say, that if you allow any set of individuals, for any purpose whatever, to form themselves into corporations under general laws, that it will open the doors to enormous frauds and cheats, which it is the duty of the legislature to prevent. I admit it is the duty of the legislature to make these general laws so sound, so safe, and so secure, to the property that invests itself under them, that this fraud, as much as possible, may be prevented; and farther than that, it does not seem to me that it is the duty of the legislature to go. When it goes beyond that, it steps into that round of paternal legislation which has been the curse of commerce for ages. I undertake to say, that it is not the duty of the legislature to take care of the private interests of men, but only to furnish those sound, safe, and general rules, by which they may conduct their business. It is for this reason, therefore, and not for other good reasons that have been alleged, that I am in favor of extending this principle of legislation, and of inserting in our Constitution a short and simple rule or instruction to our agent, the legislature, to this effect: wherever it can be done, the legislature shall make those general laws, and cease granting special privileges.

Mr. SCHOULER, of Boston. I have only a few words to say in regard to this matter. This subject has been discussed in this hall, in days

[July 16th.

ships has never been in the hands of corporations, and, if persons should come up to the legislature and ask for an act of incorporation for that purpose, they would not get it, upon the principle that this business, as has been shown, can be done by private enterprise; and whenever this can be done, I say there let it remain. I ask the gentleman from Charlestown, (Mr. Frothingham,) and also the gentleman for Wilbraham, (Mr. Hallett,) supposing that men form themselves into corporations under this general corporation act, and it is found out afterwards that they do not transact their business properly, you cannot take away from them their charter. They are independent of the legislature and the people. You cannot stop them, unless you repeal the general act; and when you do that, you punish the innocent with the guilty, because there may be a hundred other corporations incorporated under this general corporation act. It may be said that we may pass a special law in regard to men associated together under general a law, if they transcend the power of that general law. But, supposing we do, what is to hinder those men, the next day, from forming a corporation under this general law. Last year, we had an application here to the legislature, to form a company by the name of the Worcester Caloric Power Company. They were to have $500,000 capital, and it ap

come a convert to these general corporation acts. I am not quite so much a corporation man as to give every set of men who may combine together the right to form themselves into a corporation. I think it is the duty of the legislature, to investigate all applications for corporations; and, if the applicants make out a case, to give them their charter. But, to pass a general law whereby any persons may combine-Tom, Dick, and Harry and form themselves into a corporation, and go into any kind of business, I think ought not to be tolerated. The gentleman for Wilbraham, (Mr. Hallett,) and the gentleman from Charlestown, (Mr. Frothingham,) have spoken against this idea of encouraging associated wealth. They are in favor of having everything done, that can be done, by individual corporations, and so am I. It is because I am in favor of individuals doing all the work that can be done, that I am opposed to passing a general corporation act, whereby any persons may form themselves into corporations. We have a certain kind of business in this State, that has never been transacted by corporations, and that is, the great trade of manufacturing shoes. The shoe and leather business in this State, has never been transacted by corporations, and I trust it never will be. The great work of building

were to hold real estate in the city of Worcester to the amount of $400,000. It was well known that it was nothing but a land speculation, got up under this title, intended to create the impression that it was intended for mechanical purposes. This is what gentlemen might call mortmain, although this definition of mortmain is a little different from the original definition. But, when that came to be discussed before the House of Representatives, they killed it by a decisive vote. I do not know but what they may have forced themselves, under general laws, into the Worcester Caloric Company. What you can stop by legislative enactment and investigation, they can obtain under general laws. The gentleman for Wilbraham, (Mr. Hallett,) says the amount of property owned by corporations, amounts to four hundred millions, and yet he is the advocate of a system, by which you can put the whole mechanical, and other business of the Commonwealth, into corporations. He talks about corporations owning this great amount of property, and yet he advocates a law whereby they can hold the whole State, and the legislature cannot say no. And they will be independent of the people and the legislature. I am not such a corporation man as that.

Saturday,]

FROTHINGHAM.

Mr. HALLETT, for Wilbraham. Will the gentleman allow me to ask him one question. If four hundred millions of property have gone into corporations, I should like to ask him what right he has to exclude the other two millions from going into corporations also.

Mr. SCHOULER. If the gentleman comes before the legislature and makes out a good case for an act of incorporation, he will get it. I was reminded, while the gentleman was speaking about monopolies, that if there is anything like a a monopoly, it is the profession which the gentleman himself follows. Why does not the gentleman go for incorporating into the Constitution a provision that every-body should be a lawyer, and that he shall not have to serve three years, and then be examined before a certain legal tribunal, to see if he is fit to exercise the duties of the profession.

Mr. HALLETT. If the gentleman will incorporate a provision into the Constitution that would make lawyers, I would be very willing to do it.

Mr. SCHOULER. I believe that lawyers can be made about as easily as anything else.

Mr. HALLETT. I wish barely to make one statement. I wish to say, under a law in our Constitution, that that gentleman, or any citizen may be admitted for an examination to the bar to-morrow, if he possesses good moral character and general information.

