FREEDOM OF THE CITY
Towns, like men, stamp themselves with marked traits. Toledo had an
individuality which showed itself from the start. Its leading men
clubbed together and borrowed money as early as 1832 to build one of
the first railroads constructed west of the Alleghanies--the Erie and
Kalamazoo, to connect Toledo and Adrian. When, in 1845, the steamboats
on the lakes formed a combination, and discriminated against Toledo,
the city through its council refused to submit, and appropriated
$10,000 to get an independent boat to Buffalo. The city appropriated
its credit and revenues to other important and costly enterprises,
including four railroads, to keep it clear of the cruel mercies of
private ownership of the highways. In 1889 it expended $200,000 to
secure direct railway connections with the Pennsylvania and the
Baltimore and Ohio railways for competition in rates with the Lake
Shore Railroad.
As it had been authorized to do so by the State, the City Council of
Toledo, April 29, 1889, ordered gas bonds to the amount of $75,000
sold, that work on the city pipe line might begin. Before proceeding
with the enterprise confided to them, the natural-gas trustees gave
the private companies an opportunity to save themselves from the
competition of the city. They asked them in writing if they would agree
to furnish gas cheaply for a term of years, or if they would sell
their entire plant to the city? They did this, as they expressed it,
as "an honorable effort ... to obtain cheaper gas without unnecessary
expenditure, and without injury to established rights." After a
delay of nearly a month a reply was received, refusing to enter into
negotiations either for a reduction of charges or for the sale of the
private plants to the city. The trustees then asked for a personal
interview, but this was refused. Then when the city began preparations
to sell its bonds, a cannonade was opened on it in the courts, the
money-market, the gas-fields, the city government, the press, among
the citizens, and everywhere. Injunctions were applied for in three
courts, unsuccessfully in all instances. No injunction was ever granted
in these or any other of the many suits brought for the purpose of
enjoining the sale of the bonds. Courts will usually grant temporary
injunctions awaiting a hearing on the merits when complainants will
enter into ample bonds and indemnify defendants. But the parties
instigating this litigation would not put up the necessary bonds. They
thus could smirch the bonds without incurring any personal liability in
so doing.
An expensive array of lawyers was sent before the United States
courts to prevent the issue of the bonds on the ground that they were
illegal, and the law under which they were issued unconstitutional.
The principle involved had been frequently discussed and always upheld
both by the Supreme Court of Ohio and the Supreme Court of the United
States.[517]
"Does not your argument appear to be in conflict with the views of the
Supreme Court of Ohio and the Supreme Court of the United States?" the
judge asked. The counsel for the gas companies responded in substance:
"If so, then so much the worse for the views of those courts."
As it was through the suffrage that the people of Toledo were able to
do this, the attack was widened from an attack on the enterprise to one
upon the sovereignty of the citizens which made it possible. "Everybody
votes in Ohio--in fact, too many people," said the lawyer who applied
for an injunction against Toledo. If he had his way, he declared, there
would be fewer voters, and he stigmatized the arguments of Toledo as
those of John Most, the communist.
"Unquestionably," decided Judge Jackson, "the Legislature may
authorize a city to furnish light, or facilities for transportation, or
water to its citizens, with or without cost, as the Legislature or city
may determine.... Since the decision in Sharpless _vs._ Philadelphia
it is no longer an open question whether municipalities may engage in
enterprises such as the one contemplated by the act in question in this
case. The act of January 22, 1889, authorizing the city of Toledo to
issue bonds for natural-gas purposes, is clearly within the general
scope of legislative power, is for a public use and purpose, and is
not in contravention of any of the provisions of the constitution. The
court being of the opinion that the legislation is valid, it follows,
of course, that the injunction applied for must be refused."[518] When
the news of Judge Jackson's decision was telegraphed to Toledo nothing
less than the booming of cannon could express the joy of the citizens.
They sent this message to the just judge: "One hundred guns were fired
to-night by the citizens of Toledo in honor of your righteous decision
to-day." Judge Jackson again upheld the bonds at Toledo, January 14,
1890, when he again dismissed the case against the city "for want of
equity, at cost of complainants."
