SEVENTY‑FIFTH DAY

MONTGOMERY, ALA.,

Monday, August 19. 1901.

The Convention met pursuant to adjournment, was called to order by the President and opened with prayer by Rev. Dr. Andrews as follows:

Almighty God we pause ere we enter upon the duties of another day and of another week. We pray Thy blessings upon us and Thy guidance in all that we do. We are dependent upon Thee for help our Father, and for guidance and for strength. Our judgment is very weak, and we make many mistakes. We need a divine and mighty power to lead us, that power that never makes mistakes; and that can never do wrong. Therefore, we would lay our hands in thine today, praying Thee to lead us in the way that wouldest conserve Thy glory and that would enable us to perform faithfully the labors that we have to do. We pray Thee to forgive our sins, for all the things wrong that we have done. O Lord, forgive us and grant that each of us may have a consciousness of Thy divine presence and may we be impressed with the idea that we are free moral agents before God, that we are answerable before Thy judgment for every word and for every deed. Help us, therefore, our Father, to live today just as we will wish we had lived when we stand before Thy judgment bar. Help us to spend this day just as if we knew it was the last day that we had to spend on earth, spending it in the faithful discharge of duty, doing the lest we can the work that is given us to do, and looking to Almighty God for guidance and for help. May the Lord bless this Convention today. Help the presiding officer its his difficult and responsible duties. Bless each member of this Convention. Bless the work that shall be done today.  Move upon each one, our Father, that the work that should be


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done may be accomplished. We pray for the families of these Thy servants; may the Lord watch over them in their absence and keep them from harm of every kind. Bless the people that are here represented, and may this be a year of great prosperity to our people; may they be a people in every walk of life whose God is the Lord. May the Lord bless our land and country; bless all who are in authority over us. Bless Thy servant, the Governor of our State, and all those who aid him in the management of the affairs of our commonwealth. O Lord, give us godly men to rule over us, men actuated by conscientious motives, who look unto the Divine Being for their help and strength. Now, Lord, lead us all today and through all this week, and help us, we pray Thee in all things that eve undertake, and may the Lord, if He spares us, enable us in the future of our lives to glorify him and to do faithfully the work that he has given us to do until we are through working here below, and then, our Father, may we have the consciousness of knowing that life's labor has been as well performed as we could have done it and may we die in that peace and die, in the faith of the Christian hope, and then give us, we pray and beseech Thee. O Lord, an abundant entrance into the Heaven of the pure and the holy and the good, and in that glorious land, we will praise Thee forever, through Christ, our Redeemer.   Amen.

Upon a call of the roll, 109 delegates responded to their names.

Leaves of absence were granted to the following delegates: To Mr. Lowe of Lawrence for today; to Mr. Locklin for today and tomorrow; to Mr. M. M. Smith for today; to Mr. Eyster for today; to Mr. Sollie for today; to Mr. Graham of Talladega for today.

The report of the Committee on the Journal was read, stating, that the journal for the seventy-fourth day had been examined and found correct, and the same was adopted.

MR. ESPY‑ I desire to offer a resolution, and ask unanimous consent that the rules be suspended, that the resolution may be put upon its passage.

The following resolutions were read:

Resolution No. 312, by Mr. Espy:

Whereas. Death has invaded the home of one of our brother delegates and taken from him his life companion, leaving his home sad and desolate, therefore be it

Resolved, That the sincere sympathy of this Convention be extended to Hon. M. Sollie and his little children in this hour of bereavement, and we trust that a kind and loving Father, "Who doeth all things well," will comfort him during this trying ordeal.


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Resolved., further, That the Secretary of this Convention be instructed to forward a copy of these resolutions to our brother delegate, thus conveying in some slight way our feeling for him in this dark hour.

Upon a vote being taken, the rules were suspended.

MR. HEFLIN (Chambers) —  I move that the resolution be adopted by a rising vote.

Upon a rising vote, the resolution was unanimously adopted.

MR. GRAHAM (Montgomery)– I rise to a question of personal privilege. I wish to have a mistake on page 4, first column of the stenographic report corrected. I am reported as having made a motion on Saturday to lay the amendment offered by the gentleman from Montgomery on the table. The motion was to lay the amendment offered by the gentleman from Lauderdale on the table, and I desire that that correction be made.

Also on the last page in the second column, the stenographic report says that "Mr. Graham of Talladega made the motion to extend the time of the gentleman from Mobile ten minutes. I suppose the gentleman from Talladega has enough sins of his own to answer for, and I am unselfish enough to desire to answer for mine, and I desire it to be changed from Mr. Graham of Talladega to Mr. Graham of Montgomery.

THE PRESIDENT– The official stenographer will be instructed to make the correction.

MR. COBB– On last Saturday, I entered a motion to reconsider the vote by which Section 7 of the Article on Corporations was adopted. I understand from some communication I have had with the Chairman of the Committee, that he is willing for the reconsideration, and I want the Convention to understand that.

MR. HARRISON– Not only the Chairman of the Committee, but all of the Committee who have been consulted, are perfectly willing to the proposed amendment prepared by the gentleman from Macon and the gentleman from Madison, which has been submitted to us and I think it expressed the matter a little more clearly. I ask that the vote by which the section was adopted be reconsidered.

THE PRESIDENT– Unanimous consent is asked that the vote whereby Section 7 of the Article on Corporations was adopted, be reconsidered.

The consent was given. The amendment was read as follows:

Amendment by Mr. Cobb of Macon:


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Amend Section 7 of the Article on Corporations by striking out all after the word "provided" in line nine and inserting in lieu thereof the following: "He shall have paid into court in money the amount of the damages assessed, and shall have given bond, with good and sufficient sureties, to pay such damages as the property owner may sustain, and the amount of damages in all cases of appeal shall, on the demand of either party, be determined by a jury according to law."

MR. COBB‑‑I would suggest to the Chairman of the Committee, if I ought not to have put in there "to be approved by the Clerk of the Court to which the appeal is taken"—

MR. HARRIS0N‑‑I don't think it makes any difference.

MR. MACDONALD–I have an amendment to the amendment.

The amendment to the amendment was read as follows:

Amend by adding the following words to said section: “Whenever any municipal or other corporation or individual invested with the privilege of taking private property for public use, takes, injures or destroys any property, wilfully and intentionally, and without first restoring to legal proceedings to condemn the same, the owner of the property so taken, injured or destroyed, shall be entitled to recover three times the value of the property so taken, injured or destroyed in addition to such other damages as may be recovered by law for the trespass.”

THE PRESIDENT– The question will be upon the amendment to the amendment offered by the gentleman from Montgomery.

MR. MACDONALD– I presume that any lawyer in this body who has had any experience whatever in reference to proceedings for the condemnation of property or the actions by municipal or other corporations in endeavoring to enforce, in their own way and according to their own notion, their rights, has had occasion to observe repeatedly that municipal and other corporations are in the habit of, without first resorting to any legal proceedings whatever, seizing the property of private individuals or of other corporations, and proceed to construct thereon, their own works, or to act in reference to the property so seized, exactly as they pleased before any legal proceedings were resorted to whatever. We have had in this town many instances of that kind. Why, it has come to pass that a man may leave his home and while he is absent on his business, a municipal corporation may enter upon his premises and either cover it up or elevate it too high by grading, and then leave him to the expense and doubtful proceedings of court to assert his rights. Instances of that kind have occurred in my practice more than once. Not only


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that, but within this city and within the last few years, we have seen a railroad corporation or railroad corporations enter on the property of another one, in the night time, seize it, construct its line of railway on it, and do it in such a manner as almost to create bloodshed. Armed men have been brought by either corporation, the one to assert its supposed rights and the other to defend them.   I say that something should be done to deter these people from this unlawful method of exercising a right and privilege conferred upon them by the legislature. In the first place, if that is done, if these entries are made, and these unlawful takings, injuries or destructions are permitted, the person injured will have to resort to the doubtful and expensive method of asserting his rights in the Courts of law by action for trespass, or the still more doubtful way of applying to a court of equity for mandatory or other injunction. I know an instance in this town whereby the municipality of Montgomery undertook to practically bury the lot of a man I represented, and when he requested the poor privilege of being allowed to see his counsel before any other proceedings were taken, that was denied him, and he was compelled to go to expensive litigation in the Chancery Court and the Supreme Court before his right could be asserted; but as soon as it is known that when these corporations or individuals vested with this right are to be met with a penalty in the nature of three times the value of the property taken or destroyed, in addition to the penalty for trespass, it may possibly deter them in their action. This is no new thing. As I said before, the experience of every lawyer in this Convention who has had anything to do with matters of this kind will bear me out as to the frequency of such things, and it is a fact, and not an isolated case to which I allude in the city of Montgomery that often the peace of the community is disturbed in efforts to take such property and in efforts to resist such unlawful aggression, therefore I think the amendment should be adopted. The objection may be raised that this is a matter of legislative interference; that the legislature should be called upon to right this wrong. That has been the answer made to almost every proposition of this character made to this Convention, but why it should it not be done here without leaving it to the legislature? We are dealing with the subject now. We are dealing with the limitations upon the exercise of eminent domain at this time. We have adopted, as it seems to me, this particular section which authorizes the corporation, after condemnation, but before appeal, to enter upon the property; at any rate leaving the owner of the property to the poor privilege of suing upon the bond for his damages, but if these unlawful acts could be stopped in the first instance, we would have some security that the law would be observed by corporations or municipalities vested with this privilege, before they undertook to take the property of private citizens, according to their own ideas of how it should be subjected to public use.


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MR. COBB ‑ The amendment prepared by the gentleman from Madison and myself and submitted by me, was agreed to by the Committee on Corporations, and unanimous consent is being asked for its adoption. I hope it will not be encumbered by any provisos or amendment. I therefore move to lay on the table the amendment of the gentleman from Montgomery.

MR. MACDONALD‑I hope the gentleman will withdraw that motion.

THE PRESIDENT‑ It is moved that the amendment offered by the gentleman from Montgomery be laid upon the table.

Upon a vote being taken, a division was called for, and by a vote of 54 ayes and 31 noes. the motion to table the amendment prevailed.

MR. ALMON‑I move the adoption of the amendment, and upon that I call for the previous question.

THE PRESIDENT‑ It is moved that the amendment offered by the gentleman from Macon be adopted, and the previous question is demanded upon the Section and the amendment. The question is shall the main question be now put?

Upon a vote being taken the main question was ordered.

THE PRESIDENT— The question will first be upon the amendment offered by the gentleman from Macon.

MR. O'NEAL (Lauderdale)‑I would like to have it read again. Some of us over here did not distinctly catch it.

The amendment was read as requested.

Upon a further vote being taken, the Section as amended was adopted.

Section 9 was read as follows:

Sec. 9. No corporation shall issue preferred stock without the consent of the owners of two-thirds of the stock of said corporation.

MR. MURPHREE‑ This is the same as in the old Constitution, and I move that the Section be adopted.

Upon a vote being taken, the Section was adopted.

Section 10 was read as follows:

Sec. 10. The Legislature shall have the power to revoke any charter of incorporation now existing and revocable at the ratification of this Constitution, or any that be hereafter created whenever, in their opinion, it may be injurious to the citizens of


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this State; in such manner, however, that no injustice shall be done to the stockholders.

MR. GRAHAM (Montgomery)‑Upon behalf of the Committee I offer an amendment.

The amendment was read as follows:

Amend Section 10 of the Article on Corporations by inserting between the words "to" and "revoke" where the same occurs in the first line of said Section, the following words to wit: "alter, amend or."

MR. GRAHAM (Montgomery)‑That is to make this Section conform to Section 1. These words here introduced into Section 1, and are introduced here for the purpose of having this Section conform to that Section.

Upon a vote being taken, the amendment was adopted.

MR. GRAHAM (Montgomery)‑I move the adoption of the Section as amended.

Upon a further vote being taken, the Section as amended was adopted.

Section 11 was read as follows:

Sec. 11. Any association or corporation organized for the purpose, or any individual, shall have the right to construct and maintain lines of telegraph and telephone within this State, and connect the same with other lines, and the Legislature shall, by general law of uniform operation, provide reasonable regulations to give full effect to this Section.   No telegraph or telephone company shall consolidate with or hold a controlling interest in the stock or bonds of any other telegraph or telephone company owning a competing line, or acquire, by purchase or otherwise, any other competing line of telegraph or telephone.

MR. ROGERS (Sumter)— I would like to ask the Chairman of the Committee a question: It provides that no telegraph or telephone company shall consolidate. I want to know what danger will ever come to the people of Alabama by the consolidation of telephone and telegraph lines, and why it does not provide that railroad companies shall not consolidate?

MR. HARRISON‑ The gentleman will find railroads provided for later on. This is a copy of the old Constitution relative to telegraph companies, and it was changed by the Committee so as to include telephone companies. There is a similar provision under the head of railroads, which will be read later on.

MR. SANFORD (Montgomery)— I rise to a question of information. Section 11 says. "organize for the purpose of any individual." Individual what?


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MR. HARRISON‑ This is a misprint. The word "of" should be "or." I move the adoption of the Section.

Upon a vote being taken, the Section

The Secretary read Section 12 as follows:

Sec. 12. All corporations shall have the right to sue, and shall be subject to be sued, in all courts in like cases as natural persons.

MR. HARRISON‑ This is an exact copy of the old Constitution, and I move its adoption.

Upon a vote being taken the Section was adopted.

The Secretary read Section 13 as follows:

Sec. 13. The term "corporation," as used in this Article, shall be construed to include all joint stock companies or any associations having any, of the powers or privileges of corporations not possessed by individuals or partnerships.

MR. HARRISON‑ This is an exact copy of the same section in the old Constitution; there has been no change made, and I move its adoption.

Upon a vote being taken, the section was adopted.

The Secretary read an additional section numbered 13 ½ , reported by a minority of the Committee as follows:

Section 13 ½.   After the ratification of the Constitution, no corporation, society, organization or association shall be allowed to charge or collect for, or upon the loan or forbearance of money, goods or things in action, either in the way of interest, fines, forfeitures, premiums, commissions or sums of money for the purchase of stock, bonds, or any interest in the business of such corporation, society, organization or association, as a condition upon which such loan or forbearance is obtained or in any other way connected with such loan or forbearance, as a charge, a greater amount than the legal rate of interest provided for by the general laws of the State upon the loan or forbearance of money, goods or things in action; and all such sums of money paid such corporation, society, organization or association in excess of the legal interest provided for by the law, by whatever name called, shall be credited on the principal of the loan made by said corporation, society, organization or association, and every such loan male in Alabama shall he governed by the laws of this State.

Respectfully submitted,

John F. Proctor,

W. T. L. Cofer,

J. Lee Long.


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THE PRESIDENT‑ The question will be upon the motion to adopt the, additional Section 13 ½  by the minority of the Committee.

MR. PROCTOR‑ It was with some regret, Mr. President, that the minority of this Committee was forced to bring in a report of this kind, but we feel that there is a great injustice done by permitting some corporations to charge for the use or forbearance of money from borrowers, more than the legal rate of interest, or more than any other private individual was allowed to charge. Now, it is claimed that this is a strike at the building and loan associations. Well, if the building and loan associations are charging more than the regular rate of interest, it is a strike at the buildings and loan associations. It is a strike at any association or corporation doing business at a usurious rate of interest, and now that the building and loan associations have taken up the fight, why, then, we want to meet that issue with them, and show wherein the people of the State have not been treated fairly in the part.

Now, as I understand it, most of the delegates here have received a memorial to the Convention from the building and loan associations. They do not even undertake to explain the conduct of the National Building and Loan Associations, but they say all the injustice that has been done was done by the national associations, and that the local building and loans are doing a legitimate business. There is not a building and loan association in the State of Alabama that claims to be doing a business at the legal rate of interest.   Now, what do they do?   They tell you that their bylaws and their contracts are so complicated that very few people understand them, and that is true, and because of that fact, they have gotten many men to take stock in a building and loan association, thinking that he was getting his money cheaply, when, in fact, he was paying at the rate of from 18 per cent to 36 per cent. They tell us further that it is a stock company, and that every borrower is a stockholder. That reminds me of the two little news boys; one had a nickle and the other didn't, and the one that didn't have the nickle asked the other one to step behind the house and form a corporation. They entered into an agreement to take the nickle and buy a cigar. The little fellow who didn't have any nickel took the cigar, struck a match and lit it, and he says, "Now, we have formed a corporation; I will be the president of the corporation and you will be the stockholder; I will do the smoking and you can do the spitting." That is the very same way that these borrowers have had to do in these corporations. They will come to you and tell you that you will be a member of the corporation; they will give you a certificate of stock; they will require you to take out double the amount of shares that you have borrowed, and I have just made a little calculation here, showing how much a man has to pay on


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it.  I deny that the borrower is a stockholder after he gets his money.  Under the terms of the contract, they require you to assign your certificate of stock to the company before you get the money, and you are no longer, as laid down in the case of Falls in 75 Alabama—

MR. GRAHAM (Montgomery)–I desire to ask the gentleman a question.

