"The System," As Uncovered by the San Francisco Graft Prosecution

Transcriber's Note

Footnotes have been gathered at the end of each chapter.

There are numerous apparent spelling or typographical errors, including those that appear in the copious quoted material. These have been corrected, and are noted in the detailed notes at the end of this text.

Italics are represented here using the underscore character as _italic_. Bold text uses the equal character as =bold=.

"The System"

As Uncovered By

The San Francisco Graft Prosecution

By

Franklin Hichborn

(Author of "The Story of the California Legislature of 1909"; "The Story of the California Legislature of 1911"; and "The Story of the California Legislature of 1913.")

"It is well enough, my fellow-citizens, to meet as we do to-night, and to applaud the sentiments of patriotism, and to echo the voice of indignation uttered upon this rostrum. But another and more imperative duty devolves upon every one of us individually, and that is to give his and her moral support to the officers of the law. We must not content ourselves by merely adopting a set of resolutions, and then going home and forgetting about it, placing all responsibility upon the constituted authorities. This is not a case of the constituted authorities. It is the case of the people of San Francisco. And unless the people of San Francisco do their individual duty in supporting the prosecution, the officials of the courts and of the law must fail in their efforts."--_Walter Macarthur at the mass meeting called at the time of the attempted assassination of Heney._

COPYRIGHT, 1915 by FRANKLIN HICHBORN

San Francisco Press of The James H. Barry Company 1915

Franklin Hichborn'S Books On California Politics

Story of the California Legislature of 1909 $1.25

Story of the California Legislature of 1911 1.50

Story of the California Legislature of 1913 1.50

"The System," as Uncovered by the San Francisco Graft Prosecution 1.50

Contents

Chapter Page

I. The Union Labor Party Movement 11

II. The Ruef Board of Supervisors 22

III. The San Francisco Ruef Ruled 30

IV. San Francisco After the Fire of 1906 49

V. Graft Prosecution Opens 73

VI. Ruef's Fight to Take the District Attorney's Office 87

VII. Oliver Grand Jury Impaneled 96

VIII. Ruef Loses Fight for District Attorney's Office 107

IX. Ruef and Schmitz Indicted 110

X. Fight to Evade Trial 121

XI. Ruef a Fugitive 130

XII. The Trapping of the Supervisors 139

XIII. Confessions of the Bribe-taking Supervisors 154

XIV. The Source of the Bribe Money 168

XV. Ruef Pleads Guilty to Extortion 186

XVI. Schmitz Convicted of Extortion 208

XVII. Schmitz Ousted from Office 215

XVIII. The Real Fight Begins 240

XIX. The Glass Trials and Conviction 269

XX. The Ford Trials and Acquittals 279

XXI. The San Francisco Election of 1907 300

XXII. Higher Courts Free Schmitz and Ruef 320

XXIII. The Defense Becomes Arrogant 335

XXIV. Jury Fixing Uncovered 357

XXV. The Shooting of Heney 370

XXVI. The Calhoun Trial 388

XXVII. The San Francisco Election of 1909 405

XXVIII. Dismissal of the Graft Cases 425

XXIX. Ruef's Last Refuge Fails 440

XXX. Conclusion 455

Appendix.

Judge Lawlor's Ruling in Motion to Dismiss Graft Cases i

How the Supervisors Were Bribed vii

Gallagher's Order Removing Langdon from Office of District Attorney xii

The Ruef "Immunity Contract" xix

"Immunity Contract" Given Supervisors xxi

District Attorney Langdon's Plan for Reorganizing the Municipal Government xxii

Roosevelt's Letter to Spreckels on the Graft Situation xxv

Governor Johnson's Statement Regarding Ruef's Imprisonment xxviii

Schmitz's Attempt to Control San Francisco's Relief Funds xxxiii

Receipts and Disbursements of the Graft Prosecution xxxiv

Preface.

A tethered bull does not know that he is tied until he attempts to go beyond the rope's limits.

A community does not feel the grip of the "System" until it attempts resistance. Then it knows.

San Francisco during the Ruef-Schmitz regime was no more under the heel of the "System" than when other "bosses" dominated; no more so than to-day; no more so than other communities have been and are.

The political "boss" is merely the visible sign of the "System's" existence. However powerful he may appear, he is, after all, but agent for the "System." The "boss" develops power, does the "System's" work until he is repudiated by the people, when another "boss," usually in the name of "reform," takes his place.

But the second "boss" serves the same "System." Ruef entered San Francisco politics as a "reformer." He supplanted other "bosses." But Ruef in his turn served the "System" they had served.

San Francisco, when Ruef had reached his point of greatest possible power, rose against him. The "System" was not immediately concerned. Ruef had lived his day; the hour for another "boss" to succeed him had come. But San Francisco proposed to get at those back of the "boss"; to get at the "System." And then San Francisco found the "System" more powerful than herself; more powerful than the State of California.

And San Francisco was beaten down, humiliated, made to understand that within her borders the laws could not be enforced against those to whom the "System" granted immunity from punishment.

To secure evidence against bribe-givers, the State granted immunity to bribe-takers who confessed their crimes and joined with the State to bring larger criminals to justice. And the "System's" agents cried outrage that bribe-takers should go free of punishment.

But the "System" granted immunity from punishment to those who had bribed. And the apologists for the "System" will tolerate no criticism of this sort of immunity.

Other communities have risen against the "System's" agents, the "bosses," and the "bosses" have given place to other agents. But few communities, if any, have attacked the "System" as did San Francisco. Had they done so, unquestionably they would have found themselves as ineffective against corruption as San Francisco has been shown to be.

The "System" is confined to no particular State or locality; it permeates our entire public life. Judge Lindsey in Colorado calls it "The Beast." In California we call it "The Southern Pacific Machine," for in California the Southern Pacific Company was its chief beneficiary. Other communities call it the "Organization." The bull does not discover his rope until he strains at it; the community knows little or nothing of the overpowering "System" until it resists. San Francisco resisted and discovered.

The mere bribing of a board of supervisors was not extraordinary. Our newspapers furnish us daily with sorry recital of bribe-taking public officials discovered in other communities. But the effective, searching resistance to bribe-giving which San Francisco offered was extraordinary. It was a new thing in American politics. It compelled the "System" to show its real strength, and that, too, was new in American politics, and extraordinary, also.

The "System" at San Francisco had taken the usual precautions which ordinarily ensure it against successful opposition, or even question. It had, through its agents, selected the candidates for public office, including the District Attorney. With the District Attorney loyal to the "System" the "System" was secure against attack. And even were the District Attorney to resist the "System," still was the "System" secure, for the "System" could deny the District Attorney, through the public officials it controlled, the funds necessary for successful opposition.

But here again extraordinary circumstances worked for the "System's" confusion. Not only had the "System" been mistaken in the caliber of the man whom it had permitted to be nominated for District Attorney, but patriotic citizens guaranteed the expenses of effective attack through the District Attorney's office.

Nevertheless, the "System" would ordinarily have been able to laugh at the attack, and render it abortive, by compelling the citizens who were backing the District Attorney to withdraw their support.

Even at San Francisco, the supporters of the District Attorney felt the force of such attack. Those who supported the Prosecution found themselves harassed in their business ventures, and snubbed in the social circles in which they had moved. When Heney, stricken down in the discharge of his duty, lay at the point of death, a minister of the gospel prayed for the wounded Prosecutor's recovery. Immediately from the pews came silent expression of disapproval. That pastor refused to be intimidated, refused to join with his fashionable congregation against the Prosecution. He was eventually compelled to resign his pastorate. Rudolph Spreckels, while accounting for every dollar that the Graft Prosecution had expended, asked to be excused from naming those who had subscribed to the fund, lest they be attacked. Ordinarily, those citizens whose instincts had led them to guarantee the District Attorney their support, would have been forced to abandon him.

But at San Francisco, a few citizens, in spite of ridicule, abuse, social ostracism and business opposition, stood firm for civic righteousness. This made San Francisco's attack upon the "System" possible and stirred the "System" to extraordinary resistance.

The "System," seeing itself threatened, went to the relief of the "boss," its agent, whom even its chief beneficiaries despised. The "boss," through his puppet in the Mayor's chair, declared the office of the District Attorney vacant, and appointed himself to fill the vacancy. The boldness of the move startled the whole community. But the act merely demonstrated the extremes to which the "System" was prepared to go. It was not extraordinary in comparison with what was to follow. Later on, witnesses were to be concealed, intimidated, gotten out of the State; their kidnaping even being attempted. The managing editor of a newspaper opposing the "System" was to be taken on the street in daylight, hurried across the country to a suburban town, forced into a stateroom of an outgoing train, and sent on his way to a distant city. The home of the pivotal witness against the "System"-protected defendants was to be dynamited, the witness and other inmates of the building miraculously escaping with their lives. A public prosecutor was, while conducting one of the "System"-attacking trials, to be shot down in open court. A prisoner at the bar was to arise to denounce the judge on the bench as a partisan and a scoundrel. Thugs were to invade court-rooms while trials were going on, to intimidate "System"-threatening prosecutors and witnesses; men were to be trapped as they offered bribes to trial jurors; agents of the Prosecution were to be bribed to turn over to the defending element the Prosecution's papers and reports. An agent of the Prosecution in the employ of the Defense, working in the interest of the Defense, was to sit at the Prosecutor's side during the selection of a trial jury, to advise the Prosecutor of the character of the men under examination for jurors, and with such advice mislead and confuse.

No; bribe-giving at San Francisco was not so extraordinary as the events which grew out of attempt to punish for bribe-giving.

And now, as we look upon San Francisco beaten, and retarded in her development because of that beating, the hopelessness of her opposition to the "System" is the most startling thing of all. We see now, that with a District Attorney intent upon doing his duty, with funds ample for vigorous prosecution guaranteed, with trial judges of integrity and ability on the bench, none of the accused, so long as he remained loyal to the "System"--so long as he did not "snitch"--was in real danger of suffering the law-provided punishment for the crimes uncovered against him.

Ruef carefully weighed the ability of the Prosecution to save him, against the power of the "System" to punish or to save, and knowing the power of the "System" as few other men knew it, Ruef betrayed the Prosecution and cast his lot with the "System." The outcome would have justified his judgment but for a series of unusual events which none could have foreseen. The most extraordinary incident of the whole Graft Prosecution, we can now, with the "System" uncovered before us, see, was that Abe Ruef went to the penitentiary. With full knowledge of the power, resources and methods of the "System," it is not at all extraordinary that guilty men under its protection should escape punishment. But it is extraordinary--due only to a chain of extraordinary happenings--that one of its agents, who continued faithful, who didn't "snitch," finds himself in prison and unable to get out.

The San Francisco Graft Prosecution uncovered the "System" as it has been uncovered in no other American city, for San Francisco made the hardest, most persistent, and longest continued attack that a municipality has ever made upon it. California has profited greatly because of the uncovering, for while uncovered, the "System" may be proceeded against intelligently, not in the courts, but at the ballot-box. California has been quick to profit by the opportunity which the uncovering of the "System" has offered.

In preparing this volume for the press it is my purpose--so far as lies in my power to do so--_to keep the cover off_.

_Franklin Hichborn._

Santa Clara, Calif., Dec. 25, 1912.

Chapter I.

The Union Labor Party Movement.

Eugene E. Schmitz[1] was elected Mayor of San Francisco in November, 1901. He had been nominated by the Union-Labor party. This party was organized after labor disturbances which had divided San Francisco into militant factions, with organized labor on the one side and organized capital on the other.[2]

The convention which had nominated Schmitz was made up in the main of delegates who had affiliations with labor unions and were in close sympathy with the labor-union movement.

But this did not mean that the new party had the unanimous approval of the labor unions, or of the rank and file of organized labor. A considerable faction, with P. H. McCarthy, president of the State Building Trades Council, even then a dominating figure in San Francisco labor circles, at its head, advised against the movement, and opposed the new party candidates not only in 1901, but in 1903 when Schmitz was a candidate for re-election.

On the other hand, the new party had in the beginning the support of the Coast Seamen's Journal, published at San Francisco, and one of the most influential labor publications on the Pacific Coast. It had, too, the advocacy of several earnest Labor leaders.

Very frankly, such leaders questioned the ultimate consequences of the movement, expressing fears which time was to justify. But to them the situation offered no alternative. Their support and influence went to the new party as an expedient of the times, not as the beginning of a permanent political organization.

But the movement, once started, got beyond their control. During the first five years of Union-Labor party activities in San Francisco many of these original supporters were forced, first into silence and finally into open repudiation of the methods of the Union-Labor party administration.

In the meantime, members of the McCarthy faction, which had resisted the organization of the party, and had opposed it at the 1901 and 1903 elections, became its strong partisans. This element supported the party ticket at the 1905 election; and in 1907, and again in 1909, when McCarthy was himself the Union-Labor party candidate for Mayor.

But the Union-Labor party ticket which McCarthy headed did not have the united support of labor leaders who had organized the movement. Indeed, labor leaders whom the McCarthy faction in 1901 called "scabs" for organizing the Union-Labor party, were, by the same men who had condemned them in 1901, denounced as "scabs" during the 1909 campaign for not supporting the Union-Labor party candidates.

