COMMON SCHOOLS.
The House resumed the consideration of the bill [H. R. 322] concerning Common Schools.
Mr. MURRAY moved to amend Section 98 by striking out the word "eight" and inserting in lieu thereof the word "seven" per cent. interest.
Mr. MORGAN moved to amend the amendment, viz.: "Not less than 6 nor more than 8 per cent."
Mr. DAVIS offered a substitute by striking out the word "eight" where it occurs and inserting in lieu the word "six."
Mr. MURRAY said: "This amendment simply reduces the rate of interest on the school fund."
Mr. EDWINS--In view of the fact that our Government is loaning its funds at from 4 1/2 per cent. to as low as 3 1/2 per cent., and the legal rate of interest our own State is 6 per cent. I do not think that our school fund, which is loaned amongst ourselves and for the benefit of our smaller class of farmers, ought to be loaned for more than 6 per cent. interest. While I have the greatest respect for the gentleman from Union (Mr. Huston) I can not but be impressed with the fact that the business the gentleman is engaged in precludes the posibility of his supporting the measure under consideration. The business of banking is and always has been at variance with a low rate of interest, and while I concede the fact that a man should at all times look well to his own interest, I do not consider that a Member elected to represent a County on this floor ought to use that position to advance his own interests. Did you ever con- page: 53[View Page 53] sider the difference in the manner of borrowing money from the school fund on one hand and borrowing money from your neighbor and neighboring bank on the other? On the one hand you go to your neighbor, or neighborhood bank, with your personal security on a plain note of hand, and get your money at 6 or 8 per cent. On the other hand, in the first place you have to file with the Auditor the certificate of the Clerk and Recorder that there is no incumbrance on your land, and you pay for that; you must have your little plat of land appraised, and you pay for that; you have a mortage drawn by the Auditor, and you pay for that; you have your mortgage recorded and you pay for that; the Auditor demands his interest in advance, and you pay that. Count all this up, and see if this 8 per cent. don't amount up to 9 or 10 before the mortgage is finally released. Then Mr. Speaker, as money is floating all around us at from 4 to 6 per cent. interest, why should not we loan to our farmers our school fund at 6 per cent. rather than allow it to accumulate on our hands at 8 per cent. and not bring into our school fund any revenue at all?
Mr. STEWART said he was willing that the school money should be loaned at a less rate than money of individuals. He considered it an imperative necessity to loan this fund at a less rate because it requires more stringent security. He favored the substitute because the demand in some Counties is greater than in others, and money can be loaned out in some Counties at 7 per cent. where in others it would lie in the treasury for want of borrowers. It is better to have the money loaned out all the time at a little less rate of interest than to have part of the fund lying idle and another part drawing a high rate of interest.
Mr. WRIGHT was opposed to reducing the rate of interest on this fund, and thought the substitute offered by the gentleman from Vigo [Mr. Morgan], would not do at all, because County Auditors have particular friends to whom they would be very likely to loan this money at a low rate, and those on not so friendly relations with the County Auditor would have an opportunity to pay 8 per cent. He opposed reducing the rate for the other reason that nearly all the money could be loaned at the present rate.
Mr. COMPTON thought it a gain to have all the money loaned out at 6 per cent. than but a portion at a higher rate.
Mr. MORGAN understood that if the County does not succeed in loaning all the money they are responsible for the interest on the full amount anyway. Some thirty or forty Counties have a large amount of this fund on hand which they can not loan. He favored giving the County Auditor discretionary power to loan at 6 or 8 per cent., thus giving as much freedom as possible, which will prevent Counties from paying interest on money not loaned.
Mr. HUSTON did not object to fixing the rate of interest at 7 or 6 per cent., but he considered it a serious objection to allow County Auditors to fix the rate of interest on this fund. There would necessarily have to be some enactment requiring the Auditor to show that the money was loaned at a certain rate. He thought the only wise step to be taken in this matter would be to establish some rate of interest.
Mr. CABBAGE thought 8 per cent. interest was too high a rate for the farmer to pay. He said the House was called upon to say what is just in this matter, rather than what they can compel the farming community to do. He favored a 6 per cent. rate.
