GIFT OF 8061'IZ WlVd 'A 'K ' MUNICIPAL SOCIALISM The Conservative Victory in Cleveland By H. T. NEWCOMB Of the Bar of the District of Columbia, Author of "Railway Economics," "The Postal Deficit," "Some Consequences of the Trust Movement," "A Study in Municipal Socialism," " Some Recent Phases of the Labor Problem," 'The Work of the Interstate Commerce Commission," "Who Own the Railroads?' "The Regulation of Interstate Railways," "The Federal Courts and the Orders of the Interstate Commerce Commission," Railway Rate Regulation in Foreign Countries," etc., etc. PRESS OF GEORGE E. HOWARD WASHINGTON, D. C. MUNICIPAL SOCIALISM The Conservative Victory in Cleveland cST By H. T. NEWCOMB M Of the Bar of the District of Columbia, Author of "Railway Economics," "The Postal Deficit," 'Some Consequences of the Trust Movement," "A Study in Municipal Socialism," " Some Recent Phases of the Labor Problem," 'The Work of the Interstate Commerce Commission," "Who Own the Railroads?" "The Regulation of Interstate Railways," "The Federal Courts and the i Orders of the Interstate Commerce Commission," Railway Rate Regulation in Foreign Countries," etc., etc. PRESS OF GEORGE E. HOWARD WASHINGTON, D. C. 1905 V CONTENTS PAGE The Personal Element 5 Mayor Johnson's Waning Popularity 7 The Question Submitted 7 Results in Cleveland and Other Cities Compared 10 Militant Conservatism 12 A Far-reaching Program 13 The Line of Least Resistance 15 Democratic Opposition 16 The Fight Begun 17 Real Needs Neglected 19 The Estimates Submitted 22 The Opposition Slumbers 23 Civic Consciousness Aroused 27 The Chamber of Commerce 30 Business Men in Opposition 31 Cleveland's Immediate Needs 33 Rough Riding 34 The Spoils System at Work 36 A Flank Movement by the Mayor 38 The Special Election Stratagem Foiled 39 A Full Vote Insured 41 Methods of the Campaign 42 An Absurd Misrepresentation 43 "Bonds and Taxes" 44 A Decisive Victory 46 The Personal Element Remains 49 Three Easy Lessons 50 327502 MUNICIPAL SOCIALISM: The Conservative Victory in Cleveland' By H. T. NEWCOMB Of the Bar of the District of Columbia THE PERSONAL ELEMENT The story of the recent defeat of the project to erect a public electric lighting and power plant in the city of Cleve- land and to inaugurate competition between the city and those of its tax-paying citizens who are interested in the electric lighting business now established there, will not be understood unless it is illuminated by the details of its personal and political relations. The contest was charged with the personal element from the beginning, for it com- menced when Mr. Tom L. Johnson resumed his political *The writer of this paper desires to explain that he was not an impartial observer of the events it chronicles. He was glad to accept an invitation to participate in the active opposition to the proposed public electric plant not only because he regards political ownership as vicious in principle, but also because it appeared that in the case of Cleveland there were particular objections which ought to lead even the advocates of that principle to oppose Mayor Johnson's project. O MUNICIPAL SOCIALISM residence in Cleveland, a city which he had represented in the Federal Congress before he abandoned it for New York, and having invested his millions of capital so as to allow ample time for other than financial and industrial ac- tivities, announced that he would devote the balance of his life to an effort to secure the application of the Henry George system of taxation. It became political when, very soon after this announcement, the local leaders of the Democratic party of Cleveland made Mr. Johnson their candidate for mayor and permitted him to control the plat- form and the policies of that organization. From his nom- ination for the mayoralty, early in 1901, to his defeat for the governorship in November, 1903, Mr. Johnson was the dominant force in the Democracy of Cleveland; he drove from its councils the conservative leaders under whom it had functioned as a vigilant and virile minority organiza- tion and he made it the party of extreme radicalism. As an immediate consequence of his course, many Democrats of the old school were driven into acting with the Republi- cans, but this loss was, for a time, more than offset by the large number of Republicans who were allured to the temporary support of the program which contained so many specious promises. This particularly accounts for Mr. Johnson's second election as mayor, for although during his first candidacy he received considerable support which was based upon a superficial acquaintance with his career as a business man, this support had been withdrawn before his second election and his majority at the polls in April, 1903, MAYOR JOHNSON S WANING POPULARITY 7 represents the preponderance, at that time, of the radical voters of Cleveland over the practically unanimous body of its stable citizenship and its substantial business men. MAYOR JOHNSON'S WANING POPULARITY The votes received by the various candidates for the mayoralty of Cleveland at the election of April i, 1901, aggregated 66,568, of which Mr. Johnson received 35,817 or 53.81 per cent. Two years later the vote was 68,571 and Mayor Johnson received 36,060 or 52.59 per cent of the ag- gregate. Six months later the referendum on municipal ownership evoked the suffrages of 54,625 citizens of Cleve- land of whom but 24,193 or 44.29 per cent voted on the side advocated by the Mayor. At the same election utilized for the submission of the lighting project Mayor Johnson was the Democratic candidate for governor of Ohio and his vote in Cuyahoga county, in which Cleveland is located, fell some 8,500 below that of the successful Republican candidate. THE QUESTION SUBMITTED The precise question submitted to the voters of Cleveland on November 3, 1903, was whether they would authorize a bond issue of $400,000 for the purpose of constructing an electric lighting plant. It was commonly understood that this would no more than provide for an experimental plant which, however, would be utilized to supply light for both public and private use in a certain limited section of the 8 MUNICIPAL SOCIALISM city. There was good ground for believing that the plant proposed by the Mayor could not be built for the sum named, but that point will be discussed hereafter. The referendum on this project was secured by its opponents after its advo- cates had exhausted the means at their command, both legal and political, for committing the city to it without a direct expression of the will of the people. Before a referendum could be forced, the opponents of municipal socialism had to show the illegality of an ordinance authorizing a bond issue to build an electric lighting and power plant, which had been adopted by a unanimous