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Chapter XIII.

Machine Defeats the Stetson Bill.

Southern Pacific Attorney Succeeds in Clouding the Issue - Railroad Claquers Active in Advocating the Maximum Rate, Which Was Designated as Little Better Than No Rate At All - No Fight Over the Bill in the Assembly.

Having succeeded in transferring the railroad regulation measures from the Senate Judiciary Committee, the majority of whose members were anti-machine, to the Committee on Corporations, the majority of whose members were machine, the machine proceeded to discredit the Stetson bill, by making it appear that the State Constitution by implication prohibits the fixing of absolute railroad rates, and provides that the Railroad Commissioners may fix maximum rates only. Peter F. Dunne was brought to Sacramento to make this argument before the Senate Committee on Corporations.

Dunne, in his address, showed greater ability than integrity. When he had finished, even the anti-machine members of the Committee were completely befuddled. Walker, one of the members of the Committee who is not a lawyer, groped in utter darkness thereafter, until he finally stumbled into the arms of Eddie Wolfe and Frank Leavitt and Jere Burke, when the final vote on the railroad bills was taken. It was Walker's only stumble of the session. But for his unfortunate vote against the Stetson bill and for the Wright bill, Walker would have made an exceptionally clean record.

Not only did Dunne befog the lay Senators of the Committee, he shook the faith of men like Miller and Roseberry - both lawyers - on the constitutionality of the absolute rate. Miller recognizes that the absolute rate is the only practical rate; but until the end of the session he was not prepared to say that it could be constitutionally established. Dunne certainly did a good job. To be sure, his address was a mass of misrepresentations, but of misrepresentations cunningly put. He shattered the implicit faith of the anti-machine Senators in the absolute rate. And that was what he had been sent to Sacramento to do. The evil that Dunne did lived long after he had left the capital.

Curiously enough, neither the term "absolute rate" nor "maximum rate" appears in the State Constitution.

Article XII, Section 22, of the Constitution, provides that the Railroad Commissioners "shall have the power and it shall be their duty to establish rates of charges for the transportation of passengers and freight by railroad or other transportation companies."

Further on in the same section, it is provided that "any railroad corporation or transportation company which shall fail or refuse to conform to such rates as shall be established by such Commissioners, or shall charge rates in excess thereof, * * * shall be fined not exceeding $20,000 for each offense."

The dispute between those who stood for maximum rates - that is to say, the members of the machine lobby, the machine Senators, the Southern Pacific attorneys and those who wanted absolute rates - namely, the anti-machine Senators and the attorneys representing large shipping interests - waxed hot over the words in the above quotation which are printed in Italics.

The advocates of the absolute rate held, with at least apparent reason, that the words "fail to conform to such rates" mean just what the dictionaries say they do: That the railroad charging a rate in excess of that fixed by the Railroad Commissioners, or a rate less than that fixed by the Commissioners, is not conforming to the rates. Such, at least, seems reasonable construction of a very simple phrase.

But not so, insisted the railroad lobby. That aggregation of patriots skimmed over the words "fail to conform to such rates," and saw only, "or shall charge in excess thereof." Inasmuch, the pro-railroad element held, as the Constitution says that the railroads shall not charge in excess of the rates fixed by the Railroad Commissioners, the railroads are at liberty to reduce the rates as fixed by the Commissioners at will. In other words, according to the pro-railroad element, the Constitution authorizes the fixing of maximum rates only.

The pro-railroad claquers even went so far as to claim that the Supreme Court has decided that the maximum rate is the only rate that can be fixed under the State Constitution. They referred the doubtful to the notorious decision in the Fresno passenger rate case known as the Edson decision.

But no question of maximum rates was involved in the Edson case. To be sure, Chief Justice Beatty took occasion to say in his opinion in that case that his understanding had been that the State Constitution provides for the maximum rate. But this had no place in the decision, was purely dictum, and is so regarded.

