Friday,] HATHAWAY. [July 15th. wishes so to experiment? By no means. Shall we bring our experiments into competition with each other? I think that that is altogether unnecessary. If the Western Railroad does all that is necessary to be done, and all that was expected to be done, under that experiment, then why experiment farther? Sir, I am not disposed here to go into statistics, although I have seen some statistics upon this subject. I am not disposed to show here, if I could, that the reduction upon the carriage of freight is going to be but very small, provided you build your railroad from here to Troy. I rather think that a matter not to be discussed here. the establishment of railroads or not-but the principle involved in this provision I then maintained, and yet maintain to this day, as being true. In reference to this matter of loaning the credit of the State, or the funds of the State, I have to say, that the funds of the State belong to the State; the credit of the State belongs to the people, and to the individuals who make up that people. But, permit me to say, Sir, that the individuals who make up the people, have an interest not only in the credit of the State, but they have an interest, also, in the money that is in the treasury of the State. I was remarking the other day, when I was up before, when the proposition of the gentleman from Taunton was under discussion, that that proposition did not go far enough for me, but yet that I should vote for it, because I thought it probably was the best we could get. After it was negatived in the Convention, I made up my mind to take the next best that I could find, and that came as near shutting down the gates as might be; and hence I voted for the proposition of the gentleman from Boston, that is now the subject of reconsideration. any corporation, Sir, in this Commonwealth-I lay it down as a rule, and more especially railroad corporations, when fairly looked at and considered-will probably yield six per cent., and the community are satisfied that it will yield six per cent., there will always be a sufficient amount of private capital in the Commonwealth to take the stock. It probably never will be otherwise in all time. Hence, if the Hoosac Mountain is to be bored, if there is a tunnel to be made through it,vidual corporation. The State took the stock, if a railroad in that direction will be a six per cent. paying stock, there is no danger but that sharp-eyed individuals and keen-sighted speculators-the men of money and of means-will be ready to take that stock; aye, plenty of them; and there will be no necessity for ever asking the loan of the State credit. If Sir, the Western Railroad was a matter of experiment; so, too, was the great canal which was opened from Buffalo to Albany. Both of these were mere experiments. Every one saw the necessity of having a great highway from Albany to Buffalo, in order that the waters of the Hudson and the waters of the lakes might be connected. Every one saw the necessity of having a highway between Boston and Albany, as the products of the West might as well and as cheaply find their way to the eastern section of the country, as to go down the waters of the Hudson to the city of New York. But, because we have experimented once or twice, and may have come out well, is that any reason why we should be continually experimenting so long as any person But, in reference to this matter of experiment, what are the facts? The great State of New York took the lead, as to these great avenues of travel which have been opened. She opened her canal from Albany to Buffalo. Pennsylvania followed, and she not only opened her canal, but a railroad, in order to connect the two extremes of the canal on either side of the mountains from Johnstown on the one side, to Hollidaysburg on the other. It was an undertaking which required a great amount of capital, but being an experiment, not an individual who was a capitalist, dared to hazard his money upon it. It became necessary, then, in order to ascertain whether this experiment would be profitable or not, that the State should loan its credit to the enterprise. It did not exactly loan its credit either, for that great internal improvement belonged to the State, and not to an indi and the State built it. There was no asking the State to loan its credit for the encouragement of any association of individuals. The work was State property. Well, what followed in process of time? The next thing we see, so far as the State of New York is concerned, is a railroad laid along, almost upon the banks of the canal, from Albany to Buffalo. The different links in the chain were built and owned by different corporations, but they are virtually one. Was there any loaning of the State credit to this corporation. No, there was not. But instead of this, individuals of capital vested their money in different portions of that chain, as they advanced from one stage to another. And what did the State of New York do? She imposed upon that road burdens, and because the State itself owned the canal, she would not permit the railroad from Albany to Buffalo to carry a single pound of freight over their road, between those two points, without paying precisely the same duty to the State, which the owners of property transported upon the canal, paid to the State. That was very well for the time being. In process of time, the project of the New York and Erie road was started. I supposed the gentleman from Boston was going through the history of that enterprise; but he did not tell us the end of the matter. That road went on for a time, and they asked the loan of the State credit to assist them. Mark, the first experiment in reference to the canal was paid out of the public purse, and the first road built from Albany to Buffalo, was an experiment paid for out of individual funds. Then comes the New York and Erie road, the object of which was to open another great highway between the waters of the lakes and the waters of the Hudson River and the ocean, for the exportation and the importation of goods, from this section to that section, and the produce of these different sections to New York. They call upon the great State of New York to loan its credit. The loan was made, to the amount, according to my recollection, of three millions of dollars. Well, they undertook