Ohio Natural Gas Wars

Here are the chapters from Henry Demarest Lloyd’s Wealth Against Commonwealth (1894) dealing with the struggles of the citizens of Ohio with large oil and gas suppliers.

Wealth Against Commonwealth

Henry Demarest Lloyd (1847-1903)
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CHAPTER XXII
ANOTHER TALE OF TWO CITIES

THE South is the most American part of America. Close observers note as its especial characteristic the preservation of the original Anglo-Saxon types, which gave this country its first and deepest impress.

The South is not yet so steeped as the North in the commercialism to which it is all of life to buy and sell, and its population, less affected by trade and immigration, remains more nearly American, as the fathers were American, than the parts of the country flooded by the full force of the modern tide. Only in the South is there record all through this history of a man “too prejudiced to buy” from those who claimed the sole right to sell.

The merchants of Columbus, Mississippi, were buying their oil of the southern branch of the combination when they were offered a supply at cheaper prices by an independent refiner. They asked the combination to meet this competition of the market. This was refused. There were eleven firms there which sold oil in connection with other things. The combination “coolly informed us,” wrote one of the firms to a journal of the trade, “that we were in their power, and could not buy oil from any one else, and that we should either pay such prices as they demanded or not sell oil. We immediately formed an association among ourselves and ordered from other parties. On receipt of our first car they immediately put the retail price below the cost per car lots, and for some time tried to whip us in that way, as we still declined to handle their oil. They then wrote offering to rebate to several of the larger firms if they would withdraw and leave the smaller ones to fight the battle alone. This proposition we declined, and they again tried the low-price dodge, their agent telling us that they would spend $10,000 to crush us out. This game they have now been trying for three years, and in that time we have not handled one gallon of their oil.” As these devices, irresistible in more commercial civilizations, did not fool the brother hood of Columbus, a special agent was sent to Columbus to carry on the war.

“You can tell the Columbus merchants if this does not succeed we will have it out on other lines,” the agent was instructed, in the strain of the letter to the merchant of Nashville. “The battle has not fairly opened yet; sharpen up your sword, we mean war to the knife.” And again: “We want Columbus squelched,” was the word sent the agent from the headquarters at Louisville.

He was ordered to start a grocery store in Columbus, to compete in their entire business with the “black-mailers.” While the fight was on, and it was still hoped to conquer Columbus, the following was kept prominently before the people in the daily papers:

“We desire to state that we did not establish an agency in Columbus to force the wholesale grocers to handle our oil.”

But seven years later the general in command of this department told Congress it was his practice to fight in that way. “Almost invariably I did that always.”

“To threaten the people elsewhere with Columbus,” the agent at Columbus was told, ” will make them scat, as it were, and take our oil at any price.” But the people of Columbus did not “scat.” The new store had a complete stock of groceries. Prices on everything, including oil, were put “down to the bone.” But one essential feature of the enterprise all the ingenuity and power of the invader could not furnish—customers. Goods were advertised at cost; alluring signs were hung out with daily variations; but the people would not buy. A few citizens who bought at the beginning, without understanding the plan of campaign, came out in the newspapers with cards of apology, and pledges that they would not repeat the mistake. Local bankers refused to honor the drafts of the enemy, threw out its accounts, and gave notice that they would advance no money to persons who bought at its store. The public opinion of Columbus so bitterly resented the attack upon the livelihood of its merchants, because they had dared to buy where they thought best, and so clearly saw that the subjugation of the merchants would be but the preliminary of a conquest of themselves, that any one seen within the doors of the odious store fell into instant and deep disgrace. “Their store is regarded as a pest-house,” wrote one of the leading business men, ” and few respectable people ever darken their doors, their trade being confined mostly to negroes. Their oil trade has dwindled down to almost nothing, and we are selling now to merchants in other towns who heretofore bought exclusively from them.”

At the first sign of aggression the merchants had given up competition, which they saw meant only mutual ruin, and had tied themselves together in an association. Now as the struggle widened the people did the same, and found a greater benefit and pleasure in co-operation than in keeping up the delusion of the “higgling of the market” where there was no market. The Index, of Columbus, printed an agreement signed by hundreds “of those who will sustain our home merchants in the struggle they are making. . . . It will receive many more signatures among our citizens. . . . The people have only to understand to properly decide in this matter between right and wrong.”

“You ask if the feeling is bitter against them in our ‘community,'” one of the merchants wrote. “I can only liken it to the spirit which prevailed when the people of Boston emptied King George’s taxed tea into Boston Harbor.”

Attempt was made to intimidate the press. Advertisements were discontinued because the papers supported the cause of the people. “If the agent,” said the Index, of Columbus, “thought the cash that might be obtained for such advertisements could purchase the silence of this journal when it should speak, or its support in a wrong cause, he reckoned without his host.” “The pledge” was signed by practically every man in the place. The country people about Columbus, when they came to town to sell produce and buy supplies, took back with them blanks of the agreement not to buy the obnoxious oil, and circulated them among their neighbors for signature. Agents were sent among these country people to Will back their trade, but they could not be moved. The competition was made “war to the knife,” and the knife “to the bone.” It was a singular sight—this concentration of millions to “kill” these little men in this remote country town in far-off Mississippi. Nothing was too small to do. When one of the Columbus “rebels ” bought oats for his trade, a competitive stock of the same kind of oats was hurried into Columbus, and these instructions sent with it: ” Put your sign out. Rust-proof oats to arrive at 98 cents to $1 a bushel. This will kill him. The same signs should be posted about meats, sugar, coffee, etc.”

The plan of action of the Merchants’ Association was simple: they declined to handle the enemy’s oil at any price. “Then to have a stock of our own always on hand, ready to sell whenever we could at a profit, and hold in reserve whenever they put prices below cost; and in this way we have made it a losing business to them for over three years, and will continue to do so as long as they remain in our town. . . . When our association buys a car of oil, each member pays for and takes charge of an equal share, but the oil remains the property of the association; and should any member sell out before the others, he has the right to buy from them at cost, and the next car is not ordered until all are nearly sold out.”

It is “our pleasure to make oil cheap”; but a written proposition was made to the merchants that if they would repent and return, the price would be 20 cents a gallon, with a rebate to the loyal dealers. As this oil could be, and was being, laid down in Columbus at 12 cents a gallon, the proposition amounted to a request that the merchants join in imposing a tax on the people of 8 cents a gallon, which must be added to the retail price, and go to swell the profits of the ” sympathetical co-operation.” “And any one,” said the Index, “after knowing these facts, doubt that in a pecuniary point our merchants could have done better by surrendering the principle and joining the ring? But, at the same time, could any reasoning man (even viewing it in the light of policy alone) advise such a course?—one which, if adopted, would only open the door for other monopolies to enter and demand high prices on meat, flour, and the other necessaries of life, until our city becomes the highest market in the land. Let all good citizens, then, unite in a steady effort to resist the yoke which this monopoly is now trying to force upon us, and let us teach them and ail others that our people are too loyal to each other and too intelligent to allow themselves to be made the instruments of their own destruction.

“Remember, that should our merchants be forced to yield, the day of low prices will be a short one, and then these strangers, having accomplished their purpose and forced their yoke upon you and us, will return to their homes, and while rioting in the taxes wrung from you, with your own assistance, will laugh at you for allowing yourselves to be so easily duped, and, emboldened by their success in forcing upon you high-priced oil, will soon return to demand high prices on sugar, coffee, and every other article of trade.”

The nose for news of the American press scented out the novelty of a whole community acting as one man in successful resistance to those who had till then found nowhere any cohesive brotherliness to make a stand against them. The newspapers of the country took the matter up. It was absolutely the first time any method had been found that could prevail against the tactics of divide and conquer, which had been elsewhere irresistible. Public attention was fascinated by the revelation that a brotherhood to ravage the people turned impotent when the people were roused to meet it with their brotherhood of the commonwealth. There was in the spectacle a moral illumination—the light that never fails. Instead of becoming, as had been planned, a warning to all the people of the dire destruction to be visited upon any who dared to disobey, the encounter between the one-man power of united Columbus and the one-man power of hundreds of millions of dollars became every day more brilliantly a sign in the sky, showing all the people how the invasion of their industrial liberties could be changed into a ruin more complete than the retreat from Moscow. Scores of such assaults on the people had been w on before. “What was being done at Columbus,” said one of the papers, “is but what they have done before at Aberdeen, and at hundreds of other places North and South.”

But as despoilers always have to fear, one defeat may undo a lifetime of conquest. The success of the people of Columbus was teaching the people of the whole country, and of all markets, that their real enemy was not the oil trust, but the lack of trust in each other. The people were learning there was a magic in association more potent than the trick of combinations. The Index proposed to the people of the South to join the citizens of Columbus, and make the fight general. “There is this about it: if there was concentrated action among the smaller cities and towns throughout even this section of the State, we would have no fear of the result. The oil trust may be too strong for a single small locality, but if a combination of a certain number of localities handling oil were effected, they would soon be forced to retire. Such a combination can be and should be brought about at once.”