vote of the City Council ; and to arouse enough opposition in the same legislative body to secure the defeat of a second ordinance, in which the word "power" did not appear, which was pressed by every device which the chief magistrate of a city can use to overwhelm opposition to his policies. Then, when forced to permit a referendum, the plan of the supporters of the city adminis- tration was to hold it under a law which would have ren- dered a full vote impossible. An injunction preventing the execution of this design was the final means by which a complete expression of the will of the city was made pos- sible. The verdict recorded on November 3 was against munic- ipal socialism by a vote of 30,432 in the negative to 24,193 in the affirmative. As the approval of two-thirds of those voting upon the proposition would have been necessary in order to permit the bond issue, it is evident that the margin by which the conservative citizenship of Cleveland won this THE QUESTION SUBMITTED 9 substantial victory was not the majority of 6,239 over the advocates of a public lighting plant, but rather the difference of 12,224 votes between those cast in favor of the measure and the number necessary for its enactment. Thus while the opponents of municipal socialism cast 55.71 per cent of the total vote polled, they were successful by a margin amounting to 22.38 per cent of that total. It is interesting to compare this result with the popular vote of 15,282 to 1,245 by which, ten years earlier, the neighboring city of Detroit authorized the erection of a municipal electric lighting plant. In Chicago, in 1902, 139,999 voters approved the principle of public ownership "of the gas and electric lighting plants, said plants to furnish light, heat and power for public and private use," and only 21,364 declared themselves in opposi- tion. While the Cleveland contest was in progress, the citi- zens of San Francisco voted on a proposal to acquire a street railway and to issue $710,000 in 3^ per cent bonds therefor, the proposition being defeated because favored by less than two-thirds of the voters, although it received 14,351 affirma- tive votes to 10,790 in the negative. On the face of these re- turns it appears that in Cleveland but forty-four in each one hundred legal voters are in favor of municipal social- ism, while in Detroit it is favored by ninety-two in each one hundred, in Chicago by eighty-seven in each one hun- dred, and in San Francisco by fifty-seven in each one hundred. Of course, these figures do not tell the entire story. It is altogether likely that the latent spirit of conservatism was just as extensive in Detroit, Chicago and 10 MUNICIPAL SOCIALISM San Francisco prior to these more or less complete expres- sions of popular ideals and purposes as in Cleveland, and that the chief difference is really in the degree in which the dormant opposition to radical departures from the govern- mental practices which have the approval of American ex- perience was aroused and made effective. Whether this conclusion is correct or not, there can be no doubt that the importance of the municipal ownership referendum ap- peared much greater to the citizens of Cleveland than to those of the other cities named. This is shown by the fol- lowing table in which the aggregate number of votes cast and those on each side are compared with the number of possible voters : RESULTS IN CLEVELAND AND OTHER CITIES COMPARED Per cent of Number of vote cast males over 21 voting Date of males City referendum over Per 21 years cent 1 Against old Num- of muni-^ J-QQJJJQJ. ber males over 21 own- ership pal own- ership Cleveland 1903, Nov. 3 *III,522 54,625 48.98 21.69 27.29 San Francisco. 1903, Oct. 8 *i28 >9 8 5 25,Hi 19.49 11.13 8.36 Chicago .... 1902, Apr. i *5H,048 161,363 3L57 27.39 4.18 Detroit 1893, Apr. 3 t 55,476 16,527 29.79 27.55 2.24 * Census of 1900 f Census of 1890 RESULTS IN CLEVELAND AND OTHER CITIES COMPARED 1 1 Apparently, the active discussion of municipal owner- ship in Cleveland, which resulted from the vigorous cam- paign made against it, was the means of bringing out a much larger proportion of the total vote than is customary in such contests. It is noteworthy also that the proportion of the total possible vote cast against municipal ownership was very greatly increased while the affirmative proportion was considerably lower than in either Chicago or Detroit. At any rate, these figures make the assumption that the real popular spirit, in these four great cities, is substantially the same in regard to municipal ownership sufficiently plaus- ible to justify making it the basis of an inquiry whether the widely divergent results that have been recorded can be explained in any way which reconciles them with such a working hypothesis. They will be successfully reconciled if it appears that the principal difference lies in the opportu- nities afforded the voters to acquaint themselves with the nature and importance of the questions at issue. At the out- set it should be recognized that the citizens of Cleveland had unusual reason to be satisfied with existing conditions and that the demand upon the resources of the city for the development of its ordinary activities was admittedly great. The private corporation which supplies electric light and power to public and private consumers in that city has merited general approval by rendering excellent service at reasonable rates, and there have been no serious scandals in connection with any of the public service corporations of the 12 MUNICIPAL SOCIALISM city. On the other hand, when the people of Chicago voted on a similar question they had become accustomed to alle- gations that influences corrupting to the political activities of the city and state emanated from some of its public service corporations ; and when it arose in Detroit, two private elec- tric lighting companies having recently contested bitterly for the field, the victorious corporation had signalized its suc- cess by making exhorbitant demands upon the city in regard to payments for necessary street lights. MILITANT CONSERVATISM No such effort to hold their government within the fields of activity already permitted to it was ever made by the con- servative citizens of any other great American municipality as was made in Cleveland. The educational campaign, begun in June, was pressed so persistently that it is scarcely possible that Cleveland contained a single legal voter who was not afforded an opportunity to acquaint himself with the argu- ments against the project. Nor was the campaign in any way one-sided. Mayor Johnson and several of his ablest lieutenants devoted a great deal of attention to this topic in nearly all of their speeches, and the former repeatedly ad- vised his hearers that the erection