Mr. SCHOULER. Suppose he should not be able to pass an examination. What would be the case then? But, to pass from this, I say that that profession is the only profession in this whole Commonwealth that approaches anything like monopoly; and I have noticed in the Revised Statutes, that they have a lien law whereby they can keep the money of their clients, and pay themselves, before they pay over to their clients the money which they may collect for them. I say, if you pass this general law, you make all the corporations in existence monopolies, and you are shutting down the gate in such a manner, that these corporations will stand without any rivals and without any competition. They have got their charters, there they will remain, and the Commonwealth will grant no more. desire to know if this Convention is ready to assert and maintain such a doctrine. I desire to know if we are intending to pass a law which will give to the banks that have been incorporated within the last two years, and those which have had their charters renewed, the whole monopoly of banking in the Commonwealth for the next twenty-five years. The gentleman says that all the new banks can come under the general

I

[July 16th.

banking law. The people do not want it. It is well known, at least financiers tell me so, that the banks under the general banking law cannot compete with those under special charters. Last year, or the year before, the legislature amended the law, by saying, that those banks that went into operation under the general law, should not pay any taxes for it. They offered this as an inducement, but you cannot find any company in Massachusetts that would avail themselves of this advantage. So it was in regard to the general corporation act for manufacturing, which was passed two years ago. There are a very few, I believe, that have availed themselves of these privileges; merely enough to make exceptions to the rule. As a general thing, the people of Massachusetts are not in favor of that law. I judge so from the fact that persons have come up to the legislature to get their charters, entirely disregarding the general corporation act. These are the general reasons why I am opposed to placing in our Constitution this provision, although other States may have passed, as we all know, general corporation acts, still, I believe our system is better than any which has been adopted anywhere else; and, I think all the time expended in legislating upon and investigating this matter of incorporations, is time well spent. I would warn this Convention against incorporating a provision into our Constitution which will give to irresponsible persons the power of forming themselves into corporations, and in that way getting rid of individual responsibility for their debts. The gentleman from Charlestown (Mr. Frothingham) is an anti-corporation man. I recollect that, in 1844, when we had that long debate about the camels, down in Nantucket, that the gentleman from Charlestown was very earnest in his opposition to all kinds of corporations at that time, and particularly against those small corporations. He has changed his ground altogether. He is now in favor of every-body forming themselves into corporations, and of throwing the whole business of the Commonwealth into the power of citizens who form themselves into corporations, and of placing them above the people, and the representatives of the people.

Mr. FROTHINGHAM. The gentleman very truly says, that in some year, before the legislature, I had the honor of making an argument against granting special acts of incorporation. I have now very feebly made an argument against such special acts. I am in favor of granting now to all, those privileges which so large a body of our fellow-citizens have.

Mr. SCHOULER. The gentleman's explanation amounts to this, that he was opposed to that

suggested by the gentleman from Charlestown, (Mr. Frothingham). I think there is no force in his argument, because we have had, for many years, an act for general copartnership, by which all persons of small means may unite together, and carry on business, and that without endangering anything more than the amount they put in. That law is neglected, because the whole attention is turned towards corporations. Yet the law was a good one. It was amended in 1851, and made still better, so that now men may unite in carrying on business, with all the facilities they would derive from incorporations. Under our present law, business men have the advantages which result from the combination of capital, and of acting with others without endangering anything more than they invest in the concern. Besides, for the largest manufacturing operations, it is evident corporations are not necessary; for in the neighboring State of Rhode Island, where manufacturing industry has been more profitable, in proportion to its extent, even than in Massachusetts, they have, as a general fact, no corporations.

Sufficient capital can always be obtained, without the aid of corporate powers and privileges, for all useful and profitable undertakings.

I have said that I object to the whole experiment. I do not believe that the final result of it will be beneficial. I wish it understood, however, that when I speak of corporations in this connection, I mean those of a business character. Corporations for other purposes-for railroads, banks, and insurance companies, public charities, and the like-are, if not in all cases a matter of necessity, are at least a great public convenience, and do not interfere with the general business and ordinary pursuits of the people of the Commonwealth; but, for all other purposes, I do object to them.

The first reason is, that corporations change the relation of man to wealth. When a man has his property in his own hands, and manages it himself, he is responsible for the manner in which he does it. He does not delegate his power over it to anybody else. But when the management of property is put into the hands of corporations, the many delegate the power of managing it to the few; and that is an important consideration, when we reflect that nearly half of the wealth in this State has passed from the hands of individuals into the hands of incorporated companies. It aggregates power, of course, and necessarily, all the property of the Commonwealth, included in these corporations, must be put into the hands of a very few men, having absolute power over it for the time being. Hence, the agent of a factory,

[July 16th.

or a corporation of any kind, has absolute control over all persons connected with that corporation. This, I hold, to be one of the bad consequences of incorporated wealth.

