to the northern boundary, and including all the bays, harbors, and islands adjacent to the said coast; and thence, east from the said coast, at latitude forty-two degrees north, upon and along that parallel of latitude to the place of beginning. All of which is respectfully submitted.

L. W. HASTINGS,

Chairman.

On motion, the House then adjourned to 8 o'clock P. M.

NIGHT SESSION, 8 O'CLOCK p. M.

Mr. NORTON, from the Committee on the Constitution, reported the "Executive Department, ," which was received, and referred to the committee of the whole. On motion of Mr. Botts, the House then resolved into

COMMITTEE OF THE WHOLE,

Mr. SHERWOOD in the Chair, on the report of the Committee on the Constitution. The amendment offered by Mr. Lippett, yesterday, being under consideration, as follows:

To strike out after the word "purposes," ," "and in cases where, in the judgment of the Legislature, the objects of the corporations cannot be attained under general laws."

Mr. BOTTS said: I rise Mr. Chairman, to support that amendment. I think, sir, that we have arrived at an era in the discussion of this Constitution. The questions that have hitherto been presented to this Convention, although grave in their character, are nothing at all in practical importance, compared with the question now under consideration. Those points which have been the main subjects of discussion in the original declaration of rights, although in themselves of momentous importance as great fixed principles, may be regarded as fit subjects for declamation; for it does not matter a great deal in my opinion whether they are embraced in this Constitution or not; they have become established truths. But, sir, we have now come to a question of the most vital importance to the interests of the community-a question of direct and practical importance, and one which will be brought home to every man in his daily business relations. I hope we will consider it with all the gravity and deliberation that its character demands. This Convention should be willing to spend one or two days if necessary, in the full consideration of the subject. Sir, there is not a gentleman on this floor, who has a constituency at home, who will not be made to feel the effects of his decision on this question. For my own part, I must apologize to the House in advance, for the crude remarks which I am about to make. The subject has been brought up in such a manner as to prevent me from reducing my ideas to anything like a systematic arrangement. I am in favor of this amendment simply for this reason: that the object of the original section as reported, being to limit the power of the Legislature in the creation of corporations, the clause giving a discretionary power to the Legislature, entirely destroys that effect, and grants all the power which it is evidently the object of the section to deny. Corporations may be formed under general laws, says the section, but shall not be created by special act, except for municipal purposes, and in cases where, in the judgment of the Legislature, the object of the corporation cannot be attained under general law. That is to say, the Legislature shall not erect corporations of a particular character, unless they choose to do so. Now, sir, my object is, and I suppose it was the object of the Committee, to prohibit the Legislature from erecting these particular corporations, whether they choose to do it or not; and yet from the section, it is perfectly clear that the discretion is left with the Legislature. Whatever law they may pass, is constitutional, because the question as to the necessity of the law is left to the judgment of the Legislature. There is not a judge in the land who will not be compelled to tell you that any law erecting corporations under this clause, is rendered constitutional by the act of the Legislature. There is no check contained in the section. If, therefore, we are to have this section at all, I would greatly prefer it with the clause stricken out as proposed by gentleman from San Francisco, (Mr. Lippett.) But I would prefer even to the gentleman's amendment, prohibiting the Legislature from granting any exclusive privileges to corporations at all, by special act, or any immunities not possessed by the citizens of the State generally. Corporations as they were originally known to the Roman law, had several beneficial properties. One was the power of succession, by which the property of the corporation does not become subdivided into the hands of the heirs, but remains subject to the rules of the corporation. Another was, to sue and be sued in their corporate capacity, instead of being regarded as a partnership merely of individuals. These were the useful properties of these corporations as known to the Roman law. The institution as it was known when adopted by the common law, had engrafted upon it this doctrine: that to establish a corporation was the great prerogative of the crown; and it followed soon with the numerous other prerogatives of the crown, that it was claimed by the crown ; and certain great privileges and immunities were given to these corporations. This is the evil which we have followed so nearly in our own country, and of which we have such grevious cause to complain. I propose now to deny the Legislature the power of creating them for the purposes which we do not desire, and to give it the privilege of creating them for all useful purposes. The Legislature should