to build their road-that is, the corporation, and not the State-with the loan of about three millions of dollars of the State credit to assist them. They constructed the road as far as the village of Elmira, and there they stopped, for want of funds. The stock was not worth a dollar in the market. But they formed a connection with another road which came down from the head of Seneca Lake to Elmira. By this means they were able to diverge to that lake, take a steamboat, and land at Geneva. Now, pray tell me, if they stopped there in the construction of their road, how much better off the State of New York would have been for this loan of three millions of dollars? What was the consequence? The State of New York, to induce that company to carry through their road in a given reasonable time, said: "Gentlemen, I know you will never proceed another inch, and the people of the State will lose the money they have loaned you. We know your work is to come into competition for the same business done upon our canal and by the other road. We cannot raise a single dollar from the road to pay us our three millions, and if you will go on and complete your road in a given time, we will give you the three millions of dol. lars." That was the condition in which that great Erie road stood. They went through with the work, and yet, with this gift of $3,000,000, how much is the stock worth? Is it worth the one hundred dollars the share, the par value? By no means, and never will be; and I do not believe that any man in his senses believes it ever will be worth that. After that contribution of three millions, I [July 15th. believe the stock is worth about eighty or ninety dollars on the share. But that is not the end of the matter. The road between Albany and Buffalo comes to the legislature, and says: "You have imposed a restriction upon us in regard to the transportation of freight, and now you have put a road in competition with us. Now, we do not ask of you a gift of $3,000,000, but we ask permission to carry freight free of tolls at that season of the year when your canal is frozen up. You have imposed upon us a duty, when you could not carry a pound of freight upon your canals. We ask you to remove that restriction, and put us upon the same footing with the other road." And what did the State of New York do? They took off the duty, and that road is now permitted to carry freight in precisely the same manner as the southern road does, and although duty is to be paid upon goods transported upon the canals, no duty is paid upon that which is carried upon the railroads. This is the history of the internal improvements of the State of New York. Now, who has suffered from that policy? Who but the individuals that live in the State of New York? Sir, I should not have said a word in reference to the history of these great matters in the State of New York, had not the subject of the Hoosac Tunnel been introduced here. I am opposed to the proposition of loaning the State credit, from principle. If I had been here at the time when the credit of the State was loaned to the Western Railroad, I should have been opposed to it, because it was a matter of experiment; and I hold that the agents of the people ought never to experiment with the people's money. But the loan was granted, and I pray it will turn out well for the State. I believe the State of New York also loaned its credit to another railroad, called the Hudson and Berkshire Railroad. What is the condition of that road to-day? I understand it is advertised for sale for the non-payment of the interest to the State. It never will be a road paying six per cent. Well, Sir, what is applicable to a great community is applicable to a small community, and what is applicable to a small community is applicable to a great State. Now, let us see how this matter has worked, when applied to a smaller body than the State. The city of Bridgewater, in Connecticut, under the authority of the legislature, loaned their credit to a railroad called the Housatonic. They did this under the mania and fever that was then raging in relation to railroads. Repudiation was the consequence. When the scrip which was issued by them became redeem able, there was a perfect tumult in reference to the matter; and yet I venture to say that every person in Bridgewater, at the time the scrip was issued, was in favor of it. Yet repudiation took place, and execution after execution issued to enforce the payment. They went to the supreme court of Connecticut, and it was not until the law had been confirmed, over and over again, that they would pay. In consequence of the great amount of internal improvements in which Pennsylvania became interested, she almost came to the door of repudiation. Time after time she could not pay the interest upon the money she had borrowed in Europe. How has this matter been at the West? This perfect avalanche of excitement and feeling in relation to railroads, which seemed to pervade the whole community here, found its way to the West. And what was the result? Repudiation after repudiation, and disgrace after disgrace; and I would by no means bring the ancient Commonwealth of Massachusetts within that vortex of repudiation which has been exhibited all over the Western States. But I would go even farther than to prohibit the loaning of the State credit. I would not only say that the legislature should not loan the State credit, but I would not permit the legislature to authorize any municipal corporation to loan its credit to, or take stock in, any corporation what ever. [July 15th. them, and that I regard as an element of repudiation. Now, Sir, in reference to these Western States, how came they by these State debts? Just look at the history of the matter. It was not in consequence of the great internal improvements by the States themselves. It was not in opening these great public channels of communication, but it was because the people of the various sections of those States seemed to have an absolute mania for these improvements. Corporation after corporation was authorized by the legislature, supposing that they would be equally beneficial with those great projects which the State had entered into. And what was the consequence? Why individuals connected with those corporations were the sufferers. I speak what I know in reference