MR. PROCTOR–I prefer not to be interrupted; my time is limited.  I will answer the gentleman when I get through.  You take a loan of $10,000 in a corporation that issues shares of $100. They require you in the outset to take out two hundred shares of stock, double the amount that you borrowed.  They require you to pay back in monthly installments sixty cents per share; that is, $120 per month; they require you to pay the interest on that $10,000, which would amount to $50 per month at the rate of 6 per cent–that amounts to $170 per month on the $10,000 loan; they require you to pay three months in advance before they will let you have the money.  In other words, you get a fraction over $9,000 instead of the $10,000.  Then, how do they apply that?  When you borrow, they tell you that a part of this is premium, and a part of it is your stock, and that your premium will be bearing interest and you will get the benefit of it, but I have never yet been able to find a man to get that benefit out of one of them; never got his home except he had paid twice the amount he borrowed.  They will give you credit for $60 on the premium, credit for $60 on the loan, credit for $50 interest–but your mortgage never sees but $60 out of that $170, and at the expiration of the eighty-four months, you will have paid into the association $14,480, and then when you go to settle they will tell you that you still owe them $4,960.

Now, I have here some letters from men who have been in these concerns, and they bear out this proposition.  Here are two men, each borrowed one thousand dollars; they paid seventy-two monthly payments at $15.34 each, and then had to compromise at the expiration of the seventy-two months by paying four hundred and eighty-four dollars in addition.  Here is another man who borrowed fifteen hundred dollars and paid back twenty-five dollars and fifteen cents per month for seventy-two months, and now they claim that he owes them nine hundred and two dollars in addition before they will release his mortgage.  Here is another man who lives here in Montgomery, whom many of you know, I do not care to mention names, but I will furnish his name to any delegate privately, that borrowed thirty-four hundred dollars, and in order to get out he had to pay seven thousand four hundred and seventy dollars.  (Laughter)  The borrower, Mr. President, has absolutely nothing to do with the expenses of the concern, he has nothing to do with the profits of the concern, but


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if they see proper they can tax him with the losses of the concern as long as he stays in there or until he compromises.  Now, who gets the benefit?  There is nothing in their contract, and I cite you to the Falls case, which I think is mighty sound, even though overruled, I think it is mighty good reading in this case. The Secretary and Treasurer and the attorney and the directors after they put them in there, and start up with the business, if the business is good then the salaries are increased and the borrower pays that, so it does not matter whether the business is profitable or the reverse, the borrower has to pay just the same.  Then, what do they tell you about the investment?  They say to you, if you have got two thousand dollars, or ten thousand dollars, and you want to put it in there, they will frankly admit to you that they make from 14 per cent to 24 per cent per annum–they admit that to the men they want to go in as investors, but the man to whom they want to loan money they tell him they will lend the money to him at 6 per cent.  I was very much struck with a remark what a gentleman on this floor made while this was under discussion.  They went, it seems, into his office and got after him to take some stock, knowing that he was a man of some means and had idle money and it was his money they were after.  They outlined their beautiful plan and told him they wanted him in there.  He said; “I see here you are charging about 24 per cent interest.” and the agent sidled up close to him, and thinking to catch him, said.  “That is right, but you get the benefit of it, the investor is the man that gets the benefit of this.” The gentleman replied: “My friend, when I decide to act the rascal, I want the money to come through my own hands, and not through yours.”  Now, they claim further, Mr. President, that under the stature as it mow exists, that you cannot charge more than 12 per cent interest, and I desire to say that I do not think that is a correct proposition.

If you turn to Code Section 1133 in reference to Building and Loan Associations, it says:”Such Associations may, by their bylaws, impose fines and penalties upon their members for default or delay in payment, when same are due, of installments upon their loans, the interest, premium and charges thereon, and upon the shares of stock of such members, and the same may be secured and collected by mortgage, in addition to the amount of interest, premium and other charges allowed by law, but such fines shall not exceed 2 per cent per month of such arrearages.”

Now, in this case of the ten thousand dollar loan, how much would that be?  If a man was in arrears for one month only, which was one hundred and seventy dollars, it would be 2 per cent per month on that one hundred and seventy dollars.  Now if you will take up Section 1134 you will find these words: “The premium to be charged upon any loan must be fixed by the bylaws, but such premium and the interest on the loan taken to-


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gether shall not exceed 1 per cent per month, of the amount actually loaned or advanced."

Now that says the premium and the interest shall not be more than 12 per cent, but the fines, it says nothing about the fines, the fines, the forfeitures and the arrearage may be 2 per cent a month. ('That is Section 1133.) So, by a doubling process, they can charge you more than 12 per cent interest, and I say this is not right. It is rather catchy when you look at it but when you get into it is mighty hard to get away from it and I do not see why these corporations, if doing business on greater interest than other corporations, should not be required to come down on the level with everybody else.

MR. PETTUS–I move the reconsideration of Resolution 246, which was adopted on Saturday and ask unanimous consent that that motion go over until the pending motion is disposed of.

MR. OPP‑ What is the subject matter?

MR. PETTUS‑ In reference to the fertilizer tag tax.

THE PRESIDENT‑‑ The gentleman from Limestone moves the reconsideration of Resolution No. 246. and moves that it be postponed until after the article under consideration.

There being no objection, it was so ordered.

MR. HOWZE–Mr. President, I rise to take a short time on this proposed amendment by the minority of this Committee. The mover, and the gentleman who has just preceded me in this matter, in speaking of this matter admit that the purpose of it is a strike at the Building and Loan Associations.  In other words, the report in effect and intention is made in order to abolish the Building and Loan Associations in this State.  The question then, that presents itself, is as to whether or not these institutions are good in themselves, or whether or not they are evil and such as should be abolished by the laws of this State.

Now, from the remarks of the gentleman who has preceded me, it is very evident that he has been detailing woes and troubles that have arisen, by parties who have borrowed money from foreign Building and Loan Associations.  As we all know there are two classes of these associations, who have been doing business in this State, those who are local and confine their business to the city, county or to the State, and those who are national in character and do business in different portions of the United States and in different States of the Union.  In those cases, Mr. President, and the reason why these hardships have arisen, it is very apparent to my mind, as I have had some experience in the matter.  The foreign companies have been very unfortunate.  They have had to rely upon local parties in making their loans, and these


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parties have not been careful in their valuation of properties, consequently the losses of foreign corporations have been very. enormous, and of course. their revenues have been greatly diminished, and the expectation of the stockholders and the borrowers in those companies have been greatly defeated and disappointed, and therefore the maturity of their loans and their stock has been deferred far beyond the time it was expected to mature. Another reason parties have taken out loans in those companies, and have obtained far more value than the property would justify, and have become defaulters. I know from personal experience a number of parties who borrowed money from these associations on their property who never paid another cent after they paid their three months installment, who absolutely discontinued from that moment, paying a single dollar upon the stock which they had sub-described doubtless, because they had failed in the first place, they had all about that their property was worth, when they obtained the loan, and in the second place, many obtained a loan, had no way of meeting monthly payments, and therefore they defaulted, and suits arose, litigation began, and of course these contracts bore heavily upon them under those circumstances.  Now, the nature of the Building and Loan Association requires that every stockholder should be prompt in the payment of his dues. If he is, why then he will often receive some benefit from it. If not, then hardships come in and it is that class of people my friend speaks of this morning in his address. Now we have the Falls case, where a party borrowed from a corporation a large sum of money on a vacant lot, and he made no more payments.  After a short time he stopped his payments. The mortgage was attempted to be foreclosed, and this litigation was produced. Of course, the Supreme Court in passing upon this matter, the able Chief Justice Stone argued at length upon the principles of these corporations. Unfortunately, to my knowledge that case was not properly presented to the Supreme Court. The great defect in it being that the certificate of stock which this party held in that corporation was not in evidence in the case, and that case failed to show that this party was a stockholder in the corporation, consequently Judge Stone based his opinion upon the fact that he was not a stockholder.

THE PRESIDENT‑ The gentleman from Jefferson will be entitled to the floor this afternoon.

Thereupon the Convention adjourned.

__________

AFTERNOON SESSION

The Convention met pursuant to adjournment, there being ninety-four delegates present upon the call of the roll.


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MR. LONG (Walker)‑ I rise to a question of privilege. I respectfully ask the attention of the delegates present upon the floor to "The Woman's Journal," published at Boston, Saturday, August 17, 1901, which says: "In the debate upon reconsideration, August 9th, soma angry and disrespectful speeches were made against the measure. Among others, that of Hon. T. L. Long, of Walker, seems to have enjoyed an unwholesome pre‑eminence.  A correspondent says:  'He spoke as loud as he could scream, with the gesticulations of a ruffian. I have never heard anything less chivalric or more savage, uttered in the presence of dignified men, who have mothers, wives and daughters.' " (Laughter.) I wish to state, Mr. President, that the stenographic report will bear no just criticism, nor show that I made any unjust or improper statement upon that occasion. I wish to say that ever‑ since our forefathers, the Puritans, first settled in Massachusetts, they seem up there to have undertaken to dominate and influence public opinion, sometimes wisely and sometimes unwisely. 'This is not a true representation of the opinions or thoughts of the Boston people, but it comes from a class of people who believed in burning old women at the stage as witches in the years gone by, and I will state that Boston is the only city I was ever in that I saw a white woman hanging on the arm of a colored "gentleman" as her husband. (Applause.) I want to state that Boston is the only two that I ever attended a Christian church, twenty-five years after the war, when representative men were mentioned in the pulpit and abused because they were from a different section of the country.  I want to state that while this emanates from women, I never saw a woman in my life who wanted to vote but what she was so ugly that she could not get married.  (Applause.)  If I should do anything that would meet approval from a Boston standpoint, I would weaken my position.  That is all I have to say in regard to this matter.

MR. WALKER— I arise to a question of personal privilege.

THE PRESIDENT— The Chair would inquire if it is of the same nature? (Applause.)

MR. WALKER‑ No sir, I want to correct the impression that some members may possibly have received from my treatment of the question asked me by my friend, Mr. O'Neal, on Saturday. I understood the question referred to a matter contained in the amendment which had been proposed, but had already been disposed of.  As I stated at the time, it certainly was far from my intention to treat the gentleman with any discourtesy, and I simply desire that no man shall have the impression that I would intentionally treat the gentleman from Lauderdale on any question otherwise than properly and with consideration.

MR. O'NEAL‑I desire simply to say that I was satisfied the gentleman's remarks were due to a misrepresentation and his


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explanation is in keeping with his uniform courtesy and manly character.

MR. JACKSON‑I move that the rules be suspended and that the privileges of the floor be extended to the Hon. T. L. Kennedy of Opelika, a member of the Legislature.

Upon a vote being taken the privileges of the floor were extended to the gentleman.

THE PRESIDENT ‑The question will be upon the minority report. Section 13 ½  was under consideration when the Convention adjourned and the gentleman from Jefferson has the floor.

MR. HOWZE‑ Mr. President and gentlemen of the Convention: I will be very brief in w hat I have to say.  It is undoubtedly evident that the object, or at least the effect, of this proposed Section to this Article, would be to abolish Building and Loan Associations in this State. I ask  the gentlemen of the Convention to consider what that means. This is an institution not established in the last few years, but one that has been in existence nigh on to a hundred years. It has grown so that it has spread all over the United States of America as well as over England and other countries in the world. It has prospered in all of these countries and has been a blessing and benefit in many localities of all the countries of the land. By this action they ask you to abolish an institution of that kind. It is an institution that has been particularly fostered by our own government. In the recent act raising revenue for the war with Spain, these companies were particularly favored, and the United States Government saw proper to exclude them from paying the stamp tax on all contracts between these associations and their members. Further than that, they are made an object of interest in the Government to the extent that the Commissioner of Labor is required to make a report upon these different institutions, and I have before me here a volume of over 700 cases gotten out by the Commissioner of Labor in regard to these institutions throughout the United States from which I desire to read you. This was in 1896 I believe.

"Of the 5,838 Associations in the country, both local anal national, 4,444 have reported as to homes acquired by their borrowing shareholders, and through this latter number of Associations 314,755 homes have been acquired. In the 4,422 Associations reporting as to that fact 28,459 buildings other than homes have been secured."

In addition to that in the State of Ohio particularly, these Associations are a great benefit and advantage, and it is a matter of interest that in the city of Dayton, O., which, at that time had  a population of about 80,000 people there were 19,886 sharehold‑


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ers in the association; of that city. One-fourth of the population was shareholders in the Building and Loan Associations in Dayton, O.

Now these things go to show the great importance and great value of these institutions. They are fostered by the United States government and by other governments and by the States of the United States mainly because of the fact that y they are the great home builders of this country.

MR. OATES‑ Is this not entirely a matter of legislation?

MR. HOWZE– Entirely so, I was just getting at that. In all the States of the Union they are recognized and regulated by legislation of the different States, and I was coming down to our own State. For more than thirty years these Associations have been recognized and regulated by the General Assembly of the State of Alabama beginning way back in the seventies. In 1868 or 1870 the first act was passed regulating these Associations and when four years also, in 1896‑7, the legislature of the State of Alabama had this matter under consideration. and after an exhaustive fight on the part of those for and against these institutions, put in our code a fine system of law regulating these associations.  This is a matter entirely within the province of the legislature, and it is an unheard of proposition that the fundamental law of the State of Alabama should have in it a provision which absolutely destroys an institution of so great value as this It is remarkable.  We had almost as well say there shall be no banking institutions in Alabama.  It is an institution wherein men of small means can go and put in their little pittances by the month, and have those savings loaned out at interest for their benefit, and it enables the wage-earner of the country to obtain homes.  A man with a small lot as his only capital can go to one of these institutions and become a member of it and by that means erect himself a home.  It is peculiarly an institution adapted to the needs of the poor people of our country and as I said before, it is within the province of the of the legislature to regulate these institutions, and if they are such a great evil, as my friend (Mr. Proctor) over there would have us believe, the legislature can abolish the, but with the statistics I have given you, it cannot be said that these institutions are of very great harm to the country.  I desire to call your attention to some further figures:  “The Comptroller of the currency, in his report for 1896, shows that we now have 3,679 national banks with a paid up capital of $650,000,000, owned and controlled by 288,000 stockholders, and the Commissioner of Labor shows in a bulletin issued in May, 1897, that we have 5,618 Building and Loan Associations, with $607,118,070 of paid up capital, owned and controlled by 2,500,000 stockholders” showing you the enormous growth of these institutions. Can it be that they are of such great evil as the gentleman would


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have its to understand when we consider the wonderful growth of these institutions throughout the land. 

THE PRESIDENT‑ The time of the gentleman has expired.

MR. BROWNE—  I move that the rules be suspended and that the gentleman's time be extended ten minutes.

Upon a vote being taken the motion to extend the gentleman's time ten minutes prevailed.

MR. HOWZE‑I am very much obliged to you gentlemen of the Convention, I have tried not to take up much time since I have been here and I will try to be as brief as possible in concluding my remarks.

This statement goes on to say that "the foregoing figures show that more individuals are interested in the stock of Building and Loan Associations than in any other class of corporations in existence."

In the State of Ohio, by a report made in 1897 to the Governor of that State, there are found to be "$99,770,161.07, or an amount greater than the combined capital of the banks of Texas, Louisiana, Arkansas, Mississippi, Alabama, Georgia, North Carolina and South Carolina. The Inspector of Building and Loan Associations of the State of Ohio in his last annual report said:  "They foster habits of economy and thrift and steady increase the wealth of the locality in which they operate. A well managed Building and Loan Association is one of the greatest blessings any community could have and should receive every reasonable encouragement."

