« ForrigeFortsett »
say, that if you allow any set of individuals, for ships has never been in the hands of corporations, any purpose whatever, to form themselves into and, if persons should come up to the legislature corporations under general laws, that it will open and ask for an act of incorporation for that purthe doors to enormous frauds and cheats, which pose, they would not get it, upon the principle it is the duty of the legislature to prevent. I that this business, as has been shown, can be done admit it is the duty of the legislature to make by private enterprise ; and whenever this can be these general laws so sound, so safe, and so se done, I say there let it remain. I ask the gencure, to the property that invests itself under tleman from Charlestown, (Mr. Frothingham,) them, that this fraud, as much as possible, may be and also the gentleman for Wilbraham, (Mr. prevented ; and farther than that, it does not Hallett,) supposing that men form themselves into seem to me that it is the duty of the legislature to corporations under this general corporation act, go. When it goes beyond that, it steps into that and it is found out afterwards that they do not round of paternal legislation which has been the transact their business properly, you cannot take curse of commerce for ages. I undertake to say, away from them their charter. They are indethat it is not the duty of the legislature to take pendent of the legislature and the people. You care of the private interests of men, but only to cannot stop them, unless you repeal the general furnish those sound, safe, and general rules, by act; and when you do that, you punish the innowhich they may conduct their business. It is cent with the guilty, because there may be a for this reason, therefore, and not for other good hundred other corporations incorporated under reasons that have been alleged, that I am in favor this general corporation act. It may be said that of extending this principle of legislation, and of we may pass a special law in regard to men assoinserting in our Constitution a short and simple ciated together under general a law, if they transrule or instruction to our agent, the legislature, cend the power of that general law. But, supto this effect: wherever it can be done, the leg- posing we do, what is to hinder those men, the islature shall make those general laws, and cease next day, from forming a corporation under this granting special privileges.
general law. Last year, we had an application Mr. SCHOULER, of Boston. I have only a here to the legislature, to form a company by the few words to say in regard to this matter. This name of the Worcester Caloric Power Company. subject has been discussed in this hall, in days They were to have $500,000 capital, and it apgone by, with great ability, but I have never be- peared in the bill, if I recollect aright, that thes come a convert to these general corporation acts. were to hold real estate in the city of Worcester I am not quite so much a corporation man as to to the amount of $400,000. It was well known give every set of men who may combine together that it was nothing but a land speculation, got up the right to form themselves into a corporation. under this title, intended to create the impression I think it is the duty of the legislature, to inves that it was intended for mechanical purposes. tigate all applications for corporations; and, if the This is what gentlemen might call mortmain, applicants make out a case, to give them their although this definition of mortmain is a little difcharter. But, to pass a general law whereby any ferent from the original definition. But, when persons may combine-Tom, Dick, and Harry, that came to be discussed before the House of and form themselves into a corporation, and go Representatives, they killed it by a decisive vote. into any kind of business, I think ought not to I do not know but what they may have forced be tolerated. The gentleman for Wilbraham, themselves, under general laws, into the Worces(Mr. Hallett,) and the gentleman from Charles ter Caloric Company. What you can stop by town, (Mr. Frothingham,) have spoken against legislative enactment and investigation, they can this idea of encouraging associated wealth. They obtain under general laws. The gentleman for are in favor of having everything done, that can Wilbraham, (Mr. Hallett,) says the amount of be done, by individual corporations, and so am I. property owned by corporations, amounts to four It is because I am in favor of individuals doing hundred millions, and yet he is the advocate of all the work that can be done, that I am opposed a system, by which you can put the whole meto passing a general corporation act, whereby any chanical, and other business of the Commonwealth, persons may form themselves into corporations. into corporations. He talks about corporations We have a certain kind of business in this State, owning this great amount of property, and yet that has never been transacted by corporations, he advocates a law whereby they can hold the and that is, the great trade of manufacturing shoes. whole State, and the legislature cannot say no. The shoe and leather business in this State, has And they will be independent of the people and never been transacted by corporations, and I trust the legislature. I am not such a corporation man it never will be. The great work of building
Mr. HALLETT, for Wilbraham. Will the banking law. The people do not want it. It is gentleman allow me to ask him one question. If well known, at least financiers tell me so, that four hundred millions of property have gone into the banks under the general banking law cannot corporations, I should like to ask him what right compete with those under special charters. Last he has to exclude the other two millions from year, or the year before, the legislature amended going into corporations also.
