HOUSE OF REPRESENTATIVES.
THURSDAY, February T, 1861.PETITIONS.
Mr. BUNDY presented the petition of Susan B. Hunt, and other ladies, citizens of the State of Indiana, for a prohibitory liquor law. He said this was a petition from ladies of his county; and as women were more interested in this question of prohibiting liquor selling than others in community, because they suffer more from the evils of intemperance than any other class, they deserved a hearing. Under court decisions, he supposed, it was not competent for the Legislature to grant the prayer of the petitioners, He would, however, move that the petition be referred to the Committee on Temperance.
It was so referred.
Mr. FRALEY presented the petition of H. McDice and others, citizens of Fountain county, asking for a change in the law that will allow any man, at his own expense, to change lie course of a public highway on his own and in any manner, so he does not increase its length more than 10 per cent.; which was referred to the Committee on Rights and Privileges.
Mr. JENKINSON presented the petition of page: 187[View Page 187] William T. Hunter and others, for protection against sheep-killing dogs; which was refer-red to the Committee on Agriculture.
Mr. UNDERWOOD presented the petition of Israel Caldwell and others, for changes in the liquor nor law, so that the general reputation of a a drunnkard shall be sufficient notice against selling to him ; to give justices of the peace power subpoena witnesses, make arrests, appoint a prosecutor, and allow him a fee if the State gains. It was referred to the Committee on Temperance.
Mr. DAVIS presented the petition of John McFaclden, Sr., which was referred to the Committee on Claims, without reading.
Mr. GORE presented the petition of Ephraim Hunnicutt, and others, residents of Hamilton county, asking for specific salaries for county auditors, treasurers, sheriffs, and clerks of the courts, proportioned to the number of inhabitants in the county; which was referred to the Committee on County and Township Business.
REPORTS FROM THE JUDICIARY COMMITTEE.
Mr. VEATCH returned Mr. Williams' bill [85] amend the title of the Bridge act, and repeal the Bridge act of March 3, 1859, with an amendment by substitute, entitled, A bill [186] to authorize the Board of Commissioners to purchase toll bridges, or any private interest therein. He said the act referred to contained a provision authorizing the Commissioners to purchase bridges; but as that was not indicated in the title, some doubt had arisen as to its constitutionality. The Committee thought it better to report an original bill for the purpose, than to amend the title of an existing law.
The bill was passed to the second reading.
Mr. JENKINSON returned Mr. Heffren's bill [73]-hard money treasuryand reported a motion that it lie on the table.
The report was concurred in.
Mr. BUNDY returned Mr. Packard's conventional interest bill, [14] and reported a motion to lay on the table-the Committee having heretofore reported a bill on the subject.
The report was concurred in.
EXECUTION LAWS.
Mr. WOODHULL, from the Judiciary Committee, returned Mr. Packard's bill [134] to amend section 476 of the practice act-[so as to abolish the five days in proceedings against non-paying purchasers at sheriff sale, which require notice and judgment at the next term of the Court; and deprive the purchaser of the benefits of valuation and appraisement]-reporting the opinion that further legislation on the subject is inexpedient, and a motion that the bill lie on the table.
Mr. ATKISSON hoped the House would not coocur. It was a bill simply to provide that an individual purchasing at sheriff sale, and refusing to pay, shall not have the benefit of valuation and appraisement law, when he is proceeded against by motion. Under the law now, the defaulting purchaser has the benefit of valuation and appraisement. He gave an example of hardship in collecting, where such a person turned out a worthless old mill, &c. protected by valuation. A man purchasing at sheriff sale ought not to have the benefit of appraisement laws.
Mr. PACKARD was surprised at the report. It was simply to prevent injustice and wrong in cases of purchasing at sheriff sale. He also gave an example, and moved that the report be re-committed.
Mr. VEATCH. It provides for abolishing the five days' notice; it gives ten per cent. damages and no stay of execution. It is often the case that a man buys at sheriff sale without having an opportunity to look into the title, and his title might not be worth his money. The original judgment stands good; and the bill would offer a double remedy. He considered the law wisely arranged, as it now stands.
Mr. WOODHULL. The Committee had heretofore reported Mr. Atkisson's bill [66] on the same point.