"In Pennsylvania they amounted to $81,870.964. It is a well known fact that the city of Philadelphia was built up largely through the aid of these Associations. It is called the City of Homes, and those home are mainly built through the instrumentality of the Building and Loan Associations of that city. It is one of the most solid and substantial cities in the universe and it shows that great and good results have come from these institutions of Building and Loan Associations.

Now then you ask by this proceeding here to abolish in the State of Alabama an Institution which is should to be of such great benefit to other communities. It will not do to say that because there are individual instances where hardships have been wrought by reason of the action of solve of these institutions, that they should be abolished. That trouble prevails in everything. You take the banking system; we know that many banks have been mismanaged, that hard contracts have been made by them, and that many of them have gone under by reason of mismanagement. Is that any reason why we should condemn the


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banking system ? It is the same way with other Institutions, with land companies for instance. Some of them have been mismanaged, yet you do not condemn the good because of the evil produced by some.

I say, gentlemen of the Convention, we should not condemn an institution of such vast importance as these are shown to be.  It is now the question what will be the effect of your action here?  What is going to be the effect and who will be affected by it?  Why, we have in the State from twelve to fifteen local associations. There are three in Birmingham, two in the city of Montgomery, one in Decatur, two in Selma, one in Cullman, one in Bessemer, one in Tuskegee, one in Avondale, and perhaps one or two of other small institutions in the State. The people invested over a million dollars in these institutions, and this act in this Constitution absolutely abrogates every one of the institutions. They are bound to go to the wall ; they cannot be maintained, and the system is such that if this act is passed, they are bound to become insolvent, or bound to be wound up. Take now an instance where the assets in this State amount to over a million dollars in that way. There is in the city of Birmingham one institution which has in force $1,600,000, one of these local Institutions. They have made total loans of $1,100,000. They have members who have cancelled their loans to the extent of over $700,000, and in cash paid members in savings profits and matured stock of over $600.000, and have aided in building homes for the people of Alabama not only in Birmingham, but the company has operated in different towns of the State, and have aided the people of Alabama  to January 1st. 1901, to the extent of $1,100,000 in loans for building, homes and paving off existing mortgages, and through its aid, members have paid for their homes to the extent of $700,000, and in Jefferson County alone last year this Association furnished money for building over $150,000 in homes. Now, that is one of the institutions you are called upon to destroy lay this act, by the passage of this section to this Article, and, besides that, these institutions represent a capital of over $1,000,000 which you will destroy. Reports show they have assets of over $1,000,000. As I stated just now, if this ordinance is passed, these concerns would have try go into liquidation. Necessarily so—

MR. OATES‑ Did not the Legislature know and everyone else, when they were chartered, that it would require more than 8 per cent to run them?

MR. HOUSE‑ Certainly they did.

MR. OATES‑ Considering the expense of maintaining the institution, 8 per cent would not pay men for investing their capital in that way, and, therefore, it was not any disappointment on anyone.


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MR. HOWZE‑ None in the world. The Legislature provided in the Act that I had before me, that they must pay non-borrowing stockholders 8 per cent on their capital. It is well known that there are two classes of stockholders, one non-borrowing and one borrowing. The non-borrowing is the one who furnishes the money and expects a return which the statute has fixed at 8 per cent. Now, how will they earn that with their expenses? The Legislature recognized, as my friend suggests, and provided, that the interest shall not exceed 12 per cent. They are limited to 12 per cent, and yet my friend over there, the delegate from Jackson, (Mr. Proctor) says they have hidden in it a little fine of 2 per cent extra. Now, he would have you believe that is an additional 2 per cent. The law says it shall not exceed 2 per cent of arrearages. The arrearages do not exceed from $6 to $10.

MR. PROCTOR‑ Suppose you were to borrow $10.000, the monthly payment would be $170. What would the arrearage be in the $10,000 loan?

MR. HOWZE‑ It would depend upon the amount of premium paid every month. If we paid $100 per month and fell short on that payment, 2 per cent of the arrearages would be $2.

MR. PROCTOR ‑ Two dollars per month?

MR. HOWZE‑ That is all that means, not 2 per cent on the debt, as you would have the Convention believe. That is necessary to make the stockholders prompt in their payment. It is for their benefit that it is done. It is not for the benefit of the corporation, but for the stockholder himself if he makes these payments regularly by the month. These are big institutions. They are not capitalized by the payment of any, large sum in at once, but by small monthly payments made by the stockholders, both the borrowing and non-borrowing. If the borrowing stockholders would pay regularly the amount of his due so that they can go into the general fund, he will get the benefit of it. Every dollar he pays in is used for his benefit. This interest he calls usury here, and his fines and dues are all embraced in the money loaned out for his benefit, and the money he puts in there is loaned out and from month to month accumulates with the amount of loan that he has made with that company. and it cancels his stock.

THE PRESIDENT‑ The time of the gentleman has expired.

MR. COFER‑I am surprised that the gentleman would make any such statement. It seems to me that about three weeks or a month ago, from the same locality, there came to this Convention a hue and cry upon the part of the people in that locality against certain corporations which, if compared with the corporations the gentleman now defends, shows that the earnings allowed


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by law and earned by them are greatly disproportionate. There is a cry against the railroads of Alabama, and if you will examine the history of the railroads you will find that the average earnings of the railroads are not 3 per cent per annum, and here is a corporation authorized by law to collect from the people of Alabama anywhere from 12 to 36 per cent, Now, I insist, Mr. President, that if there ever was a legally authorized institution in the State  of Alabama whose purposes were that of fleecing the unsuspecting public, it has been the organization and manipulation of the building and loan associations. If there ever was a crowd of gentlemen— and I care not whether they are foreign or domestic — who are authorized to collect usurious interest in their own way, and under the terms of their own contracts, made by persons who could not help themselves, it has been the statutes regulating and controlling these institutions.

Now to illustrate it, they first make a loan to their members. They bring them indirectly into dishonest competition, so far as the value of money is concerned, and they sell the money to the highest bidder for money greatest amount of premiums they can receive, and I have known the premium to be as high as ten and twelve per cent., in addition to which they charge eight per cent., running the entire length of time for the entire month, and in addition to that, if the borrower happens to be unfortunate, they are authorized by law to inflict the further penalty of charging or assessing a fine of five per cent., differing according to the corporation, being sometimes five per cent upon each share or fifty dollars, for delay in payment of weekly or monthly dues, and they say it is right because it is a mutual concern, and that it is done for the benefit of loaning money to persons to build homes. The same argument can be said about the banker or the individual who loans an individual money to pay off and discharge an indebtedness on his home: the same argument might be used in justification of the action of Shylock when he attempted to collect the money that was due him that he had a right to enforce it under the penalties of the bond. They have no objection to the non‑payment of the money. In other words they prefer that the poor creature in their grasp be not able to make the payment, because each time they add another link to the chain to bind him securely. Each moment that he refuses to pay they fine him and these fines accumulate and are added to, the principle until these Shylocks come to the conclusion that the limit has been reached, they turn over the mortgage to their lawyer and there is an additional fee of twenty-five dollars, and they say "take the pound of flesh" and they generally do it. It is authorized by law. It is part and parcel of the code of Alabama. The question has been asked why put this in the Constitution? Is it not a subject of legislative enactment? It is not the first thing that has been put in this Constitution that was a subject of legislative enactment.


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The same answer might be made, why not regulate the great railroad pass evil in Alabama by legislative enactment? Why not regulate the right of railroad corporations in carrying freight? Why not leave that to the Legislature and yet it is put in this same report, and they now say it is not fair to put in a provision regulating and controlling this gigantic corporation. Last night I had the opportunity of going to church and I am sorry that the delegates of this Convention who represent these Shylocks were not present. I heard a sermon by that eloquent divine, Rev. Dr. Patterson, pastor of the Presbyterian Church, upon Zaccheus.  Zaccheus paid a tribute to the Roman Empire for the privilege of collecting taxes and he robbed them right and left and he grew immensely rich. And as this splendid preacher proceeded with eloquence unsurpassed and pathos seldom equalled. I thought times had changed but little since then. The eloquent minister went can to justify the visit of Christ who spent the night with Zaccheus and while he justified it on account of friendship and kindness, I thought for one time Christ got into lead company, and desired to inquire if he was not the originator of the scheme of the building and loan associations which have invaded the fair fields of Alabama. When you undertake to justify this corporation, this law and this Constitution says, that the banker cannot charge but eight per cent., and the individual cannot charge but eight per cent., legally, they say it is not right to charge over eight per cent., but here is a corporation doing business in a particular way, who charge what they choose and what they please, and enforce the collection of their money by the authority of law in a Christian country.

MR. VAUGHAN‑I would ask if these building and loan associations are not creatures of the Legislature.

MR. COFER‑ Yes.

MR. VAUGHAN‑ Cannot the Legislature repeal their charters?

MR. COFER‑ The railroads are creatures of the Legislature. Why not leave them out? What is the difference in principle? I say there is no difference. If we are going to let them regulate the rule of right and justice between corporations of Alabama and the individual of the State of Alabama, if it the purpose of this Convention to assist the people of Alabama, from being imposed upon by corporations let us do so. I do not care whether they are foreign or not. I would just as soon be robbed by a fellow from New York as a fellow from Alabama. There is no difference, and I say that these charters are unjust. The time has come in the history of Alabama when it ought to be stopped, and when the people of this State ought to be protected. If not, I would suggest or endorse the idea of not putting in the Constitution or


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statutes any rule to prevent usury.  Why not say to the individuals and bankers and corporations, charge just as much interest as you can get. Take advantage of every victim you can, and when they are thoroughly and completely in your power, stand over them with the power of your mortgages, with the laws of collection, and crush their life and existence out of them? Now I ask, Mr. President, if this be just to be put in this Constitution. They have nearly legislated them out of Mississippi because of their fleecing capacities and abilities. Mississippi says no longer in the history of that great state shall these miserable Shylocks stand like vultures over their victims, holding high carnival over the forms of human happiness, and dance in hideous revelry around their victims.

MR. LONG (Butler) — I have very few words to say on this subject. It seems to me that the gentleman from Jefferson thinks that if this minority report is adopted it would abolish building and loan associations in Alabama. That is a very strange doctrine to me. It seems to me that it would put them on the same plane with every individual and banker and every one else doing business in this State, instead of giving them privileges which they are allowed under the present law. We all know that a building and loan association gets out a pamphlet that puzzles with facts and figures, and is simply a gold brick scheme to catch the unsuspecting public. I have never myself bought any stock in a building and loan association, and I do not expect to buy any, because I think I know what they are. I have here in my hand a statement of a gentleman who lives in Greenville, Alabama.  He took stock in a building and loan association in Montgomery, Alabama.  The same association is now doing business in this city.  He borrowed on three certificates of stock, which I hold in my hand $750, $1,000 and $2,000, respectively, and he paid on this stock for sixty-seven months up to January 1, 1898. At that time he asked for a statement of his account, asking how  much he owed as a balance, and they sent him a statement which I hold here, showing he owed a balance of $1,177.27.  He continued to pay according to his contract with this association, and asked for another statement on July 26, 1899, a year and six months after this first statement had been made to him, and they sent another statement saying he owed a balance of $1,735. (Laughter) Now if anybody doubts that statement, I hold the certificates in my hand, and am willing to show them.  I do this to show you that ordinarily when a debt is created, when a man pays and continues to pay on the debt, it gets smaller, but in this instance it grows larger.

Now if we take this position, in the spirit of fairness, and I do not want to do any Building and Loan Association, or any legitimate concern that does business in this State, or any other


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CONSTITUTIONAL CONVENTION, 1901

State, an inquiry.  I do think that they should be prohibited from doing injury to the individuals of this State.

I do think, Mr. President that we should place in our organic law such a Section that will prevent any concern, let it be banker or what not, going out and preying upon an unsuspecting public. We should throw all the barriers around this possible. That is the reason I favor the minority report. If anybody will suggest anything better I will accept it. The only thing I object to, and the only thing that induced the to sign the minority report is because of knowledge of the fact that I know these Building and Loan Associations have been gold brick schemes in my town. I hold documents in my hand of these Building and Loan Associations that I am willing to show to any member of this Convention to see what they have done over their own signature, and I tell you that they have just robbed the people of my town, and I do not believe that it should be allowed to continue any longer.

MR. SPRAGINS‑ It seems to me that the purpose of the minority report is not to destroy Building and Loan Associations, but to bring them down to the position where they will enjoy only the same privileges as individuals. The Building and Loan Associations of Philadelphia do not charge 12 per cent. interest as the Building and Loan Associations in the State of Alabama are allowed to charge. It is true Mr. President, that the Legislature could control the matter of interest charged by the Building, and Loan Associations in this State, but after the Supreme Court decided that they were charging usurious interest they went to the Legislature of this State and had a law enacted authorizing them to charge usurious rates of interest and making such rates of interest lawful. They have undoubtedly been favored by the Legislature of Alabama instead of being controlled by that body. Every citizen of the State of Alabama and every other corporation, except the Building and Loan Associations, pay taxes to the State, count, and city in which they may reside upon any money that is loaned. By special enactment the Legislature of Alabama exempts Building and Loan Associations; they are exempted from paying these taxes. I admit, Mr. President, that the principal stated in that enactment would be the true solution of the taxing power, to allow a man credit for every dollar that he pays and charge him up with every dollar that he owes. but the wisdom of the State has kept us from the difficulties that such all enactment would produce because of the fear the tax payers when he showed his debit and credit side of the ledger, he would owe so much that no taxes would be due from him to the State.  Now what good reason is there that a Building and Loan Association should be allowed to deduct from their assets. their taxable assets which is the stock and the money paid in, all the money which they have loaned out on mortgage? Instead of charging, as the Building


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and Loan of Birmingham, of which my friend Mr. Howze has spoken, 9 and 60‑100 per cent. interest, they could charge 8 per  cent., instead of making 8 per cent., they could make 6 per cent., as other individuals in this State with less capital are now contenting, themselves; with. It is no matter of defense to the report of the minority to say that this is a matter of mere legislative detail, because the Legislature has had this thing in their power for many years and instead of controlling and restraining, they have added to and enlarged the power of these corporations. While it is true that the Legislature could do these things, it is not objectionable I contend for this Convention to set down the principle that no Building and Loan Association nor any corporation of any character should charge in premium or dues or whatever name it may be given, any greater rate of interest than 8 per cent., that per cent which is allowed to every man, and every other corporation in the State of Alabama to charge, and no more.

MR. BULGER— I move that the privileges of the floor of this Convention be extended to the Hon. Benjamin Huey of Perry.

Upon a vote being taken the motion was adopted.

MR. WALKER–There is no doubt that in Alabama certain Building and Loan Associations which have operated in this State have been guilty of some abuses, and that some people have had the misfortune to lose money by connecting themselves with institutions that were planned improperly or were improperly managed.  In this respect a good many people in Alabama have had an experience similar to the experience of a great many people in Alabama in the years immediately after the war in reference to life insurance.  If the Convention of 1875 had yielded upon the subject of life insurance to the representations that might have been made to that Convention as to the losses that had been incurred all over the State of Alabama, had yielded to it to such an extent as to prohibit in the State of Alabama the future carrying on of life insurance it would have done as foolish a thing, in my opinion, as this convention would do by yielding to the representation of a few people in reference to losses in mismanaged Building and Loan Associations, to the extent of prohibiting in the future the carrying on in Alabama of that kind of business, one would have been as great a folly as the other.  It had been demonstrated in the world up to that time, that life insurance was a good thing, and it was a good thing, although in the Southern States after the war the country was infested with a number of life insurance companies presided over by distinguished solders of the Confederate army who had been inveigled into those mismanaged institutions and vast losses had been incurred by the people of this country.  Was that any reason for prohibiting in the future the carrying on of life insurance which was a system of saving, the wisdom of which had been demonstrated


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CONSTITUTIONAL CONVENTION, 1901

all over the world, because a number of insurance companies in the Southern States particularly, presided over by gentlemen distinguished in the service of the Confederacy, from Jefferson Davis down, had been unsuccessful, and the people of this country had lost vast sums of money in those companies. Now it has been demonstrated over the world that Building and Loan Associations properly managed are as great agencies of thrift and home acquiring as have been developed in the experience of commercial countries. Look at England, look at the continental countries. look at the old established communities of this country and you will find that the greatest agency of thrift and independent home acquisition that exists in those communities are the Building and Loan Associations properly managed. Are we now in Alabama to strike down the possibility of institutions properly managed being conducted upon that plan in the future because the people in this State in the past have had the misfortune to connect themselves with some improperly managed institutions? Now that is the whole question. The utility and the great benefit to the common people of Building and Loan Associations managed upon proper principles has been as fully demonstrated as anything could be demonstrated, but because of the unfortunate experience of some people in this State— of a good many of them I am afraid‑-of connecting themselves with some mushroom institutions which no longer do business, in this State, will this Convention be guilty of a folly of striking down the possibility of beneficial institutions being; established and carried on.