The struggle at Columbus lasted three years. It had seemed unequal enough—a few thousands of dollars against hundreds of millions. But three years of this commercial warfare failed to break the spirit or resources of the brave—and wise because brave—people. The community never broke rank. They laughed when they were tempted with cheap coffee, flour, sugar, to join in the attempt to bankrupt their home merchants. They could see that the gift of forced cheapness, used to destroy natural cheapness, was a Trojan horse bearing within itself the deadliest form of dearness. Defeated, the oil lords gave up the contest, closed their store in Columbus, and left the people of that place free.

“England,” says Emerson, “reaches to the Alleghenies; America begins in Ohio.” In the Western Reserve of Ohio, hive of abolitionists and Union soldiers, was the same spirit of America which, at Columbus, Mississippi, had defended its market rights as outposts of all other rights. It was only a few years ago discovered that the dames of the ” burning springs ” of the Caspian Sea, China, and America, whose torches kindled the lamp of history, were beacon-fires uncomprehended by a procession of civilizations, and waiting to light man to the knowledge that the earth beneath him was a city of domes, huge receivers storing up the products of vaster gas-retorts below. Man found that he need not wait for this spirit to come to him out of the “caverns measureless to man.” He could go to it, as in oil, and, tapping the great tanks, could lead their flighty contents to homes and mills, to emerge there as light and warmth and power.

Experience in oil had made ready skill and capital to use the new treasure. In a very few years thousands of miles of pipe were laid, and millions of capital invested in the natural-gas business, mainly in Ohio and Pennsylvania. The gas was found in the same general localities as oil, and the methods of procuring and distributing it were similar, and the similarity easily extended to the methods of administering this bounty of nature as “property.” Toledo began to be supplied in 1887 with the new fuel through pipe lines by two companies. They obtained their franchises as competitors, but were soon found to be one in ownership, prices, and all details of management. The discovery that the two companies at Toledo were really one, and that one the evil one of the oil trust, aroused the apprehensions of the people, and these were increased by a number of circumstances.

The Toledo companies got from the city as a free gift a franchise worth hundreds of thousands of dollars, on condition that they would supply Toledo before a certain date. But in the midst of the work of laying pipes they suspended operations, and declared that they would do nothing more unless the City Council fixed, at rates dictated by them, the prices the people were to pay. These rates were enough to pay not only a fair dividend, but to return in a few years every dollar of capital invested in lands, pipes, etc. Later they demanded another increase which, according to the sworn statement by their superintendent of the amount of gas supplied daily, would have amounted to $351,362.50 a year. They made the charges regardless of the ordinance, and used delay in furnishing gas as a means to make people willing to pay these illegal rates. Consumers seeking to renew their contracts were informed that the price would be doubled. The companies had assured the people that they should get their heat at half the price of coal; but when the bills were footed up, the gas in many cases cost more than coal. The companies refused to supply fuel to an oil refinery which had been built in Toledo in opposition to the trust refineries. The companies discriminated against some customers, and in favor of others. The power to say which manufacturer should have cheaper fuel than his competitor was a power to enact prosperity or ruin. It was a power to force themselves into control of any business they desired to enter.

Those who controlled these gas companies appeared in the Circuit Court of the city in a proceeding which alone contained warning enough to put any self-governing community on guard. The Court was asked to deny the right of farmers in Wood County to give a way over their lands to the Toledo, Findlay, and Springfield Railway, being built to give the independent oil-refiners and producers of the Ohio oil-field a route to market. The farmers in question had made leases to an oil corporation of the trust, giving only the specific right to bore for and pipe and store oil and gas. The farmers supposed that they had parted only with what they had signed away in the leases. They supposed they still owned their farms. When the new railroad sought the privilege of a right of way the farmers granted it. Suit was at once brought for an injunction to prevent this use of the land. According to the logic of the claim in these cases a farmer who has made such a lease could not build a road across his own farm without permission. “Most certainly not,” was the reply made by one of the lawyers to the judge who asked if the farmer could do so.

By occurrences like these an increasing number of influential citizens were convinced that the gas companies would hold a power over the comfort and daily life of the people not wise to surrender entire to any corporation. An agitation was begun for the supply of gas to the people by themselves acting through the municipality. Six thousand citizens sent a petition, in the session of 1887-88, to the Legislature to pass the necessary enabling act. There was a discussion of the project for two years. Public opinion grew more favorable every day. The citizens chartered a special train to carry a delegation to Columbus the day the pipe-line law came before the Senate. The Legislature in 1889 passed the law. It authorized the people of Toledo to issue bonds to the extent of $750,000 to buy gas land and build pipe lines. This legislation was, of course, bitterly opposed by the existing gas companies, and they demanded of the Legislature that before the law became operative it should be ratified by a three-fifths vote of the people. The friends of this scheme of municipal self-help and independence accepted the challenge. In the ensuing campaign the opposition to the people was officered by the president of one of the natural-gas companies, twice Governor of Ohio, afterwards United States Secretary of the Treasury. The natural-gas trustees of the City of Toledo in an official communication said: ” There is reason to believe the money of the natural-gas companies was freely spent to defeat it.”

The act was ratified April, 1889, by a vote of 7002 for to 4199 against—”a vote,” say the trustees, “in which the heavy taxpayers were largely acting with the majority.” Organized labor took an enthusiastic part in the work of this election. The Central Labor Union held a special meeting which filled the largest public hall. Men paraded the streets with banners favoring the policy of independence. The Knights of Labor held meetings to discuss the project, and the Central Council, representing all the assemblies in the city, passed unanimously resolutions appealing to all members of the order and all working-men to support no candidate who would not pledge himself to the city pipe line. At a meeting of the glassworkers it was resolved to be “the duty of every working-man to vote ‘Yes’ for the pipe line next Monday.” “Many of us glassworkers,” said the resolutions adopted, “have been employed in factories in the Ohio Valley, receiving their natural-gas fuel from a gigantic corporation similar to that which now supplies Toledo. We have seen our employers unfairly dealt with, and arbitrarily treated in the matter of making rates. Some of them were forced to go into the courts, to prevent the extortion of the piratical company who were bent on assessing each citizen and industry at the highest rate possible, irrespective of its effect on the industries or the wages of the employees. Many manufacturers were compelled to move their plants to the cheap gas-fields of Ohio and Indiana. The employees were compelled to break up their homes and emigrate, in order to follow their trade for a livelihood.” The question came before the people again the next spring, when both the Republican and Democratic parties by acclamation renominated a natural-gas trustee, whose term was expiring, to succeed himself. At the election the vote was 8958 for, and only 58 against—a practically unanimous indorsement of the project by the people.

Toledo now began to make history. “It is entirely safe to say,” a well-known citizen declared in the Toledo Blade, “that in the history of this country no other people have been called to the experience which Toledo has been undergoing for the past year. Communities often are agitated and divided on questions of local policy; but no second case will be found in which a people, after settling such questions among themselves according to recognized rules, were confronted with warfare, bitter and persistent, such as this city is now called to meet, and at the hands of a combination wholly of non residents, without the slightest proper voice in their domestic concerns.” In every direct encounter with the “commons” the “lords” had been defeated—in the two years’ debate which preceded the first appeal to the Legislature; in the Legislature, where the bill passed the House almost unanimously, and the Senate more than two to one; in the appeal to the voters; before the governor, who had been approached to cripple the enterprise of the municipality by naming unfriendly trustees. The gas companies had tried at each city election, after the Legislature acted in 1889, to seat in the City Council a majority in their interest; but the people, making the city pipe line the issue of the election, gave an overwhelming preponderance of their votes to the men pledged to see it through.

“Strong and subtle opposition” was then brought to bear on the Common Council to prevent it from passing the necessary ordinances; but, in spite of it, both branches of the Council voted them unanimously. A clearer case of the will of the people and of law and order there could not be. A free and intelligent community, in a matter of vital concern to its industrial freedom and business prosperity, after thorough discussion, in which all sides had been freely heard, had by constitution proceedings decided by an overwhelming majority upon a policy altogether within its legal, moral, and contract rights. The ablest lawyers, writers, and financiers that money could hire had had it under the microscope to find some breach for attack, but had not been able to find a flaw. All was constitutional, legal, proper, and expedient. A glance at the contestants brings out in clear outlines some conditions of our modern development which have come upon us almost unawares. The City of Toledo was a vigorous community of 90,000 people; its opponent was a little group of men; but they controlled in one aggregation not less than $160,000,000, besides large affairs outside of this. The assessed valuations of the property of the people on which Toledo could levy taxation was, in 1889, but $33,200,000. The total income of the municipality was $961,101; that of a single member of the little group opposing them had been acknowledged to be $9,000,000 a year, and was believed by the best informed to be several times as much. This individual income was greater than the product of all the manufactories of the city, and three times greater than the combined wages of the work men in these establishments. There were several members of the natural-gas syndicate who collected and disbursed every year more than the community. Toledo had about the same population as Kansas in 1856. The slave power of the South that assailed the liberties of the 90,000 in Kansas numbered millions, but the new power in the North, which in a short generation had grown so strong that it did not fear to attack the 90,000 freemen of Toledo, counted only nine names. The people could act only after public deliberation, and through the slow stages of municipal and State procedure. Their antagonist met in secret council, and devised plans executed by a single hand, armed with the aggregated power of hundreds of millions of dollars, and liable, if found illegal or criminal, to only “nominal” punishment, or only 6 cents damages.’

