ten thousand dollars for it. And was it any less an order of nobility because a man bought it himself instead of its being conferred by the crown? No gentleman will say that it was. An order of nobility, I suppose gentlemen here would consider as an evil. I suppose that we And what course do we take would all think so. in this respect? Why, Sir, we prevent their existence altogether. But my friend, who considers corporations an evil, and would prevent

men from going into them indiscriminately and without means, yet does not prevent the man with ten thousand dollars from going into them. After all, it seems to me that this is only legislating for the few; for the "many," as the gentleman calls them, stand in the same degree by the one proposition as by the other.

I thought the argument of the gentleman's colleague very conclusive, but it seemed to me that it did not go far enough. I shall be obliged to go against the amendment, and also against the Report, for reasons which I have stated before, and which I will not now repeat. But I will say a word or two in addition to what I have said, and my object is rather to direct the minds of gentlemen to what I consider the true state of the question-rather to lead them to take a discriminating view of the issues before them, and I think only a little reflection is necessary for that -than to urge any other argument.

Now, we speak of creating corporations by special acts; and we say that we voted to create them by general laws. The truth is, if we would be precise, that I think our system is a mixed system. Take an illustration. Say that a manufacturing company comes up, or that you and I establish a milling company at Lawrence. We come in and petition for an incorporation, with a certain amount of capital. The legislature grants us an act of some twenty lines; and what is the provision that it puts in? It grants a charter with all the powers, and subject to all the liabilities of the 38th chapter of the Revised Statutes. The legislature grants this incorporation partly by general act, and partly by special act, covering the few points which, from the nature of the case, cannot be covered by a general act. They retain the provision of allowing persons to incorporate themselves under a general law, unless they see some objection to it. Now, let me ask, is not that distinction a wise one? Are gentlemen prepared to say that every-body ought to go in under all circumstances, and that to all future time? I think not. Is this to be done in regard to railroad corporations, canal corporations, and the like? No, Sir; because you would put into their hands the power of eminent domain. By a construction of the Constitution not warranted in its express terms, -as an original question, I think not a clear one, nevertheless highly necessary it may be,-we give them a power of eminent domain; we hand over to them our sceptre, and they march through any man's land they please; and they give him such remedy -the best remedy, perhaps, that can be had; but how near it is to perfect remedy, gentlemen can pretty well judge-they give him such remedy as he can find, by going to law for his recompense; for it does happen, that these corporations are sometimes difficult to deal with. But we give them certain powers which they generally take care to exercise. For instance, here is a private corporation in some business or other with which the public interest is connected, say a railroad company; or, if you choose, take another class of corporations-those engaged in the banking business, as that has been so specially referred to. Well, Sir, these corporations are connected with the public interest. They are not mere corporations for the transaction of business benefiting or injuring the public it may be by their relations with those who are their customers, or who transact business with them; but they have the power of regulating the whole

[July 20th.

currency of the State, and that I call a high public power. They can affect the prosperity of those who can least afford to lose any anything, and therefore, I think that these are corporations over which the legislature ought to exercise some control. They ought to adopt something more than a general act. But the general act they have now. They have the 36th chapter of the Revised Statutes, which, after all, regulates the banks; a provision enforcing the soundness of their currency; a provision which enforces their keeping themselves in good condition, as far as banking men under the supervision of the statute can affect it. These, and other provisions of importance, are all contained in the general act. Well, but my friend thinks that there ought to be other provisions—provisions as to the investment of their capital-provisions like that existing in the New York system; establishing a different basis of currency, a better system than ours. Now, how can that objection be met? Why, Sir, it can be met in a much less hazardous way than he proposes to meet it. Let him go into the legislature and take up the 36th chapter of the Revised Statutes and persuade the legislature to alter it, or else learn a lesson which we all have to learn even here-that is, to be voted down when we think and feel that we are right. That is the course, Sir.