MR. BOONE‑ Isn’t it a question of opinion as to what constitutes a much room institution? Would the gentleman call the Fidelity Trust and Loan Company of Mobile, and the National Building and Loan Association of Montgomery or the New South, I forgot the balance of the name, or the Southern Building and Loan Association of Huntsville such companies? Weren't they doing a business as large as done in the State, and what has been the result? Have they not been managed by just as fair, apparently, a set of men as any of the others?

MR. WALKER–As I am not acquainted with the history of those institutions I am not able to give the information. If the gentleman knows about them he can give the information, but if he can give the information. But if the gentleman desires to know the operation of institutions properly managed, there are several in this State that have had no lawsuits and the people that have borrowed from them, the people that have built homes through the Association have no complaints. Now that was a specimen of the arguments--selecting three institutions in this State, and because those institutions have not been successful, to make that a reason for prohibiting other institutions properly managed from being carried on. The gentleman could well select three insurance


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companies, or three banking institutions, including the State bank, and say that therefore because they were not successful, that such institutions should not be permitted.

MR. BOONE–Do you state to this Convention that under the law of Ohio and under the laws of Pennsylvania where it is said such companies have done good, have the privilege as they have in Alabama?

MR. WALKER‑As I am not acquainted with the laws of Pennsylvania and Ohio, compared with those of the State of Alabama, I will not undertake to give the explanation.

MR. BOONE‑I say that they are not. The gentleman is supposed to be familiar with the subject when championing one side.

MR. WALKER‑I will leave that to the Convention and I will not undertake to answer the last thrust of the gentleman. I disclaim having the fund of information that the gentleman from Mobile has at his command.

MR. PROCTOR‑‑I would like to ask a question. Suppose an aggregation of capital put together for the purpose of lending the farmers money to make crops at 14 or 15 per cent interest, what do you think the people would say to a proposition like that?

MR. WALKER‑I think if the farmers themselves were getting the benefit, and it was a mutual concern I do not think it would be anybody else’s business. That is the situation. Here are these concerns getting from themselves out of the borrowers these rates of interest, it is impossible for that to be so in a properly managed Building and Loan Association.  Why? Because the borrowers as well as everybody else has got as much interest in the amount of money received whether interest or anything else, as anybody else in the Association–it is a mutual concern.

MR. PILLANS‑Is it not a fact that in these mutual concerns known as Building and Loan Associations, the borrower, as these gentlemen style him, is a person not expected to pay back the principal, but it is paid by the accumulated profits and interest.

MR. WALKER‑ Of course the gentlemen claim that they ought to pay legal rate of interest. That is all impossibility where the scheme is for the amount to be paid back monthly or annual installments which of course of time, by reinvestment will cancel the debt.

MR. MACDONALD‑I have had some little experience in this matter and it seems to me that the opponents of the minority report have overlooked or forgotten the decisions of the Supreme Court in reference to these Associations, and the contract made by


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CONSTITUTIONAL CONVENTION, 1901

the parties that deal with them. They are stockholders or mortgagors or debtors, as they are called, as the occasion may arise. The difficulty about the proposition is this, that our Supreme Court has repeatedly, within the last year or two, decided substantially that these corporations are far away and beyond the law in any respect, and any one familiar with the decisions in that regard will bear me out in that statement. The Supreme Court has decided and said in substance that these are had contracts, but they are based upon legislative enactment, and they will not relieve the parties that make them. They have decided that when a man goes to one of these Associations and asks for a statement of his account and gets it, and he denies the correctness of that account and files his bill in a court of equity, for the redeeming of his mortgage alleging that the full debt has been paid, that he cannot get out because he has made such a contract as this and that character of contract is based upon the statute.  Now that is the character of privilege granted by the legislature of Alabama to these institutions, that when a man borrows money from there becomes indebted to them, he absolutely belongs to them and cannot even redeem his own mortgage except at the kind permission of this company. It is said by the gentleman opposing the minority report that these institutions were created for the benevolent purpose of allowing a number of people to get together and mutually aid in building homes— a very benign and benevolent purpose, but one entirely departed from by these institutions. Every one of them of any importance whatever in this State, issue what they call preferred stock. In other words they borrow money from large investors at 8 per cent or more and the purpose in lending the money is because they can get a larger rate of interest and better security than they can get anywhere else, and they prefer preferred stock, and this rate of interest on their money is taken out of the profits of the business, whereas their contract with those who borrowed money to build homes is that their delfts are paid out of those profits, and that thereby by this action the profits which should go to the payment of the stock, and ultimately to the payment of the debt are diverted from their original purpose and go to the men who loan the money.

When the man who borrowed money goes to get a statement, they will tell him they have paid out in interest immense sums to those who loaned them money.

MR. BOONE‑ Under the operation of these associations, say a man made a loan on his house of $1,000, and he took stock after he had paid off the amount loaned, does he not have to keep on paying?

MR. MACDONALD ‑Absolutely, there is an indefinite time for their collection of seventy-two months, or whatever they chose to put it in their alluring prospectus, or promise to the borrower,


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which they say is an estimate. As was said by the learned Chancellor of this district in a case before him, that if they were correct in the proposition, the borrower was entirely at their mercy that the payments would go on indefinitely and never terminate.

MR. PILLANS–Was the gentleman of counsel in that case?

MR. MACDONALD‑‑ Yes, and no man knows letter how a shoe pinches than the man who wears it, he knows it better than any one else. Yes, and I will say further than when I addressed the Supreme Court in the application for re‑hearing in the case that the gentleman alludes to, I stated to the learned tribunal that it was well to know whether the building and loan corporations were far away and beyond, the reach of the law anywhere, and could not be controlled. I asked that court whether the mortgagor who had mortgaged his property to this corporation was so different from any other mortgagor that he could not get redemption. They said yes, under the statutes of this State, and under the law of that contract. The gentleman had talked of the benevolent operation of these building and loan association, when the newspapers of the whole world two or three years ago were filled with accounts of the scandals created in England. And what have they done here? I don't know the successful institution, there may be some, and I understand there is one in Birmingham and that they deserve all praise. It is suggested here that this is a legislative matter, one that ought to be left to the Legislature. Well, it seems that when a man wants to get rid of a proposition before this Convention, he suggests that it be left to the Legislature where it has been left for the last twenty years. What are we here for, but to limit the Legislature in their grants of power; what are we here for, but to say you shall not grant to any corporation any immunity or privilege beyond that which another man gets? What sanctity attaches to these particular corporations that they are afforded the right to charge from 12 to 14 per cent, and the limit is hazy, if anybody knows how far it goes, that they should have the right to charge 12 or 14 per cent, and absolutely say when the debtor shall cease payment, when no other corporation or individual in the State of Alabama is granted such monstrous and extraordinary power?  Why, there are men in this Convention who would  revolt if the suggestion is made that a bank should have this power, and yet it is said because this is an agency, an aggregation of poor people wanting to build houses, gathered together to help each other, that we should grant this power, when it is known, and the Supreme Court asserts it, that it is a power to go into the money markets of the country and borrow money at 8 per cent, and turn around and lend it at 14, stopping a large quantity as it goes through for the managers and officers of the corporation.


4537

CONSTITUTIONAL CONVENTION

MR. PILLANS‑Is not the evil you have discovered in this well known co‑operative system, the evil that grows out of their being allowed to issue preferred stock and borrow money?

MR. MACDONALD‑I think to a great extent that is one, but under the law in force they can do it.

MR. PILLANS‑ Then what we want to stop is not taking the interest and part of the principle monthly, but to stop them from borrowing money to lend to their stockholders?

MR. MACDONALD ‑No, sir; if they are limited in the amount of interest they can charge other people, they will not be willing to borrow money at 8 per cent, because they cannot make this immense profit out of it.

MR. PROCTOR‑ Mr. President—

MR. PILLANS‑I suggest that the entire debate almost has been conducted from that side of the house. The gentleman from Jackson has already spoken upon the proposition.

MR. HOWZE‑I raise the point of order that the gentleman has made one speech upon the question.

THE PRESIDENT‑ The point of order is well taken.

MR. PROCTOR‑I would like the gentleman to withdraw that. This is the second speech that I have made upon this floor, and I am willing afterwards to yield to the gentleman from Mobile.

THE PRESIDENT‑ The gentleman from Jackson asks unanimous consent to make a few remark. The Chair hears no objection.

MR. PROCTOR–Now, the entire argument on the part of the building and loan people in this case seems to indicate that this minority report is striking solely at building and loans. There is not a word said in the ordinance about building and 1oans. If building and loans are the only corporations that are doing this business, why, then of course, they are the only ones that come under the ban of this section. If there are other corporations that are charging more than that, they, likewise, come under this section, but no corporation that is not doing the business at a usurious rate of interest is affected by it. Now, the contention of the minority Committee is that building and loans, or any other corporation, ought to be put down like the plain people, charged the same rate that any other individual in the state has to abide by. Now, the gentleman from Madison said something about that it would hurt the bank. Mr. President, under the law as it stands now, and the gentleman from Madison will bear me out, the banks are allowed to charge but 8 per cent.


4538                                          

OFFICIAL PROCEEDINGS

MR. WALKER–I beg the gentleman’s pardon.  I said nothing about banks that I remember.

MR. PROCTOR–I understood the gentleman, or was informed, but some gentleman on that side intimated that private banks charged possibly more than 8 per cent interest.  If he went to the bank and borrowed one hundred dollars and the bank told him it would charge 2 per cent per month, if that statement was made to me, and I make the contract, it is my duty to walk up and pay that 2 per cent interest.  If the building and loan associations were doing the same character of business with their clients, and not getting them in by delusive literature and charging them from fifteen to twenty-five per cent, representing in their literature that they were not charging but 6 per cent, then I would say to stand to the trough and take their medicine, but where the literature goes out and tells the poorer class of people, many of them not able to investigate for themselves, that they are getting the money at 6 per cent., and women, too I dare say, because the case I quoted from this morning was a woman.  It is wrong.

It is not right and just, and if the Convention takes time to study the literature of these associations, and I think the home companies as well as the national ones, they are all doing business under the same law, they have the same privileges and powers, and they can practice their rascality just as well.  Possibly there may be one or two Building and Loan Associations in Alabama who are doing a fair, legitimate business, but it is because of the honesty of the men at the head of them, and not because they have not the power under the law to act the rascal with the borrower. Another thing they tell us that an individual won’t lend money at 6 per cent. to be paid back in monthly installments.  Who is the beneficiary of the money being paid back by the month?  It is not  the borrower, because he pays on the principal from the first day to the end, and does not get any credit for the payment, he don’t get credit for the partial payments, the beneficiary is the Building and Loan Association.  Then how can they come up and argue to us because of the fact that they receive these slow payments by the month that it is helping the poor man and not the Building and Loan Association.  In their literature they say they are doing a great business.  I would like to see any corporation or association that is making this unlawful charge that would not be in a healthy condition of business.  Turn over to the rear end of the memorial and you will find a number of affidavits where fellows have invested in them and have come out all right.  How many do you find that have borrowed money and come out all right–one single, solitary one, and who is he, a man of means because he says in that same affidavit that he not only borrowed but he was an investor.  Well, if a man has money to put in there for six or seven years, he certainly has plenty of money and only borrowed to get some other poor fellow in not so fortunate as himself.  Now I claim, Mr.


4539

CONSTITUTIONAL CONVENTION, 1901

President, that the borrower the very moment they get their money, they are no longer a member of  the Association, there is no mutuality between them. Whenever they borrow they are required to transfer their Certificate back to the Association. What else are they required to do, required to pay all the expenses for abstracts, and is compelled to pay the insurance just so long as the mortgage remains in force, the association takes no risks at all, and then splitting the principal in two, yet he is paying on the total amount ever since the loan was made.  Who is paying the lobbies ever since this question has been raised here— they are business men and good lawyers, certain of them I know.  Why have they left their business, and who pays them–these poor borrowers are paying the expenses of the lobby to defeat this matter and put it upon the table, or somewhere else. I will say just one more word, and then I am through. I say that the borrowers cannot come here, but they are represented by letter and that is the only way they can get here.  These fellows that belong to the association as secretaries, treasurer, attorney and directors they incur these expenses out of an expense fund which is as big as any other fund and they can send representatives down here.

MR. GRAHAM (Montgomery)‑The misfortune  which has marked the line of the argument those who favor the minority report is that they brand all classes of Building and Loan Associations with the same iron. It is well known to every lawyer in Alabama, and citizens of the State, that there are two classes of Building and Loan Associations in this state. One is known as national associations whose business extends beyond the confines of the State in which it is organized— two or three associations, possibly more, were organized in Alabama–numbers were organized in the North and in the Northwest, they extended their business over the State of Alabama and these are the associations and these are the causes which led to this debate in this Convention. Unfortunately, Mr. President, for some of those who are in this Convention, they were the attorneys, or local agents, of these foreign associations who solicited for business and those with whom they were successful have lost by mismanagement and they are here attempting to reform the wrong which they have caused.

MR. BOONE‑ Will you please name the men. When you make a broad statement like that you ought to name them.

MR. GRAHAM‑I desired to ask a question of the minority Committee this morning and they refused to permit me, and. I propose to consume my whole time without being interrupted. It would he manifestly improper for me to name any one in this Convention; that I would not do under any circumstances. There is not a man on the floor of this Convention but for whom I have the greatest respect, that he was unfortunate and was the cause of his clients losing money was his misfortune and not his fault,


4540                  

OFFICIAL PROCEEDINGS

but he makes a mistake when he attempts to engraft an amendment to this report for the purpose of trying to cure a wrong which he was instrumental in committing. Now my friend from Jackson says that he has the papers in his hands to show parties who have suffered by reason of these Building and Loan Association. I have in my hand, Mr. President, and I introduce them at this time because I may want to talk about them hereafter. Here are statements, four or five from the county of Jefferson, to which are signed 113 names, which read as follows: "'That the following citizens of Jefferson Comity being borrowers front Building and Loan Association of that county are perfectly satisfied with the terms on which loans were made. There are three others of the same character, and one from Morgan County in which the subscribers state that the undersigned citizens of Morgan County. Ala., being; borrowers from Building and Loan Associations of that county are perfectly satisfied with the terms upon which loans were made. That is a contradistinction and set-off to the remarks of the gentleman from Jackson. There is a class of Building and Loan Associations in Alabama known as home associations, that is, those who engage in the business of lending money in the locality in which they are organized and where their principal office is located.

In the city of Montgomery we have two of those.  They are prosperous.  They have been prosperous from time of their organization, and we have never, down to this time, in relation to either one of those institutions, heard a single solitary complaint of the manner in which their business was connected.  My information is that there is one in the town of Tuskegee,  one in the city of Birmingham, one in the city of Decatur and others in other cities in Alabama, which have been conducted by home men, and not a word of complaint has ever been made of them.

I define the two classes in order that the Convention may draw the distinction between them.  If you brand the national associations, which you may possibly have the right to do, is that any reason why you should brand the home associations?  Is it right that you should say to these associations which have conducted their business right and honorably, because some concern has come into Alabama and conducted its business dishonestly, we will class you as dog-tray among a crowd of scurvy curs. This Convention is assembled here for loftier purposes and loftier motives.  We are here to protect the whole people of the State of Alabama, and to brand none of them because they happen to have names similar to those of others denounced by members of this Convention and people on the outside as rascals.