The favorable decision by Judge Jackson, although an appeal was taken,
made it possible for the city to sell the $75,000 bonds which had been
issued by order of the Council. The bonds brought par, interest, and
over $2000 premium. With the money thus procured the city's Board of
Natural Gas Trustees began operations. Their opponents had spread far
and loud among the voters before the election--among those who would
be likely to buy the bonds, everywhere it would hurt--the assertion
that all the territory that was good had been bought up by them, and
the city's trustees would not be able to get any. One of the companies
had no less than 140,000 acres of gas lands in its possession or under
contract, at a cost in rentals and royalties of $100,000 a year.[519]
But the city trustees, even with the small sum at their command, were
able to secure at the very beginning wells with a capacity more than
four times as great as the private companies had had when the latter
began the investment of a million or more to lay their pipe lines to
Toledo.[520] Together with this supply the city trustees got 650 acres
about 35 miles from Toledo of as choice gas territory as there was in
Ohio, almost all of it undrilled, and they had offers amounting to 5000
acres more within piping distance from the city. The city's trustees
made their purchases with success, and received the laudations of their
constituents for having got lands and wells at better prices than the
private companies.
August 26, 1889, after a decision in the United States courts that
there was no ground on which to object to the issue of the bonds, the
City Council voted the issue of the remaining $675,000.
Defeated in the public debate which preceded the decision of Toledo
to supply itself; defeated at the State Capitol; defeated at the
polls of Toledo time and again--every time; defeated in the Common
Council; defeated in the gas-fields; defeated in the courts of their
own choosing, the opponents of the city, thorough as only the very good
or the very bad can be, refused to submit. When the two corporations,
in 1886, were seeking the franchise indispensable for doing business
in Toledo, they said to the Board of Aldermen: "We ask no exclusive
privilege.... We cannot have too many gas companies." They also said:
"If the city desires to furnish its own gas, there is nothing in this
ordinance to hinder it. We are ready and willing at any time to enter
into competition with the city or any other company." They said, on
the same occasion, in answer to apprehensions which had been expressed
about the danger of putting the fuel supply of the city into the hands
of a monopoly: "You can go before the Legislature and obtain the right
to issue bonds for furnishing yourselves with gas." It was by these
assurances the companies induced the Common Council to grant them
gratuitously the very valuable franchises they were seeking.
The right of the people to compete was not left to these assurances.
It was specifically and formally asserted in the ordinance of July 5,
1887, fixing rates. This was the ordinance to procure which the gas
company suspended its operations in mid-course, and declared it would
not continue unless the prices which it wanted were made. The ordinance
was, in fact, prepared by the company. It said: "Provided that nothing
herein contained shall be construed as granting to existing companies
any exclusive rights or privileges, or prevent any other company from
furnishing natural gas to the citizens of said city." But the same
learned counsel who, in behalf of the companies, had assured the city
that "there was nothing in this ordinance to hinder it," went before
the United States Court and pleaded that ordinance as good reason for
the intervention of the Federal Government to prevent the city from
going on with its enterprise.
The only morning paper--an able advocate of the city pipe
line--suddenly changed owners and opinions. Among its new directors
were two of the lawyers of the trust opposing the city, a director
in one of its companies, and, besides them, the manager, a contract
editor from Pennsylvania. His sole conspicuity there had been won in
turning against the people of the oil regions a paper which had been
their stanchest defender. This Toledo daily, in its espousal of the
cause of the city, had been firing hot shot like this against the oil
combination: "It wants a monopoly of the natural-gas business. This
is what it is driving at." Under its new management it roared like a
sucking dove, thus: "It is fashionable with demagogues and men who are
not capable of appreciating the worth of brains in business to howl
against it"--the oil combination--"as a grasping, grinding monopoly."
Just after the people had decided in favor of the pipe line, and only
a few days before it changed owners, it had said: "All manner of
influences were brought to bear to defeat this proposition.... All the
plausible falsehoods that could be invented, and all the money that
could be used, were industriously employed, but the people saw the
situation in its true light, and the majority voted right." It now made
the defeat of the city's pipe line the chief aim of its endeavors. In
this work "no rule or principle recognized in decent journalism was
respected."
In all the history of Toledo no interest on its bonds had ever been
defaulted or delayed; no principal ever unpaid at maturity. The city
was prosperous, its growth steady; its debt growing less year by year
in proportion to its population and wealth. Its bonds ranked among the
choicest investments, and commanded a premium in the money-market.[521]
But the credit and fair fame of the city were now over-whelmed with
wholesale vituperation by this paper, and others elsewhere under
similar control. Articles were carefully prepared for this purpose by
skilled writers. These were then copied from one newspaper to another.