Attorney-General Webb has an ingenious but very plausible explanation of Judge Beatty's much-discussed observation. General Webb points out that previous to the adoption of the present State Constitution - 1879 - Justice Beatty had been engaged in the active practice of the law in this State. Up to the time of the adoption of the Constitution of 1879 the maximum rate had prevailed in California. About that time, Judge Beatty went to Nevada and was absent from the State for several years. Returning to California, after the State Constitution had been adopted, Judge Beatty found no case in which the duties of the Railroad Commissioners had been involved, until the Edson case came up.

"I am of the opinion," said General Webb in discussing this point, "that when the Chief justice spoke of the maximum rate in the Edson case he was governed by mental impressions received previous to 1879, when the maximum rate was indeed the rule in California."

All this was a very pretty theory. To the common-sense mind "conform to the rates fixed" might mean conform to them; the normal man might be unable to dig out of the Constitution any prohibition of absolute rates. But the confusion caused by the raising of the question got the Stetson bill very much in the air.

During all the discussion, however, the Wright bill was not considered at all. Nobody was thinking of the Wright bill - that is to say, nobody outside of those scheming for its passage. Like a mongrel duck's egg under a respectable hen, it was left to incubate undisturbed, to surprise everybody at the hatching.

Finding themselves unable to clear away the doubt which raising the question of the constitutionality of the absolute rate had created, the anti-machine Senators and the attorneys of the shippers finally, after the Wright bill had been forced into prominence, put the case something like this:

"If the Courts decide that the maximum rate only is constitutional, then the Wright bill, which provides for the maximum rate, will be constitutional, and the greater part of the Stetson bill will also be constitutional.

"But if the Courts decide that an absolute rate is the only rate justified under the Constitution, then the Wright bill will be unconstitutional and all the Stetson bill constitutional."

This somewhat loose argument unquestionably kept certain Senators who recognized the impracticability of the maximum rate, but feared for the constitutionality of the absolute rate, in line for the Stetson bill.

With the situation thus confused, all was in readiness to bring the Wright bill before the public. This was done on February 17th. Up to that date the writer honestly believes that not two minutes had been devoted to public discussion of this measure, although the Stetson bill had been discussed paragraph by paragraph, line by line, every word weighed carefully.

The ceremony of giving the Wright bill prominence took place behind the closed doors of an executive session of the Senate Committee on Corporations. These executive sessions, by the way, are seldom held when the best interests of the public are to be conserved. The proceedings were evidently pre-arranged. Senator Wright opened by moving that the policy of the Committee should be that the Railroad Regulation measure to receive favorable consideration from the Committee must provide for the maximum rate.

The vote was as prompt as it was decisive. Senator Wright's motion carried by a vote of 7 to 3. The vote was as follows:

For the maximum rate - Bates, Welch, Wright, McCartney, Bills, Finn, Kennedy.

Against the maximum rate - Walker, Roseberry, Miller.

Burnett, the eleventh member of the Committee, was absent.

Gradually it dawned upon Walker, Miller and Roseberry that this meant the favorable recommendation of the Wright bill. The next moment that fact was hammered into them by the Committee deciding by the same vote, 7 to 3, to recommend that the Stetson bill do not pass; and that the Wright bill do pass.

The machine had won the opening skirmish in the railroad regulation controversy. Incidentally it had come out in the open squarely for the Wright bill. From that moment the machine Senators labored openly for the passage of the measure. However, the machine was not yet out of the woods with its Railroad Regulation bill. The Senate Judiciary Committee had still to pass upon it, and the majority of the Judiciary Committee was anti-machine.

Wright followed the same course in the Judiciary Committee as he had taken in the Committee on Corporations, namely, moved that it be the sense of the Committee that the Railroad Regulation bill to be favorably considered by the Committee should provide for the maximum rate.

Wright's motion was, however, lost by a vote of 8 to 10. The Committee not only rejected the maximum rate, but endorsed the absolute rate, thus reversing the Committee on Corporations. The vote by which this was done was as follows:

Against the maximum rate, against the Wright bill and for the Stetson bill - Campbell, Cutten, Miller, Stetson, Thompson, Caminetti, Boynton, Roseberry, Curtin and Cartwright - 10.

