HD 
 
 I35C4 
 
 '^^ 
 
 :^:-.^' 
 
 -'A 
 
 "S^;"^ 
 
 ti* 
 
 ■*- i_.V'-..: > 
 
 n^^ 
 
 :y<^ 
 
 ■^ V 
 
LIBRARY 
 
 University of California. 
 
 Gl FT OF 
 
 J-TLa^. 
 
 r 
 
 Class 
 
s# 
 
 / PUBLICATIONS OF 
 
 
 The American Academy of PoliticaI and SdciAi, ^- 
 
 ^ . . '^. L 
 
 No. 486 
 
 
 The Movement for Municipal Ownership 
 in Chicago 
 
 BY 
 
 Hugo S. Grosser 
 
 City Statistic! ao of Chicago 
 
 Reprinted from THE ANNALS of the American Academy of Political 
 and Social Science for January 1906 
 
 PHILADELPHIA 
 THE AMERICAN ACADEMY OF POLITICAL AND SOCIAL SCIENCC 
 
 Entlaad : P. S. Klnc & Son, 2 Great Smith Street. Wesimltiister. Loodon. S. V. 
 
 Pr, I I Rue Soufflot, 22 Piri« 
 
 Itilr : Direcloti« del Gforn* ::, Rome, Vii Monte Stvello, Pttixzo Qraini 
 
 Spalo :3xa dc Santa Ana, Madrid 
 
 Prict 25 cents 
 
//» I 
 
 

 The Movement for Municipal Ownership in Chicago 
 
 ir>(U44 
 
THE MOVEMENT FOR MUNICIPAL OWNERSHIP IN 
 
 CHICAGO 
 
 By Hugo S. Grosser, 
 City Statistician of Chicago. 
 
 The movement for municipal ownership in Chicago, although 
 but recently designated by the most prominent merchant of the city 
 as "a fad and a craze that will die out and not be heard of again 
 within five years," is as old, almost, as the city itself. According to 
 the records, the question of municipal ownership was first voted 
 upon in Chicago in 185 1, and the point at issue at that time was 
 the acquisition and operation by the municipality of the water works. 
 Of the four thousand four hundred and forty-five persons voting 
 at that time, two thousand six hundred and eighty-eight voted for, 
 and five hundred and thirteen against the measure, while one thou- 
 sand two hundred and forty-four were silent on the question. 
 Chicago as a result of that election acquired its water works, and 
 has owned and operated them ever since. That the public mind, 
 even in the early days of the city's life, considered the possibility of 
 extending municipal ownership to other public utilities, and particu- 
 larly to the street railway lines, may be seen from the fact that when 
 the city council of Chicago in 1858 granted the first street railway 
 ordinance to a number of gentlemen, the predecessors of the Chicago 
 City Railway Company, it contained a provision for the purchase 
 of the street railway property by the city. 
 
 Again in 1887, the city of Chicago without much ado, and with- 
 out creating a bonded debt, erected its first municipal lighting plant, 
 which, during the past eighteen years has been continually enlarged 
 and extended, and has become one of the largest electric street light- 
 ing plants in the world. Thus not only the principle, but also the 
 practical value of municipal ownership of public utilities was well 
 known to the citizens of Chicago for many years. 
 
 (72) 
 
The Movement for Municipal Ownership in Chicago 73 
 
 There was little cause to discuss the question of municipal 
 ownership for several decades, but the time came when the people 
 were aroused as never before, and for a good reason, for one of the 
 boldest attempts ever known in legislative history was made by the 
 street railway interests to obtain, in a roundabout way, an exten- 
 sion of their grants for a further period of fifty years. In 1886 a syn- 
 dicate headed by Charles T. Yerkes, organized the North Chicago 
 Street Railroad Company and the West Chicago Street Railroad 
 Company, which took over the leases of the street railways and the 
 franchise rights of the North Chicago City Railway Company and 
 the Chicago West Division Railway Company for nine hundred 
 and ninety-nine years, guaranteeing to the retiring companies annual 
 dividends of 30 and 35 per cent, respectively. The new companies, 
 after they had assumed the operation of the railways, received in 
 their own right, from time to time, from the city numerous grants 
 for additional streets in the north and west divisions for twenty 
 years, which, in fact, constituted a very large part of the mileage 
 of the respective lines of these companies. In 1897, through the 
 efforts of Mr. Yerkes, the senate of the State of Illinois passed a 
 law, popularly known as the "Humphrey Bill." which provided that 
 any street railway ordinances heretofore granted to any one were 
 extended for the period of fifty years from and after the first Tues- 
 day in September, 1897. Although Mr. Yerkes personally appeared 
 before the house committee to whom the bill was referred and urged 
 the passage of it, the house finally rejected it, but passed a substitute, 
 afterwards amended and passed by the senate, popularly known as 
 the "Allen Law," which conferred upon the city the power to extend 
 street railway ordinances for fifty years, instead of twenty years, as 
 provided by the cities and villages act of 1874. The people of 
 Chicago were up in arms, and when in 1898 Mr. Yerkes, on behalf 
 of his two companies, tried to get the city council to pass an ordi- 
 nance extending the time for the operation of the lines for fifty 
 years, genuine alarm was felt everywhere, as, considering the com- 
 position of the city council at that time, well-grounded fears were 
 entertained that the people's rights might be sold to the street rail- 
 way corporations in spite of the probable veto of Carter H. Harrison, 
 the new mayor, who had been elected not quite a year before. In- 
 dignation meetings were held everywhere ; frequent threats of hang- 
 ing the aldermen who would dare to vote for the propositions were 
 
74 The Annals of the American Academy 
 
 heard, and so stoutly did the people fight in their own behalf that 
 the council did not dare to pass the ordinances. Not satisfied with 
 that result, the agitation was kept up until in 1899 the legislature re- 
 pealed the so-called "Allen Law," and in lieu thereof passed a law 
 corresponding to the old law limiting franchise grants to twenty 
 years. 
 