Mr. STOTSENBERG considered that no argument. He was unwilling to accept a report without the Committee alleging reasons for it. He favored the bill. The executive plaintiff had not a double remedy under it. If he takes one of the chances, then he has to advertise again, &c. He would give a man a chance to collect his debts. It was now five days notice, but it must be in the proper court.
Mr. VEATCH. Can't the sheriff sell again on the same day-re-offer the property ?
Mr STOTSENBERG. Yes: but suppose the honest debtor tell him he will pay it, then the Sheriff may wait, and the court will adjourn ; and so ordinarily the creditor would have to wait until the next term of the court; and then, if the man choose to turn out property worth little or nothing, the execution creditor might never get his pay in the world. The gentleman's argument would go against the right of all sales. When property is sold by the sheriff on appraisement, the bidder may easily find out its cash value. And if his property were held to make his bid good without valuation or appraisement, he would be more careful to go and see first, whether the title is good or not. We were making laws for the benefit of the people of the State, and not for speculators. Business men desire some chance to collect their debts; and if a man buys property in this way, he ought to pay for it, and pay for it soon.
Mr. PACKARD. It could work hardship to no one. How could a person be entrapped in bidding off property with published terms? That was a strange way of being entrapped. If a person buy in this way, and fail to pay, it must be from sinister motives. If he does not comply with the terms of sale, let him take the consequences. He believed the Judi page: 188[View Page 188]ciary Committee, on reflection, would report in favor of the bill. It had the approval of good lawyers.
Mr. CAMERON hoped it would be recommitted. He did not want to protect purchasers at sheriff sale.
Mr. EDSON said there were two sides to this question. The sheriffs sell merely the interest of the holder, and sometimes the purchaser is deceived. In such cases there would be hardship. He knew also that the passage of this bill would be a benefit to the lawyers.
Mr. STOTSENBERG. How would it benefit the lawyers?
Mr. EDSON. Why, the man, before purchasing, would have to go and consult a lawyer with regard to the title.
Mr. CAMERON. Does this bill propose to gave the purchaser?
Mr. EDSON. No; but if proposes a remedy for creditors.
Mr. ATKISSON. Do you propose to let the purchaser go on and buy, and then give him time to get, counsel afterwards?
Mr. EDSON. No, sir; nor would it be right and just for him, if he makes a bad purchase, to pay 10 per cent, damages, and so have his property sold without benefit of the valuation laws to pay another man's debt.
Mr. JENKINSON. Suppose a man wants time, after purchasing.
Mr. EDSON. There were two remedies: one to re-offer tho property; the other to get a rule for notice and sale at the next term.
Mr. JENKINSON. What was the plaintiff's remedy?
Mr. EDSON. If the purchaser does not take the property, one remedy is, to re-offer it; and if it does not bring enough, take more, and ten per cent, damages, without benefit of valuation or appraisement laws.
Mr. HOLCOMB. Was not the three months advertisement sufficient time to look after the title?
Mr. EDSON. Certainly. He admitted that there were two sides to this question. There were no doubt fra ids perpetrated under the law as it now stands. And this bill would work hardships in cases where worthless property is bought. But it would guard against irresponsible bidders.
Mr. JENKINSON. The sheriff was not bound to take an irresponsible bidder.
Mr. EDSON. Neither was he bound to postpone the sale. He gave examples.
Mr. CASON hoped the matter would be voted on now. It had been twice considered by the committee. If they were to report differently, it would be merely to accommodate the House. In reply to Mr. Stotsenberg's allusion to the lack of reasoning in the report, he did not understand it the duty of any committee to put a stump speech into every report. The reading of the bill before the House would answer better. The matter stands thus : The property may be unsound, title bad-the sale goes on-the property is struck off, and if the money is not paid, the sheriff sells again immediately, and the judgment creditor has a right to the difference between what it brought, at the first and las sale, if it sell lower. &c.
Mr. PARRETT moved to lay the motion tn re-commit on the table, but withdrew for a direct vote on concurrence in the report.
Mr. PACKARD demanded the yeas and nays which being ordered and taken, resulted-yeas 50, nays 43 ; so the report was concurred in, and the bill laid on the table.
EXTRA SERVICE OF SHERIFFS AND CLERKS.
