THE
BREVIER LEGISLATIVE REPORTS.
FOURTEENTH VOLUME.
INDIANA LEGISLATURE.
Rate of Interest on Judgments.---Debate in Continuation.
IN SENATE.
[Morning Session.]
[CONTINUED FROM TOP OF SECOND COLUMN PAGE 76.]
The bill [H. R. 27,] to regulate the rate of interest on judgments, the special order for 10 o'clock was taken up.
Mr. SLEETH moved that Mr. Steele's amendment to limit such rate of interest to six per cent, be laid on the table. The motion was agreed to by yeas 27, nays 15.
Mr. CARNAHAN moved that the bill and pending amendment be indefinitely postponed, the amendment being the one offered by Mr. Gooding, providing that the law shall not affect any contract heretofore made.
On motion of Mr. Brown, the question was divided and the vote was first taken on indefinitely postponing the amendment, which was lost. The question then recurred on the indefinite postponement of the bill.
Mr. HARNEY spoke in favor of the motion. He said: The reason I desire this bill should not pass is that the tendency of legislation recently has been in favor of capital. A few years ago the legal rate of in-est was six per cent, and that was a restriction to some extent on capital. The Legislature afterwards passed a law that interest at ten per cent, should be taken on contract. I never could see any reason why the rate of interest should be increased. Money is not worth ten per cent. No man in debt who pays that rate of interest can extricate himself. The effect of this bill will be to plunge the unfortunate debtor still further into difficulty. I do not propose to argue the general proposition; or set forth the effect it has upon community, but I do think it is worth our attention.
Mr. BROWN said the remarks of the gentleman would apply very well on the question of the reduction of the rate of interest, but not to the present question. The bill will simply compel a man to live up to his contract. And as far as the debtor is concerned he believed it would be an advantage to him to require a strict fulfillment of his contracts. As far as the State was concerned it would certainly be an advantage as it would bring capital into the State.
Mr. CARNAHAN. My views in relation to this matter are different from those of the Senator from Jackson [Mr. Brown.] My view is that one of the main objects of law is to take care of the weak as against the strong. This subject has been before the Legislature more or less for the last fifteen years. I go against any legislation for the advantage of money over labor. Let any gentleman take ten or twenty thousand dollars to buy a farm with, and stock it, and then make a minute calculation of the profits and he will find not a farmer in the State will annually realize three and-a-half per cent. upon the capital invested. Why should great rate of interest page: 371[View Page 371] be allowed for money? It simply gives advantage to monied men and grinds down the face of the poor laboring man. I am decidedly in favor of putting money and labor on an equality. Therefore I am in favor of indefinitely postponing the bill.
Mr. FRIEDLEY, of Lawrence. When I disagree with the experienced and able Senator from Posey [Mr. Carnahan,] I do so with some doubts. His experience as well as his ability entitle his views to great reaped in this Senate or elsewhere. It seems to me, however, that his argument is not round. It seems to me this is not legislating against the poor man, but rather legislating in the interest of the laboring man. I can very well imagine that a capitalist under the present law, would be willing to lend his money to men who was able to pay and who would be likely to pay at the time the money becomes due; but he would not be so likely to loan to a poor man who hadn't the ability to pay at the time he intended. And why? Because if compelled to sue on the contract he knows the moment he takes judgment he has to take but six per cent. My notion is this: That by this law, and the collection laws now in force in this State, we have been driving capital away from us. Why is it that money is scarcer in Indiana to-day, than in the State of Illinois or any of the States surrounding us? Simply because our collection laws are very defective. We hold out no inducements for capital to come here. If you hold out inducements to capitalists their money will come here, and the prices paid laboring men will be good.
Mr. CARNAHAN, [interposing.] Which would you prefer to be?