the law, by saying, that those banks that went Mr. SCHOULER. If the gentleman comes into operation under the general law, should not before the legislature and makes out a good case for pay any taxes for it. They offered this as an an act of incorporation, he will get it. I was inducement, but you cannot find any company reminded, while the gentleman was speaking in Massachusetts that would avail themselves of about monopolies, that if there is anything like a this advantage. So it was in regard to the gena monopoly, it is the profession which the gentle- eral corporation act for manufacturing, which man himself follows. Why does not the gentle was passed two years ago. There are a very few, man go for incorporating into the Constitution a I believe, that have availed themselves of these provision that every-body should be a lawyer, and privileges; merely enough to make exceptions to that he shall not have to serve three years, and the rule. As a general thing, the people of Masthen be examined before a certain legal tribunal, sachusetts are not in favor of that law. I judge to see if he is fit to exercise the duties of the so from the fact that persons have come up to the profession.
legislature to get their charters, entirely disreMr. HALLETT. If the gentleman will in- garding the general corporation act.
These are corporate a provision into the Constitution that the general reasons why I am opposed to placing would make lawyers, I would be very willing to
in our Constitution this provision, although other do it.
States may have passed, as we all know, general Mr. SCHOULER. I believe that lawyers can corporation acts, still, I believe our system is betbe made about as easily as anything else.
ter than any which has been adopted anywhere Mr. HALLETT. I wish barely to make one else; and, I think all the time expended in legisstatement. I wish to say, under a law in our lating upon and investigating this matter of inConstitution, that that gentleman, or any citizen corporations, is time well spent. I would warn may be admitted for an examination to the bar this Convention against incorporating a provision to-morrow, if he possesses good moral character into our Constitution which will give to irresponand general information.
sible persons the power of forming themselves Mr. SCHOULER. Suppose he should not be into corporations, and in that way getting rid of able to pass an examination. What would be individual responsibility for their debts. The the case then ? But, to pass from this, I say that gentleman from Charlestown (Mr. Frothingham) that profession is the only profession in this is an anti-corporation man. I recollect that, in whole Commonwealth that approaches anything 1844, when we had that long debate about the like monopoly; and I have noticed in the Revised camels, down in Nantucket, that the gentleman Statutes, that they have a lien law whereby they from Charlestown was very earnest in his opposican keep the money of their clients, and pay tion to all kinds of corporations at that time, and themselves, before they pay over to their clients particularly against those small corporations. He the money which they may collect for them. I has changed his ground altogether. He is now say, if you pass this general law, you make all
in favor of every-body forming themselves into the corporations in existence monopolies, and corporations, and of throwing the whole business you are shutting down the gate in such a man of the Commonwealth into the power of citizens ner, that these corporations will stand without who form themselves into corporations, and of
rivals and without any competition. They placing them above the people, and the representahave got their charters, there they will remain, tives of the people.
and the Commonwealth will grant no more. 1 Mr. FROTHINGHAM. The gentleman very
desire to know if this Convention is ready to as truly says, that in some year, before the legislasert and maintain such a doctrine. I desire to ture, I had the honor of making an argument know if we are intending to pass a law which against granting special acts of incorporation. I will give to the banks that have been incorpo- have now very feebly made an argument against rated within the last two years, and those which such special acts. I am in favor of granting now have had their charters renewed, the whole mo to all, those privileges which so large a body of nopoly of banking in the Commonwealth for the our fellow-citizens have. next twenty-five years. The gentleman says that Mr. SCHOULER. The gentleman's explanaall the new banks can come under the general tion amounts to this, that he was opposed to that
WALKER — SARGENT.