not be permitted to grant exclusive privileges to these corporations; they are then not only harm. less, but they are useful. If it be the will of the House to adopt the amendment, and the section as amended, I shall propose to follow it up by another proposition, instead of the one that comes afterwards. But at present, my object is merely to put the House in possession of the principles which I propose. I am opposed to any corporations with exclusive privileges, and especially to banking corporations. My chlef object, therefore, is to crush this bank monster. I do not believe that any system you can devise here that does not secure the existence of a circulating medium of paper money, will ever put down banks. I repeat the proposition, for it may seem a very singular one to some members. To put down banks, you must give the people a paper circulating medium. For twelve years, more or less, my mind has been given to the consideration of this subject. In the year 1836-7, I witnessed the desolating operations of the banking system in the United States. My mind has been intent on the subject ever since. The result of my observation and reflection has been this-that in a mercantile community, some circulating medium more portable than gold and silver is absolutely necessary to its existence. Sir, you must give to the people a good circulating medium of paper currency, or they will have a bad one for themselves. You may make al! the provisions in the world that you choose; but if you leave a loop-hole, this insinuating serpent, a circulating bank, will find its way through, because of the absolute necessity of the community for a paper currency. How is it then that we are to effect the object?

[Here Mr. Botts read a paper, the substance of which was understood to be, that it should be the duty of the Treasurer of the State to open a place of deposit for gold and silver, and to issue certificates, of suitable denominations, dollar for dollar on the amount deposited, payable on demand, which certificates were to circulate as money, being secured by actual deposits with the Treasurer, and for which the State was to be held responsible.]

The greatest genius of the age, a bank man of the very purest water, declared upon the floor of the Senate, that the greatest evil with which a country could be afflicted, was an irredeemable circulating paper medium. I do not believe that statesman ever said a wiser or truer thing; I do not believe that any bank paper that the ingenuity of man can devise which is not covered dollar for dollar by actual capital, can be other than the ruinous system to which Mr. Webster alluded. I do not believe it is possible to pay three dollars with one. There may be some gentlemen on this floor who have had experience in that experiment; but I consider it the hardest matter in the world. Now, sir, that is the foundation of all your circulating banks. I grant you there are times, when these banks have the full faith and confidence of the community, when they can redeem with a certain portion of gold and silver; but when a foreign debt is to be paid, which has usually to be paid with the products of the country; when these products fall short, when your corn crop or tobacco is deficient, there then occurs what is called a run upon the banks. Individuals who have their debts to pay abroad, unable to purchase cotton or tobacco unless at a very high rate, find it cheaper to export gold and silver. They come upon the banks, and if, by, force of circumstances, the scarcity in the crops should be general, the banks must necessararily fail, being unable to pay three dollars with one. The consequence is, ruin and desolation are spread throughout the country. But it is not worth my while here to expatiate on the evils of bank paper. It has been stated, and I hope it is true, that a majority of this House are opposed to the system. I hope every gentleman on this floor feels as deeply as I do the ruinous effects of bank paper. I hope there is not a member present who disguises his opinions, or desires to steal through this House a bank in disguise.

But, Mr. Chairman, I fear that, without being aware of it, this vigilant enemy is near them; they may find bank men in this country, and they are the sharpest and cunningest of men. I call upon every anti-bank man in this House to weigh well every word used here. For I tell you, sir, these banks can creep through an auger hole; they can get into this country through the smallest place you ever saw in your life; and I will endeavor to show you, when I come to the proper place, that there is a clause in this bill which will admit the enemy I speak of into our midst. Mr. Chairman, I believe that the framers of the Constitution of the United States were not less aware than we are of the injurious character of bank paper. I think you will admit, if you look at the published debates of that Convention, that there was as much unanimity there as there is here on that subject. But they unfortunately fell into the error into which I am afraid we will fall, if we are not extremely careful. They thought when they had provided that gold and silver coin should constitute the legal tender, that they had forever crushed this bank monster. It did not occur to them