 As soon as, through the "Humphrey Bill," the people of Chicago 
 were challenged to protect their rights in the streets of the city, the 
 council appointed a committee to make an exhaustive investigation 
 of the entire matter. This committee, known as the Harlan Com- 
 mittee, reported to the council in March, 1898. In this report were 
 set forth all the facts as they existed at that time in regard to the 
 street railways, and for the first time the public came into possession 
 of reliable and helpful information. Aroused by the bold efforts 
 of Yerkes, and fortified by the knowledge that most of the franchises 
 of the old companies were about to expire, the public there and then 
 became firmly determined that no further franchises should be given 
 to these companies. They realized how utterly inadequate the street 
 car service had been for years — how they had been subjected to the 
 most abominable, yes, indecent, treatment — how the purpose of 
 accommodating the people had been entirely lost sight of by the 
 companies, whose only aim for years seemed to have been to pro- 
 cure the largest number of nickels for the least amount of service. 
 The cause of municipal ownership received an impetus which since 
 then has grown stronger and stronger ; which, in spite of all the 
 machinations on the part of the traction interests, could not be 
 downed, and which, to judge from the present attitude of the people, 
 will not down until it has been brought to a successful realization. 
 It might be truthfully said that Mr. Yerkes is the father of the 
 present municipal ownership movement, for, had he been wise 
 enough to introduce proper transportation service and be modest 
 or at least moderate in his demands for franchise renewals, it may 
 justly be assumed that the companies would have received an exten- 
 sion of their grants, and that consequently there would have been no 
 street railway question in Chicago. 
 
 As soon as the street railway interests saw their attempt to 
 grab the streets of^ Chicago for another half century foiled in so 
 pronounced a manner, they at once began to raise the cry of their 
 rights under the so-called "Ninety-nine Year Act," under which they 
 
The Movement for Municipal Ownership m Chicago 75 
 
 claimed their franchise rights extended until 1958 and i960 re- 
 spectively. This ninety-nine year act playing so great a part in the 
 present controversy is nothing but a mere legislative enactment, 
 passed in 1865, amending an act of February, 1859, which incor- 
 porated the Chicago City Railway Company and the North Chicago 
 City Railway Company, and likewise amending an act of February, 
 1861, which incorporated the Chicago West Division Railway Com- 
 pany. Under this act the corporate life of these three companies was 
 extended from twenty-five to ninety-nine years, and further con- 
 tained the following amendment : 
 
 "And any and all acts or deeds of transfer of rights, privileges or fran- 
 chises, between the corporations in said several acts named, or any two of 
 them, and all contracts, stipulations, licenses and undertakings, made, entered 
 into or given, and as made or amended by and between the said Common 
 Council and any one or more of the said corporations, respecting the loca- 
 tion, use or exclusion of railways in or upon the streets, or any of them, of 
 said city, shall be deemed and held and continued in force during the life 
 hereof, as valid and effectual to all intents and purposes as if made a part, 
 and the same are hereby made a part of said several acts." 
 
 The claim of the companies under this amendatory act, passed 
 over the veto of the then governor, Oglesby, in spite of great pub- 
 lic opposition, has never been adjudicated, has always been disputed 
 by the city, and is now pending in the United States Supreme Court. 
 
 In the light of the following events it seems as though Mr. 
 Yerkes, no doubt aware of the weakness of his position, must have 
 had some very deep and mysterious purpose in thus setting up these 
 proud claims, and this became evident when in 1899 he managed to 
 organize the Chicago Union Traction Company, as the successor 
 of his two former companies. These leased all their property rights, 
 including their leasehold interests, privileges, franchises, etc., to the 
 Chicago Union Traction Company, which latter undertook and 
 agreed to assume and pay the floating indebtedness of the former 
 corporations, interest on the bonded indebtedness, aggregating over 
 twenty-five million dollars, and dividends to the stockholders of 
 the five underlying corporations to the amount of one million six 
 hundred and thirty thousand one hundred and sixty-three dollars 
 annually. After Mr. Yerkes had succeeded in floating this new 
 enterprise, out of which he is reputed to have drawn more than ten 
 million dollars, he disappeared from the field of action to build his 
 
76 The Annals of the American Academy 
 
 "two-penny tubes" in London, leaving to the syndicate that suc- 
 ceeded him the heritage of the legal battle that has already con- 
 sumed many years. 
 