Mr. BUNDY, from the Judiciary Committee, returned Mr. Nebeker's bill [8] to provide allowance to sheriffs and clerks of the Circuit and Common Pleas Courts for extra services and reported an amendment by way of substitute. The substitute [187] provides thai the Board of County Commissioners shall allow their clerks and sheriffs an annual compensation for extra services not exceeding $100 each; but no such allowance shall be made until the clerk or sheriff shall have filed a detailed statement of his extra services and the ordinary charges therefor. The Board shall then make such reasonable allowance as they shall see proper, but in no case exceeding $100.
Mr. B. said his was a substitute for Mr. Nebeker's bill. But still he thought $150 too small. He proposed to further amend by inserting $200 for $100. Some discretion should be confided to the commissioners. This was a revival of the law of 1852. There had been progress in business since. There were abuses under the act of 1855, which gave unlimited dircretion to the commissioners. But here the discretion was limited again. They were not required, of course, to come up to the limit. His amendment was for the larger counties.
Mr. NEBEKER. Would not the office of sheriff be better in Warren than Marion under that bill?
Mr. BUNDY. The sheriff was the poorest paid officer in the State; but he still would prefer the office in the larger county.
The matter passed over for the special order of the day.
Mr. VEATCH (by unanimous consent) returned from a majority of the Judiciary Committee Mr. Nebeker's bill [39] to authorize new counties, &c., with sundry verbal and clerical amendments, recommending passage.
Mr. CASON, on the part of a minority of said committee, also recommended the passage of the bill, with an amendment to the effect, That nothing in this bill shall operate so as to supercede any proceedings heretofore commenced for the organization of new counties, but that all such cases shall proceed under the law as it now exists.
Mr. VEATCH moved that tho bill and page: 189[View Page 189] amendments lie on the table, and be made the special order for Wednesday next.
Mr. STOTSENBERG proposed "Thursday," to get beyond the time of Mr. Lincoln's visit.
Mr. VEATCH acquiesced.
Mr. WOODHULL moved to print the bill, He urged caution on this subject, from the fact that the journals show that the bill of the last session became a law without embodying the intent of the Legislature.
Mr. McLEAN also alleged that the new county bill of 1859 was passed through fraud or mistake. He confessed that he himself voted for it by mistake.
Mr. BUNDY asked for a division of the question.
Mr. FRASIER opposed printing, because every member was now perfectly conversant with its provisions. The only question was, whether the amendment reported by the minority should be adopted.
On motion by Mr. DOBBINS, the motion to print was laid on the table.
The report and bill were then laid on the table, and made the special order for next Thursday at 10 o'clock.
Messrs. Moody, Davis, Heffren and Collins, of Adams, had leave of absence on account of indisposition.
CONVENTIONAL INTEREST.
The SPEAKER announced the special order, viz.: the consideration of Mr. Orr's conventional interest bill [84], to regulate interest on money, to repeal the act of May 27, 1852, and repeal, &c., ($6 a year on $100, or at any rate contracted, not exceeding $10 on $100.
On motion by Mr. NEBEKER the House resolved into committee of the whole on the subject-Mr. Nebeker in the Chair-and the bill was considered by sections.
In the first section-
Mr. BRANHAM proposed to amend by striking out " ten," and inserting "six" and at the proper time he would move to repeal all laws in relation to usury.