For the maximum rate, for the Wright bill and against the Stetson bill - Anthony, Martinelli, McCartney, Wright, Willis, Wolfe, Burnett and Estudillo - 8.

Absent - Savage - 1.

Thus the Stetson bill after two months of machine effort against it, went to the floor of the Senate from the Judiciary Committee with the recommendation that it "do pass." Of the forty Senators, nineteen were lawyers, and every one of the nineteen was a member of the Senate Judiciary Committee. Thus the majority of the lawyers of the Senate, in spite of the confusion which the machine claquers had created, were willing to take their chances on the constitutionality of the Stetson bill.

But in fairness it must be admitted that members of the Judiciary Committee who voted for the absolute rate provision of the Stetson bill were still in the befuddled condition in which Peter F. Dunne's sophistry had left them. Senator Miller, for example, in explaining his vote for the absolute rate, said:

"I take this stand, not that I am convinced that the Supreme Court will decide the absolute rate to be constitutional; I fear that it may not. But the maximum rate is little better than no rate at all. I wish the absolute rate provided in this bill, that the Supreme Court may be given opportunity to pass upon it."

Senator Roseberry, who voted for the absolute rate, confessed himself as much at sea as was Senator Miller. Senator Estudillo, who voted for the maximum rate, insisted that he had not been able to make up his mind which should be adopted.

On the other hand, Senator Cutten, himself a lawyer and a close student of the legal questions involved, stated that while he had thought originally that the maximum rate is the only constitutional rate that can be fixed, he had been forced to come to the conclusion that the absolute rate alone is constitutional.

But in the end the Wright bill and not the Stetson bill passed the Senate. It passed after a day of debate in which the issue became clouded, if anything, worse than at any stage of the proceedings. Leavitt and Wolfe, with Wright chipping in with a me-too word now and then, led the debate in favor of the Wright bill. Senators Stetson, Boynton, Cutten, Roseberry and Miller led the fight for the Stetson bill. Significant enough was the fact that the line-up of Senate leaders was precisely the same as that in the fight which the machine carried on against the Direct Primary bill.

Miller's argument in favor of the Stetson bill showed the confusion under which the advocates of effective railroad regulation were laboring:

"If we adopt the Wright bill," said Miller, "the railroads will be satisfied and never dispute it in the Courts. Whereas, by the adoption of the Stetson bill the railroads will almost be compelled to appeal to the Courts, and then we shall have a quick decision on the question in which we are all interested. If the Courts sustain the Stetson bill, we shall have a law that will do all we want for the present."[64]

The debate on the measures was on a motion by Stetson that the Stetson bill be substituted for the Wright bill. In this Stetson made a serious mistake. He staked his whole bill on one issue, that of absolute or maximum rates. On all other points, the Stetson bill was better than the Wright bill. It was a mistake in policy for Stetson to stake the fate of his measure on a single issue.

Stetson's motion was lost by a vote of 16 to 22; the Stetson bill was accordingly not substituted for the Wright bill, and the Wright bill, which had come from the Judiciary Committee with a minority report back of it, went to third reading and final passage.

The vote by which Stetson's motion was defeated, was as follows:

To substitute the Stetson bill for the Wright bill - Bell, Birdsall, Black, Boynton, Caminetti, Campbell, Cartwright, Curtin, Cutten, Holohan, Lewis, Miller, Sanford, Stetson, Strobridge, Thompson - 16.

Against substituting the Stetson bill for the Wright bill - Anthony, Bates, Bills, Burnett, Estudillo, Finn, Hare, Hartman, Hurd, Kennedy, Leavitt, Martinelli, McCartney, Price, Reily, Savage, Walker, Weed, Welch, Willis, Wolfe, Wright - 22.

Senators Roseberry and Rush were absent from the room when the vote was taken but both were for the Stetson bill, which would have made the vote 22 to 18 in favor of the Wright bill.