At Columbus the struggle was with something very simple but extraordinarily difficult to overcome, as simple things often are—an obstinate, immovable, thoroughly angry public opinion, acting only through private voluntary means, its set will to exchange the fruits of its labor with whom and on what terms it pleased. There was absolutely no leverage to be got to bear upon the people of Columbus except by changing their feelings. Compulsion was out of the question. But at Toledo compulsion was possible. There the people had acted not through unofficial combination as at Columbus, but through the official machinery of the town and State. If the law could be turned against them by able counsel or compliant judges; if any smallest fault, however technical, could be found in the legislation of the State or the city or the practical administration of the official machinery provided for the natural-gas business of the city—if this could be done, the people of Toledo could be compelled, however little their will had changed, to see their enterprise of independence balked; this compulsion could be carried to the use of force if they resisted, and the militia of the State and the regular army could be brought into the conflict.

Such is the prize of power which tempts—more than tempts, it drives as by fate—our overgrown wealth to fortify itself by: control of judges, governors, presidents, commanders-in-chief—all the agents of the supreme authority and force.

Columbus was so local that its people were sufficient unto themselves. All they had to do was to keep on saying, We will not buy. But Toledo was a citizen of the great world of affairs and finance. It was part of London, New York, Chicago. Much of it was owned as an investment elsewhere. Sensitive nerves connected it with all the markets, especially the greatest of all—the money-market. It sold and bought and borrowed and lent far beyond its own border. What Wall Street gossips said about the people of Columbus would not make a dollar’s difference to the whole town in a year, but a whisper started through the offices of the great capitalists in New York and abroad would flash back by wire to Toledo, and go like a quick poison through its industries and credit, private and public.

“Private enterprise” could not afford to let the people of Toledo go forward with their public enterprise. Many millions had been invested in getting control of a business representing $200,000,000. Many towns and cities, as Fostoria, Sandusky, Fremont, Clyde, Bellevue, Norwalk, Perrysburgh, Tiffin, and Detroit, were being supplied with gas at a handsome profit. If Toledo should set a successful example of self-supply, it would find imitators on every side. The essence of “private enterprise” was that the people should get their gas from Captains of Industry, and pay them for their captaincy two or three times the real cost as profit, just as monarchical countries pay kings for kindly supplying the people with the government which really comes from the people. The essence of municipal supply was that the people should supply themselves at cost without profit, and without Captains of Industry, except as the people provided them. Toledo, in fine, proposed to keep step with the modern expansion of self-government, which finds that it can apply principles and methods of democracy to industry. It proposed to add another to many demonstrations already made, noticeably in this very department of gas supply to municipalities, of the truth that the ability to carry on the business of supplying the various wants of mankind is not a sort of divine right vouchsafed from on high to a few specially inspired and gifted priests of commerce, by whose intermediation alone can the mysteries of trade be operated; but, like the ability to govern and be governed, is one of the faculties common to mankind, capable of being administered of, by, and for the people, and not needing to be differentiated as the prerogative of one set of men. The Toledo experiment was another step forward in the worldwide movement for the abolition of millionaires—a movement upon which the millionaires look with unconcealed apprehension for the welfare of their fellow-beings.

Mankind views with equanimity the expulsion of the profit-hunter from the businesses of carrying letters, minting coins, administering justice, maintaining highways, collecting taxes, in which millionaireism has been universally put an end to. It views with hopes of larger results the newer manifestations of the same tendency which in England have abolished millionaireism in telegraphs and parcel express; in Germany and France, Australia, and India have gone a long way towards the abolition of the millionaire in railroads; and in various cities and towns in Europe, America, and Australia have put up local signs, “No millionaires allowed here,” by the municipalization of trade in water, gas, electricity, street railways, baths, laundries, libraries, etc. The trust of millionaires was therefore fighting for a principle, and what will good men not sacrifice to principle!

CHAPTER XXIII
THE FREEDOM OF THE CITY

Towns, like men, stamp themselves with marked traits. Toledo had an individuality which showed itself from the start. Its leading men clubbed together and borrowed money as early as 1832 to build one of the first railroads constructed west of the Alleghenies—the Erie and Kalamazoo, to connect Toledo and Adrian. When, in 1845, the steamboats on the lakes formed a combination, and discriminated against Toledo, the city through its council refused to submit, and appropriated $10,000 to get an independent boat to Buffalo. The city appropriated its credit and revenues to other important and costly enterprises, including four railroads, to keep it clear of the cruel mercies of private ownership of the highways. In 1889 it expended $200,000 to secure direct railway connections with the Pennsylvania and the Baltimore and Ohio railways for competition in rates with the Lake Shore Railroad.

As it had been authorized to do so by the State, the City Council of Toledo, April 29,1889, ordered gas bonds to the amount of $75,000 sold, that work on the city pipe line might begin. Before proceeding with the enterprise confided to them, the natural-gas trustees gave the private companies an opportunity to save themselves from the competition of the city. They asked them in writing if they would agree to furnish gas cheaply for a term of years, or if they would sell their entire plant to the city? They did this, as they expressed it, as ” an honorable effort . . . to obtain cheaper gas without unnecessary expenditure, and without injury to established rights.” After a delay of nearly a month a reply was received, refusing to enter into negotiations either for a reduction of charges or for the sale of the private plants to the city. The trustees then asked for a personal interview, but this was refused. Then when the city began preparations to sell its bonds, a cannonade was opened on it in the courts, the money-market, the gas-fields, the city government, the press, among the citizens, and everywhere. Injunctions were applied for in three courts, unsuccessfully in all instances. No injunction was ever granted in these or any other of the many suits brought for the purpose of enjoining the sale of the bonds. Courts will usually grant temporary injunctions awaiting a hearing on the merits when complainants will enter into ample bonds and indemnify defendants. But the parties instigating this litigation would not put up the necessary bonds. They thus could smirch the bonds without incurring any personal liability in so doing.

An expensive array of lawyers was sent before the United States courts to prevent the issue of the bonds on the ground that they were illegal, and the law under which they were issued unconstitutional. The principle involved had been frequently discussed and always upheld both by the Supreme Court of Ohio and the Supreme Court of the United States.[1]

“Does not your argument appear to be in conflict with the views of the Supreme Court of Ohio and the Supreme Court of the United States?” the judge asked. The counsel for the gas companies responded in substance: “If so, then so much the worse for the views of those courts.”

As it was through the suffrage that the people of Toledo were able to do this, the attack was widened from an attack on the enterprise to one upon the sovereignty of the citizens which made it possible.” Everybody votes in Ohio—in fact, too many people,” said the lawyer who applied for an injunction against Toledo. If he had his way, he declared, there would be fewer voters, and he stigmatized the arguments of Toledo as those of John Most, the communist.

“Unquestionably,” decided Judge Jackson, “the Legislature may authorize a city to furnish light, or facilities for transportation, or water to its citizens, with or without cost, as the Legislature or city may determine. . . Since the decision in Sharpless vs. Philadelphia it is no longer an open question whether municipalities may engage in enterprises such as the one contemplated by the act in question in this case. The act of January 22,1889, authorizing the city of Toledo to issue bonds for natural-gas purposes, is clearly within the general scope of legislative power, is for a public use and purpose, and is not in contravention of any of the provisions of the constitution. The court being of the opinion that the legislation is valid, it follows, of course, that the injunction applied for must be refused.”[2] When the news of Judge Jackson’s decision was telegraphed to Toledo nothing less than the booming of cannon could express the joy of the citizens. They sent this message to the just judge: “One hundred guns were fired to-night by the citizens of Toledo in honor of your righteous decision to-day.” Judge Jackson again upheld the bonds at Toledo, January 14, 1890, when he again dismissed the case against the city “for want of equity, at cost of complainants.”

The favorable decision by Judge Jackson, although an appeal was taken, made it possible for the city to sell the $75,000 bonds which had been issued by order of the Council. The bonds brought par, interest, and over $2000 premium. With the money thus procured the city’s Board of Natural Gas Trustees began operations. Their opponents had spread far and loud among the voters before the election—among those who would be likely to buy the bonds, everywhere it would hurt—the assertion that all the territory that was good had been bought up by them, and the city’s trustees would not be able to get any. One of the companies had no less than 140,000 acres of gas lands in its possession or under contract, at a cost in rentals and royalties of $100,000 a year.[3] But the city trustees, even with the small sum at their command, were able to secure at the very beginning wells with a capacity more than four times as great as the private companies had had when the latter began the investment of a million or more to lay their pipe lines to Toledo.[4] Together with this supply the city trustees got 650 acres about 35 miles from Toledo of as choice gas territory as there was in Ohio, almost all of it undrilled, and they had offers amounting to 5000 acres more within piping distance from the city. The city’s trustees made their purchases with success, and received the laudations of their constituents for having got lands and wells at better prices than the private companies.

August 26, 1889, after a decision in the United States courts that there was no ground on which to object to the issue of the bonds, the City Council voted the issue of the remaining $675,000.