that any man would take bank paper when he might require gold and silver coin. But they forgot the superior portability of the paper money would induce men to do what seemed so much against their interest. Let us not forget this fact, sir, in forming our Constitution. Let us remember that we must have a paper circulating medium; that it is impossible for any individual to carry in his pocket twenty thousand dollars of gold and silver from one point to another, especially in this country where the means of conveyance are so indifferent. Let us remember more, Mr. President; what will be the result of permitting, as some gentlemen propose to do, every individual in this community to issue his own individual paper, and put it in circulation as money, depending upon his own credit for the successful result of the speculation. Sir, this question of currency is a very delicate one; it ought not to be trusted in the hands of the community. It is peculiarly the subject of legislation; it requires the protection of Government to keep the fountain pure and healthy. If you throw open this subject of a circulating medium, as I know it is the desire of many gentlemen to do; if you permit every individual in the community to issue his own paper

notes for circulation as a currency, what wlil be the consequence? You will have fifty or a hundred different currencies in the country. It is a rule in political economy, and none better established, that when there are several currencies existing, the worst will always be in circulation; for the simple reason that, if you have a debt to pay, and you have two currencies in your pocket, either of which will pass, you will always pay out the worst and keep the best, and what you will do every other man in the community will do. The worst currency will therefore, unfortunately, be in circulation, and the probability is that there will be constant failures, and all those concurrent disasters resulting to the community from an irredeemable and depreciated circulating medium. For my own part, sir, I am so far a bank man, that if this privilege is not to be denied to individuals; if individuals are to be allowed to interfere and tamper with the currency of the country; if you will not restrain them by legislative enactment, I know of but one other way, and that is the restraint imposed upon them in the United States, which is better than none, bad as it is; the restraint of a corporation imposed upon them by the Legislature. Sir, you have never attempted this experiment yet. Let it not be said that there are portions of the United States in which individuals have been permitted to emit their own paper, and make it the circulating medium. Wherever it has been done, individuals have been overshadowed by large associations, the emission of whose paper has expelled the minor paper. This must be the inevitable result. If you remove the check upon the issue of paper as a currency by corporations, you must go one step further, and remove the evil itself. You must not only prohibit corporations from doing it, but also individuals. Why not as much an evil in the one case as in the other? What are the evils proceeding from the emission of paper money by corporations which would not exist if that corporation were a partnership, or single individual? I cannot see, for my lite, how these evils would be lessened in that way. However, I am free to admit that the remarks which I am making would be more appropriate when we come to that particular part of this portion of the Constitution which treats of corporations in general, and banking corporations in particular. For the present I shall confine myself simply to the point presented in the clause under consideration. I propose to amend it by prohibiting the Legislature from granting any particular privileges or immunities to any corporations whatever. This is not merely a different wording, it is substantially a different thing; because that clause, even with the amendment of the gentleman from San Francisco, (Mr. Lippett,) does allow the Legislature to make corporations by special laws, but it does not do what I propose. I want to make a general law for all corporations; I want to prohibit the Legislature from ganting to any corporation any peculiar privileges or immunities; that is to say, if a railroad should be proposed from Monterey to San Francisco, a general law incorporates the company, or the company becomes a corporate body under a general law. Let them make the road as fast as they see fit; but do not permit the Legislature to grant them the sole privilege of this railroad for the next forty, fifty, or hundred years, as the case may be. We have all seen how unwisely this power has been used; how likely it is to be abused. I could produce instances of thousands of evils resulting from its abuse by the Legislature. I propose, therefore, to inhibit it altogether. I propose to pass a general law which will save all the expense of constant legislation on this subject. Limited partnerships may be permitted-corporations may be permitted; but what shall be the nature of those corporations? Simply those useful principles which belonged to them in their original simplicity. To that original simplicity I would return. I would bring back corporations to what they were under Roman law, and what they ought always to have remained. You have then a creature that is useful to you as a servant, instead of being to you a tyrant master. By this section, as amended, corporations may be created by special act for municipal purposes. With respect to this clause, I have only to say that I have seen myself some of the most tyrannical violations of the rights of the people result from these charters for municipal corporations. I have seen a despotic government created in the powers granted to municipal corporations. My desire is that the character of these institutions shall not be inconsistent with the republican principles laid down in our Constitution; and that the powers of these corporations, if granted at all, shall be strictly limited to municipal purposes. I have seen the most complete and despotic power given by this provision. I have seen a majority in the Legislature compel the minority to subscribe to some magnificent scheme of internal improvement. I have seen men beggared against their will in this way. For this reason I desire that these powers shall be confined strictly to municipal purposes.