From the beginning, the Union-Labor party had the support of elements outside the labor-union movement. Much of this support came from citizens who, regardless of their attitude on trade-unionism, were dissatisfied with the old parties. The situation offered exceptional opportunity for the political manipulator. But the one man with the political vision to see the possibilities of the third-party movement, was not a member of a labor union. He was a lawyer who had already attained some prominence in San Francisco politics--Abraham Ruef.[3]

Ruef was quick to see the potentialities of the political Frankenstein which groping labor leaders had brought into being. He knew that _they_ could not control their creation; he knew that _he_ could. He did not overestimate his powers. He managed the new party's 1901 campaign.[4] Under his direction, success was won for a cause that had been deemed hopeless. The genius of Abraham Ruef made Eugene E. Schmitz Mayor of San Francisco.[5]

In practical acknowledgment of Ruef's services, Schmitz issued an open letter, in which he stated himself privileged to consider Ruef his friendly counsellor.[6] The issuance of that letter made Ruef the recognized political representative of the Union-Labor party administration, a position which he held until the estrangement of himself and Schmitz under the strain of the graft prosecution.[7]

But the government of San Francisco did not pass entirely under control of the Union-Labor party until four years after Schmitz's elevation to the Mayoralty.

During the era of Union-Labor party power in San Francisco, the Mayor and the eighteen members of the Board of Supervisors were elected every two years.[8] Schmitz, under Ruef's management, was re-elected in 1903. But the Union-Labor party failed at that election, as it had in 1901, to elect a majority of the Board of Supervisors. Many of the commissions, on the other hand, through appointments by the mayor, had, by 1903, passed completely under Union-Labor party control.

Gradually, the opinion grew in San Francisco that the management of the departments was unsatisfactory, if not corrupt. This opinion, in 1905, when Schmitz was for a third time the Union-Labor party candidate for Mayor, found expression in fusion of the Republican and Democratic parties to bring about the defeat of the Union-Labor party nominees.

This fusion was in the name of municipal reform. The organizers of the movement were in the main opposed to machine political methods. When, however, the movement gave evidence of vitality and strength, the political agents of public service corporations became identified with its leadership.[9] The new leaders were soon in practical control. Public-service corporations were largely instrumental in financing the movement. Testimony was brought out before the Grand Jury which conducted the graft investigations, that nearly every public-service corporation in San Francisco contributed to the fusion fund, the average of the contributions being $2,500 for each corporation.[10]

On the other hand, the public-service corporations contributed liberally toward the election of the Ruef-backed, Union-Labor party candidates.[11] Ruef was already on the pay-roll of the law departments of many of them. Thus, generally speaking, it made little difference to the corporations whether the "reform" fusion candidates or the Ruef Union-Labor party candidates were elected. The corporations had captained each side, and in a large measure had financed each side.

The inevitable difficulties of a campaign, financed and officered by public-service corporations, to correct municipal ills for which the corporations were in large measure responsible, were encountered from the beginning. For the head of the reform or fusion ticket, men who had been prominent in the organization of the anti-Ruef crusade were suggested, only to be rejected by the corporation allies who had after the reform group's preliminary successes become identified with the movement.

Finally, after several names had been canvassed, John S. Partridge, an attorney of good ability, and repute, but scarcely known outside the immediate circle in which he moved, was agreed upon as Mr. Schmitz's opponent. Both the Democrat and the Republican party nominated Mr. Partridge, and with him a complete fusion ticket, including supervisors.

Partridge had a clear field against Schmitz, but his candidacy failed to carry the confidence, or to awake the enthusiasm which brings success at the polls.

The Union-Labor administration was openly denounced as corrupt. Francis J. Heney,[12] fresh from his success in prosecuting the Oregon land fraud cases, went so far as to declare in a speech before one of the largest political gatherings ever assembled in San Francisco that he knew Ruef to be corrupt,[13] and, given opportunity, could prove it.

The public generally believed Heney's charges to be justified. But of approximately 98,000 registered voters only 68,878 voted for Mayor, and of these, 40,191 voted for Schmitz. Partridge received only 28,687[14] votes, being defeated by a majority of 11,504.

Not only was Schmitz re-elected by overwhelming majority, but the entire Ruef-selected Union-Labor party ticket was elected with him.

Ruef, as Mayor Schmitz's recognized political adviser, and political agent for the Union-Labor party, found himself in control of every branch and department of the San Francisco municipal government.

Footnotes:

[1] Schmitz, previous to his election, was employed as a musician in a San Francisco theater. His connection with organized labor came through membership in the Musicians' Union. He had no intention of aspiring to the Mayor's chair until Ruef suggested it to him.

[2] The San Francisco labor strike of 1901 arose out of the refusal of the organized teamsters to deliver goods to a non-union express agency. The Employers' Association refused to treat with the men collectively. Other organizations went out in sympathy.

James D. Phelan, who was then Mayor, was the intermediary between the teamsters and their employees. He advocated recognition. The negotiations failed. During the progress of the strike there were constant disturbances. A steamship company, for example, employed prizefighters in the guise of workingmen to seek positions as strikebreakers, and when interfered with to belabor the pickets. Assaults were made upon non-union teamsters carrying supplies to and from railway stations. The Chief of Police, in order to preserve peaceful traffic, placed two policemen upon each truck. Labor leaders asked not only that the police be withdrawn from the trucks, but from the waterfront. This action the Mayor refused to take, on the ground that it was his duty to preserve public order, and that it was in the interest of all to avert rather than suppress trouble. A meeting of representatives of the several factions was held at the Mayor's office, September 23, 1901. The story was circulated that the Mayor had said at the meeting that if the workmen did not want to be clubbed let them go to work. Both sides now admit the statement was not made. Joseph S. Tobin, Henry U. Brandenstein, Lawrence J. Dwyer and Peter J. Curtis, who were present, have set forth in affidavit that "Mayor Phelan did not say at said conference, as has been alleged, referring to the workingmen's strike, that 'if they don't want to be clubbed let them go to work,' nor did he make any statement of like import." At the time, however, feeling was running so high at San Francisco that the most extravagant stories were believed. Opponents of the administration--those representing capital as well as those advocating recognition of the unions--seized upon every opportunity to discredit. Crafty adventurers of the type of Abe Ruef lost no chance to work distrust and confusion. Out of the turmoil came the Union Labor party.

[3] Ruef graduated from the University of California and from the University of California law school with exceptional honors. He was at twenty-one a practicing attorney. With Franklin K. Lane, the present Secretary of the Interior, Dean John H. Wigmore of the Northwestern University, and others, he organized a club for civic reform. His first political convention, he tells us in his Confessions, showed him that representative government was a farce. He resolved to devote himself to his law practice. But almost immediately we find him an "errand boy" for Martin Kelly and Phil Crimmins, powerful "bosses" in their day, but now practically forgotten. Ruef continued with Kelly and Crimmins for ten years. He drifted with the machine, securing excellent training for his future career. His opportunity came in 1901, when, in its effort to throw off the yoke of the bosses, the State secured the enactment of a new primary law. Under this law Ruef took his first step to secure control of the State political machine. He seized upon the new law as a vehicle to organize a "reform" movement. His organization took the name Republican Primary League. He secured a large following. He was becoming powerful. He tells us in his Confessions that during this period he was invited to dine at the homes of men of political and social importance, among them William F. Herrin, chief counsel of the Southern Pacific Company, and Patrick Calhoun, president of the United Railroads. But as yet, Ruef had little real influence in the "organization." Then came the labor unrest, and the Union Labor party movement. Ruef managed to combine the Republican Primary League with the Union Labor party movement. This combination was the basis of his campaign for the election of Schmitz.

[4] Ruef also provided much of the funds employed in the first Schmitz campaign. In a statement published May 16, 1907, Ruef said: "When Schmitz first ran for Mayor I made his campaign for him, and put up $16,000. My friends told me I was a fool. I guess I was."

[5] Out of the 52,168 votes cast for Mayor, at the 1901 election, Schmitz received 21,776. His opponents--Wells (Republican) and Tobin (Democrat)--divided 30,392 between them, Wells receiving 17,718 and Tobin 12,674. Up to the present time (1914) the Union-Labor party has four times been successful in San Francisco mayoralty elections. But only once, in 1905, has its candidate been elected by majority vote. Changes in the San Francisco Charter, ratified at the 1911 session of the State Legislature, place the election of municipal officials on a non-partisan basis, and prevent election by plurality vote. Henceforth all officials must be elected by majority vote.

[6] Schmitz's letter announcing his obligation to Ruef was as follows:

"My Dear Ruef: Now that the election is over and I am to be the Mayor of our native city, I wish to express to you and through you to all your loyal friends and the faithful Republicans who supported my cause, my profound appreciation of the generous, whole-souled, substantial and effective support accorded me in the exciting campaign which has just closed. Viewed from your prominent position in the Republican party, I know the seriousness of the step which you took when you voluntarily and unconditionally offered me your valuable aid, and I cannot in words properly give utterance to my deep feeling in this regard. I can only say that your action is worthy of yourself, and that no higher praise can be accorded you.

"I have now for some fifteen years enjoyed your acquaintance and friendship and your services as my attorney in many capacities, and I say without hesitation or flattery that I have yet to find a more honorable, a more loyal, a more able attorney, or a truer friend.

"I feel that I owe a great deal of my success in this campaign to you and your friends, and I shall not permit myself at any time to forget it.

"Though you have never asked or even suggested it, I shall, with the utmost confidence and with a sentiment of absolute security, feel myself privileged at all times to consider you as my friendly counsellor and to call upon you whenever I may require assistance in the solution of any of the perplexing and complicated questions which must necessarily arise in the conduct of so vast and important an office.

"I trust that you will not hesitate to say that I may do so. Again and again thanking you and your friends, I am,

"Very sincerely yours, "E. E. SCHMITZ."

[7] Ruef at once availed himself of the opportunities which his position offered. He accepted regular "retainers" from public-service corporations. He testified before the Grand Jury that he was employed by the United Railroads through Tirey L. Ford, just after the first election of Schmitz, at $500 per month, and that he gave receipts to Ford for this money, during Schmitz's first term of office, but received the money always in Ford's office in currency; but that after the second election of Schmitz, he (Ruef) refused to give any more receipts for this money, although he continued to receive it from Ford the same as before with receipts, and that after the third election his salary was increased to $1,000 per month, which was paid in the same way by Ford without any receipts.

Ruef further testified that he was employed by the Pacific States Telephone and Telegraph Company, immediately after Schmitz's first election, through T. V. Halsey, and that Halsey paid him $1,200 per month in currency without any receipt.

E. S. Pillsbury, general counsel of the Pacific States Telephone and Telegraph Company, testified that he never heard of Ruef's employment until after the indictments were returned against Halsey, and that he, Pillsbury, attended to all of the legal business of the company during the entire time Ruef was under employment. Pillsbury received only $1,000 per month for his own services, and testified that he would have objected to the payment to Ruef of a larger salary than he was getting.

Pillsbury was a stockholder to the amount of $500,000 in his own right, and was a member of the executive committee of the board of directors of the company.

At the trial of The People vs. Tirey L. Ford, No. 817, I. W. Hellman, one of the most prominent of California bankers and at one time a director of the United Railroads, testified: "Some five years ago (the Ford trial was in 1907, which would make the date about 1902) Mr. Holland, who was then the president of the United Railways, came to me to ask my advice whether Mr. Ruef should be employed as an attorney for the United Railways, stating that by employing him peace could be secured with the labor unions, that he had great influence with them, and there would be general peace, and it was to the benefit of the railways company to have such peace. Mr. Ruef then was an attorney of high repute, recognized as a good lawyer, and I said if that could be accomplished it would be for the benefit of the railway company as well as for the public, and I advised yes. Whether he has been employed or not I do not know, because I afterward sold my interest in the company and I never have inquired whether he had been employed or not."

In this connection, it is interesting to note that Ruef in his latest confession, the publication of which was begun in the San Francisco Bulletin in May, 1912, states that his employment by corporations as attorney did not begin until after the second Schmitz election--that is to say, in 1903. Hellman's testimony would indicate that his employment by the United Railroads dates from 1902. Compare with footnote 77, page 74.

[8] Under amendments to the San Francisco Charter, ratified by the Legislature of 1911, the Mayor and Supervisors are now elected to four-year terms.

[9] George F. Hatton, Southern Pacific lobbyist and politician, and political manager for United States Senator George C. Perkins, was one of the principal leaders of the 1905 "reform" movement. He was at one time retained as an attorney by the Empire Construction Company, affiliated with the Home Telephone Company, which was seeking a franchise to establish a telephone system in San Francisco in competition with the Pacific States Telephone and Telegraph Company. The Home Telephone Company contributed to the "reform" campaign fund. Through the "reform" Board of Supervisors, who were to be elected, and whose campaign was thus financed, the Home Company was to get its franchise. But the "reform" candidates were defeated, the Schmitz-Ruef Union-Labor party candidates were elected. The Home Telephone Company thereupon proceeded to secure its franchise by employing Ruef.

[10] William Thomas, of the law firm of Thomas, Gerstle & Frick, attorneys for the Home Telephone Company, testified before the Grand Jury that his company had contributed $8,000 to the "reform" campaign fund. The testimony indicated that this money was used at the primaries. Louis Sloss, one of the leaders of the "reform" movement, testified that after the primaries, Detweiler, who was at the head of the Home Telephone Company enterprise, sent his personal check for $800 additional. Fairfax H. Wheelan, one of the leaders of the "reform" movement, testified before the Grand Jury that the Pacific States Telephone and Telegraph Company, in the name of T. V. Halsey, subscribed $2,000 to the fund; and the United Railroads, concealing its identity under the name "Cash," $2,000 more.

[11] Dr. Charles Boxton was one of the Union-Labor party Supervisors elected in 1905. At the second trial of Louis Glass, vice-president of the Pacific States Telephone and Telegraph Company, for bribery, Boxton testified that during the campaign, T. V. Halsey, political agent for the company, met him on the street and gave him a sealed envelope, saying: "If that will be of any use to you use it."