The conduct of the business of these associations is entirely different from that of any other business ever known.  There may be associations with other names conducting business in the


4541

CONSTITUTIONAL CONVENTION

same manner, but they are to all intents and purposes building and loan associations. There is no other class of business on the earth that conducts its business in the same way that building and loan association do. It is authorized by law, by the Legislature of the State of Alabama, and by the Legislatures of other Great States of this Union, and it is idle to say that whenever Alabama, or its Legislature, has authorized the doing of a particular business, and other States have authorized the doing of a similar business that that business is rascally and results in highway robbery.

Their business is conducted by men paying a small amount per month per dollar on the stock for which they have subscribed. And while I think of it I will answer one question propounded by the gentleman from Jackson. He said: "Does not every man on this floor know that a man surrenders his stock when he makes a loan from a building and loan association?" I answer him in the negative. The stock is required to be transferred as collateral security to the association for the payment of the money which is borrowed, s an additional security to the mortgage which may be made in behalf of the association. The stockholder has a right to vote that stock at all of the meetings. They do it at all of the meetings whenever they may happen to be present, and yet my friend would have vote believe that when they borrow money from the associations they absolutely wipe out the stock they have in it. Those are the facts.

These men get together and carry on a mutual business. They put in so much money per month. When they borrow, they have to pay interest on the money; they pay so much premium per month on the money, and should they fail any month to make payments, in order that those who may keep up promptly with their clues should not be permitted to lose by reason of those who are behind, the recalcitrant ones are made to pay a fine which is just and proper. If I borrow from an association they calculate upon every dollar a certain amount of profit. If I fail to pay dues and interest at the time it falls due, then I cause this man and that man, and that one, and others to suffer depreciation in their stock by not complying with my duty under my contract. That is the manner in which the business of these associations is conducted.

This committee gave this matter very mature consideration. It was one of the earliest matters that we had before us, and we considered it almost daily that is, at almost every meeting of the committee, and the result was that we refused to put anything in the report, and the minority submits the report we are now considering.

Mr. President, it is not necessary for every man to go to a building and loan association. It is not necessary for rich men like my friend Long from Butler to do so.


4542                                          

OFFICIAL PROCEEDINGS

MR. LONG‑I deny the allegation.

MR. GRAHAM‑I defy the allegation. He may not be rich, but in comparison to a certain class of men who own stock in these associations he is a millionaire. I know that there are hundreds of homes that have been built in the Capital City of Alabama by poor men through the aid of these associations, by the addition of a small amount of money to the rent which they were paving. In the course of six or seven, or eight years, or the time of maturity, they own their homes clear of all indebtedness, and the record is cancelled in the office of the Judge of Probate.

THE PRESIDENT‑ The time of the gentleman has expired.

MR. HARRISON‑As the majority of the committee have not consumed much time, I ask that the gentleman who represents the majority of the committee may have his time extended ten minutes.

Upon a vote being taken the time of the gentleman was extended for ten minutes.

MR. GRAHAM‑ Mr. President, I am very much obliged to the Convention. I have not been upon the floor of the Convention often enough to bore any man on it, and I am sorry that I am in a position now where it is probable that I do, but I feel that I am speaking in the interest of the poor people of Alabama who are interested in these associations, and it is the first opportunity that I have had to do so.

MR. OATES‑ Bore the fellows on the other side.

MR. GRAHAM ‑ But still I have some friends upon the other side, but I don't like to bore them, though they may differ with me. For instance I don't like to bore my friend Boone.

My colleague, Macdonald of Montgomery virtually admits that the preferred stock is the cause of the disaster that was overtaken building and loan association; in Alabama. I agree with him to a certain extent that his statement is a fact, but the gentleman cannot name a local association that has issued preferred stock. It is issued by the so-called "scurvy dogs," the national associations. I find there are about twelve associations doing business in the State of Alabama, two of these are national associations. The balance are home associations. But one national association outside of the State of Alabama has taken out its license this year and it is in the hands of a receiver. There is but one Alabama national association in existence in this State today, and my information is that it is in course of liquidation. Then we have nothing left upon which to operate, if we insert the minority report in the Constitution.


4343

CONSTITUTIONAL CONVENTION, 1901

My friend also says that whenever a man opposes a measure it is a question of legislation. If he is in favor of it, it ought to go into the Constitution. If he opposes it, it is a question of legislation and ought to be left out. There is a great deal of truth in the statement made by my colleague, but this is one instance where it should be left to the Legislature. It is not a matter of principle, but it is a matter of policy, and that policy should be dealt with by the General Assembly, and it will deal with it. But he seems to fear the law-making body, he seems to fear the legislature. I say to him as Voltaire said in his life of Charles the Twelfth: "Unfortunate is the country whose King loves the singing of ballets." I say, unfortunate is the country, whose people fear its General Assembly.  I, for one, do not fear the General Assembly of the State of Alabama. As was said by the distinguished gentleman from Tallapoosa on the floor of the Convention the other day, in many respects the legislature is the peer of this body. I am not a member of the legislature, and do not propose to defend it. It is able to take care of itself.

There is but one other matter to which I desire to call the attention of the Convention. I have a letter here that was written by a distinguished lawyer of Alabama, one of the ablest young men in the State, and I desire to read it, and with it, conclude my remarks. This is a letter written by Hon. S. H. Weakly of Birmingham, to Mr. W.V.M. Robertson. It is as follows:

"Dear Sir:‑‑ At your request I submit herewith the reasons why nationa1 Building and Loan Associations have not been successful, although the local Alabama companies, have been prosperous, and have met the expectations of their investing stockholders and borrowers. For the past ten years we have represented both national and home companies, have conversed freely with officials of both, and have had an excellent opportunity to observe their workings. In addition to this, I have been a stockholder with very satisfactory results in a home company, which more than met all my expectations.

“By reason of the fact that the national associations have covered such an extended field, and had to rely upon valuations and appraisements made by local people, who nearly always had an exaggerated idea of values, they were induced to make loans often times for large sums, far beyond the point of security and safety in the matter of values.

“I have in mind one case where a national company of Minneapolis, Minn., loaned $7,000 on a piece of acreage property near Birmingham on which loan they never collected from the party a cent of interest and in which case, after several years of litigation to secure the property, they sold it for $2,000, thus losing more than $5,000 on that particular loan. For the same reasons the same company suffered larger losses in other cities in this State."


4544                  

OFFICIAL PROCEEDINGS

Why don't you fellows that are opposed to national building and loan associations applaud the loss of the Minneapolis Company? He says further:

"Another embarrassing feature in reference to the national associations has been that there were conflicting rules and decisions upon the questions of law involved in the Building and Loan Association contract in the several States in which they did business. In some States the contract was sustained, and in others it was not sustained according to its terms. The result was that the general uniformity of the whole plan was destroyed, producing confusion and consequent loss.

"For these reasons the officials of the national associations have freely admitted to us that the plan was too far-reaching and extensive, and in actual practice it was a failure. As a result, investing stockholders in those associations did not realize the profits they expected, and borrowers also suffered considerable losses, in that the expected profits were not earned. Hence it required a much longer period to mature their stock than was anticipated. thereby largely increasing the rate which their loan actually cost.

"The local associations in Alabama have confined themselves to a much narrower domain and the principles of law governing their contracts have been well settled, and the officials of these Companies have been able to keep the amount of the loans at a fair proportion of the actual valuation of the property offered as security. 'The result has been that these associations have prospered, they have enabled many small owners to obtain homes upon easy monthly payments, and the profits which were earned have enabled them to mature their stock within a reasonable time, thus keeping down the rate of interest to the borrower.

"In other words the difference between the two associations is simply the difference between failure and success."

Just one word more and I am done. I ask the members of the Convention to keep in their minds, when they vote upon this proposition, the distinction between national associations and home associations; and ask yourselves whether or not you are willing to strike down these associations that are doing good in Alabama, and thereby cause loss and harm to the poor people who have borrowed money from them. Are you willing to do that? If so vote for the minority report. If vote are not willing to do that, vote against it. I move to lay the report of the minority upon the table.

Mr. Blackwell here took the chair.

MR. PROCTOR‑I call for the ayes and noes on that proposition.

The call was sustained.


4545

CONSTITUTIONAL CONVENTION, 1901

MR. CHAPMAN‑ What is the question now?

THE PRESIDENT PRO TEM.‑ The motion is to table the minority report. Those in favor of tabling the minority report will say aye and those opposed, no, as your names are called.

Upon a call of the roll the vote results as follows:

AYES

Messrs. President,

Hood,

Phillips,

Almon,

Howze,

Pillans,

Ashcraft,

Inge,

Pitts,

Banks,

Jenkins,

Reese,

Beddow,

Jones, of Bibb,

Reynolds, of Henry,

Bethune,

Jones, of Hale,

Rogers (Lowndes),

Blackwell,

Jones, of Montgomery,

Rogers (Sumter),

Brooks,

Jones, of Wilcox,

Sanders,

Browne,

Ledbetter,

Searcy,

Burnett,

Lomax,

Selheimer,

Burns,

Long, of Walker,

Smith (Mobile),

Cobb,

McMillan, of Baldwin,

Smith, Mac. A.,

Cunningham,

McMillan (Wilcox),

Stewart,

Davis, of Etowah,

Martin,

Stoddard,

Dent,

Merrill.

Tayloe,

deGraffenreid,

Miller (Wilcox).

Thompson,

Espy,

Norman,

Vaughan,

Ferguson,

Norwood,

Walker,

Foster,

Oates,

Weakley,

Graham, of Montgomery,

O'Neal (Lauderdale),

Weatherly,

Grant,

Opp,

White,

Grayson,

Parker (Cullman),

Williams (Marengo),

Haley,

Parker (Elmore),

Wilson (Clarke),

Handley,

Pearce,

Wilson (Washington),

Harrison,

Pettus,

TOTAL,‑74

NOES

Barefield,

Glover,

Proctor,

Bartlett,

Heflin, of Chambers,

Reynolds (Chilton),

Boone,

Heflin, of Randolph,

Sanford,

Bulger,

Hodges,

Sentell,

Byars,

Howell,

Sorrell,

Cardon,

Jackson,

Spears,

Chapman,

Kyle,

Spragins,

Coleman, of Greene,

Long, of Butler,

Waddell,

Davis, of DeKalb,

Macdonald,

Whiteside,

Duke,

Malone,

Williams (Barbour),

Fletcher,

Moody,

Winn,

Foshee,

Muphree,

TOTAL‑‑36


4546

OFFICIAL PROCEEDINGS

ABSENT OR NOT VOTING

Altman,

Greer, of Perry,

NeSmith,

Beavers,

Henderson.

O'Neill, of Jefferson,

Carmichael, of Colbert,

Hinson,

O'Rear,

Carmichael, of Coffee,

King,

Palmer,

Carnathon,

Kirk,

Porter,

Case,

Kirkland,

Renfro,

Coleman, of Walker,

Knight,

Robinson,

Cornwall,

Leigh,

Samford,

Craig,

Lowe, of Jefferson,

Sloan,

Fitts,

Lowe, of Lawrence,

Smith, Morgan M.,

Freeman,

Maxwell,

Sollie,

Gilmore,

Miller (Marengo),

Watts,

Graham, of Talladega,

Morrisette,

Willet,

Greer, of Calhoun,

Mulkey,

Williams (Elmore),

PAIRED

AYES                                                 NOES

Eyster,

Cofer,

Eley,

Locklin,

So the motion to table the minority report prevailed.

MR. LONG (Walker)–I ask unanimous consent to introduce a short resolution and have it referred to the proper committee.

The consent was given.

Resolution No. 314, by Mr. Long of Walker was read as follows:

“Resolved, That the Committee on Order, Consistency and Harmony of the constitution, be authorized and directed to insert in the draft of the Article on the Executive Department relating to sheriffs, the following amendment:

“Strike out the word ‘who shall be ineligible to such office as his own successor,’ where they occur therein, and insert in lieu thereof the following words: ‘Who shall be eligible to succeed himself, but not for more than two consecutive terms.’”

“Also by adding at the end of the section, the following words: ‘And the Governor, when satisfied, may suspend him from office until the impeachment proceedings are terminated.’ “

MR. LONG–I ask that the resolution be referred to the Committee on Executive Department.

THE PRESIDENT PRO TEM.–The resolution will be referred to the Committee on the Executive Department.

Section 14 was read as follows:


4547

CONSTITUTIONAL CONVENTION, 1901

Sec. 14. .All railroads and canals shall be highways, and all railroad and canal companies shall he common carriers. Any association or corporation organized for the purpose shall have the right to construct and operate a railroad between any points in this Sate, and connect at the State line with railroad of other States. Every railroad company shall have the right with its road to intersect, connect with, or cross any other railroad, and shall receive and transport, each, the others freight, passengers and cars, loaded or empty, without delay or discrimination.

MR. WILSON (Clarke)–This section is an exact copy of that in the old Constitution. In the old Constitution it is Section 21. I move the adoption of the section.

MR. HEFLIN–And upon that I move the previous question. The main question was ordered.

THE PRESIDENT PRO TEM–The question is on the adoption of the section as read.

Upon a vote being taken, the section was adopted.

Section 15 was read as follows:

Sec. 15.  The power and authority of regulating railroad freights and passenger tariffs, the location and building of passenger and freight depots, correcting abuses and prevention unjust discriminations and extortion and requiring reasonable and just rates of freight and passenger tariffs, are hereby conferred upon the Legislature, whose duty it shall be to pass laws from time to time regulating freight and passenger tariffs to prohibit unjust discriminations on the various railroads, canals and rivers of this State and prohibit charging other than just and reasonable rates, and enforce the same by adequate penalties.

MR. SANFORD (Montgomery)–I have an amendment to Section 15.

The amendment was read as follows:

“Amend Section 15 by striking out the words, ‘Conferred upon the Legislature,’ in the fourth line of said section, and inserting in lieu thereof the words, ‘Conferred upon the Railroad Commission,’ and also to strike out the remainder of the section beginning at the words ‘whose duty it shall be,’ in line four of said section.

MR. SANFORD (Montgomery)–It seems to me that fifteen or twenty years ago, when this commission was established, it was proposed by the opponents of the commission to confer this power upon the Legislature to fix the rates and with adequate


4548                  

OFFICIAL PROCEEDINGS

provisions to compel their observance, and the advocates of the Commission and friends of the railroad companies opposed it with great energy, but finally the Commission was defeated, and afterwards it was reconsidered and adopted. I remember saying to one gentleman, who was an advocate of the Commission: "Why, you have given it no power; you might as well have conferred it upon three old women, gossiping upon the transactions of a quilting as to put such restrictions upon their conduct." He said, "Certainly, that is true. I am on the side of the Indian, and I would not have given it any power." But it so happened that the men who were appointed on that Commission were men of imperious will and great force of character, men who had purposes of their own, and they made it a more powerful institution than was contemplated by it, advocates. If you adopt this provision, you absolutely destroy the Commission, for the Legislature would have then power to do precisely what has been conferred upon the Commission, and what would be the use of the Commission at all? It would be a repeal of the Commission.  See what it says: The power and authority of regulating railroad freights and passenger tariffs, etc., are conferred upon the Legislature." That power is now exercised by the Commission, as it exists, and when you confer it upon the Legislature, what have you left for the Commission to do?" It will be absolutely an office without any power. He would be a functionary, with nothing to do except to draw his salary from the railroads. Let me read it to you : "The power and authority of regulating railroad freights and passenger tariffs, the location and building of passenger and freight depots, for correcting abuses and preventing unjust discriminations and extortion and requiring reasonable and just rates of freight and passenger tariffs, are hereby conferred upon the Legislature."

Now tell me what other matters can the Railroad Commission do except these that you have conferred upon the Legislature the right to do? It would be a useless body. If you adopt that, abolish the Railroad Commission, but I am against abolishing the Railroad Commission as it now stands because the Legislature will meet only once in four ears. How can it regulate rates of freight upon articles not yet perhaps invented or manufactured?  How can it look for four years ahead when the very articles of commerce upon which freight is to be charged have no existence? The commerce of the world is increasing, and in a few years importations will be made not now known to the commerce of America. How, then, can the Legislature fix rates when it meets only once in four years? Therefore, I insist that the amendment conferring the power upon the Railroad Commission ought to pass, and the balance of the section means nothing. It is merely a tub thrown to the whale to foot the fish. I am not the fish. Where is the canal that Alabama owns upon which you have to regulate


4549

CONSTITUTIONAL CONVENTION, 1901

the rates of freight and passenger fare? If there be such, I am ignorant of it, and I ask for information. What canal is there upon which you can fix a tariff for rates? And the rivers of the State‑-you have no jurisdiction over the rivers. My impression is that that is entirely in the power of the Federal Government.  Therefore, Mr. President, I insist upon the amendment which I have offered, striking out the words conferring the power upon the Legislature and asking that it be conferred upon the Railroad Commission.