Now, Sir, I will state what I think has had great effect upon the minds of gentlemen, and that is the mere fact of the saving of the time of the legislature. Gentlemen meet here, and they sit here-it may be for a hundred and twenty days-they come here every morning with a most determined purpose to end the session at the earliest hour; but they find, somehow or other, that the session spins on, and issue after issue arises, and time after time is fixed upon for adjourning, and one branch fixes a time and the other branch postpones it, as it may be; and, after all, the legislature, like all things human, does at sometime come to an end, at a time which nobody anticipated when they commenced their labors-that is, at a later day. Well, Sir, it is customary to ascribe all this to the immense mass of "private business," as it is called; but, Sir, I think they ascribe too much to that cause. If it were of any purpose to say much about it, I should say that the size of the House had something to do with it, but that might be a disputed point. But there is no dispute that the gentlemen of the House of Representatives do sit here for the first three weeks, appearing to those who are without as if they were helping each other to do nothing, while they are quietly preparing their business. But are we sure that this can be dispensed with? Take, for instance, a railroad corporation. We wish, when such a corporation is going to march through the land of individuals, to know something about the line they are going to take; we wish to know something, not only about the practicability of the enterprise, but something, also, in regard to the route that is to be taken. Is not this necessary and proper? Are we prepared to say-as my colleague has already spoken upon that pointthat any company of men may come in and organize, under a general act, and run a railroad where they please? Sir, how can we say so? There might be a difference in the cases. Ten years ago, if we had authorized a railroad to run through the city of Lawrence, or had we authorized gentlemen to build a railroad where they

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GENERAL LAWS FOR CORPORATIONS.— GRAY - FRENCH-WATERS.

pleased, they might have run a road through that ground, and would have done no more harm than driving a railroad through the centre of Africa. But what should we say of driving a railroad through the centre of Lawrence now? So with banking corporations. Suppose that application should be made for a bank at Lawrence, with a capital of two millions. The legislature would hesitate. They might grant it to a company in State Street. They are both respectable places, but are far from being equal in the control of business.

The gentleman talks about the control in State Street. Sir, he must alter something else than general laws, before he can affect anything here. There are such things as general laws of trade, which are usually above the statute laws of any particular place, and are world-wide in their application and effect. What is done on the London exchange, we feel here; and twenty declarations of independence would not exempt us from it. But suppose the gentleman takes a general act

t-what is to prevent the owner of twenty millions from marching into State Street and doing all that the Suffolk, or any other bank, does now? Sir, I am at a loss to see it.

Now, Sir, I did not intend to trouble the House again upon this subject, and I should not have troubled them as it is, if I thought their minds were made up upon the subject. I did think that the question would not stand the worse for a little farther consideration. But, be a corporation a benefit, or be it an evil, they will be incorporated, and it is assumed that they will be incorporated under this general act; that if there are any provisions that ought to be incorporated in a general act, they can be inserted in the thirtysixth chapter of the Revised Statutes now, and every corporation can, by its charter, be referred to that statute, and to the forty-fourth chapter, which puts them all under the control of the legislature. I say, Sir, that I humbly conceive that all the evils which result from corporations, will result from them whether they create themselves, or whether they are created under a general act. I say that the number of holders of stock in joint stock companies are pretty numerous, but they are not a majority, or anything like a majority, or even anything like a respectable minority, of the whole population of the State. But whether we legislate for the few or for the many, the question now seems to be, whether we shall legislate for them by general act, or by special act.

But I go back, for a moment, to the objection which I advanced upon a former occasion. I am ready to leave this matter with, and I think it is best to trust this matter to, the legislature; but I would also say-and if I ever expected to be a member of the legislature, I would say the same thing there-I think it desirable to work by general laws as far as we can conveniently do so. I can see how we can have general laws for insurance and manufacturing companies, because they are companies for the transaction of private business. They do not seem to come in contact with the public generally, but only with their own customers. But as to railroad companies, they exercise the right of eminent domain, and come in contact with many people who have nothing to do with them of their own will, and never want to have. I say, with regard to banking corporations, that a state of things may arise in which

the legislature may properly hesitate as to granting a charter, out of regard to what they think will be the effect upon the currency of the State, and in which effects every man, woman, and child in the Commonwealth are interested, and by which the poor are affected more than the rich, because they have their all to lose by it, and less discretion and power to protect themselves from loss.