Boxton found the envelope to contain $1,000 in United States currency.

[12] Francis J. Heney when five years old went to San Francisco with his parents. He was educated at the public schools of that city, the University of California, and Hastings Law School. After being admitted to practice he lived for a time in Arizona, where he served as Attorney-General. On his return to San Francisco in 1895, he confined himself to civil practice until, at the solicitation of United States Attorney-General Knox, he undertook the prosecution of the Oregon Land Fraud cases. He was at the close of successful prosecution of these cases, when invited by Rudolph Spreckels, Phelan and others, to participate in the prosecution of the San Francisco graft cases.

[13] Heney's statement was prophetic. The published account of his speech (see Chronicle, November 6, 1905) was as follows:

"If I had control of the District Attorney's office, I would indict Abe Ruef for felony and send him to the penitentiary, where he belongs, for I have personal knowledge that he is corrupt.

"If you elect these people, the graft of this city will become so great that the citizens of San Francisco will ask me to come back and prosecute him. When the time comes I will do as the people request as a matter of civic duty."

Heney's charge brought caustic reply from Ruef. In an open letter to Heney, published November 7, 1905, Ruef said:

"Francis J. Heney:--In the published reports of your speech at Mechanics Pavilion last Saturday night you are represented as saying: 'I say to you, moreover, that I personally know that Abraham Ruef is corrupt, and I say to you that whenever he wants me to prove it in court I will do so.'

"I am not a candidate for office, but as a man I do not propose to leave your false statement undenied.

"In the past I have paid little attention to anything said by hostile papers concerning myself, feeling that the public fully understood the despicable motives underlying the utterances of their proprietors. In your case a different situation presents itself. You have recently acquired considerable repute as a prosecuting attorney for the United States Government. Your statements, if unchallenged, may be given some credence by those not familiar with the true condition of affairs.

"In making the statement that you personally know that I am corrupt you lied. You cannot personally know that which does not exist.

"In making the statement at a time and place which allowed no opportunity for a legal showing before the date of the election which you seek to influence, you showed the same courage which put a bullet into the body of Dr. J. C. Handy of Tucson, Ariz., in 1891, for whose killing you were indicted for murder, and upon trial were acquitted because you were the only witness to the deed.

"You say whenever I want you to prove it in court you will do so.

"I want you to try to prove it, and at once. I demand that you begin at once. I know you cannot prove what does not exist. Why you should wait upon my desire, why you should depend upon my wish to proceed with the performance of what must be to every good citizen a public duty, I do not know.

"But as you declare that you will proceed only with my consent, I give you here and now full consent and authority to proceed, and I go further and ask that you do so.

"I regret that your recent identification with the Citizens' Alliance and with the corporations anxious to encompass the defeat of a candidate in a political campaign should have made you so far forget the regard for truth, justice and decency which should characterize men in our profession, as to have induced you to take the chance of ruining for life the reputation and standing of one who is not rightfully amenable to your charge, and who has not otherwise heretofore given you the slightest private or personal provocation for your savage and mendacious attack.

"A. RUEF. "San Francisco, November 6th."

[14] To hold that only 28,687 electors of San Francisco wished a change in the administration of San Francisco would be unjust. Many who were opposed to Ruef's domination remained away from the polls, through dissatisfaction with the management of the fusion movement. Of the more than 40,000 who voted for the Union Labor ticket, were thousands of union men who were opposed to the Schmitz-Ruef element. But Ruef cleverly injected the Citizens' Alliance issue, and the organized labor element was, because of this, made to vote practically solidly for the Ruef-selected candidates. The fact that voting machines were used in every precinct in San Francisco for the first time contributed to this. Members of labor unions did not understand the working of the machines, and were afraid to attempt to vote anything but the straight ticket. This dissatisfied organized labor element, two years later, contributed in no small degree to the election of Mayor E. R. Taylor and the re-election of District Attorney William H. Langdon, thereby making possible continuation until 1910 of the graft prosecution.

Chapter II.

The Ruef Board Of Supervisors.

No observer of San Francisco politics, not even Ruef himself, had expected the entire Union-Labor party ticket to be elected. The election of the Supervisors was the greatest surprise of all. Ruef, with his political intimates, had selected the Supervisorial candidates, but more with a view to hold the organized labor vote for Schmitz than with idea of the fitness of the candidates for the duties involved in managing the affairs of a municipality of 500,000 population.[15] Not one of the eighteen elected was a man of strong character.[16] Several were of fair, but by no means exceptional ability. Of this type were Gallagher, an attorney of some prominence who acted as go-between between Ruef and the Supervisors; Wilson, who was a sort of second man to Gallagher, and Boxton, a dentist.

But for the most part they were men who had led uneventful lives as drivers of delivery wagons, bartenders and clerks. Without an exception, they saw in their unexpected elevation to the Board of Supervisors opportunity to better their condition. Some of them would not, perhaps, have sought bribes; few of them knew just how they could employ their office to their best advantage; but from the hour of their election the idea of personal advancement was uppermost in the minds of the majority of the members of the Schmitz-Ruef Board of Supervisors.[17] Their ignorance of the requirements of their office, their failure to appreciate their large responsibilities, and above all their ill-defined ambitions made them promise of easy prey for the agents of the public-service corporations, who were playing for special privileges worth millions.

None realized this better than Ruef. From the beginning, he recognized that the likelihood of individual members of the board yielding to temptation to petty gain[18] threatened his own larger purposes. He let it be known that he would himself personally prosecute any one of them whom he discovered to be "grafting." Ruef was emphatic in his position that the Supervisors should have no financial dealings with those seeking special-privilege advantages. He even defined regular procedure for dealing with persons and corporations that might elect to catch the easiest way to accomplish their purposes by the use of bribe money. To this end he arranged:

(1) That Supervisor James L. Gallagher[19] should represent him on the board. The Supervisors at once accepted Gallagher, and dealt with him as Ruef's recognized agent.

(2) Finally Ruef arranged for a regular weekly caucus[20] to be held each Sunday night, on the eve of the regular meeting day of the board, Monday.

The public was not admitted to these caucuses. Those who were admitted were Ruef, Mayor Schmitz, George B. Keane,[21] clerk of the Board of Supervisors, who also acted as secretary of the caucus, and the eighteen Supervisors.

At these meetings, which were held every Sunday evening, Ruef was the dominating figure. Supervisor Wilson, testifying at the graft trials, stated that Ruef took the position of "chief counsel and adviser for the board in matters that were to come before the board."

Keane, as secretary of the caucus, took full notes[22] of the proceedings and sent written notices[23] of the meetings to each of those who were admitted.

The first of these caucuses was held shortly before the Schmitz-Ruef board took office. The organization of the board was provided by the Supervisors authorizing Ruef and Schmitz to make up the committees. Ruef undertook the task. He prepared the committee lists, and submitted his selections to Schmitz and Gallagher. Schmitz and Gallagher suggested unimportant changes. The committees were then announced to the Supervisors at the next caucus. There were objections raised, but these objections, with one exception, were denied in all important particulars. The organization of the Schmitz-Ruef Board of Supervisors was thus perfected.

Ruef's way seemed clear. The committee organization of the Board of Supervisors was his own. The Supervisors were to hold no open meeting until they had met with him in secret caucus to ascertain his wishes. The official clerk of the board, who was also secretary of the caucus, was his tried henchman. Gallagher, the ablest of the Supervisors, flattered at being made his representative, and further bound by mercenary ties, was ready to do his slightest bidding. And never had entrenched boss more fruitful field for exploitation.

But scarcely had the new administration been installed, than a weak point developed in Ruef's position. District Attorney William H. Langdon, who had been elected on the Ruef ticket, gave evidence that he proposed to enforce the law, regardless of the effect upon the administration of which he was a part, or upon Ruef's plans and interests.

The first intimation the public had of Langdon's independent attitude came when gambling games in which Ruef was popularly supposed to be interested were raided under the personal direction of the District Attorney. Langdon had first attempted to close the places through the police department. Failing, he had attended to the matter himself.[24] The gamblers appealed to Ruef, but Ruef was helpless. Langdon would not be turned from his purpose. The gamblers and capitalists interested in gambling establishments charged Langdon with political ingratitude.

But those who were laboring for the development, and were opposing the exploitation of San Francisco, saw in Langdon's course the first sign that Abraham Ruef was not to have undisputed sway in San Francisco.[25] With Langdon in the District Attorney's office it was still possible that the laws could be enforced--even against Abraham Ruef. The raiding of the gambling dens marked the beginning of the division in San Francisco, with those who approached the Ruef administration with bribe money on the one side, and those who resisted with the check of law enforcement on the other.

Footnotes:

[15] At Ruef's trial for offering a bribe to Supervisor Furey, Supervisor James L. Gallagher testified that conferences for selecting the Union Labor party ticket, from Sheriff down, were held at Ruef's office. Gallagher testified of one of these conferences:

"The matter of the nominees for Supervisors was mentioned, and all that I recollect about it is that it was stated that there should be a good representation of prominent Union-Labor men on the ticket, and Mr. Ruef stated that he had that in mind, and that that would be done, and it was also stated that the members on the Board of Supervisors that were Union-Labor adherents should be nominated." See The People vs. Abraham Ruef, No. 1437--Transcript on Appeal, Part 3, Vol. 3, page 1278.

[16] The eighteen members of the Ruef-Schmitz Board of Supervisors were James L. Gallagher, attorney at law; Cornelius J. Harrigan, grocer; James T. Kelly, piano polisher; Thomas F. Lonergan, driver of a bakery delivery wagon; Max Mamlock, electrician; P. M. McGushin, saloonkeeper; F. P. Nicholas, carpenter; Jennings J. Phillips, employed in newspaper circulation department; L. A. Rea, painter; W. W. Sanderson, employed in grocery store; E. I. Walsh, shoemaker; Andrew M. Wilson, employing drayman; George Duffey, contracting plumber; Charles Boxton, dentist; M. W. Coffey, hackman; Daniel G. Coleman, clerk; Sam Davis, orchestra musician; John J. Furey, blacksmith and saloonkeeper.

At the time the graft prosecution opened, Wilson had resigned his position as Supervisor to take up his work as State Railroad Commissioner, an office to which he was elected in 1906; and Duffey to be president of the Municipal Commission of Public Works, to which office he was appointed by Mayor Schmitz.

[17] Supervisor E. I. Walsh in a sworn statement made to Heney, March 8, 1907, testified:

"Q. And what was agreed upon there (in caucus) as to programme? A. I couldn't say what was agreed upon with them.

"Q. Wasn't it arranged that every man should be treated alike as to money? A. It wasn't openly suggested that way; it might have been said among the members that way.

"Q. That was the understanding you had. A. Yes, sir.

"Q. That you would be all treated equally and fairly? A. I presume that was the way it was understood."

Supervisor Lonergan had been promised by Supervisor Wilson $8000 for voting to give the United Railroads a permit to operate its lines under the trolley system. At a second meeting Wilson stated the amount would be $1000 only. Of the scene on this occasion, Lonergan testified at the trial in the case of the People vs. Ford. No. 817:

"Q. What did he (Wilson) say on that occasion? A. There was only $4000 in it for me.

"Q. What did you say. A. I asked him what the hell kind of work that was and what did he mean by it. And he shook his head and said that if I didn't like it, all right; something to that effect."

[18] Evidence of Ruef's distrust of his Supervisors was brought out at many points in the graft trials. When he discovered that individual Supervisors were, without his knowledge, taking bribes from the Pacific States Telephone and Telegraph Company, he stated to Dr. Joseph S. Poheim:

"I see they have been trying to take my Supervisors away from me, but I have fixed them; I would like to see one of them throw me down." (See Transcript, People vs. Ruef, 1437, Part 3, Vol. 9, p. 4018.) In the midst of the troubles brought upon him by the graft prosecution, Ruef complained that "These fellows (the Supervisors) would eat the paint off a house, and in order to hold them together I had to descend to their level and take them in with me."

Ruef was also jealous of Schmitz's activity. When he learned that Schmitz had promised franchises independent of him, he directed Supervisor Wilson to oppose them. "Butt in on this Parkside business," he said to Wilson. "Mr. Schmitz has promised the Ocean Shore and the Parkside; he is destroying my political influence; these people ought to be made to come and see me."

[19] Gallagher was by far the ablest member of the Ruef-Schmitz Board of Supervisors. He was by profession an attorney at law. In that capacity he had served first as Assistant City Attorney, and finally as City Attorney. For a time he was law partner with Hon. James G. Maguire, whose opposition, as member of Congress from California, to the Pacific railroads refunding measures, won him a national reputation. Maguire was candidate for Governor on the Democratic ticket in 1898, but was defeated. Gallagher had served as Supervisor previous to his election in 1905, and was one of the most experienced members of the Schmitz-Ruef board.

At Ruef's trial on the charge of offering a bribe to Supervisor Furey, Gallagher testified that soon after his election in 1905, Ruef told him there would be a number of matters coming before the Board of Supervisors in which the corporations and other large concerns would be interested; that there would be a number of large deals coming before the board in which he wanted him (Gallagher) to represent him on the board. Gallagher accepted the agency.

[20] Gallagher testified before the Oliver Grand Jury of the nature of these caucuses. From his testimony the following is taken:

"Q. They (the Supervisors) voted in the caucus and you knew how the vote would be. A. Yes, sir.

"Q. And they would be bound by the caucus vote. A. That was understood that a man would vote at the caucus in the way he would vote at the meeting.

"Q. You were understood to represent Mr. Ruef and Mr. Ruef's views. A. That was generally understood by members of the board.