of a city electric lighting plant was more important to the voters of Cleveland than his own election to the office of governor of Ohio. A FAR-REACHING PROGRAM 13 A FAR-REACHING PROGRAM It has been said that the effort to commit the city of Cleve- land to a policy of municipal socialism dates from the an- nouncement by Honorable Tom L. Johnson, some time prior to his first election as mayor, in 1901, that henceforth he would devote his life to an effort to spread the doctrines of the late Henry George and to secure the substitution of the "single tax" for the present revenue systems of the municipal, state and national governments of the United States. Mr. Johnson, as was explained some time ago by his friend and adviser, Dr. Edward W. Bemis, now superintendent of the waterworks of Cleveland, in the significant sentences which are quoted below, believes in municipal ownership because he believes in the "single tax" and regards the former as an essential element in the latter system. Writing of "Detroit's Efforts to Own Her Street Railways" in "Municipal Af- fairs" for September, 1899, Dr. Bemis said of Mr. Johnson that: "* * * his own special interest in the matter is because of his belief in city ownership and operation of street rail- ways as an opening for the gradual introduction of the single tax, in which cause he is a well-known enthusiast. It is generally known that extensions of street railways have such an obvious effect in raising land values that there would be little difficulty under public ownership of securing special assessments on this increased land value for the 14 MUNICIPAL SOCIALISM purpose of extensions and perhaps ultimately for paying all operating expenses so that every one could ride free just as tenants of an office building are charged enough rent to permit of free running of elevators."* Obviously, the election to the mayoralty of a great city of a gentleman holding the views indicated in the foregoing, especially one of so forceful a type as Mr. Johnson had shown himself, was certain to arouse interest not only among those who would like to enjoy the services supplied by quasi-public corporations without expense to themselves, but extending also to those who might be called upon to pay the "special assessments" and to investors in the secu- rities of the public service corporations within his jurisdic- tion. The new mayor of Cleveland was confronted by the fact that the laws of Ohio do not authorize municipalities to undertake the business of street railway transportation. His efforts in connection with this service have therefore been confined to the attempted reduction of fares to three cents, to an attempt to induce the construction of lines which would compete with those now in existence and to raising the taxes of the latter. f *The italics are the present writer's. fPossibly even these efforts should be regarded as in the general direction of political ownership for Mayor Johnson is probably not unfamiliar with Dr. Bemis's suggestion that: "* * * price re- duction, however, seems legally open to city councils and, as pre- THE LINE OF LEAST RESISTANCE 15 THE LINE OF LEAST RESISTANCE In the lighting field, however, there was no obstacle of a legal character and if authority to issue bonds for the pur- pose could be secured and their sale effected, there would be nothing to hinder the erection of a city electric plant. No official public steps in this direction were taken during the first term of two years to which Mr. Johnson was elected, although the subject was known to be receiving considerable attention from the Mayor and his principal subordinates. The platform on which the city was carried in April, 1903, for the reelection of Mayor Johnson, however, contained the following, the last clause of which has been declared to have referred to an electric lighting plant: "The Democratic party of Cleveland, in convention as- sembled, asks the suffrages of the voters on the record of the present administration. It has been characterized by a marked awakening of interest in city affairs. Never before has there been so full an appreciation of the evils of private ownership of public utilities ; * * * our pledge to the people is : * * * 3. That we will build and operate a municipal lighting plant. * * * " viously suggested, should be tried as a preliminary to public pur- chase of the plants; because such regulation of price, so far as the courts will permit, would naturally result in a reduction in the value of the securities * * * and thus render easier public purchase." See article entitled "Regulation or Ownership" in "Municipal Monopolies," pp. 651-2. 1 6 MUNICIPAL SOCIALISM Another declaration of the same platform supports the claim, subsequently put forth by some of the men who stood upon it as candidates, that their election did not carry a mandate to build and operate a city electric lighting plant. This declaration follows: "The issue in this campaign is the street railroad question. * * * In the April election the voter must choose be- tween two parties the one already pledged in its platform to a complete surrender to the street railroads on their ow r n terms; the other, that party which has already forced some concessions from the street railroads, and which, if returned to power, will secure a complete victory for the people."* DEMOCRATIC OPPOSITION The leading Democratic newspaper of Cleveland, The Plain Dealer, editorially discussed the contention that the Democratic members of the City Council were bound in honor to support the ordinance providing for a bond issue in *According to The Plain Dealer, the leading Democratic daily newspaper of Cleveland, the convention which adopted the platform containing the provisions quoted above also adopted the following "supplementary resolution :" "Resolved, That the executive committee of the Democratic central committee in and for the city of Cleveland, be authorized to levy an assessment upon the nominees of this convention for the different offices to be nominated therein and be also empowered to remove from the Democratic ticket the names of all such nominees who fail to pay such assessment before 3 o'clock p. m., standard time, March 18, and that the executive committee be given full power to fill all vacancies." THE FIGHT BEGUN 17 order to build an electric plant .and the following, from its issue of August 2, 1903, contains its conclusions : "The claim that the election of the present administration and council was a mandate from the people to establish a municipal electric lighting, or lighting and power plant, is fal- lacious. The voters as a whole did not so understand it and had no such purpose, whatever a portion of them might have intended. * * * The platform itself specifically de- clared that 