By some arrangement insertion was obtained for them in financial
journals in New York and in London, and in other foreign capitals.
The Toledo organ declared that Toledo was an unsafe place for the
investment of capital in any form. Its public affairs were said to be
run by a set of "demagogues and speculators," whose administration was
"piratical mob rule." The city pipe line was a "monstrous job," and the
men who favored it were "a gang of throttlers and ravenous wolves."
They were "blatant demagogues, who made great pretence of advancing
the city's interest, but whose real aim is to enrich themselves at
public expense." The bonds, which had been issued in due form by
special authority of the Legislature, ratified by a vote of more than
three-fifths of the citizens, and declared to be valid by the United
States Court, were described as "chromos," "worthless rags," "bad
medicine," "disfigured securities," "like rotten eggs, highly odorous
goods," "but few persons at most can be found ignorant enough to buy
them."
The Mayor, City Auditor, Board of Natural Gas Trustees, united with
a citizens' committee of the Board of Trade in a plan to promote the
sale of the bonds direct to the people of Toledo through a financial
institution of the highest standing. This action the paper described
as "a scheme for gulling simples," "a blind pool," "an unpatented
financial deadfall"; compared it with "gambling, pool-playing, and
lottery selling." These grave charges were widely circulated throughout
the country. Bankers and capitalists in other cities who received them
had no means of knowing that they were not what they pretended to
be--the honest if uncouth utterances of an independent press chastising
the follies of its own constituency. Newspapers which supported the
city's project were assailed as ruthlessly as the community and
citizens. The _Blade_ was constantly referred to as "The Bladder."
Another journal was given a nickname too vulgar to be printed here. One
of the most prominent journals of Ohio was punished by the following
paragraph, which is a fair sample of the literary style of monopoly:
"That aged, acidulous addle-pate, the monkey-eyed, monkey-browed
monogram of sarcasm, and spider-shanked, pigeon-witted public
scold, Majah Bilgewater Bickham, and his backbiting, black-mailing,
patent-medicine directory, the _Journal_."
An old journalist and honorable citizen who wrote over his initials,
"C.W.," a series of able and dignified letters in the _Blade_, which
had a great influence in the formation of public opinion in favor
of the pipe line, was assailed with "brutal falsifier," "hoary old
reprobate," "senile old liar." Caricatures were published depicting the
buyers of the bonds as "simple greens." When the County Court of Lucas
County, following the United States Court, sustained the bonds on their
merits, and did so on every point in question, because, as the judge
stated, "the equities of the case are with the defendants," the organ
falsely stated that judgment for the city was given "because the merits
of the case are involved in a higher court." When a capitalist of New
York, who had been an investor in the bonds of Toledo and a taxpayer
there for twenty-five years--one of the streets of the city was named
for him--bought $10,000 of the city pipe-line bonds, the paper attacked
him by name in an article headed "Bunco Game," charging him with being
a party to a bunco game in connection with "public till-tappers" for
"roping Toledo citizens into buying doubtful securities." When the
Sinking Fund Commissioners of Toledo very properly invested some of the
city's money in the gas bonds, they were held up by name as "public
till-tappers," "menials" of a "hungry horde" of "boodle politicians,"
accomplices of "plunderers of the public treasury," unable to withstand
"the brutal threats and snaky entreaties of the corrupt gas ring." For
one of the associate editors the position of Deputy State Inspector
of Oil was obtained--an appointment which cost the Governor who made
it many votes in the next election, and did much to defeat him. Such
an appointment might give a versatile employé the chance to do double
duty: as editor to brand as bad good men who could not be bought, and
as inspector to brand as good bad oil for sale.[522]
One of the means taken to defeat the pipe line was the publication of
very discouraging accounts of the "failure" at Indianapolis, where the
citizens had refused to give a natural-gas company belonging to the
oil trust the franchise it demanded, and, forming an anti-monopoly
trust, had undertaken to supply themselves. Some "influence" prevented
the Common Council of Toledo from sending a committee to Indianapolis
to investigate. A public-spirited citizen, prominent and successful
in business, came forward, and at his own expense secured a full and
accurate account of the experience of Indianapolis for the city.
This proved that the people were getting their fuel gas at less than
one-half what Toledo was paying. The contest against giving the
Indianapolis franchise to a corporation of the trust had been a sharp
one. Its success was due to the middle classes and the working-men,
who stood together for freedom, incorruptible by all the powerful
influences employed. "We will burn soft coal all our lives," one of
their leaders told the Toledo committee, "rather than put ourselves in
the power of such men."