Mr. NORTON. I do not propose to discuss at length all the questions suggested by the gentleman, (Mr. Botts.) I have no particular objection to the amendment proposed by my colleague, (Mr. Lippett,) to the section under consideration. I thought when the report was made, and I still think, that the section as it stands is not only just but a very proper one. It provides for the passage of general laws granting corporate privileges, and in some cases where, in the judgment of the Legislature, the object of the corporation cannot be attained by general laws, although it may be perfectly legitimate and proper, it provides that special acts may be passed. I do not believe, sir, that a body of men coming directly from the people are going to do what they know the people do not desire. They are too closely connected with the people themselves; they come too directly from the people,

and are going to return too directly to them, to do anything that in their opinion, and in the opinion of the people, is not to the interest of the community and perfectly correct in itself. I have no doubt that under this section every object of a corporation that can be attained under general laws will be so attained, and that it would be very seldom special acts of the Legislature, granting corporate powers, would be passed. But I believe such cases may arise. This was the opinion of the Committee, and this was the reason why the section was introduced. But if, in the judgment of this House, it is inexpedient to give the Legislature any power to pass special acts, I would then be willing to take the section as it stands, so amend it, and let it be passed. I am not so much afraid, as some gentlemen seem to be, of these corporations. I do not believe that they are an injury to the public; on the contrary, I believe them to be a most essential benefit, for the purpose of developing public enterprise, facilitating improvements, carrying on bu siness, and affording investments for capital, when a greater amount is required than can be commanded by single individuals or limited partnerships, as in the case of railroads, turnpikes, insurance companies, cemeteries, and numerous other beneficial purposes. At the same time I am in favor of having these corporations so created as to render them perfectly safe. I believe the section introduced in the report of the Committee, guarded as it is, will be entirely safe. I go for throwing around them all necessary restrictions. But, sir, I am decidedly opposed to the proposition of the gentleman from Monterey, (Mr. Botts.) In the first place, I see no possible good that can result from it. You declare here in the organic law of the land, that the people shall have the power to associate together for the purpose of doing any legitimate act. They have that power without declaring it in your Constitution. The gentleman from Monterey supposes a case. We wish to build a railroad from Monterey to San Francisco. I consider in that instance that it would be necessary to have an act of incorporation, granting privileges not possessed by individuals, so that the corporation might take land be longing to individuals for the use of this road, by paying them a proper equivalent. Let private individuals attempt to do this; they cannot go on your land and take an acre or foot of it unless you are willing to dispose of it. A great public benefit would therefore be defeated. Under a general law of incorporation they can take. this land by paying the proper equivalent for it; and it is perfectly right, for the public good, that they should possess this power. In such cases it is necessary, and it may be necessary in a great many more. This provision does not give to corporations, or to any particular set of men, exclusive powers. Corporations are created under general laws passed by the Legislature. It is not any particular set of men who obtain the privilege. Any persons who choose may get together and form a corporation, under general laws, with these privileges. It is perfectly right that they should possess these powers; they are conferred upon corporations for the benefit of the people; they enable persons of limited means to combine and accomplish great public works by a consolidation of capital. If you place around them such restraints as will render them safe, I can see no possible reason for prohibiting institutions of this sort. The gentleman has given us a lengthy argument on banking. There is nothing in this report to favor the system of banking. No man has advocated the banking the system on this floor. I now disclaim any intention on the part of the Committee to introduce, secretly, any clause in the Constitution that will favor that system. It is not necessary to repeat the arguments which have been urged upon that subject.