'the issue in this campaign is the street railway question.' * * * The Plain Dealer distinctly declared that it was not in accord with Mayor Johnson's municipal ownership ideas. Thousands of citizens who helped elect the present municipal government held the same position * * * the people of Cleveland, in electing the present municipal government, did not give it a mandate to adopt that scheme. They expressed themselves by their votes to be in favor of home rule, honest and efficient government, and equitable taxation, but they had no intention of com- mitting themselves unreservedly to all the ideas of Mayor Johnson and Mr. E. W. Bemis." THE FIGHT BEGUN Nevertheless, the reelection of Mayor Johnson was imme- diately followed by efforts to inaugurate the municipal own- ership policy. The first meeting of the newly-elected City Council took place on Monday, May 4, 1903, and as soon as it had organized, it listened to a formal address from the Mayor in which he strongly urged the immediate practical application of his municipal ownership policy. In this ad- l8 MUNICIPAL SOCIALISM dress the council was warned against "the oppressions of certain so-called business interests" which, it was explained, are not competitive and are grounded in special privilege. The Mayor asserted that these interests "have no natural affinity for legitimate business interests," and that those who control and benefit by them use political parties, im- partially, in such ways as to secure pecuniary gains for them- selves. One of the ways in which such gains are secured, declared the Mayor, is through unjust exemptions from the full burden of taxation, but while the city must strive for a better taxing system the evil could not wholly be corrected in any way except by bringing all public utilities under government ownership. Continuing, the Mayor said : "Already the statutes permit cities to engage in the busi- ness of gas and electric lighting and of this privilege it is our duty to avail ourselves at once. Let us begin with an electric lighting plant of the most modern type, by which we can produce electricity cheaply for street lighting and in addi- tion, can give to the people in their houses and places of business the benefit of electric light and power at the mini- mum of cost. As that experiment proves its value, the same system can be extended over the entire city." The application of the Merit System of determining ap- pointments to office and the promotion and retention of those employed was insisted upon as an essential to efficient administration of the proposed new service and also of the water department in which such a system was said to have REAL NEEDS NEGLECTED 19 been already established although admittedly without the sanction of any statute or ordinance.* Progress in this direc- tion was declared to be especially important : "* * * in view of the probability of an early extension in Cleveland of the principle of municipal ownership and operation to all public utilities." REAL NEEDS NEGLECTED To those who are acquainted with the municipal condi- tions and needs of Cleveland, it is significant that the Mayor's address concerned itself solely with the problems of home rule, taxation, and municipal ownership. It contained no reference to the need of a better water supply, more sewers, better fire protection, improved facilities for crossing the old river bed which so effectively separates the eastern and western portions of the city, a more extensive wharfage system or new public buildings. In fact, so far as the pur- poses of the Mayor may be regarded as having been disclosed *Dr. E. W. Bemis, who has had charge of the water department throughout practically all of Mr. Johnson's encumbency of the office of mayor, did make an effort to establish a merit system. In so doing he incurred the ill will of many politicians, some of whom took occasion immediately after the election of 1903 to demand his dis- missal; a demand to which the Mayor declined to accede. The sys- tem in force, however, did not go far enough to preclude the active participation of the employees of the water department in every stage of the campaign for a municipal electric plant, which would have been made an adjunct to their department, and there are other indi- cations that the conditions are still far from ideal. 2O MUNICIPAL SOCIALISM in this address, he appears to have been interested in matters requiring extensive and somewhat spectacular reconstruction of state and municipal policies to 'the complete exclusion of necessary improvements which are quite within the ordinary scope of municipal activities and the existing powers of the city government. How far it would be safe to go in infer- ring an actual disregard of the immediate and necessary in favor of the remote and questionable, may be, in some de- gree, indicated by the events hereinafter recorded and will appear more plainly when the history of his administra- tion is complete. Immediately after listening to the Mayor's address, the council received from him a special message transmitting a report from Dr. Bemis concerning the plans for the proposed plant. These plans had been prepared under the direction of Dr. Bemis, who was aided by Mr. Charles E. Phelps, a consulting electrical engineer. These estimates called for a direct expenditure of $375,750 in the erection and equipment of a plant consisting of two units of 1,000 kilowatts capacity each, which would generate a three-phase alternating current of 6,600 volts at 60 cycles. It was stated that this voltage and frequency of current would secure the greatest possible combinations for both street lighting and commercial service, and that the plant would become a cen- tral generating station which, with the addition of new units from time to time, could be made to supply the entire city. For the time being it was proposed, however, to confine the distribution to the West Side of Cleveland, a region which REAL NEEDS NEGLECTED 21 contains 3477 per cent of the city's area and 30.94 per cent of its population* and to the publlic buildings on the East Side. Dr. Bemis's statement of the advantages to be gained is as follows : "It would appear that with the city in possession of land and of the building for the generators and of the foundation of a modern boiler house,! and with the possibilities of com- bining the water and electric lighting departments, it is en- tirely practicable for us to build a thoroughly up-to-date plant at a moderate cost, and thereafter to supply the West Side and the public buildings on the East Side with light for public and domestic and commercial uses at a much lower price than is now charged, even after allowing for interest and sinking-fund charges. It seems also quite possible that such a modern plant at our Division-street pumping station could sell electricity for power purposes at so low a price as to be of great advantage to many manufacturers along the river and elsewhere." On the subject of prices, Dr. Bemis said : "Mr. Phelps has prepared estimates of cost, showing that the city can maintain arc lights for less than $55 per year per arc, while it is now paying $75, and even more impor- tant, it can sell electrical energy for commercial uses for about four cents per unit or kilowatt hour. The published rates to-day vary from twelve and a half cents per unit, ac- *On the basis of the census of 1900. fit was proposed to utilize the site and structure of an abandoned pumping station. 