The election occurred November fifth. On the seventh I sent the following letter to the Cleveland Electric Railway Company:
The passage of various ordinances by the council within the past few months, and the legislation necessary to complete some of the grants already made, indicate that the council will, in the near future, be called upon to consider matters affecting the general street railroad situation. The approaching expiration of the franchises upon many of the lines operated by your company of course required early action to provide for an uninterrupted continuance of public service.
These considerations lead me to suggest that I call a public meeting of the present members of the council and the council-men-elect to consider any suggestions your company may have to offer either to insure against confusion or public inconvenience at the date of your franchise expirations, or looking to a general settlement of the entire street railroad question. I shall be very glad to call such a meeting for the council changer at ten o’clock Saturday morning, unless you prefer a later date, in which case I shall be glad to know your preference as early an hour to-morrow as is convenient, so that he persons who would attend such conference may be informed in time.
I am assured by members of the council, and I speak for them and the city administration, in saying that we have a common desire to bring about a settlement of this question which will be just and equitable to your company and upon terms that will preserve full the public right.
TOM L. JOHNSON, Mayor.“
President Andrews accepted in behalf of his company and once more we embarked on peace negotiations. Little was done at the Saturday meeting but the Concon announced it would bring a proposition to council on the following Thursday. It did – a proposition to make a six months’ trial of three-cent fare after a twenty-five year franchise had been granted. The council rejected this proposition and tried in vain at this and future meetings to have Mr. Andrews name a price at which his company would lease its property on the holding company plan.
During the election Concon stock had dropped to forty-two, and later to thirty-seven, and by the middle of November to thirty-three dollars a share. Yet the company instead of meeting council in a conciliatory spirit at first exhibited all its old time obstinacy and a good deal of its old time arrogance. Realizing at last that the city had no intention of giving up, the Concon selected F. H. Goff, a prominent attorney as well as a good business man, a man of sterling qualities and one who inspired confidence, as its representative, to arrange the details of a settlement. At the conclusion of the negotiations these characteristics of Mr. Goff were generally understood and appreciated by the public. He began by refusing all compensation for his work, and a lawyer of his standing would have charged a private client a fortune for such service.
The council appointed me to act in a similar capacity for the city. So the administration and the council were finally put in the position for the first time of dealing with a single individual with power to act, and whose decisions the Cleveland Electric was bound to accept. Lawyers representing both sides of the contest were appointed to determine the exact date of the expiration of all unexpired franchises, engineers to appraise trackage and pavement claims, operating managers to get at the valuation of cars, rolling stock and miscellaneous equipment and so on through the various classifications of the property. All valuations were made by a committee of two persons, and when they failed to agree Mr. Goff and myself were the arbitrators. The principal points to be agreed upon were physical and franchise values of the property, and that the management should be in the hands of the holding company which should manage the street railroad for the benefit of the car riders.
For four months the negotiations between Mr. Goff and the mayor were carried on in public meetings held almost daily in the council chamber. At the end of that time Mr. Goff recommended a valuation of sixty-five dollars per share on Cleveland Electric stock and I recommended a valuation of fifty dollars per share.
At about the close of these negotiations the State legislature passed the Schmidt bill which provides that property owners’ consents are no longer needed for a new street railway franchise on a street where there is already a street car line; that new franchises may be given on such streets within one year after street car service has been abandoned or within two years prior to the expiration of a franchise; that if fifteen per cent. of the voters petition for an election within thirty days after the passage of a franchise ordinance, there must be an election, and the ordinance becomes invalid if a majority of the votes cast are against it.
If this law had been on the statutes when the Cleveland Electric’s franchises expired on Central and Quincy avenues, it would have been impossible for the Concon to prevent the establishment of three-cent car service on those streets through the medium of a consent war.
Under the Schmidt law the council was enabled to grant to the Forest City Company certain franchises without property owners’ consents, and it also made a grant to the Neutral Street Railway (another low fare company) for lines on Central and Quincy avenues.
Two or three weeks previous to this the stockholders of the Forest City had had their first meeting and I had been present by invitation, and had strongly advised them to consent to a consolidation with the Cleveland Electric under the name of the Cleveland Railway Company. I told them that in my opinion their company had served its purpose, that it had been organized to get lower fares for the people of Cleveland which was now practically accomplished, that the necessity for competition had passed and the city’s needs would be best served by one company.
Mr. Goff agreed to the holding company plan and he and I soon got together on a price of fifty-five dollars a share for the stock. Council made a security grant to the old company which was to become operative as a grant only in case the holding company failed to pay the stockholders six per cent. on the agreed value, and which gave the city the option of buying the stock at one hundred and ten dollars at any time. That the fare was to be three cents on the whole united system goes without saying.