 Chicago was on the qui vive. In December, 1899, the city coun- 
 cil created the Street Railway Commision, with directions to prepare 
 and submit to the legislature a comprehensive bill for new street 
 railway legislation. In his annual message of December, 1899, 
 Mayor Harrison, who in the spring of the year had been re-elected 
 under the slogan, "The streets of Chicago belong to the people," 
 called attention to the five points which he thought must be con- 
 sidered in connection with any extension of franchises to any exist- 
 ing street railway companies. These five points were : 
 
 First. Compensation based upon percentage of gross receipts; 
 
 Second. A reduction of fare during the crowded hours of the 
 day ; 
 
 Third. A betterment of conditions in the accommodation of the 
 public ; 
 
 Fourth. A proposition for municipal ownership of the lines at 
 the expiration of the grant ; and 
 
 Fifth. The requirement that before any ordinance granting an 
 extension of franchises shall become operative it shall first be sub- 
 mitted to a direct vote of the people and receive popular endorse- 
 ment. 
 
 The Street Railway Commission prepared and submitted to the 
 legislature a comprehensive plan for new street railway legislation, 
 and in their report dwelt upon several points to be observed before 
 any franchises were to be extended. It maintained that the city 
 should possess the power to own and operate street railways ; that 
 to the council there should be reserved broad powers of control of 
 the street railway business ; that the people should be given a direct 
 voice through the referendum in the settlement of the most import- 
 ant questions of street railway policy: that the law should forbid 
 over-capitalization ; and that when any further grants of privi- 
 leges from the city are accorded to the companies, they should be 
 required, as a consideration of such grant, to renounce any claim of 
 rights under the ninety-nine year act. In April, 1901, Carter Har- 
 rison, under the old battlecry, was elected for the third time. 
 
 In May of the same year the city council created a Committee 
 on Local Transportation to deal with the street railway problem. 
 
Tlie Movement for Municipal Ownership in Chicago 77 
 
 This committee, in December, 1901, reported to the council an outline 
 ordinance for the proposed extension of franchises, but the com- 
 panies for some time had ceased to negotiate with the city. In this 
 report the committee said : 
 
 "The immediate municipalization of the street railways of Chicago as 
 a practical proposition most persons will readily admit is out of the question." 
 
 and further: 
 
 "But the public is greatly interested in the early improvement of Chi- 
 cago's belated and inadequate transportation facilities, and to that end it 
 should be prepared to consider the terms of an early settlement of the general 
 franchise question, in so far as a settlement may be an important element 
 in leading to improvement of service." 
 
 Meanwhile a great deal of pressure had been brought upon the 
 council and the mayor to "settle" the street car (luestion, and it was 
 stated by representative people that the overwhelming sentiment of 
 the people was that the question should be settled right and soon. 
 The Citizens' Association, the Civic Federation, and the Real Estate 
 Board, as well as the press in general, emphatically were opposed to 
 anything in the nature of delay. This finally caused Mayor Harri- 
 son, on January 6, 1902, to send a message to the council outlining 
 the provisions of a street railway franchise renewal ordinance, in 
 which, in order to meet the claim of the committee that a new fran- 
 chise was essential to the obtaining of a satisfactory service, he 
 stated : 
 
 "The general police power of the city is sufficient to give to 
 the people the relief demanded." In this message he reiterated the 
 points he conceived to be fundamental in any settlement. In addi- 
 tion to that, he said : 
 
 "For my part, I repard myself as under a pledge to the people to do all 
 in my official and individual power to bring about the possibility of municipal 
 ownership. The question with me, then, is : Do the people desire municipal 
 ownership? The answer to this question will not be received by me from 
 the owners of street car securities, nor from the all too interested pre- 
 cincts of the stock exchange, nor from that class of prominent citizens who 
 regard a public franchise as personal spoil and loot, nor from that portion 
 of the press which takes its editorial coloring from these classes of citizens." 
 
 Further on, he pointed out that at the time there was no author- 
 ity for the city to own and operate its street railways, and that if 
 
78 The Annals of the American Academy 
 
 municipal ownership is to be obtained, the passage of enabhng legis- 
 lation must be a condition precedent to the granting of the desired 
 extensions. In March, 1902, the city council, by resolutions, invited 
 the street railway companies to enter into negotiations for renewal 
 franchises. 
 
 The advocates of municipal ownership had not remained idle 
 during all this time. New leagues and associations sprung up in all 
 quarters of the city, taking up the fight, and in the aldermanic elec- 
 tion in April, 1902, under the Public Policy Act, through their efforts, 
 there was submitted to the people the question of municipal owner- 
 ship of street railways. At that election one hundred and forty-two 
 thousand eight hundred and twenty-six voted in favor of municipal 
 ownership, and only twenty-seven thousand nine hundred and ninety 
 voted against it. 
 
 From then on, every effort was bent to secure from the legisla- 
 ture that was to meet in January, 1903, the necessary legislation 
 authorizing the city to own and operate street railways. Within 
 two weeks after the election, the council passed an order author- 
 izing and instructing the mayor to "appoint a special committee of 
 five aldermen and five citizens to take steps to present the necessary 
 bills to the legislature and to do everything possible to carry out the 
 will of the people so decisively expressed at the recent election." 
 