22 MUNICIPAL SOCIALISM cording to the nature and amount of consumption to a little above five cents per unit."* THE ESTIMATES SUBMITTED The precise figures given by Mr. Phelps indicated his be- lief that the plant he proposed would be able to supply arc lights at an operating cost of $40 per light per year and with a capital cost of $13.67 or at a total expense of $53.67. The estimated cost of constructing and equipping the plant follows : Steam and electrical equipment $214,000.00 Distributing equipment 111,750.00 Rebuilding power-house, including coal- handling apparatus 50,000.00 Total $375,750.00 *The corporation now selling electric light in Cleveland uses the two-rate system. Each commercial consumer is charged at i2 l / 2 cents per unit for fifty hours' use per month at the maximum capacity of his installation, and for the excess over fifty hours at five cents per unit In the case of dwellings, thirty per cent of the maximum in- stallation capacity is used on account of the normal variation in the load factor for dwelling houses. The theory of this system is that the capital investment of a central station plant is determined by the maximum consumption of its customers. In other words, there must be sufficient generating and distributing apparatus to supply every one with all the lights and power he demands at the same instant. Assuming the average duration of the extreme load to be about fifty hours per month, it follows that it is not unfair to charge a larger proportion of the capital cost against this use particularly as this course encourages liberal use of current at other hours when its cost to the company is scarcely more than that of operation. THE OPPOSITION SLUMBERS 23 Mr. Phelps also gave the following estimate of probable operating expenses: General expenses $10,760.00 Production 36,300.00 Maintenance of distributing equipment 6,740.00 Maintenance of lamps 5>875.oo Repairs and renewals 7,240.00 Total $66,915.00 Attention will be called at another point in this paper to certain apparently justifiable criticisms of these figures which, for the present, serve merely to outline the proposi- tion submitted to the Council. The most significant features of that proposition will be recognized in the indicated inten- tion to go into a competitive commercial business in a field already occupied by a private corporation and to sell power, as well as light, to private users. THE OPPOSITION SLUMBERS An ordinance drawn in accordance with the plans de- scribed, and providing for an issue of $200,000 in bonds to begin the construction of the plant, was introduced at the same session of the Council, and after lying on the table under its rules, was taken up and adopted by a unanimous vote and without discussion on the evening of May n, 1903. The Council which thus complacently sought to commit the city to a program which was avowedly to go far in the di- 24 MUNICIPAL SOCIALISM rection of municipal socialism consisted of twenty-three members of the Mayor's party and nine Republicans. It is particularly noteworthy that although the Democratic mem- bership was sufficient to give the two-thirds vote required to authorize an issue of bonds, the nine Republican members were not sufficiently interested to register the opposition which they must be presumed to have felt. If this silent ac- quiescence in a policy which at a later date they vigorously and successfully resisted is to be attributed to a belief, on the part of the Republican members, that the majority by which the Mayor had been reelected a month earlier was a popular endorsement of municipal ownership and a consequent re- luctance to seem to interpose even ineffective opposition to the execution of the people's will, the conclusion seems to indicate a singular lack of appreciation of the real, but dor- mant, public sentiment as subsequently disclosed by the crushing defeat of municipal ownership at the November election. The adoption of the ordinance by the Council seemed to mark the beginning of municipal socialism in Cleveland. Had the event justified this conclusion, it would have offered abundant opportunity for comment concerning the frequent utter absence of any popular realization of the radical nature of social, political and economic changes at the mo- ment when the definitive step is taken. Municipal owner- ship had long been advocated by the man who for the time was both the dictator of a successful party and the chief THE OPPOSITION SLUMBERS 25 officer of the city ; it had been favored in the platform he had compelled the party to adopt, but, beyond this, there had been no indication of public interest in the question. It had not been discussed to any extent in the newspapers or on the stump; no one had strenuously advocated or vigorously opposed it. The portion of the Mayor's address which dis- cussed it received perfunctory treatment only from the local press, and the enactment of the ordinance was not only without a negative vote, but it was not recorded in the news columns of any of the daily papers of the city. Apparently, there was general, but careless and indifferent, acquiescence in the Mayor's plans. Such might have been the history of the initial socialistic step of one of America's greatest and most rapidly developing municipalities had not the advocates of the change overreached themselves. The law governing the issuance of bonds by the cities of Ohio permits them to be sold for certain enumerated purposes only. One of these purposes is the purchase or erection of "electric light works, and for supplying light to the township, hamlet or corpora- tion and the inhabitants thereof.* The Mayor's ordinance, as formulated and adopted, provided for bonds for the pur- pose of erecting an "electric light and power works" and the plans of the Mayor and his advisers, Messrs. Bemis and Phelps, plainly declared the purpose to produce, distribute and sell electric current for power as well as for lighting. *The Longworth bond law, adopted April 29, 1902 ; Session laws of Ohio, Vol. XCV, pp. 318-322. 