On April 27, 1908, the Municipal Traction Company, the holding company, took charge of the lines, and inaugurated its operations by running the cars free for that one day. This free day was meant to serve as an object lesson of their victory to the people. Nothing like this had been done in any large city before – nor perhaps any place else except in Johnstown after the flood. It was like a holiday. Men and women and children rode and in spite of the crowds not a single accident happened to mar the happiness of the day.
Threefer employes were getting a cent an hour more than Concon employes so the wages of the latter were immediately raised one cent per hour, and all the men were provided with free uniforms. This made the maximum pay twenty-five cents per hour. Some of the old company’s men showed a spirit of disloyalty and insubordination immediately the Municipal Traction Company commenced its operations, and a strike was early threatened. The labor union of Concon employes had, it seems, a contract with the old company which promised a wage increase of two cents an hour providing the Concon got a renewal of its franchise. The low-fare employes were also unionized, but their charter was revoked by the international body on the ground that some of them were stockholders in the company that employed them. The charter was revoked without notice to the low-fare company which had a contract with the union. Mr. du Pont declared the entire willingness of the Municipal Traction Company to arbitrate all differences and neither he nor I believed that a strike would be called, but on May 16 a strike was called. It affected the members of the old company’s labor union only. The questions raised were:
1. Whether the agreement between the Municipal and the old Forest City union had any bearing on the agreement between the Cleveland Electric and the striking union.
2. Whether the international association had the right to revoke the charter of a local which had an agreement with the railway company without the company’s consent.
3. Was the two-cent-an-hour agreement between the Cleveland Electric and the union binding on the Municipal as lessee of the Cleveland Electric?
Violence broke out at the very outset of the strike, cars were stoned, wires cut and dynamite placed on the tracks. The strike with its accompanying necessity of operating the cars with inexperienced men, and the expense occasioned by the destruction of property was just one of the things resorted to make the operations of the holding company fail. Unfriendly newspapers abused the service, political organizations were formed to refuse to pay fares by giving conductors more work that they could do, these same men organized clubs to tender large bills in payment of fares in order to exhaust the conductors’ change. It wasn’t men with dinner-pails who offered five dollar bills in payment of three-cent fare, nor was it groups of labor unionists who crowded the cars at certain points and exerted themselves to make it impossible for conductors to collect fares, and it wasn’t workingmen either who instigated conductors to overlook fares or persistently to refuse to collect them. But all these things were done – these and many more – by some of the people who were pledged to carry out the agreement which Mr. Goff had made in their behalf.
In spite of all past experiences with the Concon, we were unprepared for these attacks. We thought a gentleman’s agreement meant a gentleman’s agreement. We were mistaken.
The Municipal Traction Company, on the other hand, was not free from blame. Some bad moves must be charged to its account, but it can never truthfully be said that it dishonestly violated any agreement or maliciously refused to abide by its contracts. Its mistakes were those of judgment.
The strike finally died by reason of the weakness of its own case. It did not have the support of the labor unions of the city and strikes instigated and aided by Privilege are never very useful to the strikers themselves nor to the cause of labor.
Of course I was blamed for everything. If the cars were too cold it was my fault, if they were too hot it was my fault. If the rails were slippery or a trolley pole broke it was my fault. If the cars were late, if they stopped on the wrong corners, if they were held up at the railroad crossings, if a conductor couldn’t change a twenty-dollar bill it was my fault. It is even said that a man who fell off a car one night exclaimed as he went sprawling on the pavement, “Damn Tom Johnson.”
Finally a referendum petition was circulated just in time to become operative before the end of a thirty-day period following the making of the grant. Republican organizations, business men’s organizations and all the combinations that Privilege could bring to bear were enlisted against this grant. At the referendum election, October 22, 1908, the grant was defeated by 605 votes out of the 75,893 votes cast. The people, in my opinion, made their biggest blunder in defeating this franchise. If they had been even half as patient with the Municipal Traction Company as they had been with the Concon all would have been well. The defects in the service of which they complained, and often justly, would have been remedied. But, as I have already pointed out the people insist on a higher degree of efficiency in a public company than they do in a private one.
There was a touch of the irony of fate in the defeat of the franchise. That the referendum should be invoked by the very interests which had always opposed it, and that the result of the first election under the law should be inimical to the people’s movement was something of a blow. But people learn by their mistakes and the good effects that have come and will come from the referendum will largely outweigh any temporary disadvantages.