to this matter, for I have been a sufferer, to some extent, from that mania in one of those corporations. Under Providence, it was my fortune to have a little patrimony, located within the limits of one of them, and it happened to be real estate, and I felt the effects of it. Every town, every county almost, became connected with these projects for internal improvements. And what was the consequence? Why individuals failed in their bonds. They would carry their roads through certain sections, and then bring up. Then they would go into the next county, perhaps, and say: "If you will take half a million of our stock, or get leave of the legislature to authorize you to loan your credit to that amount, one or the other, you may have the railroad through your county. Otherwise, we must go through the adjoining county." Well, Sir, this mania continued to prevail among the How came this matter of repudiation to be so extensive at the West? I think I know something about it. The burnt child always dreads the fire. I had a slight visitation in reference to that matter, and perhaps I am not exactly a dis-peopleinterested witness in relation to it. Mr. WILSON. I wish to ask the gentleman if he will have the goodness to inform the Convention which of the Western States have repudiated their debts? Mr. HATHAWAY. Why, Mr. President, I thought what I alluded to was a matter of public notoriety. It will be recollected that Pennsylvania did not pay her interest. I suppose the gentleman would not call that repudiation. There are some of the Western States which, in a like manner, have declined to pay the interest upon their liabilities. I call that repudiation, but I presume the gentleman would not. The difference between us is a mere difference of words, and I am sure we shall not quarrel about that. He knows what I mean, when I speak of repudiation. I do not say that the people of these States refuse, absolutely, to pay their liabilities, but they did decline to pay the interest upon Here the hammer fell, the half-hour, fixed by order of the Convention, as the limit for speeches, having expired. Mr. SCHOULER, of Boston. The gentleman from Freetown, (Mr. Hathaway,) has spoken about every State, except the State of Massachu setts. Mr. HATHAWAY. I was going to speak about that, when the half-hour cut me off. Mr. SCHOULER. Well, Sir, I do not know what the gentleman would have said, if the halfhour had not cut him off, but I wish to make a remark in relation to what he has already said. In the first place, I understood him to say that he had always been opposed to loaning the State credit to private corporations, though he had never committed himself fully upon the mortgage question. He had never expressed his opinion definitely, upon the question of mortgaging the farms of the people. Mr. HATHAWAY. If the gentleman will permit me, I will explain. What I did say was, that in former times, there was a question before the people in reference to the matter of which the gentleman speaks, but whether it was right or wrong, I had nothing to say. Mr. SCHOULER. Now I wish to say a word to the reformers of this Convention. A great deal has been said about the reform party in this Convention, and, as I place myself in that category, I wish to address myself to the reform members of the Convention. A MEMBER. As brothers ? Mr. SCHOULER. Yes, as brothers. Now, Sir, we have made some improvements in our Constitution. But that Constitution has yet to receive the sanction of the people, before it becomes the organic law of the Commonwealth. It seems to me that there is such a disposition to load it down with all manner of local questions, that you will kill the Constitution before the people. The very fact of putting into your Constitution this provision, which you are considering, will, in my judgment, deprive it of a great many votes. In certain parts of the State, disguise it as you will, this Hoosac Tunnel question is one which will have an influence on the acceptance of the Constitution we may submit, if it contains a provision incorporated for the purpose of preventing the aid of the State being given for that work. In the northern and western portions of the State, there is a very strong feeling in favor of that Tunnel, and if you place in your Constitution a restriction which shall prevent the majority of the legislature, and a majority of the people of the State, from expressing their opinions upon the subject of loaning the credit of the State to aid in its construction, a large class of the people in those sections of the State, will vote against your Constitution for that reason. I want the reformers of this Convention to consider that fact. Now, Sir, I want the majority of the legislature to settle this question, just as they have settled it under the present Constitution, in years past. However much we may talk about the improvidence of other States, there has been no improvident legislation in Massachusetts upon this subject of the credit of the State. I hold in my hand the Report of the Auditor, from which I find that the whole amount of responsibility upon the part of the State, to the different railroads of the State, is about $5,000,000, and here are the details : [July 15th. £899,900 is $3,999,555 56 $100,000 00 Sept. 1, 1859, 100,000 00 April 1, 1859, 300,000 00 50,000 00 $5,049,555 56 Now, Sir, the State has a clear mortgage upon every dollar of property belonging to every one of these railroads for the money, or rather the credit she has loaned them, amounting, in all probability, to not less than from $20,000,000 to $25,000,000. Does that look like repudiation on account of these improvements? Sir, there is not a man in this Convention; there has not been an attempt in this debate, to show where the State of Massachusetts ever run any risk, or that she is likely to lose a single cent, by any act of her legislature in loaning the State credit. Now, Sir, I am ready to leave this question to the legislature. If it should appear that there is any portion of the State which has not enjoyed the benefit of any assistance upon the part of the State to develop its resources, and the loan of the credit of the State is necessary to carry out any great project which they have in view for that purpose, I say, in God's name, let them have it. Sir, I say—and I say it without fear