One word only, will I say farther, in regard to real estate corporations. Shall we part with the power of discrimination of, and control over, them? Real estate corporations are sometimes a matter of necessity; for instance, those in relation to wharves and flats. Ever since the formation of the Constitution, I suppose, such corporations have been formed by law, because it is difficult to manage such matters in any other way. A limited partnership is so impracticable and inconvenient in regard to them, as to prevent the adoption of such partnerships. But the legislature might well hesitate to create many such real estate corporations as have been created heretofore, and may hereafter be incorporated. I do think that whole matter had better be left in the hands of the legislature. They can, if they see fit, adopt every one of the ideas of my friend from Worcester, (Mr. Davis,) and what is a matter of some consequence, if experience, which may throw some new light upon their minds, should lead them to vary and modify their course hereafter, the door will be open, to enable them to do so.

Mr. FRENCH, of Berkley. I am in favor, Mr. Chairman, of these resolves, and particularly the third one. I never was very friendly to corporations. I was never fond of monopolized privileges, for I always supposed that corporations got more than belonged to them.

In reference to banks, let us look at the matter, and see whether or not, we ought to have a general law by which all the people who wish to be incorporated into such institutions, who wish to lay aside a part of their property, and be incorporated on the rest, may not have the privilege. Banks have undertaken to furnish the country with a circulating medium, and how stands the matter now, under that attempt? Go out and make inquiries in this city, and the people will tell you that they are greatly embarrassed every day for the want of change to do their ordinary and daily business. Undertaking to furnish the country with a circulating medium, they do not do it.

Are banks incorporated monopolies ? Is there any other class of people that have the privileges which pertain to banking corporations? I wish some one would show me any other class of the community, who are drawing interest on their own indebtedness-on their own promises to pay. Other people are obliged to pay interest upon their promises to pay, but banks are exempted from that rule.

There is another consideration connected with this matter. There never was a State bank created, which was not created directly in violation of the Constitution or Federal Compact. Nothing in that instrument was more perfectly guarded than the regulation of the currency. Its framers saw at a single glance, that the regulation and control of the currency, was the highest prerogative of sovereignty, and they saw that they could not put its control into the possession of any body

[July 20th.

of men, or corporation of men, and they gave it to the whole people of the United States; to my father and to yours, Mr. President, to you and to me as their descendants. They said to the people, you shall have the control of the currency. The people could exercise that power only through their representatives in congress. The Constitution declared that congress should have the power to coin money, and to regulate the value thereof, and of foreign coin. But how is that matter regulated now? Who coins money now? That power was given to the whole people, but where is it now? In the hands and possession of the banking corporations. Are they acting for the public good, or for their own private benefit? This power, Sir, has been stolen from the people, and they do not know it. What power is there in congress to regulate State banking?

Well, it was said by the gentleman who a few moments since stood where I now do, (Mr. Gray,) that they control not only the currency of the country, but regulate and control the value of the whole property of the country. Is that an exclusive privilege, or is it not? Is it an exclusive privilege to diminish the value of any man's property, when they choose, in order to make the most of it, and to increase the value of that property when it is for their interest to do so? Now, when the people come forward and ask for a general law, and ask not to be shut out from the privileges which other people have, the favorites of the banking system come up and make a great complaint, and say that it would be very improper to do so. They say the people ought not to have this privilege, and that it does not belong to them.

Banks promise to pay, and they give their notes promising to pay on demand. How is their capital stock made up? Is it made up of specie; or is it made up of stock notes? Very poor property that, with which to pay specie upon demand. Thus it is improper, very improper indeed, that the people collectively should have a general act giving them equal privileges with others, so long as it is important that those who now have the power, should retain it.

I hope, Sir, this resolve will pass, so that the people shall have some chance. Now, what does this power of incorporation do? It gives to a certain class of the community the right to trade to any amount, whilst at the same they are held responsible to pay only a specified amount. Has any other class of people that privilege? No. An individual is holden to pay his debts, to the last farthing, and that is right. I hope, Sir, in order to remedy this great complaint which is now made throughout the country, that the next legislature which convenes, will pass a law that no bill under the denomination of five dollars, shall be passed in the State of Massachusetts; and if they do that, believe me, there will be no complaint of a want of change to do business with. I submit the question to the Convention, whether or not Mr. Webster was right, when he said that the most effectual way of fertilizing the rich man's field by the sweat of the poor man's brow, is this State banking system.

