on the Report of the Committee, that it is inexpedient to act upon the subject of the loan of State credit.

Mr. BRADFORD, of Essex. As the chairman of the Committee who reported upon this subject and another gentleman who takes an interest in the question, are both absent, I would suggest to the gentleman from Natick that it would be well to substitute another subject for the consideration of the Committee.

The PRESIDENT. The Chair would remind gentlemen that this is a question which is not debatable, although suggestions may be offered, if desired.

Mr. FARWELL, of Boston. I understand that this subject was called up after I left the Convention last evening. It being a question upon which I supposed there would be little or no bebate, I did not think it material to be present, but as the subject has taken a course which I did not anticipate, and which will probably excite debate, and as there are several gentlemen now absent who desire to participate in the discussion when it shall take place, I hope that the subject will be passed over.

Mr. WILSON. To accommodate the gentleman I will withdraw my motion. It is necessary, however, that we should go on with some busi

ness.

Mr. WILSON moved that the Convention resolve itself into Committee of the Whole, on the resolve reported by a Select Committee on the subject of

General Laws for Corporations. The motion was agreed to.

The Convention accordingly resolved itself into

COMMITTEE OF THE WHOLE, Mr. Sumner, for Otis, in the Chair.

The resolve was read, as follows:

Resolved, That it is expedient to incorporate into the Constitution a provision, that corporations may be formed under general laws, but shall not be created by special act, except for banking or municipal purposes, or where the object of the incorporation shall not be attainable under general laws.

Mr. WHITNEY, of Conway. I had hoped, for several reasons, that the Convention would have taken up some other matter in the Orders of the Day. In the first place, being somewhat unwell, I do not at this time feel capable, as chairman of the Committee who reported this resolve, of presenting this case for the consideration of this body in the manner in which it should be presented. I shall not, however, ask a postpone

[June 23d.

There was

ment of the subject on that account. also a document expected from the office of the Secretary of State, containing a history of the proceedings of the Commonwealth in relation to special acts of incorporation, which I supposed would throw much light upon the subject and be useful to the Committee in considering this question. That document is wanting. Besides this, the Committee having the subject of banking under consideration, which covers the general ground of corporations, and therefore well to be discussed in the same connection, have not yet reported. For these reasons, I had hoped that the matter might be delayed. But as it cannot be, and as the resolution proposes to incorporate into the Constitution of our State a new provision, it doubtless will be expected that some member of the Committee from which that resolution emanated, will state some of the reasons which have induced their action, and as chairman of that Committee I suppose it becomes my duty, more particularly than that of any other gentleman, to give those reasons, and I shall endeavor to do so as briefly as possible.

It will be perceived that the resolution is not general or complete in its application to all corporations. Now, it was the opinion of the Committee-in which opinion I fully concur-that in the application of any principle which is manifestly right, it is the part of wisdom to make no exceptions. But the exceptions which are contained in this resolution were made for what we deemed to be good and sufficient reasons. In the first place, it will be seen that there is an exception in relation to corporations for banking purposes. The reason for this was simply that the subject had been referred by the Convention to another Committee, and consequently it did not come within the range of our duties to report upon that question. What action we might have taken upon the subject, had we been allowed to consider it, I do not know; but my own individual opinion is, that there is no good reason why the principles of a general law should not apply to the subject of banking as well as to other corporations. The matter however was not considered in Committee, and I do not propose to touch upon it now.

The second exception in relation to corporations for municipal purposes was fully discussed by our Committee, and it was made mainly for the reason that this class was considered as distinct from other corporations. They were regarded to be in the nature of governmental organizations, or associations for the formation of institutions for local purposes, for the right of enactment by individuals of a particular locality, of by-laws for their own

Thursday,]

[June 23d.

are always granted upon the application of the inhabitants of such locality, and are never carried into effect except by their approval and declared

vote.

We therefore viewed them as constituting a distinct and separate class of corporations. But few acts of this kind are asked for. We have at this time but twelve cities in the Commonwealth, therefore but little comparatively of the time of the legislature has been occupied in passing special acts of this denomination. We concluded, therefore, that this exception might be made with propriety.