Defeated in the public debate which preceded the decision of Toledo to supply itself; defeated at the State Capitol; defeated at the polls of Toledo time and again—every time; defeated in the Common Council; defeated in the gas-fields; defeated in the courts of their own choosing, the opponents of the city, thorough as only the very good or the very bad can be, refused to submit. When the two corporations, in 1886, were seeking the franchise indispensable for doing business m Toledo, they said to the Board of Aldermen: “We ask no exclusive privilege. . . . We cannot have too many gas companies.” They also said: “If the city desires to furnish its own gas, there is nothing in this ordinance to hinder it. We are ready and willing at any time to enter into competition with the city or any other company.” They said, on the same occasion, in answer to apprehensions which had been expressed about the danger of putting the fuel supply of the city into the hands of a monopoly: “You can go before the Legislature and obtain the right to issue bonds for furnishing yourselves with gas.” It was by these assurances the companies induced the Common Council to grant them gratuitously the very valuable franchises they were seeking.

The right of the people to compete was not left to these assurances. It was specifically and formally asserted in the ordinance of July 5,1887, fixing rates. This was the ordinance to procure which the gas company suspended its operations in mid-course, and declared it would not continue unless the prices which it wanted were made. The ordinance was, in fact, prepared by the company. It said: “Provided that nothing herein contained shall be construed as granting to existing companies any exclusive rights or privileges, or prevent any other company from furnishing natural gas to the citizens of said city.” But the same learned counsel who, in behalf of the companies, had assured the city that “there was nothing in this ordinance to hinder it,” went before the United States Court and pleaded that ordinance as good reason for the intervention of the Federal Government to prevent the city from going on with its enterprise.

The only morning paper—an able advocate of the city pipe line—suddenly changed owners and opinions. Among its new directors were two of the lawyers of the trust opposing the city, a director in one of its companies, and, besides them, the manager, a contract editor from Pennsylvania. His sole conspicuity there had been won in turning against the people of the oil regions a paper which had been their staunchest defender. This Toledo daily, in its espousal of the cause of the city, had been firing hot shot like this against the oil combination: “It wants a monopoly of the natural-gas business. This is what it is driving at.” Under its new management it roared like a sucking dove, thus: “It is fashionable with demagogues and men who are not capable of appreciating the worth of brains in business to howl against it”—the oil combination—”as a grasping, grinding monopoly.” Just after the people had decided in favor of the pipe line, and only a few days before it changed owners, it had said: “All manner of influences were brought to bear to defeat this proposition. . . . All the plausible falsehoods that could be invented, and all the money that could be used, were industriously employed, but the people saw the situation in its true light, and the majority voted right.” It now made the defeat of the city’s pipe line the chief aim of its endeavors. In this work “no rule or principle recognized in decent journalism was respected.”

In all the history of Toledo no interest on its bonds had ever been defaulted or delayed; no principal ever unpaid at maturity. The city was prosperous, its growth steady; its debt growing less year by year in proportion to its population and wealth. Its bonds ranked among the choicest investments, and commanded a premium in the money-market.[5] But the credit and fair fame of the city were now overwhelmed with wholesale vituperation by this paper, and others elsewhere under similar control. Articles were carefully prepared for this purpose by skilled writers. These were then copied from one newspaper to another. By some arrangement insertion was obtained for them in financial journals in New York and in London, and in other foreign capitals. The Toledo organ declared that Toledo was an unsafe place for the investment of capital in any form. Its public affairs were said to be run by a set of “demagogues and speculators,” whose administration was “piratical mob rule.” The city pipe line was a “monstrous job,” and the men who favored it were “a gang of throttlers and ravenous wolves.” They were “blatant demagogues, who made great pretence of advancing the city’s interest, but whose real aim is to enrich themselves at public expense.” The bonds, which had been issued in due form by special authority of the Legislature, ratified by a vote of more than three-fifths of the citizens, and declared to be valid by the United States Court, were described as “chromos,” “worthless rags,” “bad medicine,” “disfigured securities,” “like rotten eggs, highly odorous goods,” “but few persons at most can be found ignorant enough to buy them.”

The Mayor, City Auditor, Board of Natural Gas Trustees, united with a citizens’ committee of the Board of Trade in a plan to promote the sale of the bonds direct to the people of Toledo through a financial institution of the highest standing. This action the paper described as “a scheme for gulling simples,” “a blind pool,” “an unpatented financial deadfall”; compared it with “gambling, pool-playing, and lottery selling.” These grave charges were widely circulated throughout the country. Bankers and capitalists in other cities who received them had no means of knowing that they were not what they pretended to be—the honest if uncouth utterances of an independent press chastising the follies of its own constituency. Newspapers which supported the city’s project were assailed as ruthlessly as the community and citizens. The Blade was constantly referred to as “The Bladder.” Another journal was given a nickname too vulgar to be printed here. One of the most prominent journals of Ohio was punished by the following paragraph, which is a fair sample of the literary style of monopoly: “That aged, acidulous addlepate, the monkey-eyed, monkey-browed monogram of sarcasm, and spider-shanked, pigeon-witted public scold, Majah Bilgewater Bickham, and his backbiting, black-mailing, patent-medicine directory, the Journal.”

An old journalist and honorable citizen who wrote over his initials, “C. W.,” a series of able and dignified letters in the Blade, which had a great influence in the formation of public opinion in favor of the pipe line, was assailed with “brutal falsifier,” “hoary old reprobate,” “senile old liar.” Caricatures were published depicting the buyers of the bonds as ”simple greens.” When the County Court of Lucas County, following the United States Court, sustained the bonds on their merits, and did so on every point in question, because, as the judge stated, “the equities of the case are with the defendants,” the organ falsely stated that judgment for the city was given “because the merits of the case are involved in a higher court.” When a capitalist of New York, who had been an investor in the bonds of Toledo and a taxpayer there for twenty-five years—one of the streets of the city was named for him—bought $10,000 of the city pipe-line bonds, the paper attacked him by name in an article headed “Bunco Game,” charging him with being a party to a bunco game in connection with “public till-tappers” for “roping Toledo citizens into buying doubtful securities.” When the Sinking Fund Commissioners of Toledo very properly invested some of the city’s money in the gas bonds, they were held up by name as “public till-tappers,” “menials” of a “hungry horde” of “boodle politicians,” accomplices of “plunderers of the public treasury,” unable to withstand “the brutal threats and snaky entreaties of the corrupt gas ring.” For one of the associate editors the position of Deputy State Inspector of Oil was obtained—an appointment which cost the Governor who made it many votes in the next election, and did much to defeat him. Such an appointment might give a versatile employee the chance to do double duty: as editor to brand as bad good men who could not be bought, and as inspector to brand as good bad oil for sale.[6]

One of the means taken to defeat the pipe line was the publication of very discouraging accounts of the “failure” at Indianapolis, where the citizens had refused to give a natural-gas company belonging to the oil trust the franchise it demanded, and, forming an anti-monopoly trust, had undertaken to supply themselves. Some “influence” prevented the Common Council of Toledo from sending a committee to Indianapolis to investigate. A public-spirited citizen, prominent and successful in business, came forward, and at his own expense secured a full and accurate account of the experience of Indianapolis for the city. This proved that the people were getting their fuel gas at less than one-half what Toledo was paying. The contest against giving the Indianapolis franchise to a corporation of the trust had been a sharp one. Its success was due to the middle classes and the working-men, who stood together for freedom, incorruptible by all the powerful influences employed. “We will burn soft coal all our lives,” one of their leaders told the Toledo committee,” rather than put ourselves in the power of such men.”

In Indiana the Legislature meets only once in two years, and when this issue arose had adjourned, and would not meet again for a year. The people, not being able to get authority for a municipal gas pipe line, went to work by voluntary cooperation. Every voting precinct in the city was organized and canvassed for the capital needed. The shares were $25 each, and they were bought up so rapidly that the entire amount—$550,000—was subscribed in sixteen days by 4700 persons, without a cent of cost to the city. When subscriptions to the amount of $550,000 had been raised, $600,000 more was borrowed on certificates of indebtedness.

Gas lands were bought and 200 miles of pipe lines laid, all at a cost of about $l,200,000. The income in one year, during a part of which the system was still under construction, was $349,347. In the first year of complete operations the Indianapolis people’s trust paid off $90,000 of the principal. The income for the year ending October 31, 1892, was $483,258.21, and the bonded debt has been paid. The stock, since January 1, 1893, has been paying dividends at the rate of 8 per cent. a year.