MR. HARRISON‑I desire the attention of the Convention a moment in answer to my friends from Montgomery (Mr. Sanford), to explain what the Committee has done in making its report on this section. The present Constitution, Section 22, reads as follows:

"The General Assembly shall pass laws to correct abuses and prevent unjust discrimination and extortion in the rates of freights and passenger tariffs on railroads, canals and rivers in this State."

I know my friends have read the Constitution many times, and he ought not to accuse this Committee of throwing a tub to the whale, when your forefathers put this provision in the Constitution years ago. As you say, you are no fish. I thought you were a whale and not a succor, but so much for the tub and the whale of my good friend.

Among other things we read in the Democratic platform that no additional powers should be given the railroads, and that was a limitation, a positive requirement, and your Committee has constantly tried to adhere to that, and I say, without fear of successful contradiction, that there is no additional power conferred in this Section on any corporation, but wherever the Constitution has been changed at all it has been to the reverse of that.

MR. SANFORD (Montgomery)‑I never said it conferred additional power. I said it took away all the power the Railroad Commission had.

MR. HARRISON‑ If you are not through I will yield and give you time to finish your speech.

As is well known by delegates, the Railroad Commission is not a constitutional office. It never has been so. It was established by the Legislature by authority of the provision in the Constitution that I have read. The Legislature has perfect power, as it has been doing, to pass laws to prevent these abuses and to appoint a Commission to see that its laws are executed and carried into effect.

MR. WEATHERLY ‑ Would it not be the effect of the amendment proposed by the gentleman from Montgomery to deprive the Legislature of the power it now has to regulate that very


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matter by conferring it upon the Railroad Commission, and violating the other provisions adopted that the three departments of government shall not infringe on each other.

MR. HARRISON–Certainly.  Wouldn’t it be an infringement upon the prerogatives of the Legislature?  Now the only change that your Committee has made has been to insert, in addition to the present constitution, as I have just read it, is adding a Section embodied in the Georgia Constitution, which State has a Commission, and which a great many of the papers that came to your committee and filled the Secretary’s hands, many of them from the city of Birmingham, in a lot of type-written petitions, prayed for.  If you remember, though, it has been some time ago, they were not only written in the same language, similar to the free pass evil petitions, but most of them were printed on the same typewriter and called your committee’s attention to the Georgia Commission.  A minority of your Committee had looked in that direction and wanted something from Georgia, and the balance of this Section is a provision of the Georgia Constitution, added to ours, making it stronger against the railroads.  The Georgia legislature established the Georgia Railroad Commission to which all these petitions alluded, and after consultation, a majority of your committee believed this was not a constitutional office and never was made so by the people of Alabama, and ought not to be made so but that the Legislative, as the guardian of the people, vested with legislature rights should have the power and retain it to correct these abuses, and we thought it best not to undertake to interfere with the manner in which they had done it, for they were powerful enough, but if there was anything in the Georgia Constitution making it stronger, the majority of the Committee were willing to agree and did agree to take it as a settlement of this issue.  This does not hurt.  It adds nothing in favor of the railroads or any other corporation.  I will read it that the delegates may understand it:

“The power and authority of regulating railroad freights and passenger tariffs, the location and building of passenger and freight depots,” and we have added that to the present Constitution, because there has been some criticism that they didn’t have the power to do that.  Reading on further it says, “correcting abuses and preventing unjust discriminations and extortions and requiring reasonable and just rates of rate and passenger tariffs, are hereby conferred upon the Legislature.”  Some good friend would say, I thought they had it anyhow, but to emphasize it, we put in the very language of the Georgia Constitution: “Whose duty it shall be to pass laws from time to time regulating freight and passenger tariffs to prohibit unjust discriminations on the various railroads, canals and rivers of this State, and prohibit charging other than just and reasonable rates and enforce the same by adequate penalties.”


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I ask my good friend from Montgomery where is there any tub thrown to the whale Point it out. There is no concealment and no reservation of any right to any corporation in this report. These reports have been printed and laid upon the desks of the members---

MR. SANFORD (Montgomery)‑I will tell you. You talk about regulating freight and passenger tariffs upon canals. There is no canal that I am aware of.

MR. HARRISON‑ But we hope to have some canals in Alabama.

MR. SANFORD (Montgomery) ‑I do not know of any canals in Alabama.

MR. HARRISON‑ Maybe you don't want one. Perhaps, as I am informed, my friend has forgotten that he himself introduced an ordinance to have one dug in North Alabama.

MR. SANFORD (Montgomery) ‑Yes, sir, I did.

MR. HARRISON–If we get it, aren't you willing that we should regulate it? I wish only to explain to the Convention the action of this Committee. I say this report is stronger against the railroads and corporations than the former provision of our Constitution, and I do hope‑‑‑

MR. O’NEAL‑ May I ask a question? Is not this provision even stronger than the Georgia law.

MR. HARRISON‑ It certainly is, and I ask my good friend from Lauderdale or anybody else to compare them, and they are bound to see that it is, and I trust that this Convention will accept the report of the Committee. We copied it, and Mr. Murphree compared it, and handed it to me. I did not read it. If any gentleman denies it I ask hits to refer to the Georgia Constitution and satisfy himself. I therefore hope that the Convention will vote down the amendment. I call the previous question of the amendment.

MR. EPSY‑I ask the gentleman to withdraw the motion on the amendment.

MR. HEFLIN‑I move the previous question on the Section and the amendment.

MR. HARRIS--Do you want to speak to the amendment?

MR. ESPY‑ Yes, sir.

MR. HARRISON‑ Well, I withdraw it.


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THE PRESIDENT‑ Does the gentleman desire to speak to the amendment?

MR. ESPY‑ Yes, sir.

MR. HARRIS ‑The gentleman desires to speak to the amendment and I withdraw the motion.

MR. ESPY‑ Mr. President, yon may search this Constitution that we are now making from end to end, and you cannot find as meaningless a Section in it as this is. They attempt here to confer upon the Legislature something that the Legislature already has. What is that?  This Section says that the Legislature shall have the power to regulate railroad freight and passenger tariffs and to regulate the location and building of passenger and freight depots, the correcting of abuses, and preventing unjust discrimination and requiring reasonable and just rates of freight and passenger tariffs. Now I ask each member of that Committee if the Legislature would not have everything that they attempt there to confer, if nothing was said there at all.

MR. HARRISON‑‑ ‑They would have it, but this is a positive mandate that they shall pass them and provide penalties for a violation of it.

MR. ESPY‑ Then they would leave the right to attach penalties.  If they have the right to confer the power they have the equal right to fix penalties in the event that they fail to the power.  So this question comes back, for what purpose is the Section incorporated into this Article?  Can it be for any other purpose than to catch votes for the ratification of the Constitution?  The people, Mr. President, I know, of one portion of the State of Alabama, they expected this Convention to take some action with reference to the conferring powers upon the Railroad Commission of this State to regulate freight and passenger traffic.  This does not do it.  You might as well leave it out.  The first clause of it attempts to confer power upon the Legislature that the Legislature already possesses.  The second part of it then recommends that they shall pass laws to enforce their power.  Now what good would that recommendation do?  They say it is the duty of the Legislature to do that.  I reply to that that it is already the duty of the Legislature to do that, and yet Legislature after Legislature has met in this State and they have refused to amounts simply to child’s play.  Now they may have what is in the Georgia Constitution, I do not know; they have not what it is the Georgia law.  That much is certain.  They come here and want the Legislature of Alabama to stand between the people and the railroads and that is what your Section means.  If you are willing to let the Commissioners of the State of Alabama exercise this power, then confer it in so many words.


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MR. HARRISON‑ Does not the Georgia Section mean the same thing?

MR. ESPY‑ The Georgia Section confers the power upon the Railroad Commission. Here you put the power with the Legislature of Alabama and thereby deny the power to the Commissioners until it is conferred by act of Legislature.

MR. SANFORD (Montgomery)‑Much of that is in the Code already about the Commission.

MR. ESPY‑ You have the Commission. This does not confer power, but on the contrary restricts power to the Legislature, and power can never reach the Commission until it is done by legislative enactment and the people of Alabama so long as it remains in that condition will never get relief from the railroads of the State.

MR. VAUGHAN‑ Do you not think it would be a good idea to make the Railroad Commissioners a constitutional office?

MR. ESPY‑ Yes, if we cannot get it otherwise, I think it might be a good idea to make it a constitutional office. There is no valid objection why it should not be done. Power has been conferred upon the Commission in other State, and wherever it has been tried, it has worked well and satisfied both the railroad and the people, and the amendment offered by the gentleman from Montgomery brings the issue squarely before this Convention and that is whether this power shall be conferred upon the Legislature, or whether it shall be conferred upon the Commission, and I hope that the amendment will be adopted.

MR. CUNNINGHAM‑ Does the gentleman advance the idea that it will be safer in the hands of the Commission consisting of three, five or seven, than in the Legislature, consisting of thirty-five Senators and 105 Representatives?

MR. ESPY‑ Judging from past experience I would rather risk the Commissioners.

MR. CUNNINGHAM–And you subscribe to the doctrine. the nearer we get to a one-man government, and the further away you get from the people, the safer it is for the people.

MR. ESPY‑ Just to the Contrary, because the Commissioners might to be elected by the people.

MR. CUNNINGHAM‑ The Commissioners elected by the people would be safer than 135 elected by the people?

MR. ESPY‑ Yes, sir.

MR. CUNNINGHAM‑‑ Well, carrying out that idea, wouldn't one be better?


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OFFICIAL PROCEEDINGS

MR. ESPY‑ That is not the question under discussion. It might be better.

MR. WEATHERLY ‑ The gentleman is speaking to the amendment?

MR. ESPY‑ Yes, sir.

MR. WEATHERLY ‑ Advocating it?

MR. ESPY‑ Yes, sir.

MR. WEATHERLY ‑ Would it not be the effect of the amendment to confer these powers directly upon the Railroad Commission, and take them away from the Legislature?

MR. ESPY ‑It certainly would confer them upon the Railroad Commission.

MR. WEATHERLY ‑And wouldn't it deprive the Legislature from legislating upon these matters?

MR. ESPY‑I do not think that would necessarily follow.

MR. WEATHERLY‑ Could both bodies legislate contrarily for the same matter?

MR. ESPY ‑ Possibly not, sir.

MR. FOSTER‑ Have you read Section 3491 as to the powers of the Commission?            

MR. ESPY‑ Yes sir, I read it all.

MR. FOSTER‑ It strictly has the power in that to regulate rates.

MR. ESPY‑1 do not understand that they have the power to enforce their orders in that particular.

MR. FOSTER–Do you not know the criminal provisions upon railroads?

MR. ESPY‑ Oh yes, I understand the criminal provision.

MR. FOSTER ‑Don't you think the law is now stringent enough.

MR. ESPY‑ No, sir; I do not.

MR. MURPHREE‑I wish to state that this question of the railroad commission and the free passes are the only thing that created any, friction at all in the Committee on Corporations. I was of the opinion of my friend from Montgomery, and also from Henry, but after deliberating over the question, and looking over it and debating it time and again we effected a compromise, and therefore we make a unanimous report on both. We have agreed


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CONSTITUTIONAL CONVENTION, 1901

upon these two sections, and I would be glad for the Convention to endorse that.

MR. SANFORD (Montgomery)‑And the compromises have been an abandonment of principle, and a matter of cowardice.

MR. KYLE‑I offer an amendment to the amendment.

The amendment was read as follows:

"Amend Section 15 in line five by striking out the following words: `From time to time regulating' and insert in lieu thereof the following: `At the first session after the ratification of this constitution and from time to time thereafter, authorizing the railroad commissioners of the State to regulate.' "

MR. KYLE‑I offer that substitute to the amendment of the gentleman from Montgomery, and the object is to accomplish just exactly what the Chairman of the Committee claims he wants to do. We want to enforce the power of the legislature, and while the legislature has no means of doing it, only through the commission, we want to specify that it shall be done through the commission, and it will make the section read this way, so that every one can understand exactly what is meant :

Sec. 15. The power and authority of regulating railroad freights and passenger tariffs, the location and building of passenger and freight depots, correcting abuses and preventing unjust discriminations and extortion and requiring reasonable and just rates of freight and passenger tariffs, are hereby conferred upon the legislature; whose duty it shall be to pass laws at the first session after the ratification of the Constitution and from time to time thereafter regulating freight and passenger tariffs, to prohibit unjust discriminations on the various railroads, canals and rivers of this State and prohibit charging other than just and reasonable rates and enforce the same lay adequate penalties.

Now this Article states that the legislature shall pass these laws from time to time regulating freights, when the legislature is supposed to meet only every four years. Suppose unjust discrimination comes up, and they have to wait four years before it can be regulated. Power should be given to the railroad commission to regulate these freight arid passenger tariffs, and it cannot be done except through the railroad commission, and this amendment places it in the hands of the railroad commission.

MR. WEATHERLY‑Is not the railroad commission a creature of the legislature?

MR. KYLE ‑It certainly is.


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OFFICIAL PROCEEDINGS

MR. WEATHERLY ‑ Then under this power, giving the legislature power to do this thing, can't it authorize its creature to do this thing?

MR. KYLE‑I want the Convention no to authorize the legislature to do it, to require the legislature to do it at the very first session, to authorize the railroad commission to do it.

MR. PILLANS‑I would not the effect of the adoption of this amendment be to make the present railroad commission a, now elected and of the number now provided, a constitutional office, which it would be very doubtful if the legislature could ever hereafter change.

MR. KYLE‑I am not a constitutional lawyer and cannot answer your question.

MR. HARRISON‑ In answer, Mr. President, to certain inquiries, and an evident desire for information upon the part of some parties, perhaps not lawyers, this provision that we are amending has already been made by the legislature the mandate of the former Constitution, and I desire to read for the information of those gentlemen, Section 3491 and 3492 of the Code, who believe that the legislature have never acted and would not do it. Section 3491 reads as follows:

"Revision of railroad tariffs.‑-It is the duty of the railroad commissioners to consider and carefully revise all tariffs of charges for transportation made by any person or corporation owning or operating a railroad in this State; and if, in their judgment, any such charge is more than just compensation for the service for which it is proposed to be made, or amounts to unjust discrimination against any person, locality or corporations they shall notify the party making the same of the changes necessary to reduce the rate to just compensation, or to avoid discrimination; and when such changes are made, or when none are deemed proper and expedient, they shall append to the tariff of charges a certificate of their approval; and they shall exercise a watchful and careful supervision over all tariffs and their operation, and revise the same, from tune to time, as justice to the public and the railroads may require, and increase or reduce any of the rates as experience and business operations may show to be just; but in revising any tariff, the commissioners shall take into consideration the nature of the service to be performed, the entire business of the railroad, and its earnings from passengers and other traffic, and so revise the same as to allow a fair and just return on the value of the railroad its appurtenances and equipments."

"Section 3492. Complaints against approved tariffs, and proceedings thereon." I will not detain the Convention. Here it is in accordance with this section. They have prevented this unjust discrimination.


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MR. KYLE‑ Has the railroad commission ever exercised any of these powers?

MR. HARRISON‑ Yes, sir; they have.

MR. KYLE‑I am one of the sufferers.

MR. HARRISON‑I reckon you have never complained to them. In the last published report it says no railroad has ever refused to comply with any finding they have ever made.

MR. KYLE‑ That is all right. They pay no attention to the people.

MR. HARRISON ‑ No, because people don't go, there and complain.

MR. BEDDOW‑ Can the gentleman show where the railroad commission can enforce any rate which they propose or make.

MR. HARRISON‑ My friend from Jefferson being a lawyer understands and knows what it is.

The finding of that commission under the Alabama system is made prima facie correct, and when they fail to do it, they can go into any court of justice anywhere with the same certainty of recovery, the same as a man sues on a promissory note. In fact, if you had a law that they have always regarded, whenever complaint was made, the railroads have always obeyed it, what is the necessity to make a more stringent law when they have not refused to obey the one you have given them.