In Indiana the Legislature meets only once in two years, and when this
issue arose had adjourned, and would not meet again for a year. The
people, not being able to get authority for a municipal gas pipe line,
went to work by voluntary co-operation. Every voting precinct in the
city was organized and canvassed for the capital needed. The shares
were $25 each, and they were bought up so rapidly that the entire
amount--$550,000--was subscribed in sixteen days by 4700 persons,
without a cent of cost to the city. When subscriptions to the amount of
$550,000 had been raised, $600,000 more was borrowed on certificates of
indebtedness.
Gas lands were bought and 200 miles of pipe lines laid, all at a cost
of about $1,200,000. The income in one year, during a part of which the
system was still under construction, was $349,347. In the first year of
complete operations the Indianapolis people's trust paid off $90,000
of the principal. The income for the year ending October 31, 1892,
was $483,258.21, and the bonded debt has been paid. The stock, since
January 1, 1893, has been paying dividends at the rate of 8 per cent. a
year.
A prominent citizen of Indianapolis, one of the State judges, told the
Toledo papers, in an interview: "The private companies had their gas
laid to the city and along the streets several months in advance of the
Citizens' Trust, but it did them little good. Everybody said: 'I will
wait for the Consumers' Trust.' 'Yes, but we will furnish you gas just
as cheap,' said the Indianapolis company; 'why not take it of us?' To
this the citizens replied: 'To take gas of you means cheap gas to-day,
but high gas to-morrow.' And wait for the gas they all did." The charge
to manufacturers was 2-1/2 cents a thousand feet, as against 8 cents,
at that time charged at Toledo. There were 12,000 private consumers.
Cooking-stoves in Indianapolis were about $12 a year, against $19.50
in Toledo. One of the representatives of the private company declared
at a public meeting at Indianapolis that its charges were made
such as to give a full return of all the invested capital in three
years, as that was the probable life of the supply. A year after the
inauguration of the Indianapolis movement a committee of the citizens
at Dayton, who had risen against the extortionate prices charged them,
investigated the condition of affairs at Indianapolis. They reported
that Indianapolis had paid $200,000 on its bonded debt, and was getting
ready to pay as much more. The Consumers' Trust supplied between 10,000
and 11,000 consumers, and spent $1,000,000 less than the Dayton private
company spent to supply 3000 fewer consumers. The annual charge at
Dayton was $54.80; at Indianapolis only $26.80--less than half.
When facts like these were brought out, to the demolition of the
fictions circulated in Toledo, the answer was characteristic. The
"organ" could not deny the statements, but it fell upon the citizen
through whose generosity the information had been got for the people,
and assailed his private character in articles which, one of the daily
papers declared, editorially, "would almost, if not quite, justify him
in shooting their author on sight."
This newspaper charged the city natural-gas trustees with being "rotten
to the core," and with every variation of phrase possible to its
exuberant rhetoric sounded the changes upon their official career as a
"big steal," "fostered by deception, falsehood, and skull-duggery." It
sought to intimidate the Legislature and the courts when they failed
to enact or construe laws against the people. It said: "Law-makers,
judges, and others may feel the force of this element when the proper
time comes and political preferment is sought."
It was money in pocket that facts like those of the experience of
Indianapolis, Detroit, and other places should not be made known. Even
ideas must not be allowed to reach the public mind. Professor Henry C.
Adams, the well-known political economist, lectured in Toledo during
this contest, in a University Extension Course, on "Public Commissions
Considered as the Conservative Solution of the Monopoly Problem." The
"organ" gave a synopsis of the lecturer's views, which is printed
herewith in parallel columns, with a synopsis of what Mr. Adams really
said, as revised by himself:
WHAT THE ORGAN OF MONOPOLY REPORTED. | WHAT THE LECTURER REALLY SAID.
|
The lecturer made reference to Toledo |Professor Adams thought the
as an unfavorable place to discuss |solution of the monopoly problem
the matter of municipal control of |must be found either in public
quasi-public business and competition |control or in public ownership.