Another objection I have to this system is, that it changes the moral responsibility of capital. When a man is managing his own property, he is held morally responsible for the manner in which he conducts his business, and for the manner in which he treats the persons whom he employs. If he is unjust, or cruel, he will feel the rebuke of an indignant public sentiment, under which he will quail. But it is not so in corporations. All this moral responsibility is removed. I will illustrate my meaning in this manner: Suppose one of the employees, a young woman, in one of the factories, should feel that she was injured or wronged, by some of the arrangements of one of the mills, and she should seek redress. Suppose she goes to the overseer of the room and applies to him. What does he say? "I am not responsible; you must look to the superintendent of the mill." And what does the latter say? "I am not responsible for this; you must look to the agent of the factory." Suppose she should venture to go to the agent. What does he say? If he deigns to say anything, he will tell her that "the board of directors are responsible for all this matter." The board! and so the poor girl has, at least, run her head against "a board."

We act," says the agent, "under general rules. These rules are established by the board of directors, and the agent has no responsibility in the case." Then what is her redress? If she goes to the directors, what answer does she get? Why, that they "act for the stockholders, and are bound to consult their interests, and those interests require them to run the factory thirteen or fourteen hours per day. They must act for the interest of the corporation." Suppose, farther, that an application for redress were made to individual stockholders, what would be their reply. Very certainly they would say: "We have no personal responsibility in the matter; we submit the entire management of the factory to our directors and those they employ." This is a fair illustration of the matter, and it clearly shows that the moral responsibility of wealth is destroyed by being aggregated into corporations, of which it is said, with terrible truthfulness, that " they have no souls."

In the next place, corporations destroy the natural relation between capital and labor. The moment we incorporate capital, and refuse to incorporate labor, that moment we change the relative position of the two. And what is the consequence ? We give capital greatly

the advantage. We never incorporate laborers. Such a thing is unheard of, and such a thing would not be tolerated. And, since we do not do that, it is quite clear that we should not incorporate capital, if we would leave the two parties on an equal footing. Capital and labor are, in all cases, natural copartners in production, and natural competitors for profits. The relation between capital and labor we cannot destroy, but that competition we may interfere with, and we do so if we incorporate capital and do not give an equal advantage to labor.

Again, by this system we reduce the number of freeholders, and that, I maintain, is a great evil. When persons carry on their own business, they will live, generally, in their own houses. When they are employed by corporations, almost universally, they are tenants at will. I submit, that in this Commonwealth, this has become a matter of great importance. Thousands, and tens of thousands, who are now mere tenants, would be freeholders, were it not for corporations. For instance, take one of our manufacturing cities, where the business is carried on by corporations, and what a large proportion of all the dwellings are owned by these great companies, and what a large part of all the inhabitants hold their tenements at the will of a factory agent. On the other hand, by way of contrast, take the city of Worcester; it has not a single corporation there for any industrial purpose, and yet it is the most flourishing city in this Commonwealth, altogeth

er.

Mr. SCHOULER. I would like to ask the gentleman from North Brookfield, if the city of Worcester has not been built up by corporations, and what it would be to-day, if it had not been for railroad corporations?

[July 16th.

On the other hand, take a city whose industry is carried on by corporations, and how different is the position and characteristics of its population. I will make no invidious comparisons, for the facts are well known to all intelligent persons.

Again, Sir, this system has concentrated our manufacturing business, to a wonderful extent, in the cities, and I insist that that is a great evil. I maintain that, if it had not been for this corporation system, our manufactures would not have been concentrated to the extent they have, in cities, but would have been scattered all over the State, wherever there was a waterfall to be put to use; and that would have been much better for the Commonwealth, than the present state of things. One great object of bringing these great corporations together in a large city, is this: In the first place, when one of these cities is to be built, the land is all bought up, and monopolized. One single corporation in this Commonwealth, purchased 1,400 acres of land to start with, and now, if that land is sold at only ten cents a footand much of it will be sold for a dollar a foot-it will bring more than six millions of dollars. Now, Sir, all the rise of that land, instead of going to the benefit of the workmen, as it should, goes to build up the property of the corporation. That, I maintain, is a serious objection, and one that does not exist where manufactories grow up naturally under private enterprise.

And, I object, again, that this system necessarily destroys private enterprise, by monopolizing the money and business of the country. Every-body knows, that the moment there is a great pressure in the money market, these corporations can control a great part of all the capital of both city and country, and I have been rejoiced, when passing through Pearl and State Streets, in this

Mr. WALKER. But I have not objected to railroad companies, banking, or insurance companies. The only point of which I am speaking, and the only thing to which I object is, the establishment of corporations for carrying on the common industrial business of the country. Now, take the city of Worcester, and, as I have said, it is far the most flourishing city in the Commonwealth; and the great cause of their success and prosperity is, that they have mechanics who do business on their own account, and who, when they acquire wealth, buy a piece of land and build a house upon it. They are independent men, and act as they choose, and vote as they please.

under this tremendous system of monopoly.

Ordinary business men cannot command money, when corporations can. For, in the first place, the men who enter into these corporations are men of great capital, and have great personal influence in the money market; and, in the second place, as they can create the influence of great manufacturing and banking corporations, they can and do, readily absorb a great part of all the circulating medium of the State. Business men begin to understand all this, and to see that private enterprise is greatly crippled and impeded by this corporation system. Public sentiment, among that class of men, is becoming adverse to it, and will demand, ere long, its overthrow. They will not, and ought not, to be willing