MR. BEDDOW‑ Have there not been cases where people have been injured.

MR. HARRISON‑I do not hear you.

MR. BEDDOW‑A shipper is not injured by the exaction of $3.50 more than he ought to pay on a car load of lumber; if he makes that complaint is there any way to get that matter settled without getting it in the courts?

MR. HARRISON‑ If they didn't pay it I reckon my friend or any other lawyer would be very glad to bring such a suit.

MR. SANFORD‑I would like to ask a question, if the Convention confers all of this power mentioned in fifteen upon the Legislature, which I think it has already but suppose that it has not, what use have you for a Railroad Commission, if it does everything a Railroad Commission is to do?

MR. HARRISON‑I think that is simply your opinion and not the fact.


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OFFICIAL PROCEEDINGS

MR. SANFORD‑ You tell me that the Railroad Commission can do anything mentioned in this act, I would be glad to hear it and so would the Convention.

MR. HARRISON‑I think the Convention understands the object as well as I do. I would like very much to read other provisions, but I believe the Convention understands it. The other side has been heard and I called the previous question on the section and the pending amendment.

THE PRESIDENT‑‑ The question is shall the main question be now put.

The main question was ordered.

MR. deGRAFFENREID ‑ I move to lay both amendments on the table.

MR. KYLE‑I call for the ayes and noes on that.

The call was not sustained.

Upon a vote being taken the amendments were tabled.

Upon a further vote being taken the section was adopted.

Section 16 was read as follows:

Sec. 16. No railroad or other transportation company or corporation shall grant free passes or sell tickets or passes at a discount other than as sold to the public generally to any member of the Legislature or to any officer exercising judicial functions under the laws of this State, and any such member or officer receiving such pass or ticket for himself or procuring the same for another, shall be guilty of a misdemeanor, and upon conviction shall be fined not exceeding five hundred dollars, and at the discretion of the court trying the case in addition to such fine may be imprisoned for a term not exceeding six months : and upon conviction shall be subject to impeachment, and removal from office.

The courts having jurisdiction shall give this law specially in charge to the grand juries. and when the evidence is sufficient to authorize an indictment the grand jury must present a true bill.

Any county into or through which such member or officer is transported by the use of such prohibited pass or ticket, shall have jurisdiction of the case, provided only one prosecution shall be had for the same offense: and provided further, that the trial and judgment for an offense shall not bar a prosecution for another offense when the same pass or ticket is used, and provided  further that nothing herein shall prevent a member of the Legislature who is a bona fide employe of a railroad or other transportation company or corporation at the time of his election from accepting or procuring for himself or another, not a member of


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the Legislature or officer exercising judicial functions, a free pass over the railroad and other transportation company or corporation by which he is employed.

MR. VAUGHAN‑I have an amendment.

The following amendment was read:

Amend Section 16 by adding after the word "Legislature" on the third line the following: "Members of Municipal Councils," also by adding after the word "Legislature" on line 17, the following, "or members of Municipal Councils."

MR. VAUGHAN‑ Mr. President, I have heard something said here about having been a compromise between the enemies and advocates of the free pass question. As for me I was not a party to the agreement and am not bound by it. I am then to presume that the section offered us is a compromise measure. I am opposed to the compromise of a principle. I take it that if a principle is compromised as this section is, then we have a defective section, admittedly so. Those who have contended for the principle have agreed to demand or take less than they conscientiously think ought to be incorporated in this Constitution.  I am not one of those. There are those in the Convention who sav that there is no evil in accepting a pass from a railroad corporation whenever thev can be obtained; that is in accepting a pass a man does not place himself under any obligation to the railroad. I deny this proposition. I contend that if a man in office accepts a pass, and he considers himself under no obligations to the railroad offering the pass, he is as much an ingrate as the man who accepts your private hospitality, and feels himself under no obligations for it. The fact that in the one case the donor is a railroad corporation, and in the other case an individual, makes no difference in principle. Now what are these passes granted for, and to whom are they granted. I am informed by a railroad attorney of no small reputation that railroad passes are granted for influence. That a company will not grant a pass to a person for business friendship. He must have influence? I take it that a railroad looks to the man who holds an office, legislative or judicial, for its friends. They give them passes to carry friendship. For what purpose? Why the answer is so plain that it needs to answer‑-They want their influence. That they give passes for influence and do so willingly, is clearly seen and noticed. I have no doubt that the State of Alabama, has many a time felt the influence of the free pass in its legislative bodies. But the report of the committee recognizes the evil of the pass with the members of the Legislature, and even the judicial officers of the State in their reports. It is because these officers are in position to pass upon the rights and privileges of the railway corporations. If this is so, then there is more abundant reason why an amendment incorporating members of municipal coun-


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OFFICIAL PROCEEDINGS

cils should be adopted. These officers have to pass upon the rights of railway companies in the cities and towns in Alabama; they have to regulate their use of the streets; they have to grant to them franchises down the streets, and many other important questions come before them affecting railroads. I submit the Corporations Committee has left out one of the most important classes of officers. They are in close touch with the people and the railroads, and their decisions affect more vitally the people's interest, than do even the acts of the Legislature. Now, Mr. President, there are some people who say that no matter how rigid the acts of the Legislature on this free pass question, the evil cannot be cured, and that officials will continue to use railroad passes, no matter whether the law forbids it or not. If some of the newspapers of the State have even taken, this same position, I do not deny that there is truth in the argument. I do not deny that whether a severe penalty is imposed by the law or not, there will still be some officials within the prohibition who will continue to violate the law. This same argument, if it be an argument, would apply with equal force to any criminal offense on the statute books. It might as well be said that there is no use in prohibiting gambling by law, because there would still be persons who would gamble; or that there is no use in prohibiting any other offense which is conceded to carry evil influences. We know that the criminal laws will be violated, but is that any argument why we should not pass them? Not at all. We can make the carrying of these passes an offense, and it being so recorded in our statute books, a man will not be so quick to accept one.  Nor will he do so openly or secretly without feeling like a man who has violated any other criminal statute, and has escaped the indictment of a grand jury. Now, Mr. President, I submit that the amendment offered embraces a class which ought to be incorporated in this section, and, by offering this amendment, I desire to say that I have no intention of reflecting upon the municipal officers of any town or city, any more than the Committee had when they incorporated "members of the Legislature; ‑ but I believe that the report has exempted a class who ought not to be omitted. I do not think municipal councilmen ought to be admitted if members of the Legislature are prohibited from using passes. Members of the Legislature pass upon laws regulating railroads of the State. but municipal councilmen pass upon the rights of railroads within our towns, and they are closer to us, and we feel the influence more. Now, Mr. President, I think inasmuch as one body is to be prohibited from using passes, that municipal councilmen ought also to be prohibited just as much as any other legislative body, and I do not see any reason why they have been left out of this. I move the adoption of the amendment.

MR BLACKWELL‑‑I have an amendment.


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CONSTITUTIONAL CONVENTION, 1901

The following amendment was read:

"Amend Section 16 by striking out after the word `himself in line 18, the following words, `or another, not a member of the Legislature, or officer exercising judicial functions.' "

MR. BLACKWELL‑ Mr. President and Gentlemen of the Convention: Section 16 says that "no railroad or other transportation company, or corporations, shall grant free passes or sell tickets or passes at a discount other than is sold to the public generally, to any member of the Legislature, or to any officer exercising judicial functions under the laws of this State, and any such member or officer receiving any such pass or ticket for himself, or procuring the same for another, shall be guilty of a misdemeanor, and, upon conviction, shall be fined not exceeding $500, and, at the discretion of the court trying the case, in addition to such fine, may be imprisoned for ,a term not exceeding six months, and, upon conviction shall be subject to impeachment and removal from office."

That part of the section provides that any man who procures a free pass for himself or another shall be subject to these penalties. Further on in the section, you will notice, in line 16, it says. "And, provided, further, that nothing herein shall prevent a member of the Legislature, who is a bola fide employe of a railroad, or other transportation company or corporation, at the time of his election, from accepting or procuring for himself or another not a member of the Legislature, of an officer exercising judicial functions, a free pass, over such railroad or transportation company or corporation by which he is employed."

This provides that a man who is a bona fide employe of the railroad shall have a free pass. I have no objection to that, if he has earned it as an employe of the railroad. but it says he may procure a pass for anybody else that he wants to, who is not a member of the Legislature, or who is not an officer exercising judicial functions. It denies to anybody who is not an employe of the railroad the right to procure for himself or for another a pass. The man who is a bona fide employe of the railroad, having a pass as a bona fide employe, is entitled to that pass, but there should be no privilege extended to him to grant passes for other people, simply because he is employed by the railroad, if granting passes to men whey are not employes of the railroad will influence their action. Then, as a matter of fact, why should the Committee pretend to say it is right for a man who already has a pass over the railroad and is entitled to ride on it, should have the privilege of obtaining passes for others? Simply the right to bring in as many friends as he wants to, when no one else can do it.  Deny the right for themselves and for others. That is proper, and if a man has earned a pass by services before he becomes a judicial officer or member of the Legislature, or any‑


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thing of the sort, and has paid for his pass, it is not a part of the consideration that it is given him to influence his action. It was his before election, he is entitled to it, but that does not give the right to procure passes for other people. I submit the employe under that section would be given an advantage over those who haft not earned passes by such connection or association, but as to giving other people the right, if other people would be influenced by that action. I do not think there is near so much danger in that as some people do, but he would be influenced, and I insist it is right he should not leave that influence when it is denied to others to have the right of having free passes and procuring them for others who are not officers with legislative functions or judicial functions, and, therefore, I move the adoption of it.

MR. BROODS‑I ask that the doors be closed and that the lobby be quiet.

THE PRESIDENT‑ The Sergeant-at-Arms will close the doors.

MR. BROOKS–I have all abiding faith in the potent influence of railroads in advancing the prosperity of the country. My observation and experience is that whenever any city or center of distribution is deprived of or has diverted from it some of the trade or traffic by the operation of the laws of trade through railroad transportation, that the remedy is not to antagonize railroads, but to build more railroads, and thereby to get back to counteract that by advancing into new fields, and get traffic from new quarters. Now, sir, all my life it has so happened I have been thrown in pretty intimate contact with railroad men, and I have never failed to advocate anything that was right and proper in behalf of the railroads. I have always opposed legislation of any kind that tended to be unjust to them.

I have always opposed legislation of any kind that tended to be unjust or unfair to them.  Then years experience as President of the Board of Trade some years ago in Mobile brought me in constant contact with these matters when the relations between the railroads and the public were not as systematized as they are now.  So in my career in the legislature of Alabama.  There are delegates on the floor, with whom I had the honor to serve as far lack as 1876, and the capable and experienced Chairman of the Committee on Corporations sat next to me for four consecutive sessions, and I venture to say that he will bear me out in the statement that he never knew me during that time to antagonize railroads in any reasonable or just assertion of their rights or demands for legislative enactments. Therefore in the pass question I and actuated by no feeling of prejudice whatever. While I do not propose to elaborate on the ethics of the question or resolve with casualty as to the effect of the pass giving or receiving directly or indirectly, consciously or unconsciously. I say this: Something must be


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CONSTITUTIONAL CONVENTION, 1901

done and we ought to have a provision in the Constitution that not only will be self-operative but will have some vitality. I undertake to say that the ordinance reported by this Committee is a very adroit one and a very pernicious one.  In pass giving and pass receiving there are always two parties to the transaction. One that gives and one that receives. Now if you want to get rid of this practice, if you want to uproot it, if you want an efficient system, you must put the penalty on the road which gives the pass as well as on the officers of the State of Alabama who accept them. In this respect the ordinance proposed by the Committee is not a whit better than what has been in the Constitution for the last twenty-five years. It simply says that railroads shall not give any pass but it puts no penalty on a violation of his provision and that is what the Constitution now is. We want it galvanized into life, and I have an amendment which proposes to say right there, after you say that no railroad, or its agent, shall give a pass, you go right on to say that violation of that on the part of the agent shall he a misdemeanor and he shall be punished accordingly.

Then, Mr. President, there is this to be said. While this is a very drastic provision on its face, really it is not so at all. There is no way in which you can prove when an officer of the government violates this law.

Now, I do not stop to consider the question of its being limited to members of the legislature and the judiciary. I am willing to gie that up, though I cannot see why you should make any discrimination. It seems to me that no officer of the government ought to receive a pass, and I am willing to let that go, but the members of the legislature and the judiciary are the only ones against whom the penalty is provided, and you cannot ascertain except from evidence that you must get through the railroads themselves, who have received and are using passes. Hence the amendment that I proposed, which not only provides a penalty on the railroad and its agent, for giving the pass or selling tickets below the rate charged the public, but that they shall also testify and shall be relieved from criminal or civil prosecution, if they testify that they gave the pass, and in that way and only in that way, would you ever ascertain the fact that a pass had been given.

Now, as a part of my remark, I will read the amendment, which I propose to offer when the proper time comes, if I have the opportunity. Section 16:

Sec. l6. No railroad or other transportation company or corporation or officer or agent thereof shall grant free passes or sell tickets or passes at a discount other than as sold to the public generally to any member of the legislature, or to any officer exercising judicial functions under the laws of this State, and a violation of this provision is hereby declared to be and shall be deemed to be a misdemeanor, but no person or officer or agent of a cor‑


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poration who Gives any such free pass, free transportation, or sells tickets for transportation at rates hereby prohibited, shall be privileged from testifying in relation thereto, and he shall not be liable to, civil or criminal prosecution therefor, if he shall testify to the selling or giving of the same. And any such member or officer receiving such pass or ticket for himself or procuring the same for another, shall be guilty of a misdemeanor, and upon conviction shall be fined not exceeding, five hundred dollars, and at the discretion of the court trying the case in addition to such fine may be imprisoned for a term not exceed six months; and upon conviction shall be subject to impeachment, and removal from office.

The courts having jurisdiction shall give this law specially in charge to the grand Juries, and when the evidence is sufficient to authorize all indictment the grand jury must present a true bill.

Any county into or through which such member or officer is transported by the use of such prohibited pass or ticket shall have jurisdiction of the case, provided only one prosecution shall be had for the same offense, and provided further, that the trial and judgment for an offense shall not bar a prosecution for another offense when the same pass or ticket is used and provided, further, that no attorney or employe of a railroad or other transportation company who, at the time of his election to the legislature, had a free pass over the line of such company shall be debarred from using the same or from procuring one for any member of his immediate family, who is not a member of the legislature or officer exercising judicial functions.

MR. LONG (Walker)--I move we adjourn.

MR. JONES (Montgomery)‑‑Will the gentleman withdraw that in order that I may submit a report on the Executive Department ?

THE PRESIDENT‑ Does the gentleman desire to suspend the consideration of the Article which is now before us?

MR. JONES (Montgomery)‑ Yes sir, it will not take but a minute.

THE PRESIDENT–Will the gentleman allow his report to be received and read as soon as this Article is disposed of?

MR. JONES (Montgomery) ‑‑Yes sir.