Mr. FRIEDLEY, of Lawrence. I would prefer to be a money lender; and if the Senator would always have the people of Indiana to be borrowers all he has to do is to continue the present laws in force. If you bring capital here you will build up the manufacturing interest and develope the resources of the State so that we will in time become independent of money lenders in the east. I am opposed to the indefinite postponment of this bill for another reason. It seems to me good faith requires that when I go to the Senator from Dearborn, and borrow his money and in my note stipulate that I will pay ten per cent. interest until the money is paid; that that contract requires that I shall pay ten per cent, until he gets his money, not until he gets judgment. As the law now is you are paying a premium to the man who disregards his contract. Here is the learned Senator from Montgomery [Mr. Harney,] who would have this Legislature still say to the people of Indiana - to every man who owes money and has given his note promising to pay ten per cent.: "Sir, when that note becomes due refuse to pay it, allow it to become due and we will take off four per cent. and allow the plaintiff to recover six per cent. instead of ten." When I agree to pay ten per cent. it seems to me I should pay that until the debt is satisfied.
Mr. ORR. Having the highest respect for the judgment of the Senator from Posey [Mr. Carnahan,] I must beg leave to differ with him now. He says the object of the law is to protect the weak from the strong. I never understood it was for that purpose. I understood it was to protect and do justice between man and man whether he be weak or strong - not to protect the weak against the strong, be they right or wrong. I am in favor of the indefinite postponment of this bill. By custom the people have made ten per cent, the rate to be taken for interest. Suppose I borrow $1000 from the Senator for Jackson at ten per cent, and I refuse to pay it back when due, should the State enable me to violate my contract and allow him only six per cent.? I know many cases where notes are allowed to go to judgment in order to avoid the ten per cent. The present law is wrong, and hence I am opposed to the indefinite postponement of this bill.
Mr. SLEETH. I think our State has suffered greatly in her commercial interests on account of the defectiveness of our collection laws. All the articles bought without the State are held at a higher price because of the difficulty of collecting debts in Indiana. The present law simply offers debtors a bonus of four per cent. to refuse to pay their debts and compel the creditor to go into the courts. This is certainly the most odious of our collection laws. We give the debtor a bonus to refuse to pay his debts when due. It seems to me it is time to legislate for justice as between the debtor and the creditor. It is high time to let debtors know that they must fulfill their contracts and pay their debts when they become due. The result would be a decrease of the debtor class and an improvement in the commercial condition of the State. Then we would not have such a large debtor class. But it is argued that this bill will operate against the poor man and in favor of the capitalists. I say that is not true. I appeal to lawyers to say what class employ them to collect notes. Bankers have to go into court, but seldom. Wealthy men, too, who have the privilege of selecting their borrowers, very seldom appeal to a court of justice to collect. It is in debts that arise out of business transactions in the middle classes - the mechanics, farmers, and merchants; and when they attempt to enforce the collection of obligations it is said they shall forfeit four per cent. of the interest stipulated in their contracts. We cannot stand here inno- page: 372[View Page 372] cent and vote to indefinitely postpone this bill in the present commercial condition of the State, and justify ourselves before our constituents.
Mr. WILLIAMS. We have had the present law in operation for sometime, and I have heard but little complaint of it. As the Senator from Rush [Mr. Sleeth,] has said the bankers are not in the habit of sueing a great deal simply because they prefer to let their customers renew their paper rather than let it go into judgments at six per cent. But, sir, you change this law and what will be the result? When they can make a judgment bear the same interest the note does they will not be so ready to renew. You commence breaking in upon a creditor with a suit and you make him pay the costs of getting a judgment in the court and add to that ten per cent, for attorneys fees - which you will always find plenty of men ready to swear is worth ten per cent. - and it maks a difference of $140 on a note for a thousand dollars. It encourages litigation and does great injustice to the unfortunate people who are forced into the courts.