 A committee appointed by the mayor in compliance with the 
 order, made a report in December, 1902, expressing the desirability 
 of municipal ownership in Chicago, and submitted several bills 
 which were approved by the council and in turn submitted to the Gen- 
 eral Assembly of Illinois in February, 1903. These bills were pend- 
 ing in the legislature when another mayoralty election was at hand. 
 The mayor being a candidate for re-election, appointed a very large 
 committee, consisting of prominent citizens of both parties, includ- 
 ing the Republican candidate for mayor, the late Mr. Graeme M. 
 Stewart, to advocate the enactment of these laws. The legislature 
 being overwhelmingly Republican, great pressure was brought upon 
 Mr. Stewart and his friends to induce the legislature to pass the 
 desired laws. Well knowing the temper of the people, and fearing 
 that a failure to pass the bills might hurt the chances of the Repub- 
 lican candidate, the delegates unanimously worked for their passage. 
 There was considerable delay, and when election day came the bills 
 were still held in abeyance. Mr. Harrison was elected for a fourth 
 
The Movement for Municipal Ownership in Chicago 79 
 
 time, but so strong^ became the general pressure that in May, 1903, 
 the legislature of Illinois passed the "Act to authorize cities to ac- 
 quire, construct, own, operate and lease street railways, anrl to pro- 
 vide the means therefor," popularly known as the "Mueller Law." 
 It had been hoped that the act would have been passed before the 
 election so it could be submitted to popular vote for approval there 
 and then, as under the terms of tlic law this was necessary XuU^rc it 
 would be in force. 
 
 In October, 1903, the council passed an ortlinancc which pro- 
 vided for the submission of the act to popular vote at the election of 
 April 5, 1904, to determine whether it should become operative in 
 Chicago under its terms. At that election the act was ai)prove<l by 
 the people by a vote of one hundred and fifty-three thousantl two 
 hundred and twenty-three against thirty thousand two hundred and 
 seventy-nine; and through the efforts of the Referendum League, 
 the following two questions were submitted at the same election : 
 
 First. "Shall the city, upon the adoption of the Mueller law, proceed with- 
 out delay to acquire ownership of the street railways under the powers con- 
 ferred by the Mueller law?" 
 
 The vote was one hundred and twenty-one thousand nine hun- 
 dred and fifty-seven for and fifty thousand eight hundred and seven 
 against. 
 
 Second. "Shall the city council, instead of Rranting any franchises, pro- 
 ceed at once, under the city's police powers and other existing laws, to 
 license the street railway companies until municipal ownership can be secured 
 and compel them to pve satisfactory service?" 
 
 The vote was one hundred and twenty thousand eight hundred 
 and sixty-three for, and forty-eight thousand two hundred against. 
 
 Such a decisive vote clearly showed the will of the people, and 
 the city having obtained the authority to own and operate its street 
 railways, there seemed to be smooth sailing ahead for the cause of 
 municipal ownership ; but what a delusion ! The difficulties were 
 greater than ever, and the prospect for the final settlement of the 
 long drawn out and exceedingly tiresome traction question looked 
 gloomy, indeed. While in the spring of 1903 the Mueller bill was on 
 its passage the city experienced a distinct shock when, without warn- 
 ing, the Union Traction Company went into the hands of a receiver. 
 It seemed impossible that such a profitable enterprise should be 
 
8o The Annals of the American Academy 
 
 forced into bankruptcy, and it was generally believed that the as- 
 tounding move was merely a subterfuge by which the Union Traction 
 Company, passing under the control of the federal court, could, and 
 actually did escape any and all interference with its service on the 
 part of the city. Through this move, furthermore, all negotiations 
 for franchise extensions between the Union Traction Company and 
 the city were broken off, and the city authorities for some time dealt 
 with the City Railway Company only — the one covering the trans- 
 portation service on the great South Side of the city. 
 
 Numerous petitions, resolutions, orders and ordinances were 
 introduced in the city council ordering the Committee on Local 
 Transportation to cease negotiations with the street railway com- 
 panies, — providing for all kinds of improvements in the service — for 
 licensing street railways, etc. These were all referred to the Com- 
 mittee on Local Transportation, where they were most conscien- 
 tiously pigeon-holed, and the committee continued its negotiations 
 until in November, 1903, a sub-committee reported for the considera- 
 tion of the entire committee a tentative ordinance for an extension 
 of the Chicago City Railway Company's franchise. The ordinance, 
 according to the report, was "complete except as to the question of 
 compensation." That question proved to be the rock on which the 
 extension ship finally foundered, as the company refused to accede 
 to the demands of the council in this respect, and when the ordinance 
 was at last, in August, 1904, reported out, it was amended, referred 
 back to the committee, again amended, re-referred, until, as a new 
 tentative ordinance it was re-submitted to the council in March, 1905. 
 Its consideration was postponed until after the spring election, and 
 shortly thereafter it was placed on file. 
 
 The people became very impatient with these negotiations, espe- 
 cially when it was discovered that the committee as well as the then 
 mayor would favor a franchise extension under proper safeguards, 
 and with a provision for ultimate municipal ownership. That was 
 not what was wanted, and the cry for immediate municipal owner- 
 ship was raised. The people at large seemed to be convinced that 
 that would be an easy matter to obtain, and the politicians were 
 shrewd enough to see that they could not disregard this immensely 
 popular movement, and some of them were very loud in their pro- 
 fessions of being genuine, dyed-in-the-wool municipal ownership 
 men. 
 