26 MUNICIPAL SOCIALISM Why the powers vested in the municipality were thus pal- pably exceeded will probably never be known, but it is almost impossible to assume that it was wholly an oversight on the part of the Mayor's young, energetic, and able legal adviser ; the chief law officer of the city. One suggestion in this con- nection can not be overlooked. It is that as Mayor Johnson's prestige had been somewhat impaired, and was in danger of suffering further, on account of the reluctance of capitalists to provide new street railway lines on a basis of three-cent cash fares and with anticipations of ultimate purchase by the municipality, a device for overcoming this hesitation was sought and seemingly discovered in the provision of a mu- nicipal power plant which could sell current for operating new street railways at less than cost, and saddle the differ- ence upon other customers, or hide it in the depreciation and betterments accounts or in some other way entail it upon the taxpayers of the city. At any rate, the final defeat of the project was made possible by the legally unauthorized inclusion of the purpose to manufacture and sell "power." At the suggestion of a taxpaper, the city solicitor, Honor- able Newton D. Baker, was obliged either to institute suit to test the legality of the proposed bond issue or to permit such an action to be brought by the taxpayer himself. He chose the former alternative, graciously according permis- sion to the opponents of the plan to designate an attorney to assist him. Suit for the purpose indicated was brought on June 17, the petition relating that the bids under the ordi- CIVIC CONSCIOUSNESS AROUSED 2/ nance had been received, opened and the highest bidder selected.* After the inauguration of this action the Mayor probably realized or was properly advised that the ordinance would not sustain a valid issue of bonds and, abandoning efforts under the original authority, he secured the introduc- tion, on July 13, of a new ordinance which avoided the fatal defect in the earlier enactment. Civic CONSCIOUSNESS AROUSED In the meantime, the public consciousness had come to a realization of the fact that events of some importance to the welfare of the community were in progress. The Board of Public Service of Cleveland, to which the defective ordi- nance was referred, received a written communication from the local Chamber of Commerce, requesting that action upon the project be deferred until the advisability of the proposed change in the functions of the municipal government could be investigated by that organization. Although treated with but scant courtesy by the board, the Chamber of Commerce appointed a committee of investigation of which more will be related hereafter. At one of the board meetings, the vice- president of the electric lighting company which does busi- ness in Cleveland, developed the important fact that the ad- ministration was seeking to institute municipal ownership for *This was, possibly, necessary verbiage. As a matter of fact, no bids had been received. 28 MUNICIPAL SOCIALISM its own sake and not, primarily, in order to secure street lighting at a lower cost. That no concession in the price of the street lights would cause the abandonment of the project had previously been known to a few and was subsequently admitted by the Mayor even while he was attempting to in- duce certain councilmen to abandon their opposition, but Vice President Scovil, in his appeal to the board, made the fact clear to all. He said, in part : "We would like to know whether the city proposes to go ahead with this municipal lighting scheme, regardlesss of what concessions might be made by the company now fur- nishing the light. We would like to know whether this is being advocated only for the sake of having a municipal lighting plant for the purpose of experimenting along mu- nicipal ownership lines."* Mr. Scovil also informed the board that his company would be willing to "meet the city more than half way in the matter of fixing rates" rather than to enter into compe- tition with a tax-supported city plant. At a public hearing held by the board on Monday, June 8, the advocates of the plan were represented by Dr. Bemis, and Mr. Scovil was heard in opposition, t Communications were received from *The Cleveland Leader, June 6, 1903. fDr. Bemis had said to the Cleveland Leader (see its issue of June 7, 1903) that "I expect to be given general supervision of the proposed electric lighting department and to retain my present position," so the Board really had before it the chief executive of the CIVIC CONSCIOUSNESS AROUSED the Chamber of Commerce, announcing the appointment of its committee to investigate the project, and from the So- cialer Turnverein urging that it be put into execution with- out delay "regardless of protests or opposition from any source." Mr. Scovil renewed his suggestion of willingness to consider a readjustment of prices. In this connection, it should be stated that the lighting company has supplied lights at very low rates compared with the average for other cities, and especially low when considered in relation to the facts that it has never had more than a twelve months' con- tract and supplies fewer lights than are taken by most large cities. The progressive reduction in the rate and the num- ber of lights supplied are shown below : Number Price per of light Year lights per year 1893 251 $88.66 1894 253 88.66 1895 335 88.66 1896 484 94-80 1897 854 93-24 1898 879 93-24 1899 890 89.88 1900 892 87.60 1901 977 82.92 1902 1,096 82.92 1903 1,099 75.00 Service Moonlight schedule All night, every night private company and the gentleman who hoped to be the chief execu- tive of the public plant by which he urged that it should be super- seded. 3O MUNICIPAL SOCIALISM THE CHAMBER OF COMMERCE The Chamber of Commerce committee, which, assisted by the secretary of the chamber, Mr. F. A. Scott, prosecuted a vigorous and searching investigation, consisting of three well-known citizens of Cleveland, Messrs. Thomas H. Hog- sett, E. J. Blandin and A. B. McNairy. Messrs. Hogsett and Blandin have both been prominent for many years as Demo- crats and are among the leaders of the Cleveland bar. Mr. McNairy is a manufacturer and a Republican. During its investigations the committee heard Messrs. Bemis and Scovil, Mr. E. B. Ellicott, city electrician in charge of the municipal street lighting plant of Chicago, and Mr. Alex- ander Dow, who erected and for some time operated the city plant in Detroit, which is also for street lighting only. Its report, a pamphlet of seventeen pages, was made public on July 27. It strongly condemns the project, basing its opposi- tion principally upon the ground that whatever may be the proper policy of a great American city in regard to municipal ownership, the needs of