"Q. And whatever way you went meant programme. A. I believe Mr. Ruef told a number of them so, and that circulated among the others; it was generally understood by them."

[21] Keane's lasting loyalty to Ruef makes him one of the most interesting characters of the graft cases. He entered Ruef's employ in 1898 as a law clerk. He remained in Ruef's office until January, 1902, when Mayor Schmitz took office. Keane was then made secretary to the Mayor. He served in that capacity until January, 1906, when Ruef gained control of the Board of Supervisors. Ruef then made him clerk of the board. At Ruef's trial for offering a bribe to Supervisor Furey, Gallagher testified that Ruef told him that Keane should be clerk. Gallagher notified the other members of Ruef's decision, and that closed the incident. Keane was, however, much more than a mere clerk. Supervisor Wilson testified at the Ruef trial for offering a bribe to Furey, that he (Wilson) owed his nomination to Keane. Keane was elected to the State Senate where his loyalty to Ruef in foul as well as fair weather made him a conspicuous and somewhat notorious character. At present writing, Keane is foremost in the movement to bring about Ruef's release from State prison.

[22] At Ruef's trial on the charge of offering a bribe to Supervisor Furey, Keane testified that these notes had been destroyed in the great fire of April 18-19-20, 1906. Keane testified further that Ruef was a constant attendant at the caucuses; that Schmitz was an occasional visitor; that Supervisor Gallagher presided.

[23] Notices of the caucus meetings were sent to Ruef precisely as though he had been a member of the Board of Supervisors. At Ruef's trial for offering a bribe to Supervisor Furey, the following letter of notification was introduced as evidence:

"San Francisco, June 21st, 1906.

"Hon. A. Ruef, San Francisco--Dear Sir: I respectfully beg leave to notify you that the Board of Supervisors will meet in caucus on Sunday evening, June 24th, at 8 o'clock p. m., at Hamilton Hall, Steiner street, near Geary. Your attendance is respectfully requested.

"Yours truly, GEORGE B. KEANE, Clerk."

[24] The San Francisco Chronicle in its issue of March 8, 1906, said of the District Attorney's raids on the gamblers:

"The political push and the underworld generally are astonished at District Attorney Langdon's unexpected outbreak. He has descended upon them like a thunderbolt out of a clear sky. For the moment even wrath is less in evidence than surprise. It was not expected. It is not what was paid for. It is like being murdered by one's dearest friend. There is a complete reversal of the usual experience of mankind. In most cities the lid is on and weighed down before election but lifted and thrown away as soon as the votes are counted. To be allowed to run wide open before election and to be closed down and nailed up as soon as the new official is fairly seated is outside of all precedent. And all that after the most liberal contributions. There is a feeling in criminal circles that somebody is guilty of obtaining money under false pretenses. The District Attorney is the one official for whose friendship the lawbreakers have the most earnest longings, and behind their closed doors the idle gamblers are trying to figure out what 'lay' this dreadful Langdon is really on, and by what trade he has been induced to ignore all the promises expressed or implied, which those assumed to be able to speak for him dispersed so freely when votes were in demand.

"As for the public, it was for none of these things. Among the decent portion of society the 'motives' of the District Attorney do not arouse even passing curiosity. What does interest them is the present vigor of his work, and the probability of his keeping it up."

[25] Ruef had consented to Langdon's nomination for District Attorney, because he considered that Langdon's intimate acquaintance with the teachers and pupils of the San Francisco public schools would help the ticket. For the three years preceding the campaign Langdon had been Superintendent of Schools at San Francisco. Ruef told Langdon after the election that he had no idea that any one other than Schmitz could be elected on the Union-Labor party ticket that year. When during the campaign Langdon began to develop strength in the contest for District Attorney, Ruef sent him a check for $200 for "campaign expenses," saying that the money had been contributed by Tirey L. Ford of the United Railroads. Langdon returned the check to Ruef with the statement that he preferred to pay his own campaign expenses. During the campaign at every meeting he addressed, Langdon made the statement: "The laws are on the statute books; all may know them. I pledge myself to the enforcement of these laws." To be sure, few if any paid much attention to what Langdon meant, but that was no fault of Langdon's. Everybody was to learn from the hour that he assumed the duties of his office that he meant just what he said. Rudolph Spreckels testified at the Calhoun trial that when Langdon's raids on the gambling dens were made public he felt that "we had a District Attorney who was desirous of doing his duty." The raids were made in February, 1906. Spreckels, Heney, Phelan, Older and others were already considering plans for the exposure and check of the reign of Ruef.

Chapter III.

The San Francisco Ruef Ruled.

The decade ending 1910 was for California an era of extraordinary enterprise and development. A third transcontinental railroad, the Western Pacific, was completed; vast land-holdings as large as 40,000 acres in a body were cut up into small tracts and sold to settlers; waters brought to the land by vast irrigation enterprises increased the land's productiveness three and even ten fold; petroleum fields, enormously rich, were opened up and developed; the utilization of the falling waters of mountain streams to generate electric power, brought cheap light and power and heat to farm as well as to city factory. The Spanish war had brought thousands of troops to the coast. Practically all of them passed through San Francisco. This particular activity had its influence on local conditions. The State's population increased from 1,485,053 in 1900 to 2,377,549 in 1910.

Up to the time of the San Francisco fire, April 18, 1906, San Francisco, of the cities of the State, profited most by this development. San Francisco bank clearances, for example, increased from $1,029,582,594.78 for the year ending December 31, 1900, to $1,834,549,788.51 for the year ending December 31, 1905, a gain of 80 per cent.

San Francisco's increase in population during those five years, can, of course, only be estimated. On the basis of the registration for the 1905 municipal election, approximately 98,000, San Francisco had, at the time of the 1906 disaster, a population of about 500,000, an increase from the population of 342,782 shown by the 1900 census of practically 50 per cent. in five years.[26]

The rapid increase in population, the sustained prosperity of the community, and its prospective development made San Francisco one of the most promising fields for investment in the country.

The public service corporations were quick to take advantage of the San Francisco opportunity. Those corporations already established sought to strengthen their position; new corporations strove for foothold in the promising field. Thus, we find the Home Telephone Company, financed by Ohio and Southern California capitalists, seeking a franchise to operate a telephone system in opposition to the Pacific States Telephone and Telegraph Company, which was already established. And we find the Pacific States Company taking active part in municipal politics to prevent the Home franchise or any other opposition telephone franchise being granted. The corporation holding the light and power monopoly, the Pacific Gas and Electric Company, had by the time of the third Schmitz inaugural, practical control of the San Francisco field. But it was face to face with a clamor for reduction of gas rates. The company was charging one dollar a thousand for gas. The Union-Labor party platform of 1905 pledged the Board of Supervisors to a seventy-five-cents-per-thousand rate.

Another matter of tremendous importance to the growing municipality was that of the supply of water. The Spring Valley Water Company had a monopoly of this necessity, but demand for municipal water to be brought from the Sierras was strong. A committee of experts had been appointed to pass upon the various sources of supply. Ruef appeared before them as spokesman for the Supervisors. The experts resigned when it was made clear to them that instead of being permitted to make an adequate study of all available sources of supply they were to report upon the Bay Cities project alone.[27] After the ousting of the Schmitz-Ruef administration the Bay Cities project was ignored and bonds authorized to bring water from Hetch-Hetchy valley. The Spring Valley Water Company, however, has been successful in blocking this project, and in 1914, San Francisco seems almost as far away from realizing her ambition for a supply of pure water as in 1905-6 when Ruef and his followers were at the height of their power.

The public-service problem which was attracting the most attention at the time of the great fire, was that of street-car transportation. The principal lines had passed into the hands of the United Railroads.[28] The corporation had, at the time of Schmitz's election in 1905, practically a monopoly of the San Francisco street-car service.

The company's principal lines were operated by the cable system. But fully five years before the fire, all traction officials as well as the general public, recognized that San Francisco had outgrown the cable road. It was admitted that electric lines must be substituted for the cable, but there was sharp division as to the character of the electric lines which should be installed. The officials of the United Railroads proposed the overhead trolley method of propulsion; the public, so far as it could find expression, declared for the underground conduit system.[29] In taking this position, the public was in reality backing up the municipal engineers, who had been sent to Eastern States to investigate electric transportation systems, and who had found in favor of the conduit and against the trolley.[30]

The San Francisco Merchants' Association, however, apparently dissatisfied with the reports of the engineers employed by the municipality, employed Mr. William Barclay Parsons to report on the relative merits of the trolley and the conduit systems.

Mr. Parsons took issue with the city's engineers, and recommended the trolley as against the conduit.[31] The directors of the Merchants' Association thereupon declared for the trolley system.

Criticism of this action of the directors was followed by submission of the question to a referendum vote of the Association membership. The members voted in opposition to the directors, declaring against the trolley and for the conduit.[32]

But the most determined opposition to the installation of the trolley system came from improvement clubs, whose purpose was to promote the best development of San Francisco.

Prominent among these organizations were the Improvement and Adornment Association,[33] the Sutter Street Improvement Club[34] and the Pacific Avenue Improvement Club. The membership of these organizations consisted of some of the largest owners of San Francisco properties. The leaders were comparatively young men, natives of San Francisco, whose interests were inseparably wrapped up in the community, and who aimed to promote the best possible development of the city of their birth and fortunes.

Prominent in this group were Rudolph Spreckels[35] and James D. Phelan,[36] rated among the heaviest property-owners of San Francisco. These men were ready to join with the United Railroads in any plan which proposed the highest development of the street-car service.[37] On the other hand, they were prepared to oppose any attempt to exploit the service to the detriment of San Francisco.[38]

A conference of the directors of the Improvement and Adornment Association with officials of the United Railroads was finally arranged.[39] The meetings were held in March, 1906, less than a month before the great fire. There were, before the attempted adjustment was abandoned, several sessions.

The citizens urged Patrick Calhoun, president of the United Railroads, to give up his trolley design for Market and Sutter streets. As a compromise, he substantially agreed to build the underground conduit as far as Powell on Sutter, and as far as Valencia on Market, picking up the trolley on Valencia, McAllister, Hayes and Haight streets. The Adornment Committee directors wanted the conduit system on Sutter street extended as far as possible, and held out for Van Ness avenue. Calhoun would not consent to install the conduit beyond Powell.

In the midst of this deadlock, the San Francisco Chronicle published what purported to be reports of the several conferences. Up to that time there had been no publication of the meetings.

Following the Chronicle publication, Calhoun, in a letter to members of the Adornment Association, declared the information contained in the Chronicle article to be inaccurate,[40] and offered to let the people decide whether they wanted a conduit system on Market street to Valencia, and on Sutter street to Powell, or a uniform all-trolley system throughout the city.

Mr. Calhoun's suggestion seemed reasonable until he stated in an interview that by the people he meant the Board of Supervisors.

He was asked how he proposed to ascertain the wishes of the people.

"I should suggest," he is reported as replying, "that the matter be referred to the decision of the Board of Supervisors. The Board of Supervisors is a public body selected by the people, and represents the ideas and wishes of the people of the city."

The reply was not well received. The Supervisors were even then under suspicion of corruption. Less than a fortnight before, March 10, the Examiner had called the board's action on an ordinance which was supported by the Home Telephone Company "suspicious," and had stated that the board had "made the mistake of acting as a bribed Board of Supervisors would have acted."[41]

Later on, the Supervisors themselves confessed to having been bribed to grant the telephone franchise. The public, not at all blind to what was going on, believed, even at the time Mr. Calhoun made his suggestion, although there was no proof, that the Supervisors had been bribed.

San Francisco was opposed to any plan that would put trolley cars on the city's best streets. Submission of the issue to the people would have been popular. Mr. Calhoun's proposal that it be left to the Supervisors was met with suspicion, and open distrust of Mr. Calhoun's motives.

In answer to the criticism which Mr. Calhoun's suggestion had aroused, Mr. Calhoun, in a second letter to the Adornment Association, withdrew his offer to submit the question to the people, and announced the intention of his company to proceed with preparation of a plan for a uniform trolley system to be installed wherever the grades would permit.[42]

This second letter was made public in March, 1906, less than a month before the fire. The position taken by the United Railroads was generally condemned.[43] But the opposition took more practical form than mere denunciation. A group of capitalists, headed by Claus Spreckels, father of Rudolph Spreckels, Rudolph Spreckels and James D. Phelan, announced their intention to organize a street-railroad company, to demonstrate the practicability of operating electric cars in San Francisco, under the conduit system.

The plan was given immediate endorsement both by press and general public. The project was explained in detail to Mayor Schmitz, who in a published statement gave the enterprise his unqualified approval.[44] But when the incorporators sought further interview with Mayor Schmitz, they found themselves unable to secure a hearing.

The company, under the name of the Municipal Street Railways of San Francisco, was formed with Claus Spreckels, James D. Phelan, George Whittell, Rudolph Spreckels and Charles S. Wheeler as incorporators. The capital stock of the company was fixed at $14,000,000. Of this, $4,500,000 was subscribed, ten per cent. of which, $450,000, was paid over to the treasurer.[45]

With this $450,000 an experimental line, under the conduit system, was to be built on Bush street.[46]

The articles of incorporation provided that the franchises acquired under them should contain provisions for the acquisition by the City and County of San Francisco of the roads thus built.[47]

The new company filed its articles of incorporation with the Secretary of State at Sacramento on April 17, 1906.

In the early morning of the day following, April 18, came the San Francisco earthquake and fire. For the moment the public forgot all differences in the common disaster. But the lines of division between exploiter and builder could not be wiped out, not even by the destruction of the city. The contest, which had, without any one realizing its full significance, been fast coming to a head before the fire, was to take definite shape after the disaster.

