My Story (31 page)
Authors: Elizabeth J. Hauser
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 appeared 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 council-men 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.
Photo by L. Van Oeyen Copyright, 1911
“The secret of a good executive is thisâone who always acts quickly and is sometimes right.”
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 right, 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 said to 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 no 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 â every last one of them â 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 â 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 than 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 hands that have a pecuniary interest in its failure. They can reap no profit above six per cent., and as the controlling stockholders have street railroad 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 of 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 â “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.