Mr. BOONE. I am in favor of the indefinite postponement of this bill. It is the policy of our law and Constitution to have business uniform throughout the State. It has been allowed by legislative enactment in this State that the rate of interest may be as the parties shall agree not to exceed ten per cent. provided it is expressed in the contract. It also makes six per cent. on judgments uniform. If this bill should pass there would be different rates of interest on judgments in the several courts of the State and in the same court. The proposition I believe to be in conflict with the general principle of the laws and the Constitution. I think it is unfair. In addition to this, it has been argued here that this is not a prop-sition in favor of the money lender but in favor of poor men. That may be the opinion of gentlemen who look at this picture from the side of wealth, but for those who look upon the picture from the side of the laboring men and the poor man, as some of us has had the misfortune to be, the condition of things is not so flattering. It is a matter of fact that men who loan money and who have means, understand the matter, and they contract against contingencies by contracting for Attorney's fees. I say this bill would be discriminating in the wrong direction. I should be rather in favor of the proposition, if the law is to be changed at all, that the contract have nothing to do with it, and that the interest should be ten per cent. on all judgments ; but I am opposed to changing the law as it now stands. I am not aware that any gentleman has failed to obtain credit because he lives in Indiana. The only question is whether he is responsible and a capable business man. Individuals with no property can obtain credit if their character is good. It is a question of character mainly. How many men are there in every community conducting business upon credit and going forward and being helped on by men ready to entrust them with capital, goods and material? The only question before the Senate now is whether we ought to changf this rate of interest on judgments; where it is the policy of our laws to have the rate of interest uniform upon judgments? All judgments are now running at six per cent. without reference to what the contract is. I think that is correct. I think that is right.
Mr. DWIGGINS. It is insisted that it is not for the best interest of any community of men to borrow money. Look back over the history of this State and nation and tell me what would be the condition of this State to-day if he had not gone into debt. How many miles of railroad would we have if built only with the money of men residing in our own State? Where would we have been if we had relied only on our own resources and if we had not gone into debt? Where would have been the entire nation if we had not gone abroad to borrow capital in order to make public improvements? To-day there is no nation in the world so great a borrower in proportion to wealth as the United States, and there is no nation so prosperous as our people. And there is no other nation in the world that pays the laboring classes so well as the United States. Go to England where money is worth from two to four per cent, and how is it with the poor man there? How is it in any of the old countries where a low rate of interest on money prevails ?
Mr. CARNAHAN. [interposing.] Do you not know that the proceeds of labor will buy as much provision there as the amount they get in the United States?
Mr. DWIGGINS. No, sir, I do not know that to be a fact. But, sir, if that is true, why is it that they emigrate to the United States by the hundred thousand every year
Mr. CARNAHAN. There are so many people there they can't live.
Mr. DWIGGINS. The Senator says men can draw as much provision from the proceeds of their labor, and why can't they live? If a man can get enough to support his family as well, why can't they live there? If the proposition of the Senator is true that the proceeds of labor will buy as much provisions there as here, I again ask why do they come to this country by the hundred of thousands? The reason of the large emigration to this country is because this is the place for the poor man. A man may here in a few years make himself independent. He may page: 373[View Page 373] better his condition, and that is the reason why he comes. There is no nation so large a borrower as ours, as I said before, and there is no nation so prosperous. There is no nation to-day paying so high a rate of interest for the use of money, and I wan't to know how gentlemen account for our prosperity if is true that you must have a low rate of interest in order that the laboring men may get along. It is complained that our railroads are not owned by our own people, but in Europe and in New York, by men who has no personal interest in our State. Why is it? Because we have to go from the State in order to get money to build our railroads. Then is it not the true policy of the State to so legislate as to induce men to come here and expend their money? That is the best policy for the poor man in order that our mineral resources may be developed. I therefore think that this is really not a proposition to increase the rate of interest, but, admitting it is for that purpose, it seems to me every person should say: Make the rate of interest at what it really is. Why should we retain a law upon our statute books making six per cent, the rate of interest when every person in the land who wants to borrow has got to pay ten per cent?
Mr. GOODlNG. I did intend to say something on this subject myself, but I think the discussion has been ample, and the time spent as much as should be required and therefore I move the previous question.
The Senate seconded the demand for the previous question, and under the operations thereof the vote on the indefinite postponement of the bill resulted as follows :
YEAS - Messrs. Boone, Bunyan, Carnahan, Cave, Fuller, Glessner, Gregg, Hall, Harney, Haworth, Miller, Ringo, Stroud and William - 14.
NAYS - Messrs. Armstrong, Beardsley, Beeson, Bowman, Brown, Chapman, Collett, Daggy, Daugherty, Dwiggins, Francisco, Friedley of Scott, Friedley of Lawrence, Gooding, Hough, Howard, Hubbard, Neff, O'Brien, Oliver, Orr, Rhodes, Sarnighausen, Scott, Slater, Sleeth, Smith, Taylor and Thompson - 29.
So the Senate refused to postpone the bill indefinitely.