One stipulation of the agreement between Mr. Goff and myself was that should our plans fail the property which had passed into the hands of the Cleveland Railway Company should be restored to the original owners, that is that the old company should take back the Cleveland Electric property and that the original three-cents lines should be returned to the Forest City. The old company refused to comply with this agreement. Instead it sought by every means to embarrass the Municipal Traction Company, urging creditors to press claims, tying up the funds of the Municipal in court and finally succeeding in having receivers appointed, though the money tied up was more than sufficient to meet all obligations that were then due. The receivers took over all the street railroads in the city and under the direction of Judge Tayler who appointed them they operated the property from November 13, 1908 to March 1, 1910.
On February 1, 1909, the fare on some of the old lines was raised to five cents. Such a raise could not be made on the low-fare lines since their franchise provided for three-cent fare. I advised charging a penny for transfers rather than raising the fare, but Judge Tayler thought the additional revenue thus provided wouldn’t be sufficient to meet immediate needs. The service was far from satisfactory and on February 6 this very significant comment appears in the Electric Traction Weekly, a monopolistic organ:
“Altogether it is a safe guess that the inconvenience in routing and the heterogeneous system of transfers and tickets will so annoy the people of Cleveland that they will force their councilmen to over-ride Mayor Johnson and grant a franchise that the receivers and the Cleveland Railway Company will accept.”
On February 27 the Federal Court at Cleveland, Judge Knappen of Michigan, sitting in place of Judge Tayler, decided that the franchise of the old company on the Woodland and West Side lines had expired February 10, 1908. This had been the city’s contention and on the strength of it a three-cent-fare franchise had been granted a year before. The old interests insisted that the five-cent-fare franchise had been extended to July 1, 1914, or at least to January 26, 1910. The receivers therefore appealed to the court to know whether they could charge five cents on these lines or were restricted to three cents as the city insisted.
Under the decision the receivers had no authority to charge a higher rate of fare than the city had granted to the low-fare company.
Judge Tayler, Attorney John G. White and the mayor were a committee endeavoring to find a way to solve the whole problem. Frequent conferences were being held. On March 26, Judge Tayler addressed the city council, saying in part:
“The streets of a city belong to the community, and not to anybody else, and cannot be acquired by anybody else; and as an incident to that proprietary interest of the community in the streets, there must be easy methods of transportation in those streets, and you cannot accomplish their suitable transportation except by the investment of large sums of money, upon which, in order to obtain it, there must be a fair return. Now there is a perfectly simple proposition, grounded on fundamental rights, in the people and in the persons who invest their money.
We have been going along here for a great many years on a certain theory of giving franchises for the operation of street railways in communities, all based upon a wrong view of the rights of both sides; so far as the people are concerned, the giving of a monopoly without suitable restraint; and on the other side such a condition of things that the necessities of their situation, the expiration of their grants at some time in the future, compelled them as business men to make the very best bargain they possibly could, with the result that scandal and injustice have from the beginning characterized a large number of street railway enterprises in all of the great communities of this country. It seems to me that the time has now come, and perhaps it never came until now, when we should reach a settlement on the foundation that the public own the streets, and that the people who furnish transportation are entitled to a fair return and a sure return, and nothing more than that. What this community wants is an ordinance that will settle this street railway trouble upon a basis which will mean that the people will get good service, and will have to pay for it not one copper more than it costs. There ought to be no grave difficulties in the way. An accommodating spirit, a spirit accommodating itself to that settlement, anxious to bring about that settlement, on both sides of this controversy, will necessarily result in a settlement of this controversy, because the differences can only arise over details which in and of themselves are not vital to the working out of a plan whereby this settlement can be reached.
Of course, we all know that if there is no settlement there must be what has been called war. But I have confidence in the purpose and in the ability of the gentlemen involved in these negotiations to come to an adjustment along those lines. It is strong because it is eternally right. How to express it in your legislation is for you to say. But I think that in the city of Cleveland we have left behind us the day when any fixed rate of fare shall be the rate of fare which the people must pay. Any rate of fare may be too high, or any rate of fare may be too low. What we are entitled to is good service at the cost of service, whether it is one cent, or two cents, or three cents, or four cents. That is the only sound basis upon which a street railway settlement can rest.”
