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Chapter III. Business and Politics

I now began to branch out in street railway enterprises on my own account and in 1879-just ten years after my entrance into the business as an office boy-I became a bidder for a street railway grant in Cleveland. Mark Hanna was a director and Elias Simms the president of a company which was after this same grant.

Captain Simms, as he was called, was an ex-steamboat man and a dredging contractor, a very considerable figure in the community. He was well to do, having made a great deal of money out of the dredging contracts which he secured through his hold on the city councils. He openly complained of the methods of his friends in the council somewhat after this fashion: “All councilmen want is money. Just have to go around with my pocketbook in my hand all the time.”

Largely because of his councilmanic control he became interested in street railways. He knew nothing about the business itself but relied for success on his ability to get grants. He was much more prominent in street railroad matters than Mr. Hanna at this time, Hanna being very much younger and having other business interests.

The law stipulated that new grants should go to the bidder offering the lowest rate of fare, but included also a provision (of which I was ignorant) for extensions to existing lines.

The bid of the Hanna-Simms company provided for a five-cent fare, while mine offered six tickets for a quarter, whereupon the council threw out all bids and made the grant to Mr. Hanna and his associates as an extension to their lines at the five-cent fare.

So that was the way it was done, was it?

Well, I was only twenty-five and willing to learn.

I now purchased the Pearl street line on the west side and subsequently got my various grants as extensions to that line, though when I bought it, it was under lease to Hanna and Simms and I didn’t get possession for over eighteen months.

Most of my operations in Cleveland were based on grants already in existence which I purchased from people who did not know their real value. This city looked like a good field to me for it then had eight street railroads operated by different companies and owned by bankers, politicians, business and professional men who had been successful in various undertakings, but without a street railroad man in the entire list. I thought my knowledge would give me some advantage there.

Cleveland is built on two plateaus some fifty or sixty feet above the level of Lake Erie. Each of these plateaus runs down a sheer bluff into a valley through which the Cuyahoga river flows. The river is less than 200 feet wide, but bridges three-quarters of a mile long are required to span the valley and bring the plateaus onto a level. Before these plateaus, known as the West Side and the East Side, were connected by a viaduct the Simms-Hanna horse-cars traveled down the steep hill on the west side, across a short river bridge and up the hill on the east side.

The viaduct was completed by the time I got possession of the Pearl street line.

TOM L. JOHNSON AT TWENTY-SIX"Just ten years after my entrance into the business as an office boy I became a bidder for a street railway grant in Cleveland."
“Just ten years after my entrance into the business as an office boy I became a bidder for a street railway grant in Cleveland.”

At this time all the car lines, except the Pearl street, which had its terminal on the west side, ran to the center of the city only. It cost two fares to go from one side of town to the other, passengers going east or west being obliged to change at the public square since there were no through lines. A very short ride, if it necessitated using two lines, cost ten cents also, while the authorized fare for the entire system (covering the city and extending half a mile beyond the city limits) was sixteen cents. Cleveland was not unlike other cities in this respect. Most of them had several private companies and the people who were obliged to use the various lines had to pay several fares.

One of my early street railway discoveries was that the best way to make money was to operate a through line at a single fare, and to supplement this by the transfer system where more than two lines were involved. In these days when this principle of operation is in such general use it is hard to believe that it was not always recognized, but I believe I was the first to introduce this plan of operation which I developed early in Indianapolis.

The Pearl street line had its terminal at the West Side Market House from which point to the center of the city it operated over the Hanna-Simms tracks. Passengers from the Pearl street cars were obliged to change to Mr. Hanna’s cars at the Market House and to pay an additional fare. Failing to get permission to operate our cars over the Hanna-Simms tracks we established an omnibus line and carried our passengers without extra fare from our terminal to the heart of the city in buses. This half mile of Mr. Hanna’s track which lay between the end of the Pearl street line and the viaduct was what prevented our cars from running to the center of the city.

When the viaduct was completed the city laid car tracks over the bridge though it had no legal right to do so. The State legislature not having delegated to the city the right to build, own or operate a street car line, it had no right to lay tracks even on its own property. If the street railroad company which was empowered by law to build these tracks had done so instead of permitting the city to do it, the whole street railway situation in Cleveland would have been changed and my operations would certainly have been eliminated.