Mr. BUNDY. That was to place it where the law is now. This was a subject that has excited a great deal of attention-the rate of interest on the loan of money. It had been peculiarly exciting in this State for the last few years. At every late session of the General Assembly it had been presented and debated time after time. It was evident that there is a great desire on the part of the community that some change should be made-that some discretion should be allowed to those who want to borrow money-that there should be some latitude for agreement as to the rate of interest, instead of holding them rigidly to the horizontal line of six per cent. He considered that a larger discretion should be allowed. The discretion asked for in this bill was allowed in the States of Michigan and Illinois; and it was so much desired in this State by our own citizens that they would go over the line into those States and make their contracts, so that they could enforce them legally here. This was done frequently. Why was it that the laws of the State of New York fixed the rate of interest at 7 per cent., others at 8 per cent., and other States higher? And why was it that parties were so frequently ready to contract and pay even 12 per cent? It was because there is no uniform value of money. It was like any other article of commerce-it fluctuates in accordance with the law of supply and demand. With money it was just as it is with corn or wheat; when it is scarce it is high; and when it is plenty it is low. Any man that would examine tho subject must be satisfied, that you cannot, in justice to the community, fix upon any rate of interest lower than its current value. Money was an article of trade, having no uniform value, as might be seen in the various interest law of New York, fixing interest at 7 cents, Alabama fixing it at 8 cents, and in some States at 5 cents. Our ideas on the subject of usury were borrowed from the old laws of England ; but did gentlemen know that we are many years behind England in our legislation on that subject? It was originally fixed there as a restraint upon the Jews, who at one time held control over the money capital of Europe. But England had long since abandoned her usury laws, and now it is thrown open there and made a matter of contract; and no punishment is inflated on a man for taking a greater rate than 5 or 6 per cent. When gentlemen refer to precedents, he would call their attention to this fact. England had progressed. We had not kept pace with England on this question. He repeated that it was a question of commerce-of supply and demand. You might just as well say that every bushel of corn shall be worth just 25 cents, as to say that the use of a dollar shall be 6 cents a year. You might just as well say that a bushel of wheat shall be always worth one dollar, as that when we borrow a dollar we shall always pay 6 cents for it at the end of the year. He was for allowing parties to contract for a rate higher than 6 per cent, for another reason, and that was, that in every community no attention whatever was paid to the usury laws. In the State of Ohio there was no penalty for the violation of their usury laws. They will always be disregarded by commercial men, for the reason that tho rate of interest will always be regulated by supply and demand. It is, or it ought to be, a matter of contract.
The banks, as a general thing, did not want to have this law. It was to their advantage to have deposits. They generally pay no interest on deposits, and they profit 12 or 18 per cent, by holding them. Therefore he was not surprised to find those representing the banking interests on hand against the passage of such a bill as this. Was there anything wrong in allowing the smaller capitalist to loan at 10 per cent., whilst the banks make 12 to 18 page: 190[View Page 190] per cent.? Individuals in this matter were not on a level with corporations. How had the banks the advantage ? They could discount bills and notes at discretion-buy a bill of exchange at 12 to 18 per cent, discount-buy a note at discount. That was taking a greater interest than 6 per cent, by an indirection. Such, under the decision of the Courts, was the talismanic power of the word Bank. The smaller capitalist was compelled to put his money in bank at 4 or 6 per cent., because he is unable to compete with the bank in loaning: He maintained that the present rate was too small from analogy; because, when it was established, the whole volume of the precious metals of the country did not exceed $100,000,000. Since then, its volume has been increased four fold. As a proof that money was worth more than 6 per cent., where do you find a man loaning for 6 per cent.? Everything else had increased in price-lands and produce had doubled-why, then, insist on this horizontal, fixed rate on money? Should everything else progress, and this alone stand still? It was unjust, unequal, and the result of it was to drive capital out of the State. In his region, the farmers were the wealthy class, and they loaned, not to their neighbors, but in Cincinnati, &c.
Mr. BRANHAM'S proposition was, that the legal rate should be 6 per cent.; and that all usury laws be repealed, and interest regulated by contract. He intended to move a re-commitment for such an amendment. He would not have any deduction of the principal loaned, as a penalty for usury; but when the law enforces collection, let the lender collect 6 per cent. He would place the people of the State in a position to make the most of their capital.
Mr. CAMERON. Under the amendment, you codld collect but 6 per cent. That would open a door for the operations of a class of persons who would contract for a higher rate than they intend to pay. The law was made to restrain that class of men. The supply of money was not equal to the demand in the north counties. They were older and better off in the southern counties. The people demand this law in the North. His county now could get money in Chicago at 10 per cent., but if they could not give the securities, they had to go into the banks and pay 12 to 18 per cent. Was there a moral, a Scriptural rate of interest ? Certainly not. This procrustean idea had been sufficiently refuted by Mr. Bundy. It had been said, if you make it 10 per cent., the lenders would take no less. But the fact was, capital would return to the State and make money plentier. He hoped his rich friends of the South would consider-
Mr. VEATCH [interposing] was very anxious to know in what part of the State that happy land was located.
Mr. CAMERON was told by the gentleman from Martin that it was in the gentleman's county. This bill was for the benefit of poor men and money borrowers, and not for capitalists.