A prominent citizen of Indianapolis, one of the State judges, told the Toledo papers, in an interview: “The private companies had their gas laid to the city and along the streets several months in advance of the Citizens’ Trust, but it did them little good. Everybody said: ‘I will wait for the Consumers’ Trust.’ ‘Yes, but we will furnish you gas just as cheap,’ said the Indianapolis company; ‘why not take it of us?’ To this the citizens replied: ‘To take gas of you means cheap gas to-day, but high gas to-morrow.’ And wait for the gas they all did.” The charge to manufacturers was 2 cents a thousand feet, as against 8 cents, at that time charged at Toledo. There were 12,000 private consumers. Cooking-stoves in Indianapolis were about $12 a year, against $19.50 in Toledo. One of the representatives of the private company declared at a public meeting at Indianapolis that its charges were made such as to give a full return of all the invested capital in three years, as that was the probable life of the supply. A year after the inauguration of the Indianapolis movement a committee of the citizens at Dayton, who had risen against the extortionate prices charged them, investigated the condition of affairs at Indianapolis. They reported that Indianapolis had paid $200,000 on its bonded debt, and was getting ready to pay as much more. The Consumers’ Trust supplied between 10,000 and 11,000 consumers, and spent $1,000,000 less than the Dayton private company spent to supply 3000 fewer consumers. The annual charge at Dayton was $54.80; at Indianapolis only $26.80—less than half.

When facts like these were brought out, to the demolition of the fictions circulated in Toledo, the answer was characteristic. The “organ” could not deny the statements, but it fell upon the citizen through whose generosity the information had been got for the people, and assailed his private character in articles which, one of the daily papers declared, editorially, “would almost, if not quite, justify him in shooting their author on sight.”

This newspaper charged the city natural-gas trustees with being “rotten to the core,” and with every variation of phrase possible to its exuberant rhetoric sounded the changes upon their official career as a “big steal,” “fostered by deception, falsehood, and skull-duggery.” It sought to intimidate the Legislature and the courts when they failed to enact or construe laws against the people. It said: “Law-makers, judges, and others may feel the force of this element when the proper time comes and political preferment is sought.”

It was money in pocket that facts like those of the experience of Indianapolis, Detroit, and other places should not be made known. Even ideas must not be allowed to reach the public mind. Professor Henry a. Adams, the well-known political economist, lectured in Toledo during this contest, in a University Extension Course, on “Public Commissions Considered as the Conservative Solution of the Monopoly Problem.” The “organ” gave a synopsis of the lecturer’s views, which is printed herewith in parallel columns, with a synopsis of what Mr. Adams really said, as revised by himself:

WHAT THE ORGAN OF MONOPOLY REPORTED
The lecturer made reference to Toledo as an unfavorable place to discuss the matter of municipal control of quasi-public business and competition of municipalities with private corporations. But he deprecated anything in that line. He did not mention particular instances, but broadly condemned the policy pursued by this city in matters of this kind, and his remarks had a visible effect on his audience. He considered municipal control of business enterprises the worst form of monopoly, as they began by having the unfair advantage of the lawmaking power, and the tendency to corruption was greater than when individual enterprises were asking privileges. The audience was much pleased with the lecturer.
WHAT THE LECTURER REALLY SAID.

Professor Adams thought the solution of the monopoly problem must be found either in public control or in public ownership. He advocated public control, and held that the State and Federal railroad commissions should have a fair trial, that their hands should be strengthened by further and adequate legislation. He entertained the hope that this control and regulation would ultimately protect the interests of the public in a satisfactory manner. He was willing to admit, however, if this effort to secure the needed public control by the aid of commissions and legislation should fail, then public ownership was the only remaining solution. He held that in local monopolies it may still be wise to try the experiment of public control by aid of commissions. He said, however, that if anything should be owned and controlled by and for the people it would be street-railroads, gas and water works. He admonished his audience not to be misled by the argument that municipal ownership would be dangerous because of undue political influence, for the local monopolies under private ownership were already in politics, and in a most dangerous manner. He observed facetiously that he hesitated to discuss the question of municipal control or ownership before a Toledo audience.

From the control of the markets to the control of the minds of a people—this is the line of march.

So direct, persistent, and bold were the charges of corruptions rung day after day by this journal against all the officials concerned in the city gas enterprise that some people began to believe there must be truth in them. But when the community at last turned upon its maligners, and the grand jury brought indictments against the active manager of the paper and his chief assistant for criminal libel upon the city’s natural-gas trustees, the whole structure of their falsehood went down at a breath. They had no defence whatever. They made no attempt to justify their libels or even explain them. Their only defence was a series of motions to get the indicted editor cleared as not being responsible for what had appeared in the paper. Counsel labored over the contention that the accused was none of the things which the language of the law holds for libel. He was neither the “proprietor,” “publisher,” “editor,” “printer,” “author,” nor a person “who uttered, gave, sold, or lent” a copy of the newspaper, but only the “manager.” The employees gave testimony which would have been ludicrous but for the contempt it showed for court and community. The journalist who was the “managing editor” of the paper under the indicted chief editor was asked:

“Who was the head of the paper when you entered upon your duties as managing editor?”
“I do not know.”
“Who hired you as managing editor?”
“I really can’t say that I was hired at all.”
“Who employed you to come to Toledo?” The witness had been an employee in Pennsylvania of the editor on trial, and had followed the latter to Toledo to take the place of managing editor. “Nobody employed me.”

The son of the indicted editor had also followed his father to Toledo, and was employed on his paper. Asked for what purpose he came, he said: “I had no purpose in coming.”

The gentleman who had charge of the counting-room was asked who fixed his salary.
“I regulate my own.”

The advertising manager declared:
“I have no knowledge who is my superior.”

The accused had to let the case go to the jury without a spark of proof of the accusations which had filled the paper every day for months. He had no evidence to offer either that the charges were true, or that he believed them to be true. He stood self-confessed as having for years printed daily gross libels on citizens, officials, and community, as part of the tactics of a few outside men to prevent a free city from doing with its own means in its own affairs that which an overwhelming public opinion, and the legislative, executive, and judicial authorities, and its present antagonists themselves, had all sustained its right to do. The agent of this wrong was found guilty, and sentenced to imprisonment in the county jail, with heavy costs and fine; like the unhappy agents at Buffalo—”made cheap” for others.[7] But sentence was suspended pending hearing of the motion for a new trial. This did not come up for a year. The court could find no error in the proceedings of the trial court, and could not sustain any of the objections made. But it found a point which even the lawyers had not hit on, and strained this far enough to grant the new trial. Then the convicted editor went before another judge—not the one who had tried him—pleaded guilty, and was fined, and so saved from jail.

One of the last scenes in this Waterloo was the abandonment of the newspaper with which the corruption and intimidation of public opinion had been attempted. Failure was confessed by the sale of the paper, and it was bought by a journalist who had been especially prominent in the defence of the city, and against whom on that account a bitter warfare had been waged by the daily which now passed into his possession. The Sunday Journal of Toledo, in commenting on the surrender, declared that the course of the organ had been one of the strongest factors of the success of the people. “In every possible way it slandered and outraged the city, where of necessity it looked for support. There could be but one result. Scores who had opposed the pipe line became its most ardent advocates purely in the general defence.”

[1] State, ex rel., vs. City of Toledo, 48th Ohio State Reports,p. 112.
[2] Federal Court Reporter, vol. xxxix., pp. 651-54.
[3] Report of the Northwestern Ohio Natural Gas Company, January 7, 1889.
[4] Toledo and Its Natural Gas Bonds, pp. 36-37.
[5] City of Toledo and Its Natural Gas Bonds, p. 3.
[6] See ch. xxix.
[7] See ch. xx.

CHAPTER XXIV.

HIGH FINANCE

WHEN Judge Jackson refused to enjoin the city from issuing its bonds an appeal was taken. The court and the lawyers of the city were promised that it would be carried up without delay. Months passed, and no use was made of the privilege of filing new pleadings and taking new testimony—that is, no use but to make the suits the basis for libels on Toledo and its bonds.

Time ran on until the day was at hand for opening bids for the bonds. That was to be Wednesday. Then the counsel for the opposition notified the city that on Monday they would begin the taking of depositions. This was not then or afterwards done, but on the strength of the notification news despatches were sent over the country that the proceedings against the legality of the Toledo bonds were being “pressed.” In consequence of this and other maneuvers, when Wednesday came there were no bids. A hasty rally of some public-spirited capitalists at home, learning of the emergency, made up a subscription of $300,000. The names of the citizens who made this patriotic subscription were printed in the daily paper under the heading of “The Honor Roll.”

Only by extraordinary maneuvers could the market for such securities offered by such a community have been thus killed in a time of great general and local prosperity, and extraordinary they were. What they were was formally and authoritatively ascertained by an investigation made by a committee appointed at a mass-meeting[1] of the citizens of Toledo called by the mayor, the Hon. J. K. Hamilton. The call ran:

“For the first time in the history of Toledo, its general bonds, secured by the faith and property of the city, and bearing a fair rate of interest, have been offered, and only such of them sold as were taken at home by popular subscription. It is deemed desirable that under such circumstances the citizens of Toledo should meet together and determine what further steps should be taken to carry out the will of the people as expressed by 62 per cent. of the voters of the city.

“It is believed that with proper effort a large additional popular subscription may be obtained, and thus notice given to the world that notwithstanding all opposition the citizens of Toledo have confidence in and will maintain the credit of this fair city, and that a great enterprise undertaken by its people will not be defeated by the machinations of private opposing interests, no matter how powerful and unscrupulous.”