Footnotes:

[26] Patrick Calhoun, in a letter to the press, dated March 21, 1906--less than a month before the great fire--stated that the time was near when the San Francisco street-car system would have to serve a million people. The 1910 census, taken four years after the fire, gave San Francisco a population of 416,912.

[27] Ruef testified before the Grand Jury that the water deal would have been the most important pulled off by the Board of Supervisors. He testified that he had told Gallagher to tell the members of the Board there would be more money in it than had been received in any other deal. Ruef gave Gallagher to understand that the amount to be divided would be as much as $1,000,000.

[28] The United Railroads was controlled by Eastern capital. Before the entrance of the United Railroads into the San Francisco field, California capital had dominated in purely local public utilities.

[29] The public's opposition to the overhead trolley system was that the poles and wires would be a disfigurement of what were regarded as the best streets; that the wires were dangerous, and would interfere with the work of firemen in fighting fires; that San Francisco was as much entitled as Washington and New York to the best system. Rudolph Spreckels at the trial of Patrick Calhoun for offering a bribe, testified as to his own opposition:

"I believed that the overhead trolley was unsightly; that it increased the risk of fire; that it was dangerous; that it was noisy and unsightly. I believed from my own observation of the operation of the underground conduit system in other cities that it was preferable, that it was more sightly, just as rapid, and in every way more in keeping with a city of the size and importance of San Francisco. Having been born here, and having large property interests I felt it my duty, as I always have, and hope I always shall, to protect the interests of this community and to protect the interests of its citizens and its property owners. That was my purpose in opposing that franchise and that grant."

[30] As early as 1901, C. E. Grunsky, at that time City Engineer, was directed by the Board of Supervisors to gather data on the operation of electric roads under the conduit system. Grunsky's findings were to the effect that conduit-electric roads were rapidly replacing other types of street railroads.

The city also employed J. C. H. Stutt as consulting engineer, and sent him to New York and Washington to inspect and report upon the conduit systems in operation in those cities.

He reported that the system was giving satisfaction in both cities, and in many cases was being substituted for the trolley. Engineer Stutt in comparing the two systems said:

"As between the overhead system and the conduit-electric system, it is natural for private corporations to prefer the overhead trolley system on account of the first cost of roadbed construction, which is more than twice as great for the conduit system. The conduit system leaves the street open with the view unobstructed by poles, conductors, feed, guard and supporting wires and without the menace to the public and especially to the firemen, always inherent in the bare overhead electric conductor."

This report was widely quoted during the overhead-trolley-conduit agitation that was a feature of a greater part of Mayor Schmitz's administrations.

[31] Mr. Parsons found for the overhead trolley on the following general grounds:

(1) That a uniform system was necessary.

(2) That the lines must be extended to the suburbs.

(3) That operation by overhead trolley is more satisfactory than by the conduit system.

(4) That the greater part of the roads could be operated under trolley only.

[32] Several questions were presented. The following is the vote as given in the Merchants' Association Review, the organization's official publication, for February, 1906:

"Total Vote Of Members, 364.

"1--Do you favor Mr. Parsons's view of a uniform system of overhead trolley lines throughout the entire city, including a central line of ornamental trolley poles, with lights furnished by the Railroad company between the tracks on Market Street, and a trolley line with ornamental poles and lights furnished by the Railroad upon Sutter Street?

"Votes received--Yes, 121; No, 204.

"2--Do you favor an overhead trolley system throughout the city except on Market Street?

"Votes received--Yes, 67; No, 212.

"3--Do you favor an underground conduit system for Market Street and for the streets with cable lines leading into Market Street in the central downtown district and in the adjacent residence district, the remainder of the system to be overhead trolley?

"Votes received--Yes, 198; No, 84.

"4--Irrespective of what shall be done on any other streets, which system do you favor for Sutter Street: (a) an underground conduit, or (b) an overhead trolley line if equipped with ornamental poles and lights furnished free by the Railroad company, or (c) an improved cable system?

Underground Conduit Trolley Cable

"First Choice 217 93 5 "Second Choice 42 83 62 "Third Choice 7 14 94

"5--Do you favor changing the cable lines on Nob Hill to electric lines by tunneling the hill and constructing a winding driveway with parks on California Street, as proposed in Mr. Parsons's report?

"Votes received--Yes, 158; No, 140."

This vote was taken after an extended debate at a banquet given by the Association in which Patrick Calhoun, president of the United Railroads, argued for the trolley system, and Frank J. Sullivan, president of the Sutter Street Improvement Club, spoke for the conduit.

[33] The Improvement and Adornment Association employed D. H. Burnham to draw plans for the development of San Francisco. These plans, while drawn to attain a maximum of utility, were intended to secure a maximum of beauty as well. Streets were to be widened, boulevards built, parks established. The carrying out of these plans would have made San Francisco one of the most beautiful cities of the world. Their preparation cost the association $17,500. Mr. Burnham volunteered his own services.

[34] The objection of the Sutter Street Improvement Club to the overhead trolley was set forth in the following statement, issued less than a month before the great fire of 1906:

"The Sutter Street Improvement Club is unalterably opposed to the construction of an overhead trolley line on the Sutter Street system. We desire that the public should have no misconception of our position. We propose to contest to the end any attempt to get an overhead trolley on the entire Sutter Street system, and for that purpose we pledge ourselves, and promise to provide the necessary counsel to maintain our position in the courts. We want the public with us in this fight, as the fight is being made in the interests of the whole people.

"Our own investigations make us absolutely certain that if the public understands the true situation, it will not be misled by the specious arguments of the United Railroads. The conduit electric system, despite what the United Railroads and its representatives may say, is practicable, safe, efficient and superior to an overhead trolley. We are further satisfied that the company is seeking, by an offer of $200,000 which they offer to the people, to save itself an expense of several million dollars, which the conduit electric system would cost, if it should be required to reconstruct all its lines using the conduits; but we believe--and we are certain that the citizens of San Francisco will agree with us in this--that since the United Railroads, through the watering of its stock, has already made many millions of dollars out of its properties, and is now taking, and will take many millions of profits from our people, that it can afford to contribute to San Francisco the cost of the most attractive and efficient system of electric railroads. The United Railroads has put forward many arguments which have been and are easily met:

"First: It contended, as the public will remember, that the conduit electric system was impracticable on account of the accumulation of rain water in its conduits. This claim it has been forced to abandon.

"Second: It proclaimed loudly that the added cost of construction of an electric conduit was such that the life of its franchise would not justify the outlay. Now, they have abandoned this claim, and assert that it is not the cost of construction, but that there are other reasons.

"Third: They have declared that a uniform system was desirable. They now admit that a completely uniform system is impracticable, owing to grades, making it necessary to operate some lines by cable. Their only contention now is that the overhead trolley system is more efficient than either the cable or conduit electric system.

"Mr. C. E. Grunsky is our authority for the statement that in making the change from the conduit electric to the trolley, in passing from city to suburbs, there are no objectionable features, nor danger. Sir Alex. B. W. Kennedy, consulting engineer to the London County Council, in recommending the adoption of the conduit electric system for London's municipal street railways, said: 'There is no difficulty in arranging the cars so that they can be run from the underground (conduit) to the overhead and vice versa, either with no stoppage at all at the point of change, or with a stopping of only a few seconds. There is no engineering difficulty whatever in using a mixed tramway system, i.e., partly underground (conduit) and partly overhead.'

"We would suggest that the public compare the present overhead trolley system, operated by the United Railroads these many years in this city and county, with the service rendered by the California Cable Railway. There is no overhead trolley system in San Francisco to-day which surpasses the service given by the California Street Company.

"It is claimed that the public will be given a speedier and more efficient service if the overhead trolley is permitted. We ask the thousands of citizens who have been compelled to wait for overhead trolley cars, and to stand up in those overhead vehicles, whether or not the overhead trolley has thus afforded them satisfactory service? If we may judge the future by the experience with the overhead trolley of the past, it means fewer cars (hence less expense to the United Railroads), overcrowding and discomfort of passengers. The only advantage which thus far has come from the system seems to be to the company itself. It employs fewer men as a result of that system, but the comfort and convenience of the public have not been substantially bettered by it as against the cable.

"Before asking our people to give them an overhead trolley system throughout the whole city, the United Railroads would do well to show on some one of their overhead trolley lines now in operation a frequent, efficient and satisfactory service to the public. We do not want for San Francisco an extension and perpetuation of the unsightly, noisy, dangerous, uncomfortable and inefficient system of overhead trolleys as operated by the United Railroads to-day.

"Citizens of San Francisco: Be not deceived by the selfish and specious arguments put forward by the United Railroads. If the public will stand together, we will win out in this fight; and, if it should be necessary to that end, the supporters of our organization will put before our citizens a plan for building a complete conduit electric system of railroads for San Francisco, to be built, in the first instance, by our people, but with a provision giving to the city an option to purchase the same at any time in the future at actual cost and interest, so that municipal ownership of the said system may result just as soon as the city is ready for it.

"All that we ask is that the people stand fast, and save their city from what we believe would be a calamity from which it would not recover in the next twenty-five years.

"Respectfully.

"Frank J. Sullivan, Rudolph Spreckels, Julius Rosenstirn, Geo. W. Merritt, W. D. McCann, Houghton Sawyer. Edward P. E. Troy, Secretary."

[35] Rudolph Spreckels is a native of San Francisco. At seventeen he was employed in his father's (Claus Spreckels) sugar refinery at Philadelphia. The Spreckels refinery was at the time in a life-and-death struggle with the "Sugar Trust." Young Spreckels was given his first lessons in the methods employed by the "trust" elements to crush competition. His Philadelphia training in large degree prepared him for the work which later he was to do at San Francisco. At twenty-two he became president of the Hawaiian Commercial and Sugar Company, owners of one of the largest sugar plantations of the Hawaiian Islands. The venture had been a losing one. Spreckels put it on a paying basis within a year, and sold it at large profit. Before he was twenty-five he had become a millionaire in his own right. He has been engaged in business at San Francisco for many years, but only when moved by corrupt conditions to take up the fight for honest government did he become active in politics. He financed the graft prosecution. He has since taken active part in California politics, but has steadfastly refused to accept public office, preferring to do his work as a private citizen.

[36] James D. Phelan is a native of San Francisco. He is one of the largest owners of real estate in San Francisco and in California. From his youth he has taken keen interest in public affairs. He was chairman of the Charter convention of 1900 which framed San Francisco's present municipal Charter. He was Mayor of San Francisco from 1896 to 1902. After the San Francisco fire he headed the Relief Committee and was largely instrumental in directing the work of rehabilitation. President Roosevelt designated him by proclamation to receive funds for the relief work, and to use the United States Mint as depository. In 1900 the Democratic minority in the State Legislature gave him complimentary vote for United States Senator. In 1914 he was elected to the United States Senate, being the first Federal Senator from California to be elected by direct vote of The People. Senator Phelan has for many years been close friend and business associate of Rudolph Spreckels. He was one of the heaviest backers of the graft prosecution.

[37] Rudolph Spreckels testified at the trial of Patrick Calhoun:

"I suggested to Mr. Calhoun one thing, that if it was a question of the length of the franchise, of the length of life of the present franchise, standing between the people getting the system which I believed it was entitled to, I would personally be glad to do whatever was in my power to have the Charter amended so that they might enjoy a longer term of franchise, to work out the difference in cost; but that I believed it was all important that San Francisco should have the very best of street-car service obtainable."

United Railroads officials objected to the conduit system on the ground that the conduits would fill with water. Spreckels suggested that property owners agree to drain the conduits without expense to the United Railroads, thus demonstrating their practicability, on the understanding that if the conduit system were found to be practical it should be installed. But in this the United Railroad officials would not acquiesce. (See testimony taken at the Calhoun trial.) The following is taken from Charles S. Wheeler's testimony given at the Calhoun trial:

"Mr. Heney: Q. Did not the property owners on Sutter street and the property owners on Pacific avenue, Mr. Rudolph Spreckels and Mr. Phelan in particular, state that they would not oppose the United Railroads obtaining a franchise or permit for the underground conduit on Sutter street?

"Mr. Stanley Moore: That is objected to, if your Honor please, as calling for the conclusion of the witness and the mental mind and statement and hearsay of other persons.

"Mr. Heney. I am not asking for their mental mind. I am asking about direct statements at these meetings of committees of the Board of Supervisors.

"The Court: I will overrule the objection.

"Mr. Stanley Moore. We take an exception.

"A. I have [heard] both of them make such statements; Mr. Phelan in substance before the Board of Supervisors, and I have heard Mr. Spreckels make it in the Supervisors' chambers." (See Transcript of Testimony, page 3197.)