The Movement for Municipal Ownership in Chicago 8i 
 
 Another mayoralty election was at hand. The four-times mayor, 
 Carter H. Harrison, had absolutely refused to be a candidate for the 
 fifth time, and both parties scoured the city for the most available man 
 that might be successful. The Republicans nominated John M. Har- 
 lan in obedience to the demands of certain interests, although eight 
 years before he had been an independent candidate for the mayoralty, 
 and had thereby helped to defeat the regular Republican candidate. 
 There can be no doubt but that Mr. Harlan was a popular candidate, 
 but the Republican platform equivocated on the question of muni- 
 cipal ownership, and the candidate himself in the course of the cam- 
 paign changed his own position in the matter so often that finally 
 no one knew where Mr. Harlan really stood. The Democrats, on 
 the other hand, had a candidate of a different calibre. His nomina- 
 tion was the final result of an absolute and firm demand on the part 
 of the people. For years he had been known as an absolutely sin- 
 cere and honest advocate of municipal ownership; as a judge on the 
 bench for fourteen years he had frequently shown his predilection 
 for the common people, so that many weeks before the convention 
 every other aspirant for the nomination had disappeared, and Judge 
 Edward F. Dunne was unanimously declared the nominee. The 
 Democratic platform, supposedly written by the candidate, demanded 
 "that Chicago follow the example of the enlightened municipalities 
 of both the old world and the new by taking immediate steps to 
 establish municipal ownership and operation of the traction service 
 of the city." 
 
 That was what was wanted, and although just a few months 
 before, in the fall of 1904, President Roosevelt had carried the city 
 by a hundred thousand majority, on April 6, 1905, Judge Dunne 
 was elected mayor of Chicago by a majority of nearly twenty-five 
 thousand votes. At the same election the following three questions 
 were submitted to the vote of the people : 
 
 First. "Shall the city council pass the ordinance reported by the Local 
 Transportation Committee to the city council on the 24th day of August, 1904, 
 granting a franchise to the Chicago City Railway Company?" 
 
 Second. "Shall the city council pass any ordinance granting a franchise 
 to the Chicago City Railway Company?" 
 
 Third. "Shall the city council pass any ordinance granting a franchise 
 to any street railroad company?" 
 
82 The Annals of the American Academy 
 
 For the first time in the history of referendum votes the people, 
 if they wanted to record their vote in favor of municipal ownership, 
 had to vote "no," while in every former referendum they had voted 
 "yes." It was feared that this might lead to confusion and fail to 
 bring out the real intention of the citizens, but what was the result? 
 The so-called tentative ordinance submitted in the first question was 
 snowed under by a vote of sixty-four thousand three hundred and 
 ninety-one for, and one hundred and fifty thousand seven hundred 
 and eighty-five against the proposition. On the second question 
 sixty thousand and twenty voted yes, and one hundred and fifty-one 
 thousand nine hundred and seventy-four voted no. On the third 
 question fifty-nine thousand and thirteen voted yes, and one hun- 
 dred and fifty-two thousand one hundred and thirty-five voted 
 no. The one remarkable fact in this vote was that in every 
 single ward of the city there was an overwhelming majority 
 against these propositions, so that while about one hundred and 
 fifteen thousand voters did not vote at all on these questions, the 
 vote must be accepted as a thoroughly representative one. Even 
 in those wards of the city where the wealthier classes live, the 
 ratio was two to one. That certainly was as plain and emphatic an 
 answer as could possibly be made, and the answer was not rashly 
 given. It was the the result of a thorough study of the ordinance 
 submitted, and of the subject of municipal ownership in general. 
 This study, encouraged by newspapers, brochures and public speak- 
 ers not only throughout the entire campaign, but for a long period 
 before, brought to the majority of Chicago's citizens the firm con- 
 viction that only through the agency of municipal ownership could 
 they expect permanent relief from the greed and oppression of the 
 street railway corporations. The splendid examples of the beneficial 
 results of municipal ownership in England, Germany and other 
 European countries did not fail to leave a deep impression upon the 
 voters, but the main cause for their great strength must be found 
 right at home, for here for many years they themselves had prac- 
 ticed municipal ownership in such a manner that the opposition had 
 to content itself with pointing out petty neglects, not being able to 
 produce any well-grounded reasons against it. 
 
 In the two utilities owned and operated by the city, namely, 
 the water works and the electric street lighting plant, the advocates 
 of municipal ownership found the most potent factors for their con- 
 
The Mcwemeut for XUinicipal Oumershtp in Chicago 83 
 
 tention that the transportation facilities also should be owned and 
 operated bv the municipality. It was pointed out that the Chicago 
 water works, even before the time of a thoroutj:h civil service, when 
 they were to some extent used for political purposes, had been man- 
 aged throughout without great scandal ; that particularly during the 
 la^'st ten years, under a strict civil service, they had been managed 
 economically ; the cost to the public for water had been reduced 
 time and again until at present the rates are lower than in almost all 
 other cities ; that thev were much lower than the rates charged by 
 private corporations. 'and that notwithstanding this fact, an annual 
 profit of about two million dollars was derived from the water works, 
 which was used to pay for the extension and improvement of the 
 system and the purification of the water supply. In two of the more 
 recently annexed territories of the city, water was still furnished by 
 private companies, whose consumers had to pay for their water more 
 than twice as much as if they had bought it from the city. It may 
 be stated here that one of these private plants was municipalized 
 shortly after the election, the city paying therefor the sum of two 
 hundred and fifty thousand dollars. 
 