MR. LONG (Walker) ‑We have been here discussing this question quite a while, and it seems to me with all due respect for the Corporation Committee that reported Section 16, that it is the most unjust and uncalled for Section that have ever heard or read in my life. In the first place, our humble servant stands before you as one low enough down to be a member of the Legislature of Alabama. This Section denies the right of riding, and


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requires me to walk to come down here and represent my county in the Legislature. Others can ride with impunity if he represents a railroad, although he might have nothing more to do than to ascertain the distance from a curve on the railroad to where you find hair when a cow is killed. He is an employe of the railroad and he can ride with impunity all over the State of Alabama. Now, gentlemen of the Convention, in the name of Justice, in the name of right, if it corrupts me to ride on a railroad glass, will it not corrupt the others? I want to state that I have a substitute for his Section, and I am opposed to every principle contained in Section 17, and will offer my substitute when the time comes. I have never yet recognized that there was a pass evil. I am opposed to corporations to such an extent that I favor getting the lowest freight rates that we can command, and I am also in favor of the best transportation for ourselves that we can get, (applause), but I do ask this Convention to think of what they are called upon to vote for now, and to meet the proposition fairly. If it corrupts me it will corrupt the Governor of your State, it will corrupt the Auditor and the Treasurer, who passes upon the valuation of every dollars' worth of railroad property in tile State of Alabama. It will corrupt the man although he is a humble citizen and not an official, for he may sit on the jury ten bears afterwards and be influenced by this hullaballoo pass evil that we now hear discussed all over this State. (Applause)

Now, Mr. President, and gentlemen of the Convention, I want this thing voted down because it is wrong in principle. There is a natural enmity and jealousy between men, and I believe some local jealousy existing right here in the city of Montgomery, is causing this howl all over the State about the pass evil. I believe that like a countryman believes in preaching‑-I believe in it from book to book. (Applause)

Now this proposition is wrong. If you are going to make a man who runs for office in the Legislature from North Alabama who gets $4 a day for his work, either pay his railroad fare or walk, while you allow all the big Ikes in the State to ride on railroad passes, and many of them in private cars from here to New York and Buffalo, make them walk along with us. Put us all on an equality. That is Democracy. You, have no more right to take away from the railroads the right to give me a free pass than you have the right to take away from Dave Fleming the right of furnishing me a free meal. Now that is honest, you know it is honest, and you cannot justly advocate a measure which is proposed by this Committee. You may adopt it by force and power, but you do that which is wrong and you know that when you do it. The Supreme Court of our land has said that railroad corporations are but persons in the eyes of the law. You allow hackmen to give free rides, and you allow every other influence and lobbyist to come here and represent interests, and you deny the right to the


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fundamental law of the State that the agents and managers of a corporation cannot control it as they see fit. I never would cast another vote in my life if I considered that the people of this State were so corrupt that they were influenced by a little ticket that saves probably 2 or 3 cents a mile. A man that is that corrupt can be bought for a dollar in cash, or he can be bought with a drink of cheap whiskey.

Now I want to tell you that the people of Alabama are not clamoring against this great pass evil that you gentlemen advocate. It is not all, uprising of the people, and while the petitions have come into this Convention  that would take five hours to read, with a list of names probably long enough to reach from here up Wetumpka, yet those petitions, were gotten up and sent here, and I can go around and get up a petition signed by 10,000 men throughout the State of Alabama to hang every member of this Convention ( applause), and we will be lucky if on going home the people do not undertake to do such a thing. You know that you can get a petition for almost anything. The people have not advocated this measure. When something was said that the representatives of paper should not have free passes, there was such a howl went up that it shook our State from the Tennessee River to the Gulf.  Is a man merely because he sits in his office and calls himself "we, the people," any better than a member of the Legislature. You know that he is not. Two-thirds of this distinguished Committee on Corporations that advocates this measure, probably, are railroad lawyers, willing to make me walk but providing that they shall ride, (applause), that is their report. That is exactly what I mean.  I probably would have been with them myself on a compromise, if I had been a railroad lawyer. But I cannot hope for anything, in this respect for I am not learned in the law, but I have some judgment and I tell you, gentlemen, that this thing is obnoxious in its face. It is wrong and should not be passed, but if you do pass it, vote down these amendments and the original Section and let me offer my substitute, which puts every man in the State of Alabama who is not an actual employe of the railroad on the same footing. It provides for Methodist preachers paying a full fare of 3 cents a mile, and Baptist divines also. (Laughter)  Go to that extent if you want to do it. If this is right you have got as  much right to say to the L. and N. Railroad that they shall not extend privileges of a rate of 1 1-2 cents a mile to ministers, It this is adopted you cannot hold a Legislature, because one-half of them are preachers, and you know it.

I tell you, gentlemen, that you should think well of this. We arc drawing to the close of this session, after sitting here much longer than we should, and I do not want to put a Section in the Constitution that the people do not want, and which is wrong in principle. It is wrong principle. you know it is wrong, and I


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tell you that if you are going to apply it to one let its make it apply to all.

MR. OPP‑‑ Mr. President, the arguments of the distinguished gentlemen from Dallas and Mobile are unanswerable, because they were inaudible. (Laughter) It was not my good fortune to hear what those distinguished gentlemen said, but knowing the high character and conspicuous ability of those gentlemen I naturally infer whatever they did say was good. I did hear, Mr. President, distinctly, what the gentleman from Walker had to say. He is always exceedingly audible (laughter), and I gathered from what he said that the word "free pass" is almost as dulcet and euphonious to his trained ear as the word "Mobile" (laughter), which he eulogized in such a pathetic and sweet manner the other day.

Now, I agree heartily with much that the distinguished gentleman has said. "There can be no doubt that there is more or less evil in the issuance and acceptance of free passes, creating to a certain extent an obligation upon the part of those who accept them, but this opposition to the granting of free passes is not a spontaneous uprising of the people, but it is largely fictitious. I do not think, Mr. President, that the judiciary or executive officers of Alabama are so susceptible to corrupting influences that these little pieces of paste board can serve them from the discharge of their duty. When I stand here in the light it may be of championing free passes, I desire to say in defense of State of Alabama that I have never yet known one man who was corrupted by the use of passes.

If there is any one tiling in which the American people excel over every other people upon the globe it is their swift and instinctive detection of a humbling, and while I do not reflect upon any gentleman upon the floor of this Convention who have opposed or advocated the adoption of legislation against the issuance of these passes, nine-tenths of the delegates upon this floor recognize in their heart of hearts that all this clamor and hulleballoo, all this urging and raring about free passes is largely fictitious, as I said before, and is something that ought never to have been indulged in. However that may he as a member of the Committee on Corporations, I desire to say that this and the hundred topics or subject of Railroad Commissioner was before the Committee on Corporations and many plans were discussed. It was the desire of this committee to arrive at what the diplomats would call a modus vivendi on these questions. The opposition to Masses was ably represented by Hon. Joel D. Murphree of Pike, who knows what he wants ands who has the heaven born ability of getting it after he knows it. The matter was put off from night to night in order that it might not be said that it had been acted on precipitately, or that there was any disposition to take snap judgment on anybody.


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My friend retired from time to time and took counsel with others who held the same views as myself, and I assume, though I don't know, and do doubt I was in error as to that, that he had counsel with the distinguished gentleman from Mobile, and finally we arrived at the agreement which is reported and included in the report made by the committee. While these compromises are not binding and are not conclusive upon this Convention, nevertheless We regard it as a highly desirable and eminently proper and fit thing to do, to see if we could not arrive at all amicable understanding upon this question. Mr. President, much was conceded by those who represent the anti-railroad pass side of the case, and my friend here, my distinguished and venerable friend who will no doubt repeat it my occasion offers, or it becomes necessary, instead of being disappointed in his undertaking, said that he really got much more than he expected to get. We assume, Mr. President, that a topic which threatened to end the endless controversy, and which might divide a body of men who desired to be harmonious upon this and all other subjects, should be settled in some way, and we were heartily of the opinion that this report would meet with the concurrence and assent of every member upon this floor. It will be observed that there are stringent self-executing penalties against those who issue passes, and those who might naturally be subject to undue or corrupting influences, Surely sir, these are stringent enough, and we assume that however rapid, however unreasonable these parties might be, that this would meet their demand, and satisfy every just expectation, of those who wanted to correct what was all evil.

I assume, Mr. President, that this whole subject is understood in all of its bearings, that this is a subject and topic which ought to be disposed of amicably, if it can be disposed of in such a way.  In order that this Convention may move on to the transaction of the grave and important matters which are ahead of it, and I think.  Mr. President, inasmuch as the agreement or compromise or understanding to which have referred, was operative with respect to the preceding paragraph, it should be operative with respect to the one now under consideration.  Therefore assuming that the whole subject has been elaborately discussed that every gentleman has been given opportunity to give expression to his sentiments on this subject. I move the previous question upon this section and the amendment.

There were expressions of dissent.

MR. LONG‑‑‑‑I move to lay the section and amendment on the table.

MR. OPP‑‑ If there is objection I will withdraw it. I do not desire to shut off any gentleman from debating this or any other matter that he may desire.   


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MR. WILSON (Clarke) ‑ I move that we remain in session until we finish this article. (There were expressions of dissent.)

MR. O’NEAL‑ I move that we continue in session thirty minutes longer.

MR. SANFORD (Montgomery) ‑I move that we adjourn, it is nearly adjourning time.

THE PRESIDENT‑ The gentleman from Greene has the floor. He will proceed.

MR. COLEMAN (Greene) ‑ Mr. President, I feel somewhat embarrassed after the intimations of the President and some of the members of the Convention.

THE PRESIDENT‑ The Chair only meant we are losing time, and that we wanted to make the best use of the time that is left us.

MR. SANFORD‑I move that we adjourn; it is five minutes of adjourning time.

THE PRESIDENT‑ The gentleman from Greene has the floor.

MR. COLEMAN (Greene)‑‑Mr. President and delegates of the Convention, there are two character of law which excite the contempt if not the odium of every one.  A law which is so framed as on account of its inherent weakness that it is not effectual to remedy the evil intended, and the other is the one so drastic that on account of the excessive cruelty, or its applicability to people that ought not to be punished, and either of these cases always bring a law into contempt, and it is not capable of being executed.  But a law intended to remedy an evil, which does meet the evil, will always meet approbation. A great deal has been said about the pass evil, and those who are influenced by the carrying of passes, and those who are jealous. Whether it be considered proper or not, I think I am justified in saying that I am in a position to discus` this question without any prejudice against the railroads, and without being under any obligations to the railroads. I never rode on a free pass in my life, down to this good hour, and I am under no obligations to the railroads in any respect, but that it is not any reason why I am not willing to do justice to the railroads.  The only influence that could be affected are those which rise from the judicial position or from the legislative. There is a demand in this country that something be done, and no unbiased and unprejudiced man will deny it. It was considered a great evil even when the last Constitution was adopted, as that document will testify, for it is plainly provided there, the very provision that we have made, and the Legislature failed to give it operation. This section is intended to remedy that evil and that only, and it does seem


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to me that if you adopt this Article, you will have accomplished everything that was intended. Why should you provide for municipalities when but few in this State are reached by the railroads and the vast number of people are unaffected by this measure and are not in a position ever to be influenced by a railroad: those are provisions that on account of the harshness, always bring a law into disrepute. Mr. President, the Legislature has full authority‑

MR. VAUGHN‑I would like to ask the gentleman a question.

MR. COLEMAN‑I decline to be interrupted. I doubt if there is a municipality in the State of Alabama that has not a provision in its own charter, and if it has not, she call easily obtain it, to remove any evil that exists of that kind.

MR. WILSON (Clarke)‑ Will the gentleman yield for me to move to extend his time a moment?

There were long expressions of dissent.

MR. COLEMAN (Greene)‑‑Mr. President, I will not trespass upon the time of this Convention, because it is too impatient.

THE PRESIDENT‑ Does the gentleman consent that the Convention will stay in session ten minutes longer.

The consent was given.

MR. COLEMAN‑I do not desire to trespass upon the patience of any body of men, which seems to be the desire of the Convention, and of the Chairman, and I will move the previous question on the section and amendments.

MR. WILSON (Clarke)‑I move that the Convention remain in session ten minutes longer.

Upon a vote being taken, the motion was carried, and upon a further vote the previous question was ordered.

MR. LONG (Walker)‑I move to lay the amendments and the section on the table.

MR. OPP‑‑I move to lay the amendments on the table.

MR. BLACKWELL–I ask for a division of the question.

MR. VAUGHN-- I call for the ayes and noes.

The call was not sustained, and upon a vote being taken, the amendment offered by the gentleman from Morgan (Mr. Blackwell) was tabled, and upon a further vote being taken, the amendment offered by the gentleman from Dallas, (Mr. Vaughn) was also tabled.


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MR. LONG (Walker)–I now move that Section 16 be laid upon the table.

MR. PETTUS–I call for the ayes and noes on that.

The call was not sustained, and upon a vote being taken the motion to table Section 16 was lost.

MR. OPP–I move the adoption of Section 16 as reported by the Committee.

MR. SANFORD (Montgomery)–I move that we adjourn.

MR. JONES (Montgomery)–Before that is put, I ask leave to make a report for the Committee on Executive Department.

Objection was made, and upon a motion to suspend the rules, the Convention suspended the rules, and the report was read as follows:

Mr. President–The Committee on Executive Department, to which was referred resolution No. 314, by Mr. Long (Walker) have had the same under consideration and instruct me to report the same back favorably with a recommendation that it be passed.

(Signed)              Thos. G. Jones

Chairman

Resolution 314 by Mr. Long (Walker):

Resolved, That the Committee on Order, consistency and Harmony of the Constitution be authorized and directed to insert in the draft of the Article on the Executive Department relating to Sheriffs, the following amendment: “Strike out the words ‘and shall be ineligible as such officer as his own successor,’ wherever they occur therein, and insert in lieu thereof the following words: ‘Who shall be eligible to succeed himself, but not for more than two consecutive terms,’ also by adding at the end of section the following words: ‘And the Governor, when satisfied, after hearing the sheriff, that he should be impeached, may suspend him from office until the impeachment proceedings are terminated.’ ”

THE PRESIDENT–The resolution will lie on the table and be printed under the rules.

MR. SANFORD (Montgomery)–I move that we adjourn

Upon a vote being taken, the Convention adjourned.

__________

CORRECTIONS

In remarks of Mr. Smith (Mobile), page five, second column, commencing with the fifty-ninth line from the bottom, after the


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word “sustained,” it should read as follows to the bottom of the column:

Then after the judgment is rendered, you come back to the probate court, and there only remains to assess the damages.  Now, when the damages are assessed, you can get no judgment of condemnation until you pay such damages.  When you have obtained your judgment of condemnation, and had it affirmed by the Supreme Court (if an appeal is taken)after the appeal has been fairly decided, and you come back and get a judgment for the damages assessed, then you can take an appeal from the assessment of damages to the circuit court.

Now, before that appeal is taken, you have gotten your right of entry adjudicated.  This provision says that this last appeal shall not suspend the right of entry, provided the person seeking to condemn goes further and gives a bond to pay such other damages as may be assessed upon such appeal.  So that your right of entry is after the payment of all the damages assessed under the condemnation proceedings, and after the right to condemn has been finally adjudicated.  You have then paid the damages assessed, and the question let to be determined is only whether or not the amount of damages paid by the corporation (if it be a corporation) to the land-owner, is sufficient, and in case it is adjudicated that such damages are not sufficient, then a bond is given to pay such further damages as the land owner may be held to be entitled to. It is during the controversy over this question that you are allowed to enter upon the land after giving bond.

This being the case, there is no question between the barefooted boy and the cross-eyed woman, whereby the corporation can reject them without paying them anything for their property, for it has then been adjudicated that the corporation or person seeking to condemn has a right to the property, and the corporation has then already paid just compensation for such property, according to the assessed value thereof determined by the tribunal first trying the question, and the only other question remaining is whether or not the land owner has a right to the payment of still further damages thereafter to be assessed by a jury.  There is also a question as to whether or not the land-owner, or able lawyers representing damage suits, shall have the right to delay the advancement of progress, whether that advancement is incidental to the opening of an ordinary coal mine, such as my friend refers to, or to any other class of improvement.  The question is whether such lawyers shall be able to squeeze a person seeking to condemn into paying to them or their clients three or four times the value of the property sought to be condemned, by asserting that the company shall not go across one piece of property, it matters not how


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narrow a patch it may be, so as to reach the property beyond it unless they pay three or four times the value of the property taken, in order to prevent them by technicalities from defeating the purposes of the company by delays. Now, I say that such a proceeding is not right, and that there ought to be a provision that after the right of condemnation has been adjudicated and the value of the property assessed, and such assessed values paid, to enter upon the property, provided you will give bond to pay such further damages as may be adjudged. And I say to the gentlemen that is the 1aw in every other State in the United States that I have been able to find and that has been recognized law in the State of Alabama until this recent decision. General Pettus and Mr. Jeffries, who were on the other side of tile case, said to me.  "Smith, if we are to win this case, for God's sake make them change the Constitution about it. It will be ruinous to our people to leave it as it is," and after it was decided in his favor, he said : "Smith, don't you forget about that Constitution. We cannot stand it," and I therefore suggested the matter to the Chairman of the Committee.

____________

In the vote upon the final adoption of Section 28 of the Article on Judiciary, referring to solicitors, Mr. Burns of Dallas should have been recorded as voting aye.

______________

In the stenographic report of the proceedings of the Convention Wednesday afternoon the report fails to note that Mr. Williams (Marengo) was the President pro tem for the afternoon.

______________________