Mr. POLK. It becomes a question whether it is wise to allow laws to remain in the statute book that are every day wantonly violated. Such a course is not calculated to cultivate that respect which insures obedience to the laws.
The law, regulating the rate of interest, is founded upon the mistaken presumption that usury is a sin. When our laws allow any interest at all, we in effect deny the sin of usury Then the argument that the taking usury is a sin is no longer tenable among us.
But the argument that the law can regulate the price of money, cannot be so easily dig. posed of. Let us look at it. Money, as money is of no use; but as a medium of exchange, it becomes the most valuable article a man can possess. It enters so minutely into the affairs of life, in creating demands, in supplying them, and in attaching value to our products that it may readily be classed with productive capital, second only to labor, and like labor subject to the same laws.
To say that our Legislature should enact that labor should demand an equal price in all lacalities and under all circumstances, would be simply ridiculous. No one would for a moment entertain such a thought; nor would this body think of declaring that no person shall receive more than five dollars per barrel for flour. It is the same with money as it is with labor. There are times and places when and where the demand is greater; and in such cases it is worth more. For instance-the farmers of Marion county secure a rich harvest, and have a large surplus to sell. To move this surplus, money is demanded, and inducements are held out for it to flow this way. That is, a better price must be offered than money is getting at other points.
By what principle do we say that a person has no right to take for an article what he can get, or give for an article what he thinks he can afford? Surely the law can not see all the circumstances surrounding the contracting parties. It does not know that a person can not afford to take six per cent., nor that a person can not afford to pay more than six per cent.
The law regulating interest on money is rather calculated to increase the interest than keep it down. For there are conscientious and law abiding men, who, rather than take so small a price will either horde their money or send it to a better market. Hence the borrower is forced to go to those who are willing to violate the law, and for the risk they run, they must be compensated, and besides they are genrally of that class of money lenders whose consciences become seared, and will take all that the necessities of the borrower require him to give.
To take another view : When the laws do page: 191[View Page 191] not allow persons at home to receive the worth of money at home, it will go abroad for more profitable investment,-to be loaned in States where a greater per cent, is given,-or to the West, to purchase wild lands, and there lay idle to await the rise.
I cannot see why we should have any law fixing a price on money. To be sure men who borrow are liable to be shaved; but are not die renters of houses, buyers of produce, and the hirers of labor liable in the same way ? yet I look upon the present bill as an improvement on the old law, therefore, I am for it.
Mr. SMITH, of Bartholomew, said this had teen called an attempt to break down the Democratic party, and so far as that was concerned, it might be he was a Republican. He referred to the hardships of the present law, and to the fact that in the more prosperous, leading States of the Union, a conventional interest was authorized. The penalties against usury kept money out of use in this State, and it went to Illinois, Ohio, and elsewhere. He referred to the disingenuousness of bank men in 1857 on this proposition. Its passage was against the interests of the banks. He concurred in the remarks of Mr. Cameron. The amendment of Mr. Branham was not sufficient. He referred to his own experience to illustrate the advantage in borrowing money at 10 per cent.
Mr. FRASIER The gentleman's success was no argument for the bill. He took issue with Mr. Bundy, that money was an article of value like any other article of trade. It was the representative of value. If the bill, in its provisions, was confined to money lending, it would be a different thing ; but then he might vote against it. The argument that the bordering States which have adopted 10 percent. were impoverishing us was not good, for we were drawing in the interest continually, and the principal would come too, some day. But Ohio has gone back to six per cent. He hail heard it stated that the banks were averse to this bill; but he could not see why they should be, because they always had lawful interest and added exchange on all the money they give out. Then our merchants usually sell their goods on sixth months credit. Pass this bill, and no merchant would draw a note of hand with less than 10 per cent, interest. Thus the burden of the provision would be made to fall on the class of people least able to bear it. It would place the debtor at the mercy of the creditor. He was in favor of the amendment of Mr. Branham-the repeal of the usury laws.
Mr. LANE also endorsed the amendment. It was a singular argument to raise the rate of interest for the benefit of poor men. If the gentleman from Bartholomew-a sharp business man-could make money on a loan at 10 per cent., it was no assurance that other men could do it. Not many men were money-leaders, and this bill was for the benefit of those. If 10 per cent, were the legal rate, our merchants would compel the payment of that rate in all cases. The bill would benefit one man in twenty and injure all.