On the mayor’s suggestion the city solicitor was then instructed by council to prepare three ordinances as follows:
1. The Judge Tayler plan providing for a sliding scale of fares so as to limit profits to six per cent.
2. A three-cent fare grant to the Cleveland City Railway, subject to its acceptance.
3. A three-cent fare grant to the Forest City Company, subject to its acceptance.
The city solicitor prepared the ordinances as directed, John G. White preparing a counter ordinance which was proposed to the council by Horace Andrews. The differences in the two ordinances were, as was to be expected, largely in the quantity and quality of the control by the city over the street railway company. While the public conferences over the settlement proposition were being carried on, the council to be on the safe side in case not settlement should be reached had passed thirteen new street railway ordinances covering all the territory over which old franchises had expired or would expire by January, 1910.On May 18, bids for new franchises on four routes were received by council from two parties. The Cleveland Railway Company bid on all the routes at five-cent cash fare and free transfers with six tickets for twenty-five cents, but no deposit accompanied the bid. Herman Schmidt, a prosperous business man and a devoted friend of our movement, bid on one route, the Payne avenue, offering three-cent fare and making a deposit of eighteen thousand dollars.
The question of a revaluation of the railway property having come up, President Andrews insisted that all stock should be treated alike, while the mayor and the council were just as insistent that the Forest City stockholders must neither profit nor lose by such a revaluation. The people who had purchased Forest City stock had rendered the community a truly patriotic service. There was nothing speculative about this enterprise, and I was determined to fight to the last ditch rather than to see their interests placed in jeopardy. It is the greatest possible satisfaction to me that when the receivership was terminated they received their back dividends in full and have been receiving them regularly ever since.
The warring between the council and the old interests went on. A three-cent fare grant was made to Herman Schmidt. The Chamber of Commerce, business men, the newspapers and the Republican organization were against the Schmidt grant and it was defeated by 3,763 votes at a referendum election on August 3. Only 68,807 votes were cast out of 80,000 expected. The people were getting tired and being humbugged by special interests.
And the newspapers – every last one of them – were joining in the hue and cry of, “settle, settle, settle,” which was raised by the representatives of Privilege. If even one newspaper had had the courage to hold out and to stand by the people to the end the result might have been different. But the influence of the counting-room is a thing mightily to be reckoned with. Newspapers at once preach the highest and practice the lowest morality. They set up the highest possible standards for everybody and everything but themselves. I am not blaming them – I am simply stating a fact.
Finally both sides in the street railway controversy agreed to leave to Judge Tayler the fixing of the physical and franchise value of the property, his judgment to be final. Almost every other point of the pending ordinance had been agreed to, but a few ordinance questions were arbitrated by him.
After a good many weeks of hearings in which I represented the city and the railroad company was represented by its president, each side now and then calling in lawyers, Judge Tayler made a slight reduction in the price fixed by Mr. Goff and myself, seeming to disregard all evidence that we had been at such pains to present to him showing that the Goff-Johnson valuation had been too high. The railroad company seemed to expect several millions increase, while I thought the company received five or six millions more that it should have had. Judge Tayler did not itemize his findings. The ordinance was approved by vote at a special election called for that purpose.
Its greatest defect is that the management is entrusted to hand that have a pecuniary interest in its failure. They can reap no profit above six per cent., and as the controlling stockholders have street railroads interests in other cities they would like the three-cent fare to fail on account of its effect on these other interests. This interest in failure however does not go to the extent of permitting them to earn less than six per cent. on the Tayler valuation for that loss would come out of the stockholders.
The traction question was practically settled before the fall election, so taxation was the paramount issue in that campaign. We directed our principal energies towards securing the election of our candidates for the board of quadrennial appraisers. This was the first election for such appraisers since the enactment of the law providing for them, and although I was defeated for mayor by 3,733 votes out of a total 80,409, four out of five of our candidates for appraisers were elected, and Newton D. Baker was returned as city solicitor.
I had been mayor for so many years that many people had lost sight of conditions as they existed before that time. Thousands of young voters couldn’t remember any other mayor, and there was a great deal of that feeling which is always manifesting itself in politics, that – “Oh, he’s had it long enough; let’s have a change” feeling, and so the wave of democracy receded and the enemies of the things we stood for were swept into power.
On December 18, 1909, after election but before I left the mayor’s chair, council passed and I signed the ordinance known as the Tayler grant with the understanding that the same was to be submitted to referendum vote. I felt most strongly that the responsibility for the settlement must rest upon the people. At the referendum election held in February, 1910, only 46,504 votes were cast, 27,307 for the ordinance and 19,197 against it. The ordinance provided for:
1. A franchise for twenty-five years with a maximum rate of fare of four cents with one cent for transfers or seven tickets for a quarter with one cent for transfers, and an immediate or initial rate of fare of three cents with one cent for transfers;
2. Profits limited to six per cent. on actual capital (including $22,923,749.53 for all existing property);
3. Rates of fare to be increased within the maximum if necessary to realize this profit, and to be reduced if not necessary;
4. The city to have complete and continuous supervisory control of operation;
5. After eight years the city may name a purchaser to take over the system at $110 per share, or it may itself purchase the property at this price at any time that the state laws permit;