The last exception is where the object of the incorporation is not attainable under general laws. But, Sir, I must confess that I am not able to give any reason at all satisfactory to myself, why this exception should be made, for I cannot conceive of any act of incorporation likely to be asked for, the objects of which cannot be attained under a general law; and I think if this Committee were to strike out that exception it would improve the resolution, and prevent the insertion of a clause in the Constitution entirely needless and uncalled for. But it was deemed desirable by our Committee, as twelve members had expressed their approbation of the general tenor of this resolution, that we should be unanimous in our action. We therefore made the Report as it now stands, and I cannot believe that if a provision of this character should be inserted in the Constitution, there is any danger that this exception will ever become the rule. If this resolution should be adopted by the Convention, and the people should sanction its application by their vote, it was considered by the Committee that no legislature would ever attempt to depart from the general principle involved in it, or under the cover of this exception attempt to create by special act, incorporations where the objects could be attained under a general law. For myself, however, I think it would be much safer, and that we should improve the resolution by striking it out. stitutional provisions of this character have been adopted by several of the States, when like exception has been made, and judicial tribunals in those States have ever held those enactments of the legislature to be unconstitutional, which conflicted in the least with the general spirit of the articles contained in their several Constitutions. These are the reasons, in brief, why the Committee made these exceptions, and now a word in relation to the resolution itself.

Con

The first question that presented itself to us, and the most natural question that will present itself to the mind of every gentleman in this

are to continue to create incorporations by some form of law? I think in answer to this there will be but one response. I presume no gentleman of this Committee will say, that a great commercial, a great manufacturing, or even a great agricultural community ought ever to dispense with the numerous advantages growing out of associated action in the form of corporations. Every man will respond in the affirmative to this proposition. It is unnecessary for me to allude, particularly, to the numerous advantages which result from associated action under the forms of law which govern business corporations. A few, however, may be mentioned, as for instance, the manner in which the property of corporations is held-namely, as personal property, in the form of shares of stock, instead of as real estate in whole or in part, which real estate is often indivisible in its nature, such as water-power, milldams, &c. Besides this, corporations are not subject to conflicting views and interests, but are more manageable in general than a private copartnership, being ruled by a majority of stock, they have an individuality in their management, not attainable under a copartnership made up of many individuals, lacking the organization imparted by corporate laws. In case of the death of a partner, no interruption of the business is had by a division of the property, as would be the case under a partnership. The individual interest of each stockholder is easily transferable without interfering at all with the general current of the business. The great advantages incident to corporate powers will not, in this age of the world, be dispensed with.

Having become satisfied upon this point, the question then arises, whether these business advantages should not be made accessible, so as to be open in their benefits alike to each citizen of the Commonwealth. They should belong to the whole people as a right, and not be dealt out to a few individuals as a privilege. There can, it seems to me, be but one opinion upon this matter.

Another reason why we should adopt general laws instead of special laws, is to be found in the fact that the past history of the legislation of this Commonwealth has demonstrated that much of the time of almost every session of the general court is consumed in making special acts for purposes which may be provided for by general laws. These acts are generally prepared with but little care, and consequently in very many instances seriously conflict with the general interests of individual enterprise. In some cases the interested party himself prepares his petition, and even

the bill, and through the lobby influence brings it up successfully for the action of the legislature. These bills are of course drawn up with an especial eye to individual interest, the matter is placed in the hands of the appropriate committee, and not being a question of general interest to the Commonwealth, remains in their hands until near the close of the session when they are reported to the legislature. If that body should happen to be liberal in regard to the policy of granting special acts of incorporation, they are passed through in great haste, and with but little consideration. The consequence is that many of these special acts have inserted in them privileges, which are of benefit to the few, but which act disadvantageously to the general interest of the Commonwealth. Under a general law, however, these incorporations will be created with great care and deliberation; they will unite in their preparation all the wisdom of your legislature, and be so framed as to protect all the interests of the Commonwealth, more equally, more guardedly, and more substantially than can possibly be done under the present system of special laws. Therefore general laws are safer, more uniform, and when any judicial decision is made in reference to them, it will apply not to one particular corporation, but to all; whereas at the present time there is hardly an act of incorporation that does not, in some of its provisions, require a special interpretation, by your judicial tribunals, to be fully understood. If the history of the proceedings of the legislature of this State were examined in reference to this subject, I have no doubt it would be found that one-half of the business done, during some of its sessions, was confined to the granting of special acts pertaining to corporations, while in other sessions but very few acts of incorporation could be obtained, the success of the petitioners depending entirely upon the character of the legislature. The adoption of this resolve will prevent the recurrence of anything of this kind in future, and will, I think, be a great saving of time to the legislature, and of expense to the Commonwealth, besides allowing the people of the Commonwealth to self-associate at any time. These facts need but to be mentioned to be understood and appreciated by every gentleman. For instance, an enterprising man finds a new article in the markets of the city of Boston, which he is satisfied he could manufacture at a great pecuniary profit; under a general law he can at once form an association, and commence work; whereas, by our present system he would be compelled to wait until the next legislature convened before a company can obtain a charter and commence operations as a corporate body-even

[June 23d.

then he may not succeed in obtaining a charter. And what is the consequence. The enterprise fails, and the party goes into another State where a general law exists, and commences work there. The Commonwealth therefore loses the advantages and profits which would have accrued from that business, had a general act of incorporation been in existence. This must be apparent to every business man. So in case of a casualty, by flood or fire, parties in this way are often reduced in circumstances, they desire to form a corporation and rebuild their manufactories, but yet are unable to do so simply because they are compelled to wait, at a great expense, for the action of the legislature.