 The fact was pointed out that our electric street lights, owned 
 and operated by the city, were furnished at a cost of about fifty-five 
 dollars per lamp per year, while for a number of rented lights the 
 city had to pav a rental of one hundred and three dollars per lamp 
 per year, and' it was plain to see that in spite of the great outcry 
 of the opponents that the city does not charge oflF anything for de- 
 preciation, etc.. the price was infinitely lower than that of the private 
 corporation. These certainly were lessons that told, and the memory 
 of the indignities the citizens and their families had suffered for 
 years at the hands of the street railway companies— the sight of the 
 illy-ventilated, unclean and uncomfortable cars in which they were 
 forced to ride night and morning, huddled like cattle— the knowl- 
 edge that aldermen and legislators had been debauched by these 
 same traction interests, while their employees had been prosecuted 
 and found guiltv of successful attempts to tamper with juries and 
 befoul the very 'fountainheads of justice— all these things helped to 
 bring about the firm determination of the people that no further 
 franchises should be given, and that the taking over of the street 
 railways by the municipality was the only means through which a 
 decent and adequate service could be permanently had. 
 
84 The Annals of the American Academy 
 
 In spite of the opposition of the pubhc press, the street car 
 interests, and a considerable portion of the business enterprises of 
 the city, the friends and advocates of municipal ownership remained 
 victorious. Edward F. Dunne was elected, and when, on April 10, 
 1905, he was inducted into office, it seemed that now, within a 
 reasonably short time, the citizens of Chicago would obtain what 
 they had fought for for many years — a decent and efficient street 
 car service. But let no one believe that the street railway interests 
 and their adherents were satisfied with that verdict of the people. 
 After such an overwheming vote it would have seemed but natural 
 that the council should at once have gone to work and tried to carry 
 out the popular will ; but far from it. The election of Mayor Dunne 
 and the unmistakable expression of the sentiment of the people 
 simply marked the beginning of the real fight for municipal owner- 
 ship. Perhaps there were some adherents of the new mayor who 
 were deceived by the term "immediate," and probably expected that 
 following the inauguration the city authorities would seize the street 
 railway properties and operate them for the benefit of the people. 
 If there was any such belief at the time, the newspapers certainly 
 tried to encourage it, and within a short time began to scofif at the 
 mayor and his advisers because municipal ownership was not had, 
 nor indeed was even in sight. 
 
 According to the contention of the city authorities the franchises 
 of the traction companies had expired July i, 1903, but they were 
 permitted to continue to run pending the controversy and decision 
 of the Supreme Court on the ninety-nine year question under a 
 special authorization by the city council. In the meantime a decision 
 had been rendered by Judge Grosscup, of the federal court, which, 
 although unsatisfactory to both of the contestants, gave the city 
 some advantage, as according to it the street railway companies lost 
 all rights to those lines for which franchises were granted later than 
 1872 ; thus denying the contention of the street railways that all 
 franchises granted at any time would not expire until the original 
 franchise expired, namely, in 1958. One line particularly, the Adams 
 street line, for which a franchise had been granted to the Chicago 
 Passenger Railway Company and had expired on April 26, 1904, had 
 been selected by the past administration for trying out municipal 
 ownership and operation as well as the validity of the certificates 
 that under the Mueller law could be issued in payment of the cost, 
 
The Movement far Municipal Ownership xn Chicago 85 
 
 and which hatl not been tested in the Supreme Court. The plan 
 comprised about fifteen miles of track. The municipal street rail- 
 way system to be established through this line was to be extended 
 from time to time as other lines expired. But this proceeding was 
 also interrupted by an injunction from the federal court, and when, 
 after full argument, no decision was rendered, and it was learned 
 from a public utterance of Judge Grosscup made in court, that he 
 deemed it unnecessary to decide the case as long as negotiations were 
 pending for a general settlement with the Union Traction Company, 
 the city advertised for bids for the construction of a municipal street 
 railway on Adams street, the advertisement appearing for the first 
 time on April 3, 1905. These bids were to be opened on July i, 1905. 
 Some weeks prior to this latter date a decision upholding the con- 
 tention of the city was rendered by Judge Grosscup, and shortly there- 
 after it was discovered by the advisers of the new mayor that ordi- 
 nances covering at least thirty miles of streets on the west side, nnd 
 considerable mileage on the north and south sides had already ex- 
 pired, which could be profitably constructed and operated, and that 
 the city in its first contract could ofTer at least one hundred miles 
 for construction. In a message to the council the mayor stated that 
 it seemed to be advisable to defer the reception of bids until a com- 
 prehensive plan for the greater system could be completed. The 
 advertisement was withdrawn, and on July 5th Mayor Dunne sub- 
 mitted his plans to the council. In his message of that date he stated : 
 
 "The people of Chicago having plainly manifested their desire for 
 municipal ownership of street railroads with the least possible delay, I have 
 diligently sought since my inauguration as mayor for the best information 
 and the best advice regarding the subject, and have carefully considered 
 all suggested plans." 
 
 He called the attention of the council to the fact that already 
 one hundred miles of track were free from corporate control, and 
 that within the next two years two hundred and forty miles in all 
 would be at the disposal of the city, and that within six or seven 
 years a great majority of all the seven hundred miles of trackage 
 now under operation will be incontestably subject to municipal 
 ownership. He further pointed out that in the ninety-nine year 
 controversy "a ruling more favorable to the city than that adopted 
 by the Circuit Court is expected to be established by the court of 
 last resort." 
 