Mr. WATERS, of Millbury. In the discussion of this subject, frequent allusions have been made to the industrial interests of Massachusetts, without defining what they are; and, by way of episode, we have been entertained, occasionally, by a chapter upon free trade. I propose to pre

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GENERAL LAWS FOR CORPORATIONS. WATERS.

sent, from official documents, some statistics, to show what those interests are, and also to prove what has been the effect produced upon them, by the repeal of the protective tariff in 1846-that being regarded as an approximation to free trade.

To these facts, I bespeak the candid attention of the members, as business men, without regard to party affiliations or favorite theories in political economy, for they involve questions vital to the growth and prosperity of our ancient Commonwealth. What are the industrial interests of Mas

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Adding to the above, various miscellaneous items, the aggregate of the products of the State for that year, is $115,000,000.

From these data, it is obvious, that the most prominent interests of Massachusetts are manufacturing and mechanical, whose aggregate annual products are at least eighty millions out of one hundred and fifteen millions-the entire products of the State. Hence, it follows as a necessary corollary, that the prosperity of the State depends chiefly upon the success of those interests. When they are prosperous, the whole are prosperous, embracing all other interests; and vice versa. This is a proposition which the experience of the last quarter of a century has abundantly established.

Of these interests, the leading in amount of products is the cotton, which amount is greatly understated in the above table, from the fact that some large establishments refused to make any return. In amount of capital invested, this interest also far exceeds either of the others. To manufacture cotton cloth requires a large investment in buildings, motive power, fixtures, machinery, &c., but in many kinds of business-the boot and shoe, for example-no such outlay is necessary. Indeed in most kinds of business the annual products largely exceed the capital invested, while in the cotton they fall below.

What has proved to be the effect upon this interest of the repeal of the tariff of 1842, in 1846 ?

[July 20th.

Maine, it is estimated that two-thirds, at least, belong to people of Massachusetts, which, added to the amount invested in this State, makes an aggregate of $37,500,000 capital owned by Massachusetts in the cotton manufacture-a sum equal to fully one-half of the whole capital invested in this business in the United States.

The following table, taken from the same Report, exhibiting the number of bales of cotton manufactured in this country, from 1841 to 1850, will show how the cotton business was affected. by the tariff of 1842, and also by its repeal in 1846:

1841-267,850

1842-325,714

1843-346,744

1844-389,000

1845-422,597

1846-427,627

1847-531,772

1848-518,039

1849-487,769

1850-404,108

From this table it appears, that in six years, from 1841 to 1847, under the influence of the tariff of 1842, the cotton manufacture increased in this country 264,000 bales-an expansion equal to 100 per cent., while, in three years, from 1847 to 1850, after that tariff was repealed, it actually receded 127,664 bales, a contraction equal to 22 per cent. These remarkable results are to be traced directly to the repeal of the tariff of 1842, and no other cause can be assigned.

II. BOOTS AND SHOES.

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I am prepared to prove, from official documents, that by that change in our national policy, Massachusetts has been set back one hundred millions of dollars in her valuation, and in amount of products seventy-five millions annually, amounting, in the six ensuing years, to four hundred and fifty millions. This statement will doubtless strike some minds as astounding and incredible, but I believe I am fully fortified by facts to sustain it. The following table, taken from the Patent Office Report, 1851, (Agricultural,) exhibits the statistics of the cotton manufacture in different States:

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$14,202,617

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of Estab

Number

lishments.

Capital in-[

vested.

Value of

products.

entire

4,257,522 3,591,989

2,120,504 1,486,384

857,200 2,884.700 $74,501,031 $61,869,184

Of the capital invested in New Hampshire and

From the above, it appears, that since 1846, the cotton crop has increased, in bales, 1,600,000,equal to one hundred per cent. nearly, and in value, $93,000,000,-exceeding two hundred per cent. This accounts for the high degree of prosperity prevailing at the South, and the great advance in the price of slave property. In the face of this rapid and enormous increase of crop, the price has been fully sustained, which proves that the consumption has advanced pari passu, with the production. Of course there has been an increase in the cotton manufacture in the same proportion. The positive increase of the crop, is equal to four times the number of bales manufactured in this country, and consequently the increase in the number of spindles, must be equal to four times the whole number running in this country. Where has this extraordinary increase of manufacture been developed? Not certainly, in Massachusetts, nor in the United States, as has already been shown. While the cotton growing interest of the South, has increased since 1846, nearly two hundred per cent., the manufacturing interest of the North has remained

Wednesday,]

GENERAL LAWS FOR CORPORATIONS. WATERS - HALLETT.

stationary. But this increase of manufacture, corresponding to the increase of crop, has been developed mostly in England. The newspapers contained an account a short time ago, of one mill erected by Mr. Titus, of Manchester, England, covering six acres; and many other similar accounts of increase there, have been published.