camel corporation, because it was a special corpo- | rations of the Commonwealth? It is very rarely ration. I understood his argument to be, and I the case that we do not have a majority in the believe it was always so argued on that side, that legislature, who are either presidents, directors, or corporations of that kind were unnecessary, and stockholders in incorporated companies. This is a I wish to know whether the gentleman would be fact of very grave importance. in favor of the camel corporation, if it was incor Mr. SARGENT, of Cambridge. I would like, porated under the general law. What difference with permission, to ask the gentleman from North is there in principle, between a special and general Brookfield, if the secret ballot law was carried by act? If a corporation is good, it is good by a the influence of corporations in this Commonspecial act. There are certain kinds of corpora wealth. tions that require a great deal of capital and asso Mr. WALKER. I have reason to think that ciated wealth, in order to carry on their business, the corporations did not have a chance to rally and it is necessary that they should have an act and combine their forces on that question, either of incorporation; but, before that grant is given, for or against it. I would have every one of them come up here Now, if it be a foregone conclusion-if this corbefore the representatives of the people, and make poration principle is to be carried out to its full out a full and clear case, before an act of incor- and legitimate result, as I fully believe it is in poration should be given them.
Massachusetts, then I am decidedly in favor of Mr. WALKER, of North Brookfield. This the resolution before us. I think that is a resoluquestion is one of great interest in this common tion which we ought to pass. I will give an wealth ; it is peculiarly a Massachusetts question, anecdote, in illustration of the reason why I am in because no other State in the Union, and I sup favor of it. In 1850, certain tailors of the city of pose no other country in the world, has so many Boston, I think to the number of twenty or incorporated industrial institutions as the State thirty, came before the legislature, and asked to of Massachusetts, or so much wealth embarked be incorporated, that they might have an opporin enterprises of a corporate character; and, there- tunity to put their small capitals together, and fore, the question is one of very great importance. unite in the manufacture and sale of clothing. In most other states and countries, corporations They came before the legislature, and it was are resorted to as a necessity; with us they are shown that they were honest, industrious, and mostly used as a matter of convenience. No one deserving men. I think their united capital will pretend that nine-tenths of all the projects amounted to only fifteen thousand dollars. What now carried on by corporations, could not be car answer did they receive to their application ? ried on by individuals. I think the gentleman | They got a negative. " You cannot be incorfrom Boston, the other day, told us that one pri- porated,” said the legislature. At that very movate firm in England owned more spindles than ment, there was a project before the same body, to there are in the city of Lowell. Probably the increase the capital of a corporation, already founders of that establishment were poor men in amounting to two millions, to three millions. the beginning, and that they attracted to them- That was granted; that was worthy the attention selves, by a necessary law, all the capital they of the law-makers of Massachusetts. That petineeded, because they were men of character and tion came from great capitalists. Laborers came ability. Such persons always attract to them forward and asked to be incorporated, and it selves all the capital they require; because capi- could not be done. They were men of no influtal needs talent and skill, as much as talent and ence, comparatively, and they could not have the skill need capital. From the statistics contained privilege of uniting their capital together, so as to in our document, No. 37, the best deductions we increase the benefits of their own industry, and can make, I think, will show that something like obtain a profit on the sale of their own products. $250,000,000, or $300,000,000 of capital in this Now, Sir, for one, I must, before voting on this Commonwealth, are locked up in corporations. subject, say, that if this policy is to be pursued, if That is about half of the wealth of the State. this grand corporation system is to be continued,
I suppose it is a foregone conclusion, that Mas- I think it should be extended to all, so that all sachusetts is to try this experiment to its fullest may participate in it equally, and the privilege of extent, and that we are to illustrate what the ad- incorporation should not be a matter of favor, but vantages or disadvantages of corporations may of general right. I have great doubts as to the be. Corporations now, with us, have the ascen expediency of creating these business corporations, dency. I ask any man to say, if he believes that either by general or special laws. I do not beany measure of legislation could be carried in this lieve in the utility or rightfulness of the system State, which was generally offensive to the corpo- itself ; I do not believe in the necessity for it, as