Cleveland in other directions would require all the capital it could afford to invest for many years. The committee reported that it was not aware of any public demand for a city electric plant, and that neither Mayor Johnson nor Dr. Bemis had alleged the existence of such a demand or claimed that the community was suffering from oppressive action or extortionate rates on the part of BUSINESS MEN IN OPPOSITION 3! the electric lighting company. Dr. Bemis was quoted, how- ever, as having asserted that : "If electricity can be sold low enough, it can take the place of steam ; it can easily have an enormous development for power and lighting purposes, and that power is taking the place of steam and gas." Another argument attributed to Dr. Bemis was that com- petition from the city might cause the existing company to reduce its prices, and that if this were to result, the munic- ipal plant would have "accomplished its mission." The com- mittee, however, came to the conclusion that : "The rates of the local company are not unreasonable, but on the contrary, your committee finds that they are as low and in several cases lower than those in other cities of a size comparable with Cleveland." s~ BUSINESS MEN IN OPPOSITION The committee also submitted the report of Dr. Bemis, on which the City Council had adopted the ordinance that proved to be invalid, attempting to authorize a bond issue, to a critical examination which showed it to be based upon insufficient data and misleading in its conclusions. It was noted that some of Mr. Phelps's "detailed tables," which were the basis of the fundamenal estimates of original and operating costs, had been withheld as subject "to revision upon further study," and that when asked to submit them to 32 MUNICIPAL SOCIALISM the committee, Dr. Bemis had replied that they were inaccu- rate and he preferred not to permit their examination. The committee alleged that in the single item of preparing the engine house, there was an omission of $50,000, and that if a proper allowance was made for the value of the land be- longing to the city which it was proposed to use, and for other omissions the real cost of the experimental plant pro- jected would be $505,750 or about 35 per cent more than the estimates. It was also asserted that the annual cost of street lights furnished from such a plant as that contemplated could not be less than $85 each.* The committee found that both Chicago and Detroit were paying more, under municipal ownership, for their street lights than Cleveland and that the general experience of city governments throughout the United States proves that operation by public officers is more costly than under private management. It argued that even if the rates and practices of the electric company were un- reasonable, which was denied, the proper policy for the city was regulation rather than ownership. It declared : ''Whenever their rates are excessive they can be made un- *An exerienced electrical engineer suggests that the projected plant of two units of 1,000 kilowatts capacity each would have about the most expensive combination that could be contrived, as half of its entire capacity would have to be kept constantly in reserve. With four units of 500 kilowatts capacity each, but one-fourth of the aggre- gate would be required for reserve. Any plant must have a reserve equal to the largest unit required in daily use. CLEVELAND'S IMMEDIATE NEEDS 33 lawful and reasonable charges established. Whenever their services are below a proper standard of quality or their meth- ods oppressive or unjust, the necessary corrections can be required by law. In fact, without risking a dollar of the city's credit or adding a mill to the tax rate the city can accomplish all that is possible through a municipal lighting plant except to require that the business of supplying electric light and power to the citizens of Cleveland shall be conducted at a loss." Another objection raised was to the use of the city's credit and its taxing power to supply a service of which rel- atively few of its citizens were likely to avail themselves. This was held to be a wrong use of the right to tax. It was suggested that if the city authorities could not be induced to abandon their project, equity demanded that the bonds issued should not be a general lein upon the city's credit but only upon the property and revenue of the plant. CLEVELAND'S IMMEDIATE NEEDS Attention was called to needs of the city which were de- scribed as 'Vital" and sufficient in their aggregate demands to necessitate a selection among desirable improvements of those most requiring immediate expenditures. Especially great, said the report, was the city's need for pure water, for want of which citizens were daily dying from typhoid fever and other diseases due to a polluted water supply. Other needs, preferred by the committee to a municipal electric 34 MUNICIPAL SOCIALISM plant, were enumerated as follows: new viaducts, sewers, parks, public buildings, improved harbor facilities and better fire protection. The committee also suggested that the ques- tion whether the Merit System would govern in the selection of the employees was debatable as well as whether the city departments were so well handled as to justify public eager- ness to increase their number and functions. In conclusion, the committee earnestly requested the City Council to con- sider its report, expressing the belief that further investiga- tion of the proposition to build a municipal electric plant would enable that body clearly to perceive "the inadvisabil- ity of proceeding with the project." In this paragraph it de- clared itself : "* * * at a loss to understand why this project to build a municipal electric plant should 'be brought forward by the city authorities at this time ; and your committee has been unable to obtain from the authorities themselves any sufficient reason for this improvement being advanced over others that are unquestionably of far greater importance." ROUGH RIDING On the evening of the day on which this report was made public, the City Council met to consider, among other things, the new lighting plant ordinance. The Mayor was present in accordance with a resolution inviting him to attend all ses- sions which was passed at one of the earliest meetings of the present Council, and under which he is entitled to the priv- ROUGH RIDING 35 ileges of the floor. By a strict party vote of twenty-three to nine the Council refused to listen to the report of the Cham- ber of Commerce and adopted a resolution sending it to the official files and: * * * in answer to the statement from the committee that it has heard of no public demand for the construction of a municipal electric light plant/' directing the clerk to transmit to that body a copy of the