The twenty Senators whose names are printed in Italics are the twenty who voted with Leavitt and Wolfe to maintain the deadlock on the Direct Primary bill that the measure might be so amended that the electors of California would be denied a practical, State-wide vote for United States Senators. But one of the twenty, Lewis, voted for the Stetson bill, while nineteen of them voted for the Wright bill.

On the other hand, only three of the Senators, Estudillo, Anthony and Walker, who stood out for an honest Direct Primary law, voted againstthe Stetson bill and for the Wright bill. Walker had supported the Stetson bill in the Committee on Corporations, but stumbled into the machine ranks when it came to final vote. Had the anti-machine had an organization, such as the machine Democrats and Republicans maintained, Walker's blunder could have been prevented. Probably, too, Estudillo and Anthony would have remained with the anti-machine forces[65]. This would have given the Stetson bill twenty-one votes, and assured its passage.

Another vote that should have been saved to the reformers was that of Burnett. Burnett was clearly tricked into voting for the Wright bill. When the Stetson bill received the favorable recommendation of the Senate Judiciary Committee, machine claquers filled the air with the indefinite promise that in the event of the Wright bill becoming a law, a constitutional amendment would be adopted, by which all ambiguity in the State Constitution on the question of maximum and absolute rates would be removed. The amendment was then pending before the Senate Judiciary Committee, which finally reported it favorably.

After the Wright bill had been passed, the amendment was defeated by machine votes, as will be shown in the next chapter.

In the closing days of the session, when Burnett was urging that steps be taken for investigation into the increase of freight rates, he called attention to the fate of that railroad-regulation amendment.

"I was led to vote as I did for the Railroad Regulation bill," he said, "on the understanding that that constitutional amendment would be adopted. As you know, it was defeated. My attitude on the regulation bill would have been very different had I known that the amendment was to be rejected."

The Wright bill met with practically no opposition in the Assembly, being rushed through the Lower House in the closing hours of the session. Had the Stetson bill passed the Senate, the machine would have tried to block and amend it in the Assembly as was done with the Direct Primary bill, but the measure would probably have been passed.

Had the anti-machine forces in the Senate been organized, the Stetson, and not the Wright bill, would have passed that body. Without organization, or even definite policy, in the face of organized machine opposition, it is astonishing - and at the same time most encouraging - that eighteen of the forty Senators stood by the Stetson bill to the end.

[64] The question to which Senator Miller referred was: Has the Legislature power under the Constitution to authorize the Railroad Commissioners to fix the absolute rate? a question upon which the machine does not propose the Supreme Court shall be required to pass.

[65] Walker and Estudillo were bitterly condemned for their vote for the Wright bill. Incidentally, the writer has been roundly criticized for offering the excuse in their behalf that these two men indicated by their attitude on other measures throughout the session that they would have continued with the reform element in the matter of railroad regulation, had the anti-machine Senators been organized to give effective resistance to the machine. Perhaps the sanest of this criticism, certainly the most reasonable, is from a gentleman who was a close observer of the work of the session. He says:

"The course of the railroad rate bill from my point of view looked somewhat different in many details, at any rate, from your account of it. I cannot bring myself to think that it was defeated by any chance at the hands of a friendly Legislature. I think that what chances there were were mostly added to the number of votes the bill got and that the attitude of men like Walker and Estudillo on that bill was fundamental and to have been expected from the start. Of course what you say about the woeful lack of organization amongst the individual men was only too apparent. That phenomenon reaches back still deeper and is based upon the quality of human nature which exerts itself more persistently and more energetically and with soldier-like rhythm of compact organization when private selfish interests are involved, than when the general interest and somewhat vague uncentered end of public welfare is concerned."

But in spite of this very reasonable view, from a very reasonable gentleman, the fact remains that in the Committee on Corporations, Walker stood out against the machine on this very issue, and that in the direct primary fight both Walker and Estudillo stood out against the machine to the end. Had the anti-machine element been organized, the Stetson bill and not the Wright bill would in all probability have been passed.

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