The meeting appointed a committee of three—David Robinson, Jr., Frank J. Scott, and Albert E. Macomber—”to prepare and circulate throughout the financial circles of the country a pamphlet which shall set forth the case of the city of Toledo in its struggle against those who by anonymous circulars and other dishonorable ways have attempted to prevent the sale of the Toledo natural-gas bonds.” This committee put the facts before the public in a very able pamphlet, “The City of Toledo and Its Natural Gas Bonds.” In an official statement asked for by this committee the city natural-gas trustees say: “Skilled writers were employed to furnish articles for Eastern financial journals, to cast discredit on the bonds on the very grounds that had been set aside by Judge Jackson’s decision. Not content with this open warfare, anonymous circulars were sent to leading investment agencies in the United States, warning them to beware of these bonds, as they were under the cloud of doubtful constitutionality and an impending lawsuit. When the day arrived for bidding for the bonds no bids were made. Agents of investors were present, who came to bid, but by some unknown and powerful influence they were induced not to put in their bids. The writers are not aware that any similar mode of striking at the credit of a whole community was ever before resorted to in this country. It is an insult and a wrong not only to this city, against which it is aimed, but to people of independence everywhere in the United States who have a common interest in the maintenance of the rights of all.”[2]

Press despatches impugning the validity of the bonds and misrepresenting the facts were sent all over the country. The anonymous circulars referred to were mailed to all the leading banks, investment agencies, capitalists, and newspapers. The New York Mail and Express said: “It would be decidedly interesting to know who is responsible for the . . . methods by which it was thought to prevent the city from undertaking the enterprise. A number of volunteer attorneys and correspondents deluged bankers and newspapers with letters warning them against the bonds which the city proposes to issue, on the ground that it had no right to issue them. The Mail and Express received several communications of this kind.”

“Not only the financial centres of this country,” say the city’s natural-gas trustees in their official report for 1890, “but those of Europe were invaded with these circulars.”[3] The circular was headed “Caveat Emptor.” It contained twenty-four questions, and every one of the answers, except those which referred to matters of record and routine, like the date, amount, name, etc., of the bonds, was incorrect. What hurt the people of Toledo most, as it was most base and baseless, was its attack on their hitherto unquestioned credit and financial honor. Asking the question, “How does the credit of the city stand?” the circular answered: “Refunding has been going on ever since 1883. The bonded debt was greater at the beginning of 1889 than of 1888; bonds bearing interest at 8 per cent. will become due in three or four years. The mayor, in his last annual message, admits the inability of the city to pay much of these except the refunding.” “Willing to wound, and yet afraid to strike,” the authors of this attempt to pull down an entire city managed, by the interweaving of such phrases as “ever since 1883,” “bonded debt greater,” “inability of the city to pay,” to create by insinuation the feeling of financial distrust for which their greatest industry and ingenuity had been able to find not a particle of foundation. No modern municipality is asked or expected or desired “to pay much except the refunding.” Capitalists would greatly prefer that even the refunding should not be carried on, but that the debt should run along at the original high rates of interest, which they regretfully see dwindling away. The circular failed to state that the city was borrowing money at 4 per cent. to pay off debts bearing 8 per cent. The insinuations of the circular could have been used of “the credit” of the United States, New York, Paris, London, Chicago, with the same appropriateness—with this exception, that Toledo’s municipal financial credit was relatively to its resources on a sounder and more conservative basis than these much more highly financed cities. The circular did not state that the proportions of debt to population had been decreasing for many years past.[4]

“Toledo has not two years’ supply of gas,” the circular said, “in all the territory acquired.” The State Geologist, in his annual report for 1890, said that Toledo would have no gas to supply its pipe lines or citizens in 1891. In 1892 the city pipe line supplied gas to the value of $168,954.46. Three years have passed, Toledo wells still flow, and new ones are being found continually. “Whatever may have been his object,” say the city gas trustees, “in volunteering such a statement, we know that so far in 1891 it is untrue, and that such positive declarations, based upon hypothetical conditions, are utterly unworthy of scientific pretensions.”[5] The State Geologist also took part in his annual report in the debate between municipal control and private enterprise, siding altogether with the latter.

The quantity of gas land owned by the city was put by the circular at 300 to 500 acres. The city had 650 acres. The circular declared the life of an ordinary well to be one to three years. There is no such limit. Referring to the quantity of gas land the city had, the circular asked and answered:

“Cannot other territory be acquired?
“Not in Northwestern Ohio, and not nearer than the gas fields of Indiana.”

This was untrue, for the gas trustees had already been offered, as stated, several thousands of acres of the best gas lands in addition to those they had bought. But the authors of the circular did their best to make it true. The city’s natural-gas trustees say in their report for 1890: “As soon as the trustees were prepared to negotiate for gas wells and gas territory, the field swarmed with emissaries and agents of the Northwestern Ohio Natural Gas Company to compete with the trustees. In order to prove what had been previously stated, ‘that Toledo could procure no gas territory,’ no means were left untried; agents of that company even fraudulently represented themselves to the owners of gas property that they were connected with the gas trustees and working in their interest, and in some instances introducing themselves as the president of this board. Prices went up 1000 per cent. in some instances rather than let it fall into the hands of the trustees. A conspicuous officer of that company, as an excuse for paying an enormous sum of money for a gas well, is reported as saying, ‘We did not want the gas well, but we had to buy it in order to keep Toledo from getting hold of it.'”[6]

Referring to the private companies, “Are the people of the city already supplied with natural gas for public and private use?” the circular asked. “They are,” it answered, and goes on: “Why does the city want to go into the natural-gas business, then?” “To boom the lands of real-estate speculators.” This is a charge affecting the Legislature and Executive and State courts of Ohio, the courts of the United States, the people of Toledo, and all the members of their city government. Burke confessed that he did not know how to draw up an indictment against a whole people. That art has been acquired since his day.

“Are these bonds of unquestionable validity?” this catechism of libel upon a community queries.
“By no means. Prominent taxpayers have suits pending attacking the constitutionality of the act under which they are issued.”
“Have these cases,” the last question ran, “ever been tried on their merits?”
“They have not.”

They had been tried so far that the United States and State courts had refused on every ground urged to interfere with their issue and sale, declaring the legislation authorizing them to be valid. They had never been tried any further in the United States courts for a very good—or bad—reason. The “prominent taxpayers,” after their defeat before Judge Jackson, took every possible means to prevent the case from reaching a final adjudication. The invariable rule of the United States Supreme Court has been to treat as final and conclusive the decisions of State courts as to such domestic issues. During the hundred years of its existence not a case can be found in which that court has overruled the fixed and received construction given to a State law by the courts of that State.[7] The only hope for the suit of the “prominent taxpayers ” was, therefore, that the Supreme Court of the United States would for their special profit reverse the practice to which it had consistently adhered since the establishment of the government. What they really thought of their prospect of success in that effort they confessed when their case, no longer delayable, was upon the point of being reached.

They who had been so “anxious to get to the case as soon as possible” refrained from printing the record, a condition precedent to putting the case on the docket of the United States Supreme Court. The city wanted the decision, and in order that the case might not be dismissed for this failure to print the record, and a decision upon the merits be thus prevented, the city’s gas trustees advanced the money—$1100—to the court printer for printing the record. Pushed thus against their will to trial, when the day came on which they most rise to state their case the opponents of Toledo folded their tents and stole silently away. On the motion of their attorney the case was dismissed, against the protest of the city. They paid all the costs, including the money advanced by the city for printing the record. To their defeat all along the line they did not want to add a formal decision against them from the Supreme Court, which was inevitable. And they ran away to fight another day.

Another purpose of these suits was confessed only a few weeks after this circular was issued. The existence of the suits was used to try to frighten the city’s natural-gas trustees into accepting a “compromise.” The compromise was that they should abandon the enterprise, sell out pipes and lands for a fraction of their worth, get their gas from the private company at higher rates, and put the city in its power for all time to come. “It will be three or four years before your case is through the Supreme Court,” its representative told the natural-gas trustees, in urging them to accept. “You can’t sell your bonds,” he continued; “you have no money.” The “compromise” was refused, but the city’s pipe line had been delayed so long that the profits of the company for another twelvemonth were secure.

The demonstration against the bonds in the United States Circuit Court had been followed by similar suits in the State courts. Here again the city was successful. It was upheld on every controverted ground—in the enabling act, in the vote of the people, in the appointment of the trustees by the governor, and in the issue of the city bonds. Appeal was taken here, as in the United States courts, and, as there, for delay, not for decision. To checkmate further use of this lawsuit to smother the law and cripple the city, the friends of the pipe line began a suit against the authorities to force an immediate decision from the Ohio Supreme Court as to the legality of the bonds. It was certainly, as was said in the press, “a curious state of things when the defendant is compelled to bring suit against himself because the plaintiff refuses to allow trial in his own case.”

These litigations, the circulars, the press, were only part of the campaign. One of the committees of the Common Council was brought under control, and induced to throw technical difficulties in the way of the sale of the bonds, which caused months of delay.[8] Effort was made to get the Governor to appoint natural gas trustees hostile to the city, but failed. It was attempted, also without success, to get the Legislature to prevent the sale of the bonds at private sale. During all this controversy the city was most fortunate in receiving the needful authority from the State Legislature. This was due mainly to a faithful and able representative of Toledo in that body, the Hon. C. P. Griffin. He was offered every promise of political preferment and other allurements to betray his constituents, but he always remained faithful. Without his support the efforts of the city would have failed. His services amid great temptations deserve the grateful remembrance of the public.