Mr. MOODY thought there ought to be a uniform law all over the State, and also a provision by which school funds not loaned in one County may be tranferred to another County where there is a demand for the money.
Mr. MORGAN withdrew his amendment.
Mr. RYAN said there is no difficulty in loaning the school fund at the present rate of interest. The difficulty seemed to be the clause in Section 97 compelling the payment of the interest by the County on the money, whether loaned out or not. There is a solution of that problem, a better one than to charge the rate of interest, which is to change the provision requiring Counties to pay interest on unloaned money.
Mr. RYAN moved to strike out of Section 112 the words "attorneys' fees," also the words "on failure to pay such principal and interest and 2 per centum of damages." He said there is no reason why the borrower of the State of Indiana should pay an attorney for collecting that money.
Mr. COLE hoped the amendment would not prevail, as a party who is to blame for the non-payment of a claim ought to be compelled to pay attorneys' fees. When a man employs an attorney he did not think the State of Indiana ought to pay his attorneys' iees. He believed the section was right as it is.
Mr. MOODY favored the amendment.
Mr. FRAZER--This is a question whether or not the State should be compelled to pay attorneys' fees where the borrower puts the State to costs.
Mr. RYAN thought it no more than right that the State should protect individuals against exorbitant attorneys' fees.
The amendment was adopted.
Mr. KAIN offered an amendment to Section 104, providing that the attorney should receive no compensation for examining titles of applicants to the real estate offered for mortgage to secure a loan of the school fund. He said: We have first the certificate of the County Clerk, and also that of the County Recorder to the effect that no incumbrance endangered the real estate offered as security to the State for the use of a small portion of the school fund, the State certainly should feel secure under the certificate of these officers taken directly from the records. And another very serious objection is that to obtain the opinion or approval of the County Attorney will doubtless entail an expense that will render the lending of the funds extremely diffcult, if not defeat it entirely. We regard it impolitic to thus incumber the school funds with such heavy expense as to compel their loan at a low rate of interest, and thus defeat the ends intended to be subserved.
Mr. AKIN-It occurs to me that Section 129 provides for that. There is no necessity for the amendment. It sets the price for each item to be charged. I believe that these fees should be charged. I, therefore, move to lay the amendment on the table.
The motion was agreed to.
Mr. CAUTHORNE moved to amend Section 123 by striking out the words "by him." He said the object is simply to leave the debt to be prosecuted by the State of Indiana. If it is a foreclosure the Sheriff is there to do it.
The amendment was agreed to.
Mr. RYAN moved to amend Section 129 as follows: Change the figures in line two to twenty-five cents, recording mortgages in line three to fifty cents, drawing up mortgages, twenty-five cents, Clerk's certificate in line six, twenty-five 'cents, recording certificate, fifty cents. He could see no good reason why this reduction should not be made. He knew that men who have had experience in loaning money, it took them about fifteen minutes to perform this duty, and by being employed all day there is no telling how much he could make.
Mr. BUSKIRK sa4d there was more work on a school fund mortgage than a common deed, for which the law now allows $1.25. He ought to have at least as much for recording a school mortgage as an ordinary deed. He opposed the amendment.
Mr. FLOYD thought the amendment was about page: 54[View Page 54] right; since the Constitutional Amendments were adopted, we ought to begin to regulate fees and salaries.
Mr. MOODY thought it unwise to maek such a radical change. A good attorney would not give his opinion upon the validity of a paper, leave alone performing labor upon it for the small amount of fifty cents.
Mr. CARTER was opposed to this wholesale reduction. When an abstract of title costs $10, it is beyond all reason to require an attorney to draw up a deed for the small sum of fifty cents.
Mr. BAKER--There is no danger of the officers going to the Poor House by the operation of this amendment. I favor this amendment because it is radically right and ought to pass.
Mr. BUSKIRK moved to amend the amendment by inserting therein "$1.10" for recording mortgages, instead of fifty cents.
Mr. MURRAY--The fees as they stand in this bill are the same as they were twenty years ago. My experience and observation is that they are small enough. This includes the abstract and everything necessary to make it a record. I am opposed to the ameudments.