platform adopted by the local Democratic convention at the beginning of the previous municipal campaign and a state- ment of the votes cast for the candidates at the election which followed. The discussion on the bond issue ordinance which ensued was extremely excited and somewhat per- sonal in tone. Mayor Johnson asserted that the opposition was due to pressure from all the local lighting companies, in- cluding the gas companies, and that in this they had the as- sistance of similar concerns from all over the country. He declared that all the Democratic members, a number suffi- cient to adopt the ordinance, were pledged to the measure and concluded with the threat that he would drive out of political life any Democratic member who voted with the opposition. As the discussion progressed, the presence of Democratic opposition became manifest and two members representing that party, who afterward voted with the Mayor, asserted that they did not feel that they were elected as advocates of a municipal lighting plant and doubted the 36 MUNICIPAL SOCIALISM wisdom of erecting one. The leader of the Democratic op- position, a councilman at large whose nomination had been opposed by the Mayor, declared that the plans for the plant had not been properly matured and that he was convinced that a vote in favor of the project was not justified by the data at hand. He also thought that the report of the Cham- ber of Commerce was entitled to a good deal of weight. The vote which followed was nineteen in the affirmative and thir- teen in the negative, one negative vote being cast, however, for the purpose of moving a reconsideration, so that the real strength of the opposition was twelve votes. The number was made up of the nine Republican members and three Democrats. THE SPOILS SYSTEM AT WORK Immediately after this vote was recorded it became evi- dent that the Mayor hoped to obtain the two votes necessary to change the result and to secure a reconsideration one week later. The measures resorted to during the week involved the utmost exercise of the power of the "patronage" of the City Hall and no member of the official force, who could aid in bringing pressure upon the independent members of the Council to reverse their position, was permitted to remain aloof from the contest or to allow his duties as an employee of the public to conflict with his activities as a political agent of the city's chief executive. The headlines referring to this THE SPOILS SYSTEM AT WORK 37 subject in The Cleveland Plain Dealer of July 29, 1903, are instructive, particularly as that paper is in political alliance with the Mayor. They are: "To Frighten or Persuade," "Mayor Seeks to Drive Bolting Democrats into the Fold" and "Won't Give Up Fight for the Electric Lighting Plant." The article which followed declared that on the day follow- ing the rejection of the ordinance by the Council: "* * * two Democratic mass meetings were held at the City Hall. One was in Mayor Johnson's inner office and was composed of active Democrats of the third ward, con- stituents of Stanton. The other meeting was of twentieth- ward Democrats and was held in the outer offices of the Board of Public Service. These were the irate fellow- wardsmen of Roche." As might be supposed, the gentlemen named in the fore- going are two of the independent Democrats who voted against the bond issue. Other mass meetings were held, peti- tions were circulated, and committees demanded that these councilmen should vote for the Mayor's project or resign. In the meantime less spectacular methods were resorted to in an attempt to divide the Republican vote and the attention of those whose support was hoped for was called to the polit- ical preferment which the Mayor had obtained for two former Republicans who had come to his assistance in earlier con- tests. The United Trade and Labor Council of the city was enlisted "to frighten or persuade," and its resolution "heartily condemned" the Democratic opposition. Even the 38 MUNICIPAL SOCIALISM final resort to a party caucus did not, however, sway the in- dependents from the position they had assumed and when the final vote was taken, the three Democrats who had registered their opposition a week earlier, stood steadfastly, with the nine Republicans, against the ordinance. A FLANK MOVEMENT BY THE MAYOR The Mayor, with his usual fertility of resource, was suc- cessful in turning a bitter defeat into a half victory by se- curing the introduction and adoption, by a three-fourths vote and under a suspension of the rules, of an ordinance calling a special election for September 8, and submitting to the people the question whether $400,000 in bonds should be issued to build an electric lighting plant. To do this he had to obtain the unanimous support of the Democratic mem- bers of the Council assisted by one Republican. It was de- cided to submit five other bonding proposals at the same election, all for purposes undeniably within the legitimate field of municipal activity. The strenuous week during which an effort was being made to undermine the opposition in the Council had in part prepared the public for an expression of its will on the question. There was no longer any danger of either side succeeding by the default of the other. The public had awakened. THE SPECIAL ELECTION STRATAGEM FOILED 39 THE SPECIAL ELECTION STRATAGEM FOILED The immediate consequence of this awakening was the organization of a Citizens Association headed by Hon. John C. Hutchins, a prominent member of the local bar, who had served honorably on the bench and as city postmaster under appointment from former-President Cleveland. This asso- ciation was strictly non-partisan and its officers were all business men of the highest local standing. Its efforts were intelligently directed and continuous up to the date of the final vote and to them is chiefly due the defeat of the pro- posed change in the policy of the city. A preliminary survey of the situation by this association convinced its executive committee that a complete expression of the will of the citi- zens of Cleveland could not be obtained under the call for the special election. This conclusion was based in part upon the impossibility of conducting an educational campaign covering completely a city of 425,000 inhabitants within the period between August 3, the date of the ordinance providing for the special election, and September 8, the date set for it, but especially upon the law governing such special elec- tions. This statute provides that when a special election to decide whether additional bonds shall be authorized is held within any city, there shall be but one polling place in each ward. The city of Cleveland has twenty-six wards and up- ward of 84,000 registered voters. At ordinary elections 4