86 The Annals of the American Academy 
 
 Turning then, to the demand for municipal ownership, Mayor 
 Dunne submitted for the consideration of the council two plans to 
 secure this result. The one plan, generally called the "city plan," 
 contemplated the construction and operation of a municipal street 
 car system for the city of Chicago through direct financiering by city 
 officials under the legal authority from the Mueller law. The second 
 plan, called the "contract plan," contemplated the construction of a 
 street car system for the city through the instrumentality of a private 
 corporation acting in the city's interests. The mayor preferred the 
 second plan for the reason that it "avoided every element of delay 
 that in the city plan would be caused through condemnation pro- 
 ceedings, appeals and repeated referendums, and because it would be, 
 financially as well as legally, immediately practicable, and enable the 
 city to proceed at once with the reconstruction under circumstances 
 assuring as good service at as early a day as the best conceivable 
 system for private profit could provide. The rights of the city to 
 take over and even to operate w^ould be neither impaired nor post- 
 poned. As soon as a market for the Mueller certificates had been 
 secured the city could acquire the system in its own right, and in 
 its own name ; and as soon as the people had by referendum under 
 the Mueller law so decided, the city could proceed to operate by its 
 own employees." The contract plan. Mayor Dunne contended, pro- 
 vided in effect for what the Mueller law contemplated and the people 
 have demanded — immediate municipal ownership of the street car 
 service. 
 
 The entire message, together with an ordinance covering the 
 contract plan, was referred to the Committee on Local Transpor- 
 tation. This committee, meanwhile, had continued its negotiations 
 with the street railway companies, who had stated definitely their 
 demands and the character of a franchise they would accept in set- 
 tlement of the controversy. The contract plan of the mayor was 
 almost contemptuously shoved aside by a vote of eight to five, and 
 on October 9th, the mayor sent a message to the council calling 
 attention to the vote had in April, and pointing out that the Local 
 Transportation Committee, instead of considering the plan submitted 
 by him in his message for the purpose of bringing about municipal 
 ownership of street railways, was then engaged in considering cer- 
 tain proposed ordinances presented by the street railway companies 
 and contemplating the granting to them of new franchises for the 
 
The Movement for Municipal Ownership in Chicago 87 
 
 period of twenty years. He gave it as his opinion that, "Considera- 
 tion of these franchise extension ordinances in the face of the vote 
 above referred to is in defiance of the express will of the people." 
 With the message he laid before the council an order that the Local 
 Transportation Coiiiinittee cease the further consideration of the 
 ordinances submitted by the street railway companies, and report 
 to the council at its next meeting the ordinance submitted by the 
 mayor, commonly known as the "contract plan." This order was 
 defeated by a vote of twenty-two against forty-one. 
 
 Again, on October i6th, the mayor sent to the council a message 
 reiterating the vote had at the April election, and pointing out that 
 the Local Transportation Committee was not acting in accordance 
 with that vote. Accompanying this message was an order that the 
 Local Transportation Conuiiittee cease all negotiations contemplat- 
 ing the granting of a franchise to any of the present existing street 
 railway companies, and all negotiations with said companies except- 
 ing those looking toward the purchase of their properties. This 
 order was defeated by a vote of twenty-seven to thirty-seven. 
 
 On October 23d, a third message from the mayor called atten- 
 tion to the adoption of the Mueller law in April, 1904, and the vote 
 upon the question, "Shall the city council upon the adoption of the 
 Mueller law proceed without delay to acquire ownership of street 
 railways under powers conferred by the Mueller law." He pointed 
 out that every ward in Chicago had voted in favor of municipal 
 ownership under the powers conferred by that law, and accompanied 
 his message by an order instructing the Local Transportation Com- 
 mittee, in co-operation with the legal advisers of the city, to pro- 
 ceed without delay to prepare an ordinance for the purpose of 
 acquiring ownership of the street railways of Chicago under the 
 powers conferred by the Mueller law. and that the matter of the 
 preparation of said ordinance take precedence over all other matters 
 now under consideration by the Local Transportation Committee. 
 The consideration of this order was deferred for one week, and on 
 Monday, October 30th, the opponents of the mayor moved the sub- 
 stitution of a resolution whereby the Comnu'ttee on Local Transpor- 
 tation was directed "to consider and report to the council at an early 
 date a method of making a legal test of the validity of the street 
 railway certificates authorized by the Mueller law." This resolu- 
 tion was adopted by a vote of forty-five to twenty-one. An amend- 
 
88 The Annals of the American Academy 
 
 ment offered, that the committee cease all negotiations with the trac- 
 tion companies except with a view of the purchase of their proper- 
 ties, was laid on the table by a vote of forty-three to twenty-one. 
 Thus the mayor and the advocates of municipal ownership were 
 again defeated. 
 
 When asked for his views on the result. Mayor Dunne stated: 
 "One point is plain ; the city council as now constituted is not 
 friendly to municipal ownership ;" and he further declared : "the fight 
 for municipal ownership has just begun." And from the way things 
 look, truer words were never spoken. 
 