Some of the devices of “private enterprise” were childish enough. “A Business Men’s Protest” was published, which proved under the microscope to have been largely signed by men whose names could not be found in the directory. A similarly formidable-looking remonstrance against the pipeline bill was sent to the Legislature. It had 1426 names; of these 464 could not be found in the directory, and over 300 of the 962 remaining names signed the petition for the city’s bill. Many of them avowed that when they had signed the “Remonstrance” it had a heading in favor of the pipe line, which must have been changed afterwards. As part of the tactics of misinformation, a report was published—in January, 1890—claiming to give the business of both the private companies; but the members of the Council Committee on Gas, when afterwards examining the books for the gas company, found that it gave the receipts of only one company. A paper was prepared by a citizens’ meeting for circulation among the manufacturers to ascertain how much they would contribute towards the city pipe line; but when reported back to the meeting it had become, in some mysterious way, a paper asking the manufacturers how much they would advance to quite a different scheme, the effect of which would be to sell out the city pipe line or convert it into a manufacturers’ line.

These were the infantile methods of men who could not see the ludicrousness of the position they put themselves in by such efforts to keep a business which they were constantly declaring to be hazardous and unprofitable.

Detectives appear in almost every scene of our story, and are as common in its plot as in any extravagant melodrama of the Bowery thirty years ago. To counteract the anonymous circulars the City Council sent a committee headed by Mayor Hamilton—the “War Mayor,” one of the ablest lawyers of the city, upright and loyal at all times to Toledo—to visit the Eastern money-markets. The committee, in their official report, state that they were assured by responsible dealers in municipal securities in New York and Boston that they would bid for the entire amount to be sold. “We regret, however, to have to report that the powerful and influential parties who have on all occasions and in every way sought to obstruct and defeat the enterprise for which the proceeds of these bonds were to be used, in some way succeeded in inducing those who intended to purchase to withhold their bids—in fact, no matter how guarded our movements, we believe that every person or firm with whom we had interviews was reported to the agents of the Standard Oil Company, for in every instance where from our interviews we had encouragement that the bonds would be bid for, within a short time more or less influential agents of opponents interviewed these parties and succeeded in changing their minds.”

What a picture of “high finance,” of the “beneficent interplay of the forces of supply and demand,” of the “marvellous perfection” with which capital moves under “natural laws” to carry its fertilizing influences where they are most needed! The officials of this free city compelled to sneak around in the open money-market under cover with “guarded movements,” seeking buyers for its bonds as if they were stolen goods! About them a cloud of spies and detectives reporting every movement as if it were a crime to the little handful of trust millionaires in their grand building on Broadway! “They have entered the Bank!” “They have just left —’s office!” After each report the leash is slipped of a waiting sleuth, who flies away to run down the quarry.

The gas trustees made public a letter and telegram they received from a prominent New York bank:

“NEW YORK, November 27, 1889.

“DEAR SIR,—A gentleman named” (naming a man who signs the certificates of the Standard Oil Trust as treasurer),[9]

The telegram sent on Friday is as follows: “introduced by the card of Mr.—” (one of the richest men in New York not otherwise known as connected with the trust), “called on us to-day and stated that understanding that our firm was on the point of bidding on the Toledo bonds, etc., he would caution against the purchase, as they were not legal. Mr. — represented himself as coming from —” (one of the companies of the oil combination), “and referred us to their lawyer for further information. Now as this may hurt the sale of the bonds we want to be cautious, and on Friday will make further inquiries, and will wire you accordingly. We may not care to hand in our bids on this account.”

“NEW YORK November 30th.

“Fearing sale of bonds has been injured, will not bid at present.”

“That tells the story,” said one of the trustees, “in a nutshell.”

A local bank bid for $500,000 of the bonds, but did not sustain its bid. A reputable citizen, an ex-mayor, wrote for publication in one of the leading journals that he had been informed by a well-known banker there was reason to believe a banking firm which, in 1892, defaulted on its bid for bonds, had been indemnified by the opposition for the $5000 it thereby forfeited to the city, and for the profits it would have made from the sale of the bonds. With the city line crippled the gas company would pocket the profits on the sale of a million dollars’ worth of gas a year. Five thousand dollars, or several times that, was a small insurance to pay for such a gain.

This was the game of hide-and-seek played in Wall Street by detectives and financial stilettos against “simple greens,” who thought supply and demand still rule values. This was the reality which the officials of Toledo found behind the outward aspect of its magnificent buildings, the benevolent millionaires who look out through their plate-glass, the grandiloquent generalizations of professors about “the money-market.”

The city was brought to the humiliation of seeing its officials meet in public session at an appointed hour to open bids it had invited from all the money centres for its bonds, only to have the news flashed all over the country that not a bid from abroad had been made. This opposition cost the city in one way and another not less than $1,000,000, according to the estimate of the city’s natural-gas trustees. The feeling of the people was expressed in the following language in a circular sent out with the pamphlet report of the committee appointed in mass-meeting to make a statement of Toledo’s case to the public:

“We have seen the modern aggregation of corporations—trusts—suppress other corporations in the same line of business. But this Toledo contest is believed to be the first instance where private corporations—creatures of the State—have assumed to exercise monarchical powers over a portion of the State—one of its leading municipalities; to dictate the policy of its people; to seek to control the legislation as to the laws that should be enacted for such portion of the State; to bribe and intimidate the votes of such city at the polls; to attempt to subsidize the press by the most liberal expenditure of money; to at last purchase, out and out, a heretofore leading paper of the city, place its own managers and attorneys as directors, import one of its long-trained men as editor, and turn this paper into an engine of attack upon the city, an attack upon the city’s honor and credit, characterized by the most unscrupulous misrepresentation and a perfect abandonment of all the amenities of civilized warfare.”

The Toledo public felt no doubt as to who were attacking it under the convenient anonymity of the two gas corporations. At a public conference, January 16, 1889, between the presidents of the private natural-gas companies and the people assembled in mass-meeting, the representative of the former said the only condition on which the members of the oil trust had been induced to interest themselves in natural gas in Northwestern Ohio was that of absolute and unqualified control of the entire business through a majority of the stock of all the gas companies to be organized.

“The trust is interested in companies engaged in supplying natural gas?” the president of the oil trust was asked by the New York Legislature about this time.
“To a limited extent, yes.”
“Have they a majority interest in any of these companies?”
“I think they have.”[10]

This was identically the arrangement by which the nine trustees owned as their private property the control of the oil business. At several later conferences with the city’s trustees and the Common Council the gas companies were represented by one of the principal members of the oil combination, the ingenious gentleman who had managed the negotiations with the railroads by which, under the alias of the American Transfer Company, the trust claimed and got a rebate of 20 to 35 cents a barrel,[11] not only on all oil it shipped, but on all shipped by its competitors. He was also its representative in the similar arrangement by which the Cleveland and Marietta Railroad agreed to carry its oil for 10 cents a barrel, to charge Rice 35 cents, and to pay it 25 out of every 35 cents Rice paid.[12] He had acted in the same interest throughout the gas field as well as in oil, and his pathway could be traced through one independent company after another, whose wrecks, like those in oil, are milestones.

July 27,1889, in an item originating in New York, in the Tribune, a friendly paper, and given an extensive circulation by news despatches sent to the leading papers in other cities, it was said that the representatives of the oil trust “in this city say emphatically that they will attack in the courts the right of the city to issue them”—the bonds.

At the great meeting of the citizens, October 19,1889, to organize a popular subscription to take the bonds killed in the money-market, the resolutions named the oil combination as the power responsible for the attacks on the city, and appealed to the people to observe that it, “no longer content with destroying individuals and associations which stand in the way of its moneyed interests, now rises to grapple with and destroy the rights of cities and states; we therefore ask all liberty-loving men to make common cause with us in the defence of the community against the aggression of colossal power.”

The aldermen and the Common Council of Toledo unanimously adopted resolutions, September 15, 1890, requesting the State and Federal courts to give decisions as promptly as possible in the suits pending against the validity of the natural-gas bonds. These bodies in their official utterance declared that the oil combination, “through its officers and agents in the city of Toledo and at many other points in the United States, has circulated false and malicious statements about the bonds of the city of Toledo issued for natural-gas purposes.” The natural-gas trustees of the city say in their report for 1890: “These injunctions and circulars, although fathered in the first instance by non-resident taxpayers, and in the second by irresponsible or anonymous parties, were traced directly to the oil trust, a trust having a large number of corporations within its control, among which is the Northwestern Ohio Natural Gas Company, and to whom the city of Toledo may reasonably attribute a loss of more than a million of dollars already. What further financial embarrassment it may suffer in the future cannot be measured by the depravity and moral turpitude which its seeds have sown in our midst.”[13]

When the warfare against Toledo became a scandal ringing throughout the country and beyond, the organ of the trust in Toledo attempted to make it appear that the oil trust was not the party in interest. But there was open confession on the record. Its connection and its control were admitted by two representatives in conference with a committee appointed by the mayor at their request to discuss the situation.[14] They described the circumstances under which the members of the oil trust had gone into the project of the Toledo line and the project of the natural-gas business. One of the two stated that he came into it as its “more direct representative.” The pipe line of the private gas company was built, he went on to say, by one of the principal corporations in the oil trust. At the same interview it was admitted that the oil trust owned 60 per cent. of the natural-gas company’s stock.