[38] Patrick Calhoun, president of the United Railroads, had several conferences with Rudolph Spreckels on the questions involved in the street-car situation. Of these conferences Spreckels testified at the Calhoun trial:

"Mr. Calhoun stated that he was very anxious to obtain the overhead trolley privilege, that he understood that I was actively opposing it, and he wanted to know whether I was open to conviction on the subject. I told him that my mind was entirely free, that if he could prove to my satisfaction that the underground conduit was not feasible that I would have no objection. I told him that the arguments that he had presented, namely, that the Sutter street system could not be converted into an underground conduit system because of the accumulation of water at some number of points--I think 16 were mentioned--was hardly worth while urging since Mr. Holland, a former president of the United Railroads, had, together with Mr. Chapman, urged that reason, and I related to Mr. Calhoun that I had questioned Mr. Chapman and Mr. Holland at length in regard to it and had satisfied myself that their reasons then urged were not legitimate or reasonable; that during the conversation with Mr. Holland I had asked him to state all of the reasons that he had for desiring the overhead and urging against the installation of the underground conduit; that Mr. Holland and Mr. Chapman had both assured me that the only reason was the fact that it was an engineering impossibility; that the accumulation of water in the conduits during the rainy season would prevent the successful operation of the cars, that there would be repeated interruptions and general dissatisfaction as the result. I then proposed to Mr. Holland, I said: 'If that is the only reason and you can convince me that that is true I have no objection to withdrawing my opposition, but I want to propose this: Suppose I, or the property owners on the system involved, agree to pay the expense of the proper drainage of those conduits, and succeed for a period of twelve months in treating the conduit drained at those points you indicate, and succeed during that entire term to keep them free from water, so that you and your engineers will be obliged to admit that there was not one hour during the twelve months during which you could not successfully operate an underground system, will you then agree to install that system?' Mr. Holland and Mr. Chapman looked at one another and finally said 'Well, no, we cannot do that.' Then I said: 'Gentlemen, you are wasting my time and your own because your argument is not the truth and is not the only reason you are urging, or that is prompting you to object to putting in that system.'

"Mr. Holland then proceeded and asked me how I proposed to insure that result and I told him I was not an engineer, but that common sense told me and indicated to me that it might be possible to carry off the water at those points through an ordinary stone sewer-pipe and distribute the accumulated waters to the various streets running parallel to Sutter street, and in that way carrying it off and keeping the conduits free from water. Mr. Calhoun said: 'Well, there are other reasons--the question of a uniform system.' He urged very strongly that it would be a very desirable thing to avoid transferring, or it would be an exceedingly nice thing if a man could go to his home without transferring, and have a uniform system of cars operating over all of the system. I told Mr. Calhoun it was hardly a possible thing, that no man would want to stand at any street corner and wait for fifteen or twenty cars to go by until some one car of a particular brand would come along which would take him to the particular part of the city he cared to go to. Then Mr. Calhoun wanted to know if the matter couldn't be compromised, whether I would be satisfied, if the United Railroads would agree to construct an underground conduit system on Sutter street from Market to Powell. He wanted to know also about constructing an underground conduit on Market street, and I told him no, that this did not enter into my calculations, that I was looking to the welfare of the city of San Francisco, that it did not involve merely getting what I wanted in front of the particular properties in which I was personally interested, and I told him that the reasons that had been urged against the granting of an overhead trolley--that it was unsightly, dangerous and noisy and not the most modern system, was my objection, and that it held good for the entire city and not alone on the streets in which I was interested as a property owner. Mr. Calhoun urged further the desirability of the overhead trolley, that it had given satisfaction elsewhere, and I suggested that he might first make the street cars then operated by the overhead trolley in San Francisco a success and satisfactory to the people; that I felt that it was far from a success, and personally, as one of the largest property-owners on Ellis street, I would emphatically prefer the ordinary cable system to the electric lines that they were then operating. Mr. Calhoun asked for another appointment and it was had I think on the following morning, a meeting at the same place, at the Canadian Bank of Commerce; I think our meeting on that occasion was held in the office of the manager, Mr. Kains.

"Q. What was said there? A. I will not be absolutely certain as to whether all that I have related occurred at the first interview, or whether some that I will relate as having occurred now, did not occur on the first interview. The two meetings were close together, and the subjects that I will relate may have occurred, some of them in the previous meeting and some in the latter. Mr. Calhoun proceeded to ask me about Pacific avenue. He said: 'Would you be satisfied if we agreed to operate the underground conduit system on Sutter to Powell, on Market to Valencia, running it, if we changed the system on the Pacific avenue line--to agree to put in the conduit there, otherwise maintaining the cable?' And he also proposed that it might be a nice thing to withdraw the entire street railway system from Pacific avenue, making of that street a boulevard, and placing overhead trolley on Broadway where there was no car line. He said, 'Of course, Mr. Spreckels, you are an owner of carriages and automobiles, and I suppose you don't use the street-cars, and it would be more desirable from the standpoint of a property owner to have your residence under those circumstances on a boulevard than on a street having a street-car service with the attending objections.' I told Mr. Calhoun that my fight was not a selfish one, that I did have carriages and automobiles, that I did not use the street-cars and had no need for them, but that I had in mind the rights of other people living on the street--that there were many people living on the street who were not so fortunate as I, who did not own carriages and did not own automobiles and had undoubtedly been brought to buy their property on Pacific avenue because of the fact that it had a street-car service there. Mr. Calhoun also in one of these interviews said that he would tunnel Powell street hill commencing at Sutter and make that the most important transferring point in San Francisco. I asked Mr. Calhoun at the time whether it was because I was interested in property at the corner of Sutter and Powell. Mr. Calhoun expressed surprise and said he didn't know that I was an owner of property there. I think that in substance was the conversation as I remember it."

[39] Patrick Calhoun, Tirey L. Ford and Thornwell Mullally were among the officials representing the United Railroads at the conference. At the meeting, first mention of $200,000 in connection with the proposed chance in the street-car system was made. Citizens had contended that the objection of the United Railroads in opposing the conduit system was the difference in the initial cost of installation. This point came up, and President Calhoun stated that he would, if the trolley system were allowed, give the difference between the cost of installing the two systems, for any public purpose. This difference, Calhoun stated, would be about $200,000. Turning to James D. Phelan, of the Adornment Committee, Calhoun stated that the money could be used in extending the so-called Park Panhandle, part of the Burnham plans, and a matter in which Phelan was greatly interested. Phelan replied that San Francisco would not accept money for any such purpose, and was able to construct the Park Panhandle if the people wanted it. (See testimony of James D. Phelan at the trial of The People vs. Patrick Calhoun for offering a bribe, page 2750.)

[40] The Chronicle in its issue of March 23, in referring to Mr. Calhoun's letter practically charged him with lack of good faith. The Chronicle said:

The alleged 'inaccuracy' of the Chronicle's interesting report of the compromise reached by the United Railroads and the Society for the Adornment of the City proves to be that the electric conduit in Sutter street is to stop at Powell street instead of extending to Polk street, as proposed, and which is the least which should have been accepted if any compromise whatever was to be made. We shall be greatly surprised if when the changes are finally made there is not a great deal less conduit than Mr. Calhoun now seems to agree to. We gravely doubt whether Mr. Calhoun expects to construct a foot of conduit in this city. However, he does agree to do so under certain conditions and we shall see what we shall see.... It does look as though some settlement of the matter would be reached, as the United Railroads have receded from their iron-clad determination not to consider the electric conduit at all. When that is accomplished we shall speedily see the last of the cables south of California street, a consummation as devoutly wished by the people as was the introduction of the cable in place of the horse-car a quarter of a century ago."

[41] It was openly charged that money had been used to put this franchise through the preliminary steps necessary for its granting. The Examiner in its issue of March 10, some five weeks before the fire, said:

"The Supervisors owe it to themselves to bring back the telephone franchise order for further consideration. Since the hasty vote on the ordinance last Monday ugly rumors have been the measure. The regard of the Supervisors for the good name of the Board demands that they should clear the record of the SUSPICIOUS CIRCUMSTANCES that surround the vote on the order.

"The present Board of Supervisors was elected on a platform that pledged its members to a municipal ownership programme. Among the purposes specifically announced was the ACQUISITION OF A TELEPHONE PLANT to be owned and operated by the city.

"Yet the FIRST ACT OF THE BOARD in dealing with a public utility question is to favor an ordinance granting a franchise for fifty years to a private corporation without proper compensation to the city and WITHOUT ANY CONTRACT that would enable the city to buy out the plant at a just appraisement when the time comes to acquire a municipal telephone system.

"The bill was introduced after a brief hearing and passed to print on the 26th of February. On the 5th of March it was passed to a vote in the Board of Supervisors without discussion. One of the members of the Board who rose to explain his vote was shut off with such indignity that he left the Supervisors' chamber. Nor, indeed, did all the members know what they were voting on; for one of the Supervisors later in the session asked if the telephone franchise was not to be called up, and was surprised to be told that it had already been passed upon.

"This sort of 'gum-shoe' legislation will not do for San Francisco. It inevitably rouses the suspicions of crookedness that have been hawked about the streets since Monday last.

"A telephone franchise is not a matter to be treated lightly. It is an affair of more moment than passing a street or even of fixing a water rate. It deserves the deepest consideration, for the division of service between two companies creates a confusion in business that should be taken carefully into account. It is only the wretched service given by the old company that has brought the backing of a certain popular support to the advent of a new company. The manner in which the obvious evils of a division of service can be lessened requires much more thought than has yet been given, and many changes in the ordinance should be made unless the last state of the San Francisco telephone service is to be worse than the first.

"It is the duty of the Supervisors to recall the ordinance, answer the rumors of crooked work by seeing that everything is carried on above board and in the open, and treat the franchise in accordance with their anti-election pledges to the people. They cannot afford to rest under appearance of evil that now surrounds the late vote on the order.

"We do not wish to believe that any undue influence was used, but the Supervisors must have heard the rumors that are frequent in the streets, and they must realize that they have made the mistake of acting as a bribed Board of Supervisors would have acted. They have broken their pledge, but happily it is not too late for them to correct the gross error."

[42] Mr. Calhoun's second letter, as introduced as evidence at his trial for offering a bribe (page 2775, Transcript, The People vs. Calhoun), was as follows:

"San Francisco, March 23.--Messrs. James D. Phelan, R. B. Hale, Herbert E. Law, Rufus P. Jennings and others--My dear Sirs: You will recall that the only condition on which I consented to even consider the introduction of an underground conduit on Market street from the ferries to Valencia, and on Sutter from Market to Powell, was to secure harmony and unanimity of action in the development of San Francisco. You will further recall that I distinctly stated that 'if all sides to this controversy are not willing to faithfully and loyally abide by what the people of San Francisco may determine on this subject, the United Railroads prefers to urge, in the interest of the development of San Francisco, a uniform system of overhead trolley operation.'

"The development of the last few days, the threatened litigation against my company, and the action of the Sutter-Street Improvement Club, demonstrate that harmony and unanimity of action, so much to be desired, cannot be obtained, and that the United Railroads cannot expect all parties to the controversy 'to faithfully and loyally abide by what the people of San Francisco may determine on this subject.' On the contrary, if the people should elect to put an overhead on Sutter street, the address of the Sutter-Street Improvement Club distinctly states 'we pledge ourselves and promise to provide the necessary counsel to maintain our position in the courts.'

"In view of these facts, I desire to inform you that the United Railroads will proceed to prepare a plan for the improvement of the transportation of San Francisco. The essential feature of which plan will be a modern, up-to-date, efficient and uniform system of electric propulsion, through the introduction of the overhead trolley system wherever the grades of the streets of the city will permit. When this plan is perfected it will be presented to the proper authorities of the city for their consideration. We will be very glad to go over it with you. Under the circumstances, it will be useless for me now to furnish the preliminary plan of which we spoke.

"In conclusion, permit me to express my appreciation of the motives which led you to seek a conference with me, and the earnest desire of every gentleman who participated in that conference to reach a basis of harmonious action in order that the development of San Francisco might not be obstructed and delayed.

"Very truly yours, PATRICK CALHOUN, President."

[43] The Chronicle commented upon Mr. Calhoun's new position as follows:

"The letter written by Patrick Calhoun of the United Railroads to the committee of citizens who have sought to induce him to change his attitude on the subject of overhead trolleys was not in good taste. It exhibited corporative arrogance in its most exasperating form. Mr. Calhoun is too well bred, or perhaps too cautious a man to tell the public to be damned, but every line of his communication breathes the spirit of the insolent utterance of William K. Vanderbilt, and the community will take it that way....

"There is an ill-concealed menace in Mr. Calhoun's declaration that the United Railroads has a plan in preparation which, when perfected, 'will be presented to the proper authorities of the city for their consideration.' As he plainly tells us that this plan provides for an 'efficient and uniform system of electric propulsion through the introduction of the overhead trolley system wherever the grades of the city will permit,' the announcement is equivalent to a notification that 'the proper authorities of the city' will be appealed to for permission to carry out such a scheme, whether the people like it or not. His defiant attitude suggests that he feels pretty sure that the authorities will be on the side of the United Railroads against the people, but he may be mistaken on that score. There is a point beyond which even complaisant authorities would not wish to press the matter to oblige a corporation which shows so little regard for the desires and needs of a community from which it extracts over eight million dollars annually." (See San Francisco Chronicle, March 25, 1906.)

[44] Mayor Schmitz in his statement, said:

"If Claus Spreckels can see his way clear to carry out his great purpose, the fact stands that he must be known more than ever as he has been known in the past, as the greatest public benefactor of the West. I will say, if he can see his way clear, reservedly, for I doubt that any citizen of this city or State can point to any understanding that he has announced he would accomplish, that he has failed to accomplish. Not only is his determination, but within his control is the money to carry out his determination, and I have yet failed to find the man that can say that any object can fail of accomplishment when determination and money walk hand in hand.

"If Mr. Spreckels can carry out his announced desire to network San Francisco with railroads operated by the underground conduit system, I can only say that through his wonderful ambitions of purpose San Francisco will take a stride forward that is wonderful to contemplate. Such action upon the part of Mr. Spreckels would place San Francisco not only in advance of any city in America, but would place it in advance of any city in the world in the battle for public control of utilities operated for the public benefit. The offer of Mr. Spreckels is not only one that must awaken the amazement, but the approbation of every public-spirited citizen. While the rest of the great cities of the world (as well as San Francisco before Mr. Spreckels made his offer) are puzzling to find means through which they can accomplish the great purpose of municipal ownership, Mr. Spreckels has come forward and has offered, for the good of the people, to demonstrate the efficiency of a system that will mean that not only shall the beauty of San Francisco be not sacrificed, but that the public desire for rapid transit shall be fulfilled. Backed with the millions he controls, his offer is significant, and is one that we cannot contemplate lightly.