Mr. BOONE offered a substitute for Mr Gooding's amendment, declaring that the provisions of the act shall not apply to any contract except those made and executes after its passage.
Mr. BROWN moved to lay the substitute on the table. This motion was agreed to by yeas 26, nays 16 - see page 76.
Mr. O'BRIEN moved to lay Mr. Gooding's amendment on the table.
This motion was rejected by yeas 6, nays 34.
Pending the roll call -
Mr. GOODING in explanation of his vote, said: By the passage of this bill without this amendment you will make the debtor class four per cent, more in debt than they srere at the time of making their contracts. By passing this bill we make it possible to ecover from them ten per cent, where only six per cent, could be collected. It would make many of those now in debt so involved as not to be able to pay. These persons understood and contemplated in the event of their inability to pay, that when their mortgages might become foreclosed the judgment would only bear six per cent. interest, and that is all they should bear. I offered this amendment not desiring to put the debtor class in any worse condition than they contemplated at the time they incurred their indebtedness.
Mr. GREGG when his name was called, in explanation of his vote, said: If this provision goes into the bill, will it not have the effect to either compel parties who have paper due to renew it or at once stand suit? I am somewhat in doubt, but will vote "no."
Mr. SLEETH, in explanation of his vote, when his name was called, said: I vote against this amendment because I believe if it is right to make men live up to their contracts made to-morrow it is right to make them live up to those made yesterday. If a man has the purpose in his heart to violate a contract when signing it, we ought to come to the aid of the other contracting party and make him live up to his contract. I shall therefore vote against this proposition and if it carries I shall vote against the bill and do what I can to defeat the bill. I vote "no."
Mr. SMITH, when his name was called, said: I am a friend to this bill and therefore vote "no."
Mr. THOMPSON, when his name was tailed, said: This bill contemplates continuing ten per cent, interest after judgment is taken, and applies to contracts already made.
The LIEUTENANT GOVERNOR. The amendment provides that if the bill becomes a law it shall apply only to contracts made in the future. The bill applies to all contracts made in the past as well as those to be made in the future.
Mr. THOMPSON. With that understanding I vote "no."
When the roll call was completed -
The vote was announced as above recorded.
Under the operations of the previous question, the amendment was adopted.
The bill was then passed by yeas 28, nays 15.
The Senate took a recess till two o'clock P. M.
AFTERNOON SESSION.
The LIEUTENANT GOVERNOR being absent, the Senate was called to order by Mr. Friedley, of Lawrence.
page: 374[View Page 374]PRESIDENT PRO TEM.
Mr. CHAPMAN rose to a point of order. He claimed that, under the eleventh section of Article 5 of the Constitution, the office of President pro tem was vacated upon the return of the Lieutenant Governor, and that officer having been in the chair since the election of Mr. Friedley yesterday it was now necessary to have a new election.
Mr. DWIGGINS said it had been a universal custom to elect a President pro tem, for the session, and he had the opinion of Senator Morton that it was valid. He did not think the Constitution required that a new election must be had every time the Lieutenant Governor was absent.[See top of page 77.]
THE RAILROAD TAX LAW.
[CONTINUED FROM MIDDLE OF FIRST COL-LUM OF PAGE 78.]
Mr. DAGGY from the majority of the Judiciary Committee, returned the bill [S. 158,] to repeal the act to authorize aid to the construction of railroads by counties and townships, with a recommendation that it be indefinitely postponed.
Mr. GREGG from a minority of the same committee, recommended that the bill pass.
Mr. DAGGY moved to lay the minority report on the table.
The yeas and nays were demanded on this motion and being ordered and taken resulted as follows :
YEAS - Messrs. Armstrong, Beardsley, Boone, Carnahan, Collett, Chapman, Daggy, Daugherty, Dwiggins, Friedley of Scott, Gooding, Haworth, Howard, O'Brien, Scott, and Thompson - 16.
NAYS - Messrs Beeson, Bowman, Bunyan, Cave, Fuller, Francisco, Friedley of Lawrence Glessner, Gregg, Hall, Harney, Hough, Hubbard, Miller, Neff, Oliver, Orr, Rhodes, Ringo, Sarnighausen, Slater, Smith, Stroud, Taylor and Williams - 25.