Had this expansion been made in this country, it would have added two hundred millions of dollars to our manufacturing capital, and one hundred and fifty millions to our products annually. This loss of business is fairly chargeable to the advocates of free trade. What the country has gained by way of compensation, I have yet to learn. As one-half of the cotton manufacture in the United States, belongs to Massachusetts, it follows that one-half of this loss falls to herthat is to say, she has lost in her valuation, by the repeal of the tariff in 1846, one hundred millions, and in annual products, seventy-five millions, amounting in six years, to four hundred and fifty millions of dollars. This is not a matter of conjecture, nor of prophecy, nor of theoretic speculation, but it is a matter of absolute demonstration -a result, which a few short years has clearly proved. No other cause but the repeal of the tariff in 1846, can be assigned, and no theory of the free traders, can account for it. Here is experience against theory-practice against prophecy. If to any member these facts seem to be exaggerated, I would say, that no estimate was made for collateral interests, such as building, machinery, foundries, rise of real estate, trade of all kinds, &c. &c., which, when made, will be found to far outweigh all deductions that can be justly claimed on the score of exaggeration. If then, such disastrous results have accrued to the leading interests of Massachusetts, from an approximation to free trade, what are we to expect from its full realization, which some gentlemen on this floor, have, with so much confidence predicted, at no distant day? The member for Berlin, (Mr. Boutwell,) in some remarks which he made in favor of this doctrine, was so sanguine of its early adoption by the people, that he said he would venture to predict, that in ten years, it would be the prevailing sentiment of the North; that Boston itself, would adopt it, and that at some remote period hereafter, a Custom House would be as great a curiosity, as the Coliseum of Rome, or the Temple of Carnac.

Mr. HALLETT, for Wilbraham. I rise to a question of order. The gentleman from Millbury is discussing the tariff, and the doctrine of free trade. Now, I am anxious to make a speech upon that subject of several hours in length. But if it is to come in here, I wish to know whether the subject is legitimately before the Convention?

Mr. WATERS. Whether legitimately before the Convention or not, I did not introduce the subject. In the discussion of this and various other questions, we have had several speeches in favor of free trade, and no member was called to order. Regarding this as a most fallacious and destructive doctrine, it seemed to me that some remarks, per contra, would not be ill-timed nor out of order. However, I do not wish to pursue the matter against the wishes of the House.

Cries of "Go on," "Go on."

If the expansion of business to which I have referred had been developed in this country, it would have enhanced the value of every square inch of territory in Massachusetts; added thou

sands to her population, and opened new avenues of wealth and employment. The programme of those gigantic enterprises at Holyoke and Lawrence would have been filled up, and scarce a foot of available water power in the State would have remained unoccupied. Many a water-fall now wasting its power upon the desert air, would have been brought into requisition, and filled the surrounding region with the music of prosperous industry. In short, the six years of leanness ensuing the year 1846, would have been years of plenty and prosperity. It has been a common impression in the country, even among manufacturers themselves, that under the tariff of 1842, this interest was stimulated to an unnatural growth, and was in danger of a reaction, from being overdone. But the foregoing statistics prove that this opinion was entirely erroneous; that rapid as was the expansion, it did not keep pace with the growth of the crop, nor the consumption of the fabric, but fell far behind both. Massachusetts has probably never known a period of so rapid growth and dovelopment, as from 1842 to 1847. Before this period, say from 1836 to 1842, there was a general crash, or breaking down of all kinds of business. General bankruptcy, and universal prostration prevailed, as though a tornado had swept over the land, until the passage of the tariff in 1842, when there was a simultaneous quickening into life of all our dead and prostrate interests; and they continued to grow in an accelerating ratio, until that Act was repealed, when their growth was arrested, as by a sudden frost. Some of them have since remained stationary--few have flourished—during the six famine years, being sustained chiefly by the strength and impetus before acquired, to the present year, which fortunately proves to be a year of plenty and prosperity, such as Massachusetts has not seen since 1845. What is the cause of this great change, this universal and exuberent prosperity? Not, certainly, that there has been any change in the policy of our government. It was formerly thought that loyalty on the part of the citizen, and protection of person and property, on the part of government, were reciprocal duties; but that is now called an exploded idea.