of municipalities with private |He advocated public control, and
corporations. But he deprecated anything|held that the State and Federal
in that line. He did not mention |railroad commissions should have
particular instances, but broadly |a fair trial, that their hands
condemned the policy pursued by this |should be strengthened by further
city in matters of this kind, and his |and adequate legislation. He
remarks had a visible effect on his |entertained the hope that this
audience. He considered municipal |control and regulation would
control of business enterprises the |ultimately protect the interests
worst form of monopoly, as they began |of the public in a satisfactory
by having the unfair advantage |manner. He was willing to admit,
of the law-making power, and the |however, if this effort to secure
tendency to corruption was greater |the needed public control by the
than when individual enterprises were |aid of commissions and
asking privileges. The audience |legislation should fail, then
was much pleased with the lecturer. |public ownershipwas the only
|remaining solution. He held that
|in local monopoliesit may still
|be wise to try the experiment of
|public control by aid of
|commissions. He said, however,
|that if anything should be owned
|and controlled by and for the
|people it would be
|street-railroads, gas and
|waterworks. He admonished his
|audience not to be misled by the
|argument that municipal ownership
|would be dangerous because of
|undue political influence, for
|the local monopolies under
|private ownership were already in
|politics, and in a most dangerous
|manner. He observed facetiously
|that he hesitated to discuss the
|question before a of municipal
|control orownership Toledo
|audience.
From the control of the markets to the control of the minds of a
people--this is the line of march.
So direct, persistent, and bold were the charges of corruptions rung
day after day by this journal against all the officials concerned
in the city gas enterprise that some people began to believe there
must be truth in them. But when the community at last turned upon
its maligners, and the grand-jury brought indictments against the
active manager of the paper and his chief assistant for criminal
libel upon the city's natural-gas trustees, the whole structure of
their falsehood went down at a breath. They had no defence whatever.
They made no attempt to justify their libels or even explain them.
Their only defence was a series of motions to get the indicted editor
cleared as not being responsible for what had appeared in the paper.
Counsel labored over the contention that the accused was none of the
things which the language of the law holds for libel. He was neither
the "proprietor," "publisher," "editor," "printer," "author," nor a
person "who uttered, gave, sold, or lent" a copy of the newspaper,
but only the "manager." The employés gave testimony which would have
been ludicrous but for the contempt it showed for court and community.
The journalist who was the "managing editor" of the paper under the
indicted chief editor was asked:
"Who was the head of the paper when you entered upon your duties as
managing editor?"
"I do not know."
"Who hired you as managing editor?"
"I really can't say that I was hired at all."
"Who employed you to come to Toledo?" The witness had been an employé
in Pennsylvania of the editor on trial, and had followed the latter to
Toledo to take the place of managing editor. "Nobody employed me."
The son of the indicted editor had also followed his father to Toledo,
and was employed on his paper. Asked for what purpose he came, he said:
"I had no purpose in coming."
The gentleman who had charge of the counting-room was asked who fixed
his salary.
"I regulate my own."
The advertising manager declared:
"I have no knowledge who is my superior."
The accused had to let the case go to the jury without a spark of proof
of the accusations which had filled the paper every day for months.
He had no evidence to offer either that the charges were true, or
that he believed them to be true. He stood self-confessed as having
for years printed daily gross libels on citizens, officials, and
community, as part of the tactics of a few outside men to prevent a
free city from doing with its own means in its own affairs that which
an overwhelming public opinion, and the legislative, executive, and
judicial authorities, and its present antagonists themselves, had all
sustained its right to do. The agent of this wrong was found guilty,
and sentenced to imprisonment in the county jail, with heavy costs and
fine; like the unhappy agents at Buffalo--"made cheap" for others.[523]
But sentence was suspended pending hearing of the motion for a new
trial. This did not come up for a year. The court could find no error
in the proceedings of the trial court, and could not sustain any of the
objections made. But it found a point which even the lawyers had not
hit on, and strained this far enough to grant the new trial. Then the
convicted editor went before another judge--not the one who had tried
him--pleaded guilty, and was fined, and so saved from jail.
One of the last scenes in this Waterloo was the abandonment of the
newspaper with which the corruption and intimidation of public opinion
had been attempted. Failure was confessed by the sale of the paper, and
it was bought by a journalist who had been especially prominent in the
defence of the city, and against whom on that account a bitter warfare
had been waged by the daily which now passed into his possession. The
_Sunday Journal_ of Toledo, in commenting on the surrender, declared
that the course of the organ had been one of the strongest factors of
the success of the people. "In every possible way it slandered and
outraged the city, where of necessity it looked for support. There
could be but one result. Scores who had opposed the pipe line became
its most ardent advocates purely in the general defence."