The Evansville daily journal. [volume] (Evansville, Ia. [i.e. Ind.]) 1848-1862, 1851-01-18
When rate of interest is established by

iiol I'D permit exceptions 10 tne rules except
in extreme cases. and then there should be
limit.
In the case under consideration. it seems to
me. that public policy points plainly to the
enforcement OF the rule withina givenIimit.
Ii might be sale. and even desirable, to per-
nit the sale of bonds, ut somewhat less Than
the par OF State Bonds, Of the same rate of
interest, but the experience Of the State ad-
monshes us that the discreet IN i'm such cases
should have lis limits defined.
1t is remarkable fact that IN every in
stance that has come under my observation,
where the power is sought 10 he given 10 the |
directors oil companies TO borrow money, or
make sales Of Bonds, without limit or reslric-
ton, that in the first instance, acts OF Incor-
poraiion have been passed by rhe Legisla- |
ture IN which no such power is given. and
that Counties in good faith have taken stock |
in said companies that subsequently amend |
ments have been made from time to time,
until now this unlimited power ia asked. Ii is
suggested with great Difference. whether the
adding Of this power. would not be violation
OF the faith upon which the people of the sew
eral counties, III their corporate name, have
heretofore taken stock in the various compan-
les Of the State.
| Ii is said that the bill referred to does not
authorize the selling of the bonds of the coun-
ties. or the hypothecaiing of them at any rate
OF interest, that may be agreed upon. While
| this is, perhaps true, it is difficult for me to
perceive the difference between giving the
power expressly, In relation to the bonds OF
the Counties, for making the same unlimited
power, applicable alone 10 the stock oil the
company. or bonds OF the Counties or ma
king the same unlimited power, applica Die
alone to the stock ofihe Company, or the bor-
~ Y ha ofn b,,
exorbitant interest, sell the bonds Of the
company al ruinous sacrifice, it must affect
the County stock. as well as that of the citi
zen. All are connected together for the well
fare OF the work. and the adoption OF prin-
chile that is calculated 10 injure the one, will
lniGre the others. The objection to this want
of limit, in the rate of interest to be paid for
= money borrowed, and in the sale of stocks, is.
that it gives power which is Liable TO great
abuse, and may involve the most ruinous con
sequences. And cannot bat think that the
Legislature in comforting such power. have
failed to consider with the requisite maturity,
all the abuses to which it is liable. We know
not who are 20 hold the places of Directors o.
these Corporations, with The right thus to OF
fer in market the stock Of the Companies, and
10 borrow money. Prudence requires that
: We should guard against every possible state
Of things that may arise.
The Internal Improvement system was un-
. dertaken, with the too confident expectation
= that the works to be constructed. when finish
:, ed, would be productive and yield ample rev
. enue to pay the interest on the debt incurred
, in their construction. That it would impos,
% no burden of taxation on the contrary tnt
y system would confer great benefits upon tn,
. State and relieve the people from the pres
sure OF existing burdens. With such ex
= pectations the obligations Of the State were
IL issued and scattered broad cast in the market
Our experience of the disastrous conse
= quences, is too recent and costly to be for
d gotten. After the suspension OF our pubiit
{ Works in 1910, and when delusion had beer
Is dispeled by the nnmistakeable fact tina
there WAS no way to resuscitate the credi
and vindicate the faith Of the State. than by
q resort 10 taxation. 1t was then that tn,
!; mode in which the obligations of the State
: had been sold was scrutiniZed, and there wa
: no sentiment more common than this that W,
!" should not pay anything on our bonds, 70
y which we had not received the money; an,
= that we should only pay on the bonds sold
e the amount Of which had been receiue;a.. a. m
=, 'ransl;lcn irnm this sentiment is rapid. to TIN
:. following lane,2 60 :; g IN the bill before US, 6" al
~ sales at n discount, the same shall remtin a
"a "a valid and binding, in every respect, as il sol
IL at par value"
.c 1t is proper it seems to me, that we brn
:, - the question to this test, and 10 assume Thu,
IN the people of the counties may be calle
70 upon to provide for the payment OF bot
y principal and interest OF their bonds by taxa
" lion.
~ From the excitement on the subject ofrai
. . roads, and the unlimited power that is nov
~ sought. by the companies of the State.
~ would appear TINT private credit is almost eX
- haus,ed; and il is now asked to exhaust pub
-, lie credit us far as possible, by offering in on
=, ~ public aud deliberate acts of Legisat on, t
pay any rate of interest however large, an
- to sell in market our credit, for any price, I
- raise money.
ID Whatever difference of opinion may exis
:, as 10 limiting the rate oil discount on bond
40 sold in the market, it seems to me. that Their
n, should be but one sentiment, in regard TO tn
20 limitation of the rate of interest.
oil Is it not possible that, in the over anxiet
:, 10 secure the means Cor the construction of
,,a favorite work, the directors or agent might b
%. induced to agree 10 such rate OF interest. a
ro not only TO be suicidal to the work itself bu
NJ by the destruction Of public credit to involv
an all others in It's ruins
M 1t is confidently believed, that no such 20
ed icy mas Ocen projected or Iostered IN any STAT
o. of the Union. And trust Indiana will nc
Of be the first to set the example.
In addition the above consideration,
ia. canrot but regard the passage of bill ir
i, volvng such important principles, on til
~. same day gifts introduction, by repeated SUI
pensions Of the rules and without reerenc
TO committee. an instance of hasty legi
- ation, which alone would Justify executiy
IT. interference.
OF JOSEPH A. WRIGHT.
"o January Sth, 1851.