This change, it is well known, has been brought about, chiefly, if not solely, by the rise of labor in Europe. The drain of laborers from the workshops of Europe, to the gold mines of Australia and other regions, has been so heavy as to cause a general rise in the prices of labor and manufactured products, carrying them up to a grade where our manufacturers and laborers can thrive and prosper. No reason can be assigned, why we cannot, at all times, manufacture as cheap as in Europe, except the price of labor. If capital is cheaper there, so also are taxes very much higher. To obviate this difficulty-the higher price paid here for labor, and also to prepare the way for the glorious advent of free trade, the member for Berlin (Mr. Boutwell) proposes, and in his prophetic vision confidently predicts, the importation of large numbers of coolies from China. In this direction his prophetic vision even discerns an antidote for the removal of slavery itself!

Suppose this to happen; what is to become of all the Yankee boys and girls who now operate the machinery of our mills, and who are thus under-bid in the price of labor? Are they to be driven out from their native land, to make room

[July 20th.

for a horde of demi-barbarians from the Celestial Empire? Is that a wise and paternal statesmanship, looking to the best good of our country and our race? Besides, is the gentleman quite sure that these impassive Celestials, in wooden shoes, and with pumpkin-vine queues, are fitted to perform the labor of our versatile Yankees, with the same tact and rapidity? With all due deference to that gentleman, I must say, that this vision of his seems to me more like a creature of fancy, than the gift of prophecy.

This whole, and much vexed question of protection, resolves itself into a question of labor. Capital, in this country, needs no protection. The rate of interest is always about three times as much as it is in England, while the price of labor there, averages about one-third as much as is paid here. Labor can never be so cheap under a democracy as under a despotism. The former is founded upon numbers, and makes no distinctions of persons, between the laborer and the lord, the mechanic and the millionaire. To enable the laborer therefore, to maintain the dignity of his station, it is necessary that he should be able to read books, take newspapers, educate his children, and have many of the comforts of life which are unknown to the boors of England, the serfs of Russia, or the coolies of China. He must maintain a higher and more expensive style of living, and ought not, therefore, to be exposed to a competition with the bone soup, and pauper labor of Europe. "But," say the advocates of free trade, "it is on the very ground of sympathy for the poor laboring man, that we advocate this doctrine. A tariff is indirect taxation, and operates unequally. In the article of sugar, for example, the poor man consumes six times, it may be, as much as the millionaire, and consequently pays six times as much tax. This system surrounds him unseen, like the atmosphere, and he does not know how he is abused." Very likely. Probably he never will. For argument's sake admit all this to be true. If by paying one cent a day extra, on sugar, and as much more on a few other articles, he gets, instead of fifty cents, from a dollar and a half, to two dollars per day more for his labor, is he not the gainer? Where in the wide, wide world, is the laborer so well paid, as in this country? And here, especially in New England, labor is never in so great demand, nor so high, as at periods when the manufacturing interest is prosperous. Witness the present year, the years 1844, 1845, and 1846. For the reverse, witness the years from 1836 to 1842-from 1846 to 1850.

Who are the great sticklers for free trade in this country? Importers of foreign merchandise, resident agents of foreign manufacturers, bankers, and brokers, who have expended vast sums of money to buy up and subsidize some of our most influential presses. Much the largest proportion of the press, in this country, is concentrated in cities; and of that, a large share is enlisted in the foreign importing business. Hence, the gen. eral delusion which prevails upon this subject.

Another class of very obstreporous free traders, are the Southern planters, whose laborers are slaves. "Labor," say they, "should come from that quarter where it can be obtained cheapest.” If this is a correct doctrine, we should expect that, like charity, it would begin at home. Let us see how their practice conforms to their teachings, The great interest of the South, is the slave

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