Other States have adopted this provision very generally, and they have not, that I am aware of, found any evil resulting from it; and not one, I believe, that has adopted it, has gone back to the old system. The question was started in the Committee, whether we should report details or constitutional restrictions in reference to general laws. It has doubtless been observed by gentlemen who have examined the Constitutions of other States, that many of them have provided for a personal liability, that is, that no act of incorporation shall be granted where the parties are not held personally liable to an amount equal to the nominal value of their stock. But it was deemed by the Committee who reported this resolution to be unnecessary to make any such provision here, as this whole matter as to what the particular liabilities and privileges under all general laws shall be, may safely be left to the discretion of the legislature, for I think there is no danger in the Commonwealth of Massachusetts, that general laws will not be so framed as sufficiently to protect private rights while they will tend to promote the interests of all parties. It was therefore deemed advisable, after a full review of the subject in the Committee, to report merely the resolution incorporating the provision into the Constitution, that corporations may be formed under general laws, leaving detail to be acted upon by the legislature.

Another matter was somewhat considered by the Committee, to which it is hardly necessary for me to allude. The question arose, whether, in railroad corporations and the like, we could sufficiently accommodate self-associating parties, and, at the same time, guard the rights of individual property, or the right of eminent domain. But there can be no reasonable doubt on this point; your general law can as well guard and protect individual property as any special law can do. Any tribunal can be fixed upon to adjudicate between corporations and individuals, that the legislature

may determine-county commissioners, court of common pleas, or a board of railroad commissioners. Gentlemen can easily perceive that there will be no trouble of this kind. Commissioners may be appointed, if necessary, who shall have full jurisdiction over the whole matter, and who can decide questions of this nature in accordance with provisions somewhat analogous to your highway laws. All these matters can be as well, nay, better acted upon under general laws, as they can be by a series of special acts. These are the reasons, in brief, which induced the Committee to recommend the adoption of this resolution.

Mr. FRENCH, of Berkley. From the remarks of the gentleman who has just taken his seat, it appears to me that this resolve ought to be amended by striking out after the word "act" the words "except for banking and municipal purposes, or where the object of the incorporation shall not be attainable under general laws." These excep

tions seem to be unnecessary, if we intend to have general laws for incorporations. By striking out these words we have all corporations on the same footing, and I therefore hope the amendment will be adopted.

Mr. BRADFORD, of Essex. It seems to me that there is a manifest propriety in the exceptions embraced in the Report of the Committee-that is, the cases of incorporation for banking and municipal purposes, and when the object of the incorporation shall not be attainable under general laws. In the first place we frequently create municipal corporations out of one or more special existing corporations. We have sometimes, or may have, some complicated interests in the way of property or revenue, which might require peculiar special action. There may be some interest or circumstances which are peculiar in their condition, and which might not be provided for by general laws, and which could not be properly met, in the way of doing justice to existing corporations, without special action of the legislature in particular cases. It seems to me that municipal corporations should be exempted from the operation of general laws. Questions concerning them will come up rarely, and will not occupy much of the time of the legislature, which is the chief evil of the present system-of giving special action to each case. It seems to me that such cases had better be left to the operation of special legislation.

There might also some cases arise under the last exception, which could not be well provided for under general laws, such as cases relating to colleges and eleemosynary institutions, and they should be guarded and taken care of, and though I do not know that any cases which would come

under these exceptions would receive any injury in any way, yet it would be very safe and proper to leave them to be provided for by special legislation. I hope the amendment of the gentleman from Berkley, (Mr. French,) will not prevail.

Mr. STETSON, of Braintree. I move to amend the amendment by striking out only the words "banking or" and leave the exception to apply to corporations for municipal purposes, &c., as now expressed in the resolve. My reason for offering this amendment is, that an order in reference to this subject was referred to the Committee having under consideration the subject of banking charters, and the manner of their incorporation, and that a Report has come in, or is to come in, from that Committee, which will cover all this ground. Our action here may affect their Report, and therefore, as there is no particular necessity of including it in these resolves or acting upon it now, I trust the Convention will strike it out.

Mr. NAYSON, of Amesbury. I think it is somewhat premature to act definitely upon this resolve, and for the reason given by the gentleman from Braintree, (Mr. Stetson,) that one of the Committees of this body has now under consideration the subject matter of this very resolve, so far as banking incorporations are concerned. It seems to me improper and unwise to act definitely upon this question, until the Committee to which the subject has been committed, shall have reported upon the subject. With the view, therefore, of awaiting the action of that Committee, I move that this resolve do lie upon the table. Mr. BRIGGS, of Pittsfield. The Committee has no table, and the motion is not regular.