"As Chief Executive of the city I can only express the hope that something will happen that will permit Mr. Spreckels to carry out his object. At one stride this would place San Francisco at the head of the world in the titanic struggle now waging between the people and the corporations for the control of those utilities in which the people are interested for comfort and the corporations for profit. Great as is his offer, it adds not only enthusiasm, but rekindles hope in my always expressed desire that my administration would mark the first victory of the municipality in its fight to control those things that are theirs.

"The people are on the eve of winning for themselves those things that are theirs. If the offer of Mr. Spreckels can be carried out, and I see no reason why it cannot, the battle is ended. Not only will San Francisco be the victor, but from the battle she will emerge, her beauty unmarred and her railways standing as exemplifications of the fact that what in science is possible is capable of actual and practical accomplishment." (See San Francisco Call, March 24, 1906.)

But in spite of this approval, after the organization of the new company was assured, Rudolph Spreckels found the Mayor's door closed to him when he attempted to secure an interview. (See Rudolph Spreckels' testimony at the Calhoun trial.)

[45] The purposes of the incorporators were brought out at the graft trials. At the Calhoun trial, when James D. Phelan, former Mayor of San Francisco, and one of the incorporators, was under cross-examination, Calhoun's attorney referred to other public utility ventures in which Claus Spreckels had been interested, and asked:

"Q. You knew of the matter of the rival gas or competing gas lines, and the rival and competing electric lines, and the rival and competing steam railroads down the valley at the time you went into the corporation to put in the People's Street Railroad? A. I knew, and I know the effect they had; they reduced rates in both cases; and if our system accomplished the purpose of bringing Mr. Calhoun's railroad to a realization of the public desire to have a conduit system, our purpose would have been accomplished. It was the last resort. I looked upon it, as an incorporator, as the last resort. We had negotiated in a friendly way for months, and I saw the fruit of all the conferences fade away and believed that arrangements had been made by Mr. Calhoun with the city administration, and the only resort left to us to do was to build a road of our own to demonstrate that it was practicable and possibly profitable--a conduit system."

[46] As early as April 3, 1906, a petition was circulated for signatures among residents and property owners on Bush street, asking the Board of Supervisors to grant a franchise to operate street-cars on Bush street under the electric-conduit system.

[47] The San Francisco Examiner of March 31, 1906, set forth that "an important feature (of the plans for competing street railways) was that the city should have the right at the end of ten years or any shorter period that might be preferred, to take over the system and operate the same itself, the terms of the transfer to be such as would be just both to the builders and to the municipality."

Among the purposes for which the Municipal Street Railways of San Francisco was formed, was set forth in the articles of incorporation the following: "To accept and acquire franchises for street railroads, elevated railroads and subways, containing provisions for the acquisition thereof by the City and County of San Francisco, or such other conditions as may be lawfully inserted therein."

Chapter IV.

San Francisco After The Fire.

The great San Francisco fire was brought under control Friday, April 20, 1906. The Sunday following, the first step was taken toward getting the scattered Board of Supervisors together. George B. Keane, clerk of the board, is authority for the statement that the meeting place was in a room back of Supervisor McGushin's saloon.[48] The ashes of the burned city were still hot; the average citizen was thinking only of the next meal and shelter for the night for himself and dependents. But the public-service corporations were even then active in furthering plans which had been temporarily dropped while San Francisco was burning.

At the McGushin-saloon meeting, Keane found with the Supervisors Mr. Frick of the law firm of Thomas, Gerstle & Frick. Mr. Frick was on hand to represent the petitioners for the Home Telephone franchise, which, at the time of the disaster was pending before the board.

For months previous to the fire, no subject affecting a San Francisco public-service corporation had, with the single exception of the United Railroads' scheme for substituting electric for cable service, created more discussion than the Home Telephone application for franchise. There had been allegations that the progress which, previous to the fire, the Home Company had made toward securing its franchise, had been paid for,[49] but for weeks after the fire few citizens had time to think about it. The people forgot for the time the issues which had before the disaster divided the city. But the agents for the public-service corporations did not forget. We find a representative of the Home Telephone Company picking his way over the hot ashes of the burned city to McGushin's saloon to meet the Supervisors that the interests of his company might be preserved. The developments of the graft prosecution indicate that even as the Home Company was seeking out the Supervisors, the United Railroads was getting into touch with Ruef.[50]

But if the corporations were quick to avail themselves of the situation to secure privileges denied them before the fire, they were also active in the work of rehabilitation--so far as such activity served their plans and purposes.

This was well illustrated by the course of the United Railroads. Within a fortnight after the fire, that corporation had established efficient service over a number of its electric lines. For a time, passengers were carried without charge. On April 29 and 30, however, fares were collected from men, but not from women and children. With the beginning of May, fares were collected from all persons. For a time, in a glare of much publicity, the United Railroads contributed these collections to the fund for the relief of the stricken city.

The Home Telephone Company had no plant to restore nor authority to establish one; but on Ruef's suggestion it, too, contributed to the fund for the relief of the stricken city--$75,000.[51]

The United Railroads' activity in restoring its electric roads, was in curious contrast to its failure to take advantage of the possibilities offered by its cable systems. As some excuse for this inactivity, the corporation's representatives alleged that the cable slots had been closed by the earthquake, making restoration of the cable roads impractical.

The alleged closing of the slots was even used as argument against the conduit electric system.[52] But as a matter of fact, there were many to testify that the damage done the cable slots was not from the earthquake, although the slots in the burned district had been warped more or less by the heat of the fire. But this damage was easily remedied. On the Geary-street road, for example, cars were run for an hour or more after the earthquake. The fire warped the Geary-street cable slot, but this was easily and cheaply remedied by a force of men with cold chisels and hammers.[53]

Statements from officials of the United Railroads, now of record, indicate that the company's cable lines suffered no greater damage than did other cable systems. An affidavit of Frank E. Sharon, for example, who before the fire was superintendent of cables and stables belonging to the United Railroads, made in the adjustment of fire losses sustained by that corporation, sets forth that the company's principal cable power house and repair shops situate on Valencia street were damaged but little by the earthquake.[54] Although the buildings were damaged by the fire, the damage to the contents, including the machinery by which the cable cars were operated, was, according to statements made by the United Railroads in fire-loss adjustment, comparatively small. The company placed the sound value upon this machinery and contents, after the earthquake, but preceding the fire, at $70,308.80. The salvage was placed at $60,933.80, leaving a total fire loss of $9,375.[55]

The cable cars, with few exceptions, were saved. The most serious loss of cars was on the Powell-street system, where sixty-four were destroyed. Only one Valencia-street car was burned. After both earthquake and fire, the United Railroads had available at least 150 cable cars for its Market and Powell-street systems. This does not include the cable cars available on the Hayes and McAllister roads. The power-houses of these two last-named systems were not destroyed by fire. The allegation has been made that the McAllister-street cable was kept running for several hours after the earthquake.

But whatever the possibilities for the restoration of the United Railroads' cable properties, no steps were taken toward that end. Instead, trolley wires were strung over the tracks of cable systems. Street-car service was one of the greatest needs of the first few weeks following the fire. Statements that cable properties could not be restored were generally believed; the trolley service was accepted as a matter of expediency; few thought, however, that it was to be permanent.[56]

Within two weeks after the fire, the United Railroads had trolley wires strung over the cable tracks on Market street. The little objection made to this course went unheeded. The Market-street trolley cars, two weeks after the fire, were as welcome to The People of San Francisco as were the temporary shacks which were being erected upon the sites of the old city's finest buildings. Market-street trolley cars gave as sorely-needed transportation as the shacks gave needed shelter.

The opening of the Market-street trolley line was made subject for rejoicing throughout the city. In the midst of this good feeling toward his company, President Calhoun gave out that if allowed to place overhead wires on Sutter and Larkin streets, he would place 2,000 men at work and have both these lines in operation within thirty days.[57]

But the era of good feeling was not of long duration. On May 14, less than a month after the fire, the Supervisors received a communication signed by President Calhoun as President of the United Railroads, setting forth that if the board would permit the use on the cable lines of the standard electric system in use on the company's other lines, the United Railroads would be glad to put all of their lines in commission as rapidly as could be accomplished by the most liberal expenditure of money and the largest possible employment of men.[58]

That very day, the Supervisors took the initial step toward granting to the United Railroads a blanket permit, authorizing that corporation to substitute the trolley system for all its cable lines.

Immediately, San Francisco's opposition to the trolley system was revived. All classes joined in condemning the action of the board. The Sutter Street Improvement Club, representing large down-town interests and property holders, adopted resolutions demanding that the Supervisors refuse to grant the permit. The San Francisco Labor Council, representing over 100 affiliated unions, with a membership of more than 30,000 wage earners, declared as strongly against such action. The press charged the United Railroads with taking advantage of the city's distress to force the trolley upon her.[59]

Then came explanations and defense. Mayor Schmitz in public interviews set forth that the proposed permit was not a permanent measure, nor under its provisions could the United Railroads indefinitely operate trolley cars in Market street.[60] The Labor Council which had at first adopted resolutions condemning the policy of granting the permit, adopted resolutions of confidence in the "present city administration." President Calhoun himself solicited citizens to attend the meeting of the board at which a vote was to be taken on the proposed permit, to urge action favorable to the United Railroads.[61]

Long before the board met to take final action it was recognized that in spite of opposition the permit would be granted.[62] And it was granted. On May 21, the Supervisors passed the ordinance which gave the United Railroads authority to convert its cable systems, wherever grades would permit, into trolley lines. For this privilege, no money compensation, nor promise of compensation, was made the city.[63]

Demand that Mayor Schmitz veto the ordinance granting these extraordinary privileges followed. Nevertheless, the Mayor affixed his signature to the trolley permit-granting ordinance.

Fair expression of the feeling this action engendered will be found in the San Francisco papers of the latter part of May, 1906. "Mayor Eugene E. Schmitz," said the Examiner, for example, "has betrayed the trust reposed in him by the people, violated his solemn pledge in favor of an underground conduit system, and joined Abe Ruef and the United Railroads in the shameless work of looting the city at the time of her greatest need."

The Ruef-Schmitz administration protested at the criticism. The eighteen Supervisors, seventeen of whom were within a year to confess that they had accepted bribes and all of whom were to be involved in the scandal, joined in a letter[64] to the Examiner, announcing that such criticism was unwarranted, and injured the city. The letter contained veiled threat that questioning of the Supervisors' motives would not be tolerated. The threat, however, intimidated nobody. Criticism of Ruef and the administration continued.

But in spite of the hostility toward him, Ruef controlled the San Francisco delegates who were named that year to attend the Republican State convention. The convention met at Santa Cruz. Ruef held the balance of power. He was the most sought man there. He had the nomination for Governor in his hands. He gave it to James N. Gillett.[65]

While the convention was in session, a dinner was given the State leaders of the Republican party at the home of Major Frank McLaughlin, then Chairman of the Republican State Central Committee. Ruef was one of the select few present. A flash-light picture of that banquet board shows him seated in the place of honor at the center of the table, the remaining guests with the exception of the host, McLaughlin, who is seated at Ruef's side, standing.

At Ruef's back stands James N. Gillett, who had just received, with Ruef's assistance, the party nomination for Governor, his hand resting upon Ruef's shoulder. Others in this flash-light group are George Hatton, political manipulator, whose connection with the 1905 mayoralty campaign in San Francisco has already been noted; J. W. McKinley, head of the Southern Pacific Law Department at Los Angeles, who was chairman of the convention; Rudolph Herold, a politician prominent in the counsels of the old "Southern Pacific machine"; Justice F. W. Henshaw of the California Supreme Bench, who was nominated at the convention for re-election;[66] Walter F. Parker, political agent for the Southern Pacific Company; Warren R. Porter, who had just received the nomination for Lieutenant-Governor; Congressman J. R. Knowland, prominent in the counsels of the "machine" that at the time dominated the State, and Judge F. H. Kerrigan of the Appellate Bench, whose decision in favor of the Southern Pacific Company while on the Superior Bench, in the so-called San Joaquin Valley railroad rate case, made him a conspicuous figure in California public life.[67]

The group represented the most effective forces at the time in California politics. Ruef, at the Santa Cruz convention, reached the height of his power. He left Santa Cruz planning a State organization that would make him as great a factor in State politics as he was at the metropolis.

But on his return to San Francisco, Ruef found himself harassed by criticism and beset by opposition. At every point in the municipal administration, with the exception of the District Attorney's office, was suggestion of graft and incompetency. The police department could not, or would not, control the criminal element. Merchants, in the middle of the day, were struck down at their places of business and robbed. Several were fatally injured in such attacks, being found dying and even dead behind their counters. Street robberies were of daily occurrence.

In the acres of ash-strewn ruins, was junk worth hundreds of thousands of dollars. The police seemed utterly powerless to protect this property. It became the loot of unchecked bands of thieves.