Mr. NEFF in explanation of his vote, said that he was not opposed to railroad companies, but if there was any one question on which he felt instructed, it was to vote in favor of repealing the railroad tax law.
The LIEUTENANT GOVERNOR then announced the vote as above, so the Senate refused to lay the report on the table.
The question being upon adopting the minority report -
Mr. O'BRIEN said he thought action on the matter should be postponed until the House had acted on the bill passed yesterday to amend the railroad tax law.
Mr. GOODING said the unconditional repeal of the law would cause endless litigation to the people, for instance, where the tax has been levied but not collected. The bill passed yesterday afforded all the protection to the tax-payers that they could ask for. If they don't want a railroad, all they have got to do is to say so, and the contractors cannot force a railroad on them.
Mr. DWIGGINS did not see any necessity for the repeal of the law. If counties like Marion did not wish to aid in the construction of any more roads they were not compelled to do so; but surely counties like those he represented ought not to be cut off from an opportunity to avail themselves of the privileges afforded by the law. In his counties a large proportion of the land is owned by non-residents. Taxes have been levied and have been paid by the residents while, as a general thing, the non-residents have not paid. Now, if this law is repealed, the taxes already paid will go into the county treasury, while the non-residents will be exempted, and will be profited at the expense of the residents.
Mr. GREGG was in favor of the repeal of the law. He believed it a dangerous policy to allow taxes to be levied for the benefit of any private corporation. The Kankakee drainage question was here last session demanding our attention, and that was legislation of this character. We are overtaxing the country. Produce in the hands of the farmer has been declining, and taxes in every department of the government is going up. I believe we have evidence from every quarter, that this law works injurously, and there is a demand from every quarter of the State to repeal this law. I have presented thin minority report that the Senate may give the question a careful consideration.
Mr. O'BRIEN moved to lay both reports and the bill on the table.
This motion was agreed to.
QUALIFICATIONS OF JURORS IN CAPITAL CASES.
Mr. BOONE from the Judiciary Committee, returned Mr. Brown's bill [S. 107] with a recommendation that it be indefinitely postponed. (The bill provides that a man shall not be disqualified from serving on a jury in the trial of a capital offence on account of conscientious scruples on the subject of capital punishment.)
Mr. BROWN moved to amend the report so as to lay the bill on the table.
Mr. BOONE said the bill was a virtual repeal of the 85th section of the act regulating the criminal practice which reads as follows:
"If the offense charged be punishable with death, any person entertaining such conscientious opinions as would preclude his finding the defendent guilty, shall not serve as a juror."
With this restriction in the qualification of jurors in capital cases there had been but few cases in this State for twenty years where that penalty had been inflicted.
The jury could now substitute imprisonment for life and it was generally done. I was admitted that capital offences had page: 375[View Page 375] very much increased, and it was quite certain that the gentle manner in which criminals of this grade had been treated under the law, had its influence in producing this result. The perpetrators of the foulest murders are permitted to go free or be imprisoned for life because of the conscientious opinions of jurors even when the challenge is allowed, and it would certainly not make the result more favorable to the public by removing this disqualification.
The bill even goes farther and will not allow any inquiry whatever into such opinions of a person called as a juror in a capital case. Its passage would be a practical abolition of capital punishment in this State.
He thought the State was not ready for this yet, especially when high crimes seemed to be on the increase. Its abolition in other places had been followed by an increase of capital crimes. Murders were committed for the purpose of obtaining a few dollars, for any cause or no cause whatever, and the punishment no more severe and often no longer in extent, than for larceny or burglary.
He was in favor of indefinitely postponing the bill.
Mr. BROWN said the bill did not look at all to the abolition of capital punishment. It simply provided that the practice in criminal courts should be consistent with the statute on that subject.
Mr. Brown's motion prevailed, and the report as amended, was concurred in.
So the bill was laid on the table.
HOUSE OF REPRESENTATIVES.
FRIDAY, January 24, 1873.The House met at 8 o'clock, pursuant to adjournment, and was called to order by the Speaker.
The journal of Thursday's proceedings was read.
There being no quorum present, the Speaker declared the House adjourned, under the resolution adopted on Wednesday, till Monday afternoon.