To permit the city of build these tracks over the bridge was the greatest blunder Simms and Hanna ever made for it was the city ownership of this three-quarters of a mile of track that gave the city so much power in the street railway controversy which occurred years later. These tracks terminated at the beginning of four tracks in Superior street, which was free territory and which led to the heart of the city. The three-cent-fare contest running through my nine years as mayor might have resulted in final defeat for the people but for this mistake on the part of the railroad company. I say mistake on their part advisedly, for I never attributed the laying of those tracks on the viaduct to any foresight of the city council. They build wiser that they knew.

City ownership of tracks, the city’s right to allow companies the use of tracks, short-lived grants have always been the most powerful weapons in the hands of the public for resisting the aggressions of street railway monopolies.

Cleveland had all three of these advantages.

The story of that contest belongs to a much later period, but I may say here that it might have been very different if Mr. Hanna had not become absorbed in national politics. If his chief interest had centered in street railway operation in Cleveland the city would have had to contend against some sources of corruption which were fortunately lacking in our nine years’ war, for Mr. Hanna regarded politics as merely a business asset. In the early days I cared nothing for the political side of the game. My interest was in developing street railway systems relying on my knowledge of the business for success. But with Mr. Hanna and his kind street railroads were a side issue, and from the time I came into contact with him practically everything I did in the street railway business became a political question. Indeed, It was a case of playing politics or getting out of the business.

My first contests with Mr. Hanna were on the west side, but later we extended our operations and our fighting to the east side. First and last we had many bitter struggles but never any personal disagreements. I always had perfect confidence in Mr. Hanna’s keeping his word in any transaction and he never disappointed me.

We ran our buses about a year, Mr. Hanna’s company fighting every move we made, and then it happened that they wanted to renew a franchise which included that pivotal half mile of track. By this time the contest between us had become a matter of public interest and had been the chief issue in several councilmanic elections. The town was making it so hot for the council that in spite of Mr. Hanna’s tremendous personal influence and his powerful backing, the councilmen refused to grant the renewal except on condition that we be permitted to operate our cars on his tracks.

In Mr. Hanna’s eyes our victory was a reflection on the management of Captain Simms, the president of the company, or at least a sign that Simms’s power was waning, and it led to a quarrel between them. Simms was the more prominent in street railway circles than Hanna, and our success was regarded more particularly as a victory over him than over Hanna. The quarrel resulted in Hanna buying out Simms and his other partners. No doubt Hanna reasoned that if there was fighting to do in the future he would do it himself.

In the meantime I had purchased the Jennings avenue line, a narrow gauge railroad on the west side running through a low-lying section known as the “flats,” and this gave me control of two of the eight street railway companies of the city. My next move was to try to get a grant empowering me to build east side lines to be operated across the city in connection with the Pearl street and Jennings avenue lines for a single fare.

Mr. Hanna and all the other street railroad interests in the city were lined up solidly against this proposition. They contended that we could not possibly make our venture pay, that because of the length of the haul we were virtually offering to carry passengers for two and a half cents, whereas the actual cost to the company was three cents per passenger.

The real strength of the Hanna forces lay not in their arguments but in their influence with the council. Councilmen known to be on our side were spirited out of town on various pretexts. One, a railroad conductor, was suddenly sent back on his run one night to keep him away, and thus the steam railroads were drawn into the contest. Henry Everett, manager of one of the rival companies, went to Indianapolis and tried to organize against us there a fight which would divert my attention from the Cleveland situation. He failed to accomplish anything beyond giving me some extra work and a good deal of care.

Mr. Hanna was present at the council meeting every Monday night and so was I. The contest went on for a long time. By and by the odds seemed to be in our favor. Two councilmen, Crowley and Smith by name, who had always voted with the Simms-Hanna interests, lined up on our side. I could not understand why.

Finally, it occurred to me that possibly Simms might be able to throw some light on the subject. One night I hired an old public hack and drove over to his home on the west side. In response to my knock he came to the door himself – in his shirt sleeves and chewing tobacco as usual.

“Come in, Johnson, come in,” he said, showing no signs of surprise or any other emotion at the sight of me.

He gave me a chair near the stove, and taking another, sat down to listen to what I had to say. I came to the object of my visit at once, asking him to explain about Crowley and Smith. He was impassive, non-committal, almost silent for a long time, but finally in disjointed sentences I got the following from him:

“You’re a smart young feller, Johnson. Beat me, didn’t ye? Yes, ye beat me. Folks might say I ain’t very smart. Everybody knows Hanna’s smart, though. Takes more’n a fool to beat Hanna. If you beat Hanna, nobody’ll say that any damn fool could beat Simms. Ye beat me; I want ye to beat Hanna.”