of contradiction-that if the State of Massachusetts had to pay every cent of scrip to which she has put her name, for the encouragement of these internal improvements, it would be money spent to better advantage than any ever spent since she became a State. It has raised up the State; it has added to her population; it has added to her taxable property as much as $200,000,000. And if we had not lent the aid of the State, or, at least, if they had not been carried out—and it is exceedingly doubtful whether they would ever have been carried out without the aid of the State-we should have fallen in every respect far behind what we are now; we should have fallen farther behind, in proportion to our former position, than any State in the Union. I am surprised, that at this late day, when we have the light of experience, that gentlemen should talk about crippling the energies of the State, by placing a provision in our Constitution which shall deprive the legislature-by depriving a majority of the people of the State, through the representatives in the legislature—of the power of [July 15th. Friday,] SCHOULER. expressing their opinion upon this subject. I am opposed to any such provision. I hope the vote of the Convention, by which the provision now before us was adopted, will be reconsidered, and that the whole matter will be left in the power of the legislature. It will be found very difficult, in practice, to get two-thirds of the members of the legislature to go for any measure of that kind. If such a provision had been incorporated into our present Constitution, in all probability, we should never have had the Western Railroad at all. True, it❘ was an experiment. We could not tell how it would work. But, Sir, when it came to be put through, and to develop the wealth and resources of the Commonwealth, we found that we had made a good experiment. But now we have the light of experience. We know what can be done, by what has been done. And yet, gentlemen are afraid to trust the majority of the legislature, to say whether they will loan the credit of the State, or not. Sir, it seems to me that it comes with a rather bad grace from the members of the Convention, from the city of Boston, and from members who come from those portions of the State which have been enriched by the credit of the State, to come here and try to cramp the energies of the Commonwealth; to try to place a bridle upon our necks, and to prevent us hereafter from ever assist ing that portion of the Commonwealth which has never received one single dollar for the purpose of developing its resources. I am in favor of treating every portion of the Commonwealth with equal liberality. Now, Sir, the gentleman from Freetown, (Mr. Hathaway,) and every other gentleman who has spoken here upon the same side of the question, will find it impossible to make out any argument in favor of the provision now before us, from any act of the legislature of Massachusetts upon the subject. If the legislature had been improvident, that might have furnished some ground for an argument. But it has not. The gentleman from Freetown told us of three millions given up by the State of New York, which she had loaned to the Erie Railroad. Why, Sir, if that road could not have been built without the aid of that three millions of dollars-and I take it for granted that it would not have been built-I ask any gentleman here whether it was not a good investment upon the part of the State of New York? Where could she have invested her three millions to better advantage? And I may say just as much for the Erie Canal, which has been so great a source of wealth and population both to the State and city of New York. The whole West have become tributary to her. And, Sir, we wish to avail ourselves of some portion of the wealth of these Western States. In regard to the State of Illinois, every one knows there was a system of log-rolling carried on in her legislature, which was the cause of all the trouble. In order to get one project through the legislature, members were obliged to vote for others, in which other members were interested, but which were of no public interest or importance whatever. That is the way in which these Western States have become so deeply involved in debt. And I believe repudiation has taught them a lesson in this respect. But, Sir, these States are rapidly filling up, and the time will come when these very improvements, which, up to the present time have not been productive, will become productive, and they will more than compensate for all the losses they have occasioned. But here in Massachusetts we have involved ourselves in no such difficulties. Everything has gone on well, and why not allow the system to remain as it is? The gentleman talks about experimenting with the credit of the State, and experimenting with the people's money. I will ask him whether it is not, at least, as bad to experiment with the Constitution of the State? He proposes to experiment with the fundamental law in reference to this subject, and I ask him whether the credit of the State is any more sacred than the fundamental law of the State? Sir, I am willing to stand by the past experience of the State, and I believe the people are willing to stand by it. But I should like to ask the gen| tleman from Freetown, whether he can tell me if many of these appropriations of other States did not pass by a majority of two-thirds? I think the probability is, that at the time when there was such a rush for these internal improvements, many of the appropriations were passed by a twothirds vote? There are a number of States which a few years ago were repudiating States, but one by one they have got back again. Pennsylvania was one of the repudiating States, but she has entirely recovered, and I have no doubt, in a great measure, in consequence of these very internal improvements which were the cause of her repudiation. Now she is not a repudiating State. I thought a few minutes ago that Mississippi was the only State in the Union that actually repudiated, but I think Illinois has once not been able to pay her interest, and she will, therefore, have to be placed in the same category. But, Sir, that State is filling up rapidly, and I doubt not the time will come, and within ten years too, when the State of Illinois will be able to pay every cent |