 The fight has begun to take on a most disagreeable aspect. 
 The street car companies and their supporters try to harass the 
 administration at every step, although under a decision of Judge 
 Grosscup a goodly part of the franchises have expired, and the com- 
 panies are allowed to run on the streets by mere permit, revocable 
 at the pleasure of the council. The City Railway Company during 
 1904 obtained a permit to equip a certain line with a trolley system, 
 which was technically revoked last March, although left practically 
 undisturbed for the convenience of the public. The company, plead- 
 ing this technical revocation, is trying to avoid paying the license 
 fees reserved in that permit for the purpose of compelling still more 
 privileges, though knowing that the city could legally stop the use 
 of that trolley any day. With an unprecedented boldness they attack 
 the administration for refusing them new permits which they claim 
 are necessary for the betterment of the service, and are doing their 
 utmost to cause as much dissatisfaction among the people as possible. 
 
 Certain newspapers have acquired a habit of jeering at the 
 mayor and ridiculing his municipal ownership propositions ; some 
 of the aldermen are parading their opposition in an openly defiant 
 and almost indecent manner and a great deal of bitterness has come 
 to the surface. But undaunted by the hostile attitude of the council, 
 with a fidelity to his duty, as he sees it, and with a devotion to the 
 cause he champions that must challenge the admiration of even his 
 enemies. Mayor Dunne, on November 13th, sent to the council still 
 another message, in which he says: 
 
 "And inasmuch as further delay can but operate favorably to the interests 
 of those companies and unfavorably to the interests of the people of the city, 
 and as the counsel for the city have now completed their proposed ordinance 
 for proceeding under the Mueller law for the establishment of municipal 
 
The Movement for Municipal Ownership xn Chicago 89 
 
 ownership. I am of the opinion that such proceedings on our part ought to 
 begin at once. The advisory votes under the public policy statute having 
 clearly instructed every member of your honorable body, regardless of party 
 politics and every other consideration, to proceed without delay to acquire 
 municipal ownership under the Mueller law. I respectfully submit to your 
 good judgment that it has now become the duty of your honorable body to 
 provide for the necessary mandatory referendum under the Mueller law. 
 Similar instruction having been given to me as mayor, both by advisory refer- 
 endum and the circumstances of my election. I have no doubt of my own duty 
 to do all in my power to accomplish that result. I. therefore, advise your 
 honorable body to proceed without further delay to establish municipal owner- 
 ship of the traction service under and pursuant to the Mueller law." 
 
 This message and the accompanying ordinance were also re- 
 ferred to the Committee on Local Transportation. It is possible, yes 
 even probable, that the committee will report out some kind of 
 an ordinance along the lines of the Mueller law for submission to the 
 people, but meanwhile they have almost completed ordinances for 
 the extension of the franchises of the present companies for twenty 
 years which will be submitted to the city council within a short 
 time. Whether these ordinances will finally be passed, however, will 
 entirely depend upon the people, as in a resolution passed October 
 16, 1905, the council pledged itself that any ordinance for the settle- 
 ment of the Chicago street railway question before its final passage 
 by the council shall be placed upon the ballot to be voted upon by the 
 people. Thus the people will have the last word. Will they reverse 
 their opinion of six months ago, or will they stand by their verdict 
 three times given? The public press, with but one exception, favors 
 an extension of the franchises, and claims that a great deal of dis- 
 content over the failure of the mayor to end the controversy exists 
 among the citizens. But the advocates of municipal ownership are 
 keeping up the agitation, and do not believe that the street railway 
 interests will succeed in wearing out the people to such an extent 
 that they will forget what they have been made to suffer for so many 
 years, and meekly surrender to the corporations. 
 
 Aside from the street railway situation the movement of munic- 
 ipal ownership is making steady progress in Chicago. The last leg- 
 islature passed a law enabling the city to sell its surplus electricity, 
 and to regulate and control the gas service. This law was sub- 
 mitted to the people at the last November election, and was carried 
 bv a great majority. The city is enlarging its electric lighting plants. 
 
po The Annals of the American Academy 
 
 and claims that it will be able to sell electricity at one-half the rates 
 at present charged by the private companies. 
 
 Another sign of the progress of the idea of municipal owner- 
 ship, is the fact that in the last campaign both parties declared 
 in favor of public ownership and operation of the water pov/er 
 now in course of development, which was created through the 
 Sanitary Canal. A few years ago there had been much talk of 
 turning over this power to private interests to be developed and 
 utilized by them. As it is, the trustees of the sanitary district 
 elected at the last November election stand absolutely pledged to 
 the principle of municipal ownership, and the municipalities within 
 the district will be enabled at an early date to use this immense 
 power for their own public purposes, such as street lighting, oper- 
 ating pumping stations, turning bridges, etc., and thereby materially 
 cheapen the cost of these services. 
 
 Chicago, November 25, IP05. 
 
RETURN CIRCULATION DEPARTMENT 
 
 TO^^ 
 
 
 198 Main Stacks 
 
 LOAN PERIOD 1 
 HOME USE 
 
 2 
 
 3 
 
 4 
 
 5 
 
 6 
 
 ALL BOOKS MAY BE RECALLED AFTER 7 DAYS. 
 
 Renewls and Recharges may be made 4 days prior to the due date. 
 
 Books may be Renewed by calling 642-3405. 
 
 DUE AS STAMPED BELOW 
 
 
 
 
 AOU 2 2 1999 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 FORM NO. DD6 
 
 UNIVERSITY OF CALIFORNIA, BERKELEY 
 BERKELEY, CA 94720-6000 
 
■ v.- >, ■%'