6. Questions of rates of fare under the six per cent. proviso to be arbitrated.
The ordinance contains a safety clause which was fixed by an arbitration committee of lawyers of which City Solicitor Baker was one, and it provides that:
In the event that the section of the ordinance dealing with rates of fare shall fail in the courts, including the submission of the rates to arbitration, then the council shall have power from time to time to fix the rates, not exceeding the maximum. This rate must not impair the ability of the company to earn sufficient money to meet all expenses and pay six per cent. dividends; and if the company refuses to turn its property over to a purchaser, when the city so decides, then the council is given power to forfeit the franchise.
After the Tayler grant was approved at the referendum election the receivers turned the property over to the old company and since March 1, 1910, it has been operated by them under the supervision of a street railway commissioner appointed by the mayor. The man appointed to this position, Gerhard Dahl, was the Republican candidate for city solicitor defeated by M. Baker at the last municipal election.
The cars are still operating at the initial rate of fare provided in the Tayler grant, three cents with a penny for transfers.* Any disposition on the part of the company to raise the fare had been promptly discouraged by the city.
The work of our quadrennial board of appraisers (the last work for the city in which I had any share) was the best of any in the State and is the beginning of a correction of one of the worst of taxation injustices. Under the law the board was compelled to complete its labors prior to July 1, 1910. Now, for the first time since we commenced the taxation fight in Cleveland in 1901, we had the machinery for a perfect performance of the task of assessing the real estate of the city, but we lacked the time. The board was elected in the fall of 1909 and instead of waiting until the first of the year to begin its work it organized at once. W. A. Somers, who had furnished his system to us in 1901, was employed by the board as its chief clerk. The real estate duplicate as made in 1900, to which had been added the buildings erected since, was now about one hundred and eighty million dollars. When the board of appraisers got through with its labors the real estate duplicate, exclusive of such exempted property as churches and the holdings of federal, State and municipal governments, reached five hundred millions. For the first time since Cleveland had ceased to be a village was its property appraised with any degree of fairness between its owners.
To some who have followed this story, it may seem that we have achieved a comparatively small measure of success. I do not share this view. To have taken more than ten millions of dollars of fictitious values out of a capitalization of thirty millions, as we did in the street railway fight, to have established three-cent fare in the sixth city in size in the United States, and to see that rate of fare paying after two years of trial – this alone is worth all the fight has cost. Municipal ownership of street railways is not yet possible under the State laws, it is true, but the sentiment in favor of it is stronger than ever and as effort is being constantly made to have the legislature authorize cities on their own votes to own and operate their street railways. The Cleveland city council – a Republican body – has just adopted (February 20, 1911) by unanimous vote a resolution endorsing a street railway municipal ownership bill now pending in the State legislature. The resolution was offered by Mr. Haserodt, one of our administration councilmen to whom previous reference has been made.
Add to these things the by-products of our fight, if we may so characterize the beneficent legislation which had resulted from our agitation, the development and training for practical service of men interested in economic justice and the influence of our movement on other States and other cities. But the biggest thing and the most far-reaching in its effects is the example we have given of how to fight privilege. The same kind of a fight carried on in any other city under similar conditions will bring equally encouraging results.
But I would sound a note of warning here. There is very great danger of having the best of movements side-tracked by the calling of hard names and the personal abuse of individuals. Tactics of that kind will never get anywhere. Throughout the whole of our fight we adhered to our first plan, which was to attack institutions – Privilege, and not men. This is the first great thing to be kept in mind – that the battle is not a battle against persons, but against unnatural conditions, against a wrong social order! The next important thing is that the fighters be armed with patience, much patience. It takes as much patience to carry on this kind of a warfare as it takes stones to build the proverbial stone chimney.
“How much stone does it take to build a stone chimney?” asked someone of the man who had just built one, and he answered, “Haul and haul and haul until you know you’ve got enough, then haul twice that much more, and the chances are you’ll have about half enough.”
But with the object of the fight well defined, the line of action faithfully adhered to, and plenty of patience, there is no reason for despair. It is inevitable that those engaged in the great struggle should sometimes become discouraged. Temporary losses assume an aspect entirely out of proportion to their real importance. The defeats of the moment loom large and so obscure the vision of the workers sometimes that they are not always able to see that the direction of the general movement is invariably forward. But it is a forward movement and this is the word of cheer I would send to those taking part in it. It is in the nature of Truth never to fail.