suggested by the gentleman from Charlestown, or a corporation of any kind, has absolute control (Mr. Frothingham). I think there is no force in over all persons connected with that corporation. his argument, because we have had, for many This, I hold, to be one of the bad consequences of years, an act for general copartnership, by which incorporated wealth. all persons of small means may unite together, Another objection I have to this system is, that it and carry on business, and that without endan- changes the moral responsibility of capital. When gering anything more than the amount they put a man is managing his own property, he is held in. That law is neglected, because the whole at morally responsible for the manner in which he tention is turned towards corporations. Yet the conducts his business, and for the manner in law was a good one. It was amended in 1851, which he treats the persons whom he employs. and made still better, so that now men may If he is unjust, or cruel, he will feel the rebuke unite in carrying on business, with all the facil of an indignant public sentiment, under which he ities they would derive from incorporations. will quail. But it is not so in corporations. All Under our present law, business men have the this moral responsibility is removed. I will illusadvantages which result from the combination of trate my meaning in this manner: Suppose one capital, and of acting with others without endan of the employees, a young woman, in one of the gering anything more than they invest in the factories, should feel that she was injured or concern. Besides, for the largest manufacturing wronged, by some of the arrangements of one of operations, it is evident corporations are not the mills, and she should seek redress. Suppose necessary; for in the neighboring State of Rhode she goes to the overseer of the room and applies Island, where manufacturing industry has been to him. What does he say? “I am not responmore profitable, in proportion to its extent, even sible; you must look to the superintendent of the than in Massachusetts, they have, as a general mill.” And what does the latter say? “I am fact, no corporations.
not responsible for this; you must look to the Sufficient capital can always be obtained, with agent of the factory.” Suppose she should venout the aid of corporate powers and privileges, for ture to go to the agent. What does he say? If all useful and profitable undertakings.
he deigns to say anything, he will tell her I have said that I object to the whole experi- that “the board of directors are responsible for ment. I do not believe that the final result of it all this matter." The board ! and so the poor will be beneficial. I wish it understood, how- girl has, at least, run her head against "a board.” ever, that when I speak of corporations in this “We act,” says the agent, " under general rules. connection, I mean those of a business character. These rules are established by the board of directCorporations for other purposes--for railroads, ors, and the agent has no responsibility in the banks, and insurance companies, public charities, case.” Then what is her redress ? If she goes and the like-are, if not in all cases a matter of to the directors, what answer does she get? Why, necessity, are at least a great public convenience, that they “act for the stockholders, and are bound and do not interfere with the general business to consult their interests, and those interests reand ordinary pursuits of the people of the Com- quire them to run the factory thirteen or fourteen monwealth ; but, for all other purposes, I do ob hours per day. They must act for the interest of ject to them.
the corporation.” Suppose, farther, that an apThe first reason is, that corporations change plication for redress were made to individual the relation of man to wealth. When a man has stockholders, what would be their reply. Very his property in his own hands, and manages it certainly they would say: “We have no perhimself, he is responsible for the manner in which sonal responsibility in the matter; we submit the he does it. He does not delegate his power over entire management of the factory to our directors it to anybody else. But when the management of and those they employ." This is a fair illustraproperty is put into the hands of corporations, the tion of the matter, and it clearly shows that the many delegate the power of managing it to the moral responsibility of wealth is destroyed by few; and that is an important consideration, when being aggregated into corporations, of which it is we reflect that nearly half of the wealth in this said, with terrible truthfulness, that “they have State has passed from the hands of individuals no souls." into the hands of incorporated companies. It In the next place, corporations destroy the aggregates power, of course, and necessarily, all natural relation between capital and labor. the property of the Commonwealth, included in The moment we incorporate capital, and refuse these corporations, must be put into the hands of to incorporate labor, that moment we change a very few men, having absolute power over it the relative position of the two. And what for the time being. Hence, the agent of a factory, | is the consequence ? We give capital greatly
SCHOULER — WALKER.