So with the votes of Crowley and Smith we did beat Hanna, but without a vote to spare. Our ordinance got just the nineteen votes necessary to pass it.

Could anything show more forcibly than this incident does the game of politics as it was played in Cleveland then and as it is played in other cities? Think of a single man being able to control the votes of two councilmen to satisfy a desire for personal retaliation or revenge! Think of men elected to public office with no more conception of their obligation to their constituents, the community, than to permit themselves to be so used!

Taken all in all, that was the biggest street railroad fight of my life, and its innumerable and annoying details severely taxed my optimism many times; but after all, I had the best of it, for besides being possessed of the enthusiasm that went with my temperament and my youth (I was not yet twenty-eight), I had the popular side of the contest in my favor. Looking back upon it now, I realize that that was the real reason for my success, although at the time I actually attributed it to my own business sagacity.

That venture turned out to be the most profitable of any of my street railroad enterprises. My competitors’ prophecies that it would not pay failed dismally. Of course one of the immediate effects of my securing the franchise was to compel the other companies to follow our example and operate through lines at a single rate of fare.

That street railroad fight begun in Cleveland in 1879 was no mere battle but the beginning of a thirty years’ war, though certainly none of us then engaged in it had the slightest idea what was to come. Yet, I have always thought that Mr. Hanna anticipated many of the possibilities of the great struggle which was to follow, for it was after my first victory over him in the matter of gaining the right to operate over his lines that he telegraphed me in Indianapolis proposing a partnership and a consolidation of our interests. I wired my refusal.

When I met him the next time I was in Cleveland, Mr. Hanna asked me why I had declined his proposition, pointing out as advantages to such an arrangement his familiarity with the political end of the game and my knowledge of and experience in the street railroad business itself. My answer was that we were too much alike; that as associates it would be a question of time, and a short time only until one of us would “crowd the other clear off the bench;” that we would make good opponents, not good partners.

I never have had any occasion to modify that opinion.

As Mr. Hanna and I fought in Cleveland, so do other individuals, other interests fight in other cities. And so long as the street railways of our cities are operated by private interests so long will this unholy warfare continue. I had no conception of the character of the struggle I was engaged in then, but I know now that the cure for this evil with all its possibilities of terrible consequences to men individually and to society collectively is the municipal ownership of street railways.

A large proportion of the political evils of our cities is due to private ownership of public utilities. Private ownership lodges the power to grant franchises and special privileges in some council, legislature or other public body or official. Just as soon as a man become the owner of stock in a public-service corporation, he has an interest absolutely opposed to the interests of the city.

The more “liberal” the terms of the franchise the worse the bargain for the city and the public. The class which by reason of its position should be our best citizens is best served by the worst city government.

The merchant, the manufacturer, real-estate dealer and mechanic are all benefited by whatever will tend to reduce the cost of car fare, gas, water, garbage collection and taxes, while the owner of stock in a street railway, gas or water company is interested to in have the cost of these services as high as may be. Lawyers, bankers, merchants, all are excluded from active participation in city politics by this conflict of interests. The community is thereby deprived of the service of many of its ablest men.

Private ownership not only operates to exclude a comparatively small group of able men from public service, but it extends its influence to that larger body – the electorate, the people as a whole. By owning or controlling newspapers it is possible for the franchise corporations to mislead public opinion. They make a daily, hourly business of politics, raising up men in this ward or that, identifying them with their machines, promoting them from delegates to city conventions to city offices. They are always at work protecting and building up a business interest that lives on through its political strength. The watered securities of franchise corporations are politics capitalized.

Regulation by city or commission will not correct these evils. The more stringent the regulation, the more bitter will be the civic strife. Only through municipal ownership can the gulf which divides the community into a small dominant class on one side and the unorganized people on the other be bridged; only through municipal ownership can the talent of the city be identified with the interests of the city; only by making men’s ambitions and pecuniary interests identical with the welfare of the city can civil warfare be ended.

Municipal ownership will work betterment in service, reduce its cost to the people and purity politics by extinguishing a powerful interest hostile to good government.


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