The CHAIRMAN. The motion is not in order.

Mr. NAYSON. Then, as that motion is not in order, I move that the Committee rise, report progress, and ask leave to sit again.

Mr. WHITNEY, of Conway. It has been suggested to me, since I came in here, that the Committee having the subject of banking under consideration, have agreed upon a report, and that they have agreed upon the principle of this resolve; and I see no reason why we should not act upon the matter now. As a matter of personal convenience, I should like to have the matter go over, but as we have many subjects lying over, and are not getting along very fast, I think we may as well act upon it now.

The question was taken upon the motion of Mr. Nayson, and it was decided in the negative. So the Committee refused to rise.

Mr. EARLE, of Worcester, I rise simply to make an inquiry of the chairman of the Commit

tee, (Mr. Whitney,) in reference to the Report of the Committee to which he has referred. I understood him to say that the Committee to whom was referred the subject of banking, had agreed to a report in conformity with this resolve. I ask him whether we are to understand from that, that banking corporations are to be excepted from general laws of incorporations, for by this resolve they are?

Mr. WHITNEY, of Conway. In reply to the gentleman I would say, that I stated, in the few remarks I submitted in relation to this resolve, that this exception of banking corporations, was made for the reason that the subject had been previously committed to another Committee. I now understand that that Committee have agreed upon a Report, covering the principle of a general law as applicable to banking, and therefore if we strike out the words " banking or" according to the pending motion, this resolution will accord in principle with the resolution to be reported. Therefore the question of banking under general laws, may as well, for aught I see, arise under this amendment now, as elsewhere. have agreed in fact upon that Report, this amendment, if adopted, will include banking corporations under general laws, and therein conform to that Report. That Committee are undoubtedly prepared to give their reasons why these words should be stricken out.

If they

Mr. EARLE, of Worcester. The answer is such as I supposed it would be, and it is satisfactory. Still my object in making the inquiry was, that I supposed that the information given by the gentleman when he was up before, was calculated to mislead the Committee. He said it was in accordance with this Report, and this Report excepted banking institutions from the number of those which were to be brought under general laws. I concur fully with him in the opinion that we may as well consider the banking question under the amendment which is now pending as under any other circumstances, or in any other shape in which it may be presented. The present motion to amend, will bring the whole subject before the Committee, and open the entire matter to discussion. I hope the subject will be considered now, and also that the amendment will prevail.

I do not see any reason why banking institutions should not be brought under the operation of general laws, and thereby a large amount of annual legislation saved to the State. If we limit, as we propose to do, the length of the sessions of the legislature to ninety or one hundred days, we must get rid of the large amount of business which now comes before that body, and I know

[June 23d.

of no portion of that business which can be better taken away from them, than that of special corporations, including banking, as well as manufacturing, and others.

Mr. COLE, of Cheshire. The amendment proposed by the gentleman from Braintree, (Mr. Stetson,) I believe, is now the question before the Committee, namely, to strike out the words, "banking or." I move to amend that amendment by striking out all after the word "or" so that the resolve shall read :

That it is expedient to incorporate into the Constitution a provision, that corporations may be formed under general laws, but shall not be created by special act except for municipal purposes.

I make this motion under the impression that perhaps there are many who are opposed to general acts of incorporation, and perhaps there are many in the community who believe that the objects of forming corporations cannot be obtained under general laws. It seems to me that the Constitution ought to settle principles clearly, and here is a case where there is a chance for a variety of opinions, and a case where men may differ in their belief.

Mr. CHAPIN, of Springfield. Is it in order to move that the Committee rise, report progress and ask leave to sit again?

The CHAIRMAN. It is.

Mr. CHAPIN. I make that motion, and my object in moving it is, that this resolution and the Report of the Committee on Banking, may be acted upon together, that Committee having agreed upon their Report. I am satisfied that if gentlemen see both at the same time, the subject will be better understood than it now is.

The question was put and the motion was agreed to-ayes, 84; noes, 65.

The Committee accordingly rose.

IN CONVENTION.

The chairman of the Committee, (Mr. Sumner, for Otis,) reported that the Committee of the Whole had had under consideration the Report and resolve of the Committee to whom was referred an order to consider the expediency of making constitutional provision, requiring that corporations shall not be created by special act, except for municipal purposes, &c., and had instructed him to report progress and ask leave to sit again. Leave was granted.

Mr. WILSON, of Natick. I move that the Convention resolve itself into Committee of the Whole upon the Majority Report on the