the advantage. We never incorporate laborers. On the other hand, take a city whose industry Such a thing is unheard of, and such a thing is carried on by corporations, and how different is would not be tolerated. And, since we do not do the position and characteristics of its population. that, it is quite clear that we should not incorpo- | I will make no invidious comparisons, for the rate capital, if we would leave the two parties on facts are well known to all intelligent persons. an equal footing. Capital and labor are, in all Again, Sir, this system has concentrated our cases, natural copartners in production, and natu- | manufacturing business, to a wonderful extent, ral competitors for profits. The relation between in the cities, and I insist that that is a great evil. capital and labor we cannot destroy, but that I maintain that, if it had not been for this corpocompetition we may interfere with, and we do so ration system, our manufactures would not have if we incorporate capital and do not give an equal been concentrated to the extent they have, in advantage to labor.
cities, but would have been scattered all over the Again, by this system we reduce the number State, wherever there was a waterfall to be put to of freeholders, and that, I maintain, is a great evil. use; and that would have been much better for When persons carry on their own business, they the Commonwealth, than the present state of will live, generally, in their own houses. When things. One great object of bringing these great they are employed by corporations, almost uni- corporations together in a large city, is this : In versally, they are tenants at will. I submit, that the first place, when one of these cities is to be in this Commonwealth, this has become a matter of built, the land is all bought up, and monopolized. great importance. Thousands, and tens of thou One single corporation in this Commonwealth, sands, who are now mere tenants, would be free- purchased 1,400 acres of land to start with, and holders, were it not for corporations. For in
now, if that land is sold at only ten cents a footstance, take one of our manufacturing cities, and much of it will be sold for a dollar a foot-it where the business is carried on by corporations, will bring more than six millions of dollars. and what a large proportion of all the dwellings Now, Sir, all the rise of that land, instead of going are owned by these great companies, and what a to the benefit of the workmen, as it should, goes large part of all the inhabitants hold their tene to build up the property of the corporation. ments at the will of a factory agent. On the That, I maintain, is a serious objection, and one other hand, by way of contrast, take the city of that does not exist where manufactories grow up Worcester ; it has not a single corporation there naturally under private enterprise. for any industrial purpose, and yet it is the most And, I object, again, that this system necessarily flourishing city in this Commonwealth, altogeth- destroys private enterprise, by monopolizing the
money and business of the country. Every-body Mr. SCHOULER. I would like to ask the knows, that the moment there is a great pressure gentleman from North Brookfield, if the city of in the money market, these corporations can Worcester has not been built up by corporations, control a great part of all the capital of both city and what it would be to-day, if it had not been and country, and I have been rejoiced, when for railroad corporations ?
passing through Pearl and State Streets, in this Mr. WALKER. I have not objected to rail- city, in a time of pressure in the money market, road corporations.
to find that the business men were beginning to Mr. SCHOULER. The gentleman spoke of wake up to the fact that they are being crushed corporations.
under this tremendous system of monopoly. Mr. WALKER. But I have not objected to Ordinary business cannot command railroad companies, banking, or insurance com money, when corporations can. For, in the first panies. The only point of which I am speaking, place, the men who enter into these corporations and the only thing to which I object is, the estab are men of great capital, and have great personal lishment of corporations for carrying on the influence in the money market; and, in the second common industrial business of the country. Now, place, as they can create the influence of great take the city of Worcester, and, as I have said, it manufacturing and banking corporations, they is far the most flourishing city in the Common can and do, readily absorb a great part of all the wealth; and the great cause of their success and circulating medium of the State. Business men prosperity is, that they have mechanics who do begin to understand all this, and to see that pribusiness on their own account, and who, when vate enterprise is greatly crippled and impeded they acquire wealth, buy a piece of land and by this corporation system. Public sentiment, build a house upon it. They are independent among that class of men, is becoming adverse to men, and act as they choose, and vote as they it, and will demand, ere long, its overthrow. please.
They will not, and ought not to be willing