Mr. BOTTS. I expressly disclaimed any remarks of that kind, in reference to this clause. I said that banks might steal into our Constitution in spite of the vigilance of the Committee.

Mr. NORTON. I did not intend to say you made any reflection upon the Committee. In regard to restricting the powers of municipal corporations, to which the gentleman referred, I believe the subject is fully covered in section 37 :

"It shall be the duty of the Legislature to provide for the organization of cities and incorporated llages, and to restrict their powers of taxation, assessment, borrowing money, contracting debts,

and loaning their credit, so as to prevent abuses in their assessments, and in contracting debts, by such municipal corporations."

That covers the whole ground. It gives the Legislature the privilege of incorporating, for municipal purposes, towns and villages, and at the same time so to restrict their powers as not to render them oppressive upon the people. I believe then, with general laws for the purpose of granting corporate privileges, these institutions will not only be a great benefit to the corporators themselves, but to the people at large; and that they will not favor any set of men. All persons who choose can employ their capital in this way for their own benefit, and for the ben. efit of the people at large.

Mr. JONES. I merely rise to say that I am in a quandary, and while the amend. ment is being translated for the Spanish gentlemen, I will endeavor to explain what it is. I must protest against the course of my friend from Monterey, (Mr. Botts,) in making his speech this evening. If he had made it this morning it would have been all right. I think I have discovered in this article, reported by the Committee, a very fine opening for a small bank. Now, in pursuance of this idea, I have even gone so far as to draw up a fac simile of one of my bank bills over a certificate of deposit. If the bank could be got up on this principle, I have no doubt it would be a very respectable fiscal agent.

[Here Mr. Jones exhibited an etching of a bank bill, designed in pursuance of the power which he contended was conferred upon him under this clause.]

This is a bank bill to all intents and purposes, although it professes to be noth. ing more than a certificate of deposit. It is a very excellent and beautiful circulating medium; and any number of gentlemen, under the head of an association for the deposit of gold and silver, might very well make and issue such a circulating medium. No court in the country could condemn them for it.

Mr. SHANNON. I call the gentleman to order. He is not speaking on the subject before the House. The debate is on the 31st section, and not upon the section which comes up afterwards, relating to the establishment of associations for the deposit of gold and silver.

The CHAIR stated that, owing to the latitude of debate customary in Committee of the Whole, it had not attempted to impose any restraint upon gentlemen who had availed themselves of the privileges usual in bodies of this kind. The Chair considered that as one part of the subject had a direct bearing upon the other parts, it was not out of order to discuss the whole.

Mr. GWIN had always supposed that the object of a Committee of the Whole was to allow the fullest and widest discussion on all subjects appertaining to the business of the House. He desired that every gentleman should have liberty to speak his sentiments fully and freely, without the restraints necessarily imposed, when the subjects have been thoroughly discussed in Committee, and come up for final action in the House.

Mr. JONES. I hold the whole system to be embodied in the different sections. The adoption of one leads necessarily to the adoption of another. I am compelled, in discussing the subject, to take up the entire system. If I hold the system to be radically wrong, I hold that I have a right to attack it either at the tail or the head. If I choose to expose the absurdity of the beginning, I have a right to expose the absurdity of the end. I was going to remark that I thought I had seen in the amendment of the gentleman from San Francisco, (Mr. Lippett,) a complete knockdown to all speculations; but a section comes up in the rear of it, which destroys all its force. Now I have this to say, I will take this circulating medium which I hold in my hand, and make it pass, throughout the State, to all intents and purposes as bank paper, and no Court of Justice will decide it to be illegal or unconstitutional. It will be the worst and most irredeemable bank paper ever in"flicted upon a community. I can see no difference between certificates of deposit and bank paper. I should think the man who would vote for these certificates, would vote for a bank.