A reign of terror prevailed. Citizens feared to appear on the streets at night. Merchants charged that their business was seriously injured by these conditions. On all sides, blame was placed upon the Schmitz administration which Ruef was known to control.[68]

Then again, Ruef's toll from the tolerated gambling, saloon and social evil interests was getting too heavy for his own safety.[69] The public was given hint of this when the newspapers quoted George Renner, a prominent businessman, as asserting that a liquor license could be secured if the applicant "put the matter into Ruef's hands and paid a fat little fee." Ruef, in his reply, stated that the liquor people were nuisances anyhow. Ruef had long acted as attorney for the California Liquor Dealers' Association. The Association, after Ruef's flippant characterization of the liquor people, boldly dispensed with his services and employed another attorney, Herbert Choynski, in his stead. Choynski made no effort to placate Ruef. On the contrary, he gave out interviews to the press charging that Ruef had received $500,000 for the trolley permit, and that each Supervisor had been given $4000 or $5000 for his vote.

This story was given some credit, although few realized the amount of truth it contained.

The Supervisors were spending money freely. Men, who in private life had earned less than $100 a month, and as Supervisors were receiving only that amount, gave evidence of being generously supplied with funds. Supervisor Coffey, a hack driver, took a trip to Chicago. Lonergan, driver of a delivery wagon, announced plans for a tour of Ireland with his wife and children. Wilson planned a trip through the Eastern States. The official head of the administration, Mayor Schmitz, left on a trip to Europe, leaving Supervisor Gallagher as acting Mayor.[70] Reports printed in San Francisco papers of Schmitz, the orchestra player, as guest of the most expensive European hotels, did not tend to lessen the opposition to the administration.

The general dissatisfaction with the administration finally found expression in a mass meeting intended to inaugurate a movement to rid the community of Ruef's influence.[71] The meeting was called in the name of various promotion associations and improvement clubs. It was to have been held in the rooms of the California Promotion Association, a temporary shack that had been erected in Union Square, a public park in the business district. But the crowd which gathered was so great that the meeting had to be held in the park itself.

When the committee in charge met to complete final preparations, preliminary to calling the meeting to order, Ruef and Acting Mayor Gallagher, with astonishing assurance, appeared before the committee and offered their co-operation in the work in hand. Their presence does not appear to have been welcome. Nevertheless, before the resolutions which the committee had under consideration were read before the crowd, all harsh references to Ruef and the municipal administration had been expurgated. In effect, the expurgated resolutions called upon commercial organizations, clubs, labor unions and similar bodies to form a committee of 100 for public safety.

In the meeting which followed the expurgation of the resolutions, the organizers of the movement lost control. Their counsel was for moderation in a situation where all elements were at work.

The crowd was made up of Ruef claquers who shouted everybody down; members of Labor Unions who had been led to believe that the purpose of the gathering was to break down the unions; and of radicals who were for proceeding immediately to clean up the town. Those responsible for the gathering appeared appalled at its magnitude, and showed themselves unable to cope with the situation.

William A. Doble presided. Samuel M. Shortridge, an attorney who was to play a prominent part in the graft trials, stood at Doble's side and acted as a sort of director of the proceedings. The expurgated resolutions were read by the President of the Merchants' Association, E. R. Lillienthal. The ayes were called for and the resolutions declared to have been adopted. The next moment announcement was made that the meeting stood adjourned.

An angry demonstration followed. The people had met to discuss lawlessness. They refused to be put off. The adjourned meeting refused to adjourn. There were cries of =Drive Ruef out of Town=. One speaker, A. B. Truman, denounced Ruef as a grafter. For the moment an outbreak seemed imminent. At this crisis, Acting Mayor Gallagher appeared.

"I would suggest," he announced,[72] "that you disperse to your respective homes."

Citizens who did not care to participate in what threatened to become a riot began leaving the park. But Ruef's henchmen did not leave.

Ruef, who had cowered in fright when the crowd was denouncing him, was concealed in a room in the so-called Little St. Francis Hotel, which after the fire had been erected in Union Square Park. From his hiding place he could see the crowd without being seen. At the right time, he appeared on the steps of the building which were used for the speaker's stand. His followers, now in a majority, cheered him wildly. The next moment, Ruef was in control of the meeting which had been called to protest against the conditions in San Francisco, for which the administration, of which he was the recognized head, was held to be accountable.[73] The first serious attempt to oust Ruef from his dictatorship had failed.

But while the protestants against prevailing conditions were hot with the disappointments of this failure, District Attorney Langdon issued a statement that he had determined to seize the opportunity presented by the impanelment of a new Grand Jury to inaugurate a systematic and thorough investigation into charges of official graft and malfeasance in office. To assist in this work, he announced, Francis J. Heney had been requested to become a regular deputy in the District Attorney's office, and had accepted. That the investigation might not be handicapped by lack of funds, Mr. Langdon stated Rudolph Spreckels had guaranteed that he would personally undertake the collection from public-spirited citizens of a fund to provide for the expenses necessary to make the investigation thorough.[74] It became known that William J. Burns, who had been associated with Heney in the Oregon land-fraud cases, had been retained to direct the investigation, and that for several months his agents had been quietly at work.

The effect of these announcements was immediate. All talk of "vigilante committee" and "lynching" ceased. The case of The People of San Francisco vs. the Schmitz-Ruef Administration was to be presented in an orderly way in the courts.

And the united press of San Francisco, legitimate business interests, and a great majority of the people welcomed the alternative.

Footnotes:

[48] See Keane's testimony in The People vs. Ruef, No. 1437, Part 3, vol. 1, page 455.

[49] See footnote 41, page 43.

[50] Supervisor Gallagher testified in the case of The People vs. Ruef, No. 1437, that about a week before the fire "Mr. Ruef stated that the United Railroads wanted to secure a permit to use electricity upon their lines and asked me to speak to the members of the Board of Supervisors about it and let him know whether it could go through the Board, and about what amount of money it would take. I told him that I would do so." (See Transcript on Appeal, page 850.) Similar testimony, to show that the United Railroads was dealing with Ruef during the month preceding the fire, was brought out at trials of other defendants in the "graft" cases. This would make the date of Ruef's activity on behalf of the United Railroads about the time of Mr. Calhoun's announcement that he would proceed to present plans for the trolley system, to the "proper representatives" of the People (the Supervisors), who were even then, through Ruef, receiving bribe money from public-service corporations.

Gallagher testified further (see same transcript, page 853) that within a week after the fire Ruef stated to him that the United Railroads still wanted its electric permit, and directed that Gallagher find out whether such a permit could be put through the Board. Gallagher testified that he saw members, put the question to them, and reported back to Ruef that in his judgment the permit could be put through by paying each member of the Board the amount which Ruef had specified, $4,000.

[51] Supervisor Gallagher testified at graft trials that Ruef had told him the payment of this $75,000 to the Relief Fund was a good thing, as it would tend to shut off adverse criticism. But the Home Company people had asked that the money be not turned over to the Relief Fund until such time as the ordinance granting the franchise had been approved or the matter definitely determined.

[52] As early as May 5, C. E. Loss, a railroad contractor, came out with the proposition that the city should abandon all idea of conduit systems, because the cable slots had been closed by the earthquake. In this, Loss was disputed by City Engineer Thomas P. Woodward. Woodward, in an interview printed in the Examiner on May 5, 1906, said:

"I think Mr. Loss was mistaken when he said the earthquake closed the cable slots. I have not made a careful examination of the various roadbeds in San Francisco, but from what I have seen as I have gone about the city, I am inclined to think that no injury was done the cable slots by the earthquake.

"The lines on Sacramento, California, Geary, Sutter and Haight streets appear to be all right outside the burned district. Where the metal was subjected to the intense heat, the slots are warped out of shape, and in some places closed."

Loss's allegations called forth the following editorial comment in the Examiner of May 5th:

"Even an earthquake shock and a conflagration do not long obscure the vision of certain wealthy gentlemen where there is a chance to turn a calamity to their individual account.

"Before the catastrophe, San Francisco had indicated with great emphasis to the United Railroads that it would not permit the reconstruction of the cable system into an overhead trolley, but would insist upon a modern up-to-date conduit electric railroad, the safety, utility and efficiency of which had been demonstrated in New York and other Eastern cities.

"The emergency created by the destruction of the traffic systems in the city has compelled permission for a temporary trolley line because it could be constructed more quickly than any other.

"It is not intended, and the United Railroads must be made to realize that it will not be permitted, that the unsightly poles and dangerous wires will be allowed to cumber the new and more beautiful San Francisco, any more than it will be permitted that the rough shacks and sheds which temporarily shelter the people in parks and streets and otherwise vacant lots shall remain after the emergency which called them into being has ceased."

[53] A. D. Shepard, vice-president and secretary of the Geary-street Railroad Company, gave the following statement to the Examiner as to the condition of the Geary-street roadbed:

"We can run cars as far as the road goes, but the power-house is not ready for business. The smokestack at Geary and Buchanan streets must be built up to comply with the ordinance of the city before we can get a permit to build fires under the boilers. The smokestack should be repaired by the end of this week, and cars will probably be run over the road then. I cannot say just what day we will begin to run cars. All depends upon the smokestack and the Board of Public Works.

"Our line was not injured by the earthquake, and we ran cars for some time after the shake. It was the fire that drove us out of business. The heat warped the slot, making it narrow in places and wide in other spots, but this is easily remedied." (See Examiner, May 30, 1906.)

[54] Sharon's affidavit was introduced at the graft trials. It was as follows:

"State of California, City and County of San Francisco--ss.

"Frank E. Sharon, being first duly sworn according to law, deposes and says: That he was for many years prior to April 18, 1906, the superintendent of cables and stables belonging to the United Railroads of San Francisco, and situate at the corner of Market and Valencia streets; that on the property situate at said Market and Valencia streets were located what is known as the Market and Valencia Power House and Shops, consisting of power-house, stables, machine shops, special machine shops, mill, offices, store-rooms, sheds, etc.; that he was such superintendent on April 18, 1906; that on the morning of April 18, 1906, immediately following the earthquake he proceeded to the above described premises, arriving there at about 8 a. m.; that none of the buildings above described were materially damaged by the earthquake; that the walls of all the buildings were standing and intact; that the roofs of all the buildings were on and uninjured by the earthquake, with the exception of the roof of a portion of what is known as the power-house, which was damaged by reason of a small portion of the chimney adjoining the power-house on the west falling thereon; that the greater portion of said brick from the top of said chimney fell toward the south or east into the driveway; that extending from the base of said chimney to the crown thereof and on the east and west side thereof are cracks which were in said chimney for many years prior to the earthquake of April 18, 1906, which cracks were opened somewhat by said earthquake; and the boilers in said power-house were not injured to any extent and steam was kept under said boilers for some time after the earthquake; that in his judgment the building as a whole was intact and the machinery not injured in any material part of the earthquake; that the building caught fire from the adjoining buildings on the east and southeast late in the afternoon of April 18, 1906; said buildings were not dynamited nor backfired for any purpose. "F. E. SHARON.

"Subscribed and sworn to before me this 10th day of August, A. D. 1906. "CHARLES R. HOLTON.

"Notary Public in and for the City and County of San Francisco, State of California."

[55] The loss included $25 damage to two engines which cost new $24,000; $2,000 damage to six boilers, new cost $30,000; $210 water-tank, cost new $350; $500 damage to pipes, valves and fittings, which cost new $10,500; material in store-room worth $2,000, a total loss; $4,800 loss of two tension carriages used for taking up slack of the cable. These tension carriages could very easily have been restored. This loss, $4,800, and the $2,000 stock loss, deducted from the total of $9,375, leaves a total loss of $2,575 to the machinery of a plant estimated to have cost $115,842.

[56] As late as November 13, 1906, seven months after the fire, the San Francisco Call published an editorial article on the trolley permits which showed that even then their nature was not fully understood. The Call said:

"The insolent disregard of public rights in the streets by the United Railroads is inspired, of course, by ulterior purpose to entrench the corporation in the possession of privileges, permits or franchises granted at a time of stress and confusion whose legality may and probably will be questioned later.

"The Call does not desire to assume an attitude of hindering or hampering progress. We recognize fully that every new street-car line adds materially to the value of property within its tributary territory. In a word, the growth of a city or a neighborhood is, to a considerable degree, dependent on facilities for urban transit.

"But it does not follow from these considerations that franchises should be granted for nothing to any and every applicant who is able to construct a street railway. The right to use the streets is the most valuable privilege possessed by a municipality. It should be made to yield a corresponding revenue.

"All this might seem so obvious as scarcely to require statement, but in practice the principles here laid down have been virtually disregarded in San Francisco. In no instance was there more flagrant disregard of public rights than in the wholesale grants of permits or franchises to construct overhead trolley lines made after the fire.

"The United Railroads at the time professed to regard these permits as merely temporary, but that profession was not very long maintained. The company now declares that many, if not all, of these permits amount to absolute franchises in view of the capital invested in making the necessary changes. That is the explanation of the outrageous disregard of public rights shown in tearing up some five or six miles of streets at once and in different parts of town. This process is obviously wasteful as a financial proposition, and is calculated besides to arouse general indignation. We find these weighty considerations disregarded on the advice of the corporation's lawyers, to bolster up an invalid claim to the possession of franchises obtained by trick and device in an hour of public confusion.

"What the extent of the corporation's claim under these permits may be we are not advised, and there is no immediate means of finding out as long as the administration which granted these hole-and-corner permits remains in power. The same influences that made the Mayor and Supervisors so complaisant to the will of the United Railroads are still operative. It was only the other day that another permit for a street-car line was granted, and granted illegally. This administration stays bought.

"Therefore, the streets are torn up in a dozen different parts of town and left in that condition untouched for months with the full consent of the administration. But this political condition is not permanent. Some of these people will go to jail. They will all be ousted at the next election. San Francisco has had enough of them.

"The United Railroads is endeavoring to fortify one wrong by committing another. These things will not be forgotten in a hurry. We are convinced that the corporation is pursuing a shortsighted policy. Costly litigation must ensue to test the validity and extent of the overh