Mr. NEBEKER could not see how banks were benefitted under the present interest laws. If a poor man has $50 on hand, he deposits rather than loan it. He can not compete with the banks. But, it was said, the banks, if this rate is allowed, will take the greater rate. Certainly, they get what they can. The courts had decided that they may charge interest and exchange. There was no way to restrain banks by legislation against money. He wag a friend to banks, but he wanted to allow all men to compete with the banks. No man dared to plead usury against a bank, because, by the completeness of their correspondence, they could close the doors of all the banks in the country against any man they choose.
Mr. DOBBINS opposed the bill. He understood the interests of mechanics and laboring men. Increase of interest-and all interest laws, perhaps-was wrong. The six per cent. was a compromise between capitalists and laboring men. Ohio had returned to it, and Illinois was prostrated because she had not. Would an increase of interest increase the value of labor? He supposed not. But the operations of the merchants were conclusive against the bill. The hardships would fall on the consumers. It would also have the effect to increase all the evils of the credit system. The States of Ohio, Kentucky, Virginia and our own State, coming back to six per cent., was a fact, conclusive to his mind, against the bill. This question was met by him fully before the people, and they had sustained him. He did not see any force in the argument that the present interest laws were violated.
Mr. EDSON did not think it necessary to make any change in the interest laws. He referred to the cases of failure in practice of the principle of a conventional interest in other States than our own. He replied to Mr. Bundy's argument for a greater rate because there is more money. The contrary was the true principle-when money is diminished in value the rate of interest should be dimished also. The effect of the passage of this bill would be to cause every man now in debt to be sued, or give new notes drawing 10 per cent. The question was nothing to the banks now, in the present money crisis. They could not discount now. The banks and individuals were on the same footing so far as usury is concerned. No increase of interest could prevent usury by sharpers. If the principle claimed were true, there should be no restriction, but perfect free trade in money-lending.
Mr. STOTSENBERG proposed to amend, by inserting a clause to the effect, that in no case shall any person or corporation contract for or receive a greater rate of interest than 10 per cent., including therein exchange, &c.
page: 192[View Page 192]Mr. PACKARD thought the passage of the bill desirable for all-laborers and capitalists. He was for labor in preference to capital, where these interests conflict; but here was conflict: Mr Bundy had shown that the present law belongs to a period in English history too long past to be a guide for us. The principle of increasing the rate of interest did not admit of the conclusion of Mr. Edson, that there should be no restriction at all. He argued at some length against the assumption that this measure would oppress the poorer and laboring classes. All business now carried on, on borrowed capital, was by money borrowed at 10 per cent.; and when they could not get along at that rate, they stopped. There was a matter of competition that would prevent the oppression insinuated against the merchants requiring 10 per cent, on their goods. He saw nothing in favor of Mr. Bran-ham's amendment. He was for Mr. Stotsenberg's amendment. He believed in restricting corporations. He insisted that there was an intense demand for this bill, and that therein was a good argument for it. Let us at least try the experiment. When it was replied that we had tried it, he insisted that it was not tried when the resources of the State were developed as they are now. Let us try the rate that our sister States are trying with advantage, and keep our capital at home.
He gave way and the committee rose, reported progress, and asked and obtained leave to sit again.
THE "CALL" OF YESTERDAY.
Mr. STOTSENBERG. The sergeant-at-arms desires me to inform the House that he has several members in his custody, under the warrant of the Speaker, and desires to be informed what he is to do with them.
After several humorous passages between the Chair, Messrs. Gresham, Smith of Bartholomew, McLean and others-
On motion by Mr. FRASIER, the absentees were discharged, upon payment of costs.
On motion hy Mr. VEATCH, (by consent,) his bill [62], for five additional bank districts, was taken up, read the second time, and referred to the Committee on Banks.
EXTRA SERVICES OF SHERIFFS AND CLERKS.
This subject (Mr. Nebeker's bill, No. 8) was again taken up, and Mr. Bundy's amendment laid on the table-yeas 69, nays 16-and the question recurred on concurrence in the amendment submitted by the minority of the Committee on the Judiciary.
The House then adjourned.