The people of Toledo did not surrender to this success of their enemies in the money-market. The bonds which calumny and espionage prevented them from selling at wholesale to the great capitalists of New York and Boston they took themselves at retail. The legislature having given authority for such sales, a committee of one hundred had been appointed by the citizens’ meeting, October 19, 1889, to canvass all the wards of the city for subscriptions to the gas bonds. “Gas Bond Pledges” were circulated, to which people subscribed according to their ability, in amounts ranging from $2 to $5000. The employees at the Wabash Railway’ car shops sent in a list signed by fifty names for a total of $1102, an average of $22 each. The labor of two hundred men for a week without pay was offered the gas trustees as an earnest of the good-will of the people. Piece by piece the city’s pipe line was pushed through. At a critical moment a shrewd and patriotic contractor saved the enterprise by building a large part of the line, and taking for his pay the bonds the banks would not take. In June, 1890, the public were gratified by the announcement that their trustees had secured the means “for the construction of three miles more,” making eight miles in all, or nearly one-fourth the entire line. In August a contract was made for five miles more, and so the work went on, step after step.

[1] October 19, 1889.
[2] City of Toledo and Its Natural Gas Bonds, pp. 6-7.
[3] Annual Report of the Natural Gas Trustees, 1890, p. 9
[4] City of Toledo and Its Natural Gas Bonds, p. 3.
[5] Toledo Natural Gas Trustees’ Report, 1890, p. 7.
[6] Annual Report of the Natural Gas Trustees, 1890, p. 8.
[7] “Constitutional History as Seen in the Development of American Law.” Lecture by D. H. Chamberlain. G. P. Putnam’s Sons, New York.
[8] Report of the Toledo Natural Gas Trustees, 1890, pp. 8-9.
[9] Trusts, New York Senate, 1888, p. 659.
[10] ‘Testimony, Trusts, New York Senate, 1888, p. 428.
[11] See p. 99.
[12] See p. 206.
[13] Annual Report of Natural Gas Trustees, 1890.
[14] Toledo Blade, February 7 and 27, 1889.

CHAPTER XXV
A SUNDAY IN JUNE

IN the midst of the anxious discussion by the citizens of Toledo as to the character of the power which ruled them both by night and by day, the same question arose in the metropolitan religious press, but in its broader ethical aspects. After the petition of Toledo to be allowed to take the control of its light, heat, and power into its own hands had been laid before the Legislature, the National Baptist of Philadelphia, in an article on the trusts, criticised them as the prophet Nathan would have done. It gave to that in oil, “of course, the bad pre-eminence in all this matter.” “This corporation has, by ability, by boldness, by utter unscrupulousness, by the use of vast capital, managed to control every producer, every carrier, to say nothing of the legislatures and courts.” The Examiner, the leading religious weekly of the Baptist denomination in New York, rose against this. “We can readily understand how there should be differences of opinion in the matter of these trusts, and their influence is a proper subject of discussion; but to make it the occasion of so unjust and intemperate an attack on Christian men of the highest excellence of character is something that was not expected from a paper bearing such a name. The four most prominent men in the oil trust are eminent Baptists, who honor their religious obligations, and contribute without stint to the noblest Christian and philanthropic objects…. All of them illustrate in their daily lives their reverence for living Christianity.”

The National Baptist did not submit to this attempt to cite men’s creeds to prevent judgment on their deeds. It quoted the reply Macaulay makes Milton give to the similar pleas urged for King Charles: “For his private virtues they are beside the question. If he oppress and extort all day, shall he be held blameless because he prayeth at night and morning?” It held to its ground, and cited against the trust the recorded evidence, but it declared it was “a marked breach of propriety for the Examiner to bring their private character into the discussion.” The National Baptist, going on to speak in praise of a series of lively cartoons in Harper’s Weekly on the Forty Thieves of the Trusts and similar subjects, said, with some sadness: “It will be a sorry spectacle if the secular papers shall be ranged on the side of justice and the human race, while the defence of monopoly shall be left to the so-called representatives of the religious press.”

Later, March 20,1890, the Examiner returned again to its discussion of the religious performances of the chiefs of the oil trust as a matter of public importance. Of one of them it said: “The prayer-meetings of the Fifth Avenue Church are on Wednesday evening, and no business man in the church is less likely to be absent from one of them than he. His wife and children, when they are in the city, come with him, and it is by no means an unusual thing for the whole family to take part, each of them occupying one or two minutes of time. He and they are at church every Sunday when in the city, and no husband and wife keep up the good old Baptist habit more faithfully of exchanging a kind word with the brethren and sisters after the regular services are over. He dresses plainly, and so do his family, and every one of them has a kind heart and a pleasant word for all. They are among the last to leave the church and the prayer-meeting. Now the question is, How is it, as things go, that a man possessing the great wealth imputed to him should have so warm a fraternity of feeling for the lowly in their temporal conditions? And is there not an example here that might well be imitated in all the churches of our Lord?

In an address on corporations the reverend secretary of the Church Edifice Department of the Home Missionary Department of the Baptist Church followed the example of the leading Church Journal. “The oil trust was,” he said, “begun and carried on by Christian men.[1] They were Baptists, and, so far as the speaker knew, both the objects and the methods of the oil trust were praiseworthy.” A clergyman of another denomination once called upon one of the great men of the trust to seek a subscription.

“But,” said the rich man, “I am not of your Church.”
“That does not matter,” said the minister, “your money is orthodox.”

The secular press followed the example of the religious press in treating their public faithfulness to Church ceremonies as news of the day, and part of the record of their social functions. The New York correspondent of the Philadelphia Daily Record wrote for the people of Philadelphia: “It is not often that a millionaire stands up to lead in prayer, but I heard the president of the oil combination make an excellent prayer the other evening. He is said to be worth $25,000,000, but he neither drinks nor uses tobacco, and he is a deacon in Dr. Armitage’s church. He likes a fast horse, and has eleven horses in his stable here. Few men, however, lead plainer lives than he, and few put on less style. He gives liberally to unsectarian charities, but, he says, ‘when it comes to Church work I always give to the Baptists—my own denomination— and to no other Church.'” A New York daily described the same trustee “as one of the few millionaires who devote much of their time to the improvement of the condition of others. When not called away by social or business engagements, you are pretty sure to find him at home evenings. Here, in his costly and well-equipped library, he receives his visitors, many of whom represent the various benevolent and religious undertakings in which he is interested. He has for years been a hearty supporter, financially and personally, of foreign-missionary work, and no layman, perhaps, is so well informed concerning the details of it. He has a personal acquaintance with many of the leading missionaries of the world, and his residence is frequently the scene of a gathering of these workers among the heathen. He is now devoting considerable attention to home-missionary work, a field which, he is convinced, presents splendid opportunities for Christian endeavor.”

Many descriptions have been given by the press, metropolitan and interior, of the success with which one of the trustees built up the largest Sunday-school in his city at the same time that he was building up the monopoly—leading the children of his competitors and customers to salvation with his left hand, while with his right he led their fathers in the opposite direction financially. The church where these men appear has had columns of admiring description in the leading daily papers of New York and other cities. “There are few wealthier congregations than this one,” says a reporter of the New York World, though he adds, “the wealth is elsewhere more evenly divided.” The trustee of the light of the world “is the magnate of the church, the centre around which all lesser millionaire lights revolve. Everybody stops to speak and shake hands with him. Everybody smiles upon him, this modest man of nearly $200,000,000.” “It is amusing,” says the Brooklyn Eagle, “to note the manner in which his neighbors watch him during the service. Quite a number of people loiter near the door to see him as he walks out of church.” “They are worth a bit of careful study,” says another paper of the trustees, “and no place is quite so convenient as when they are at church. Their interest in religion is as sincere as their belief in oil. From the moment they enter church until they leave they are examples that Christians of high and low degree might follow with profit.” “They have made the most of both worlds,” writes another journalist. The oil trust was criticised by the Rev. Washington Gladden at Chautauqua, in 1889. One of its prominent officials, as reported in a friendly journal, defended it as “a sound Christian institution; and all these communistic attacks are due entirely to the jealousy of those who cannot stand other people’s prosperity.”[2]

“In Anniversary week” in Boston, in May, 1889, at the meeting of the American Baptist Education Society, the secretary said he had an announcement to make. “It had been whispered about,” says the New York Examiner of May 23, 1889, from whose friendly account we are quoting, “that something important was to occur at this meeting, and a breathless silence awaited the announcement. Holding up a letter, the secretary said that he had here a pledge from a princely giver to our educational causes, naming him (here he was interrupted by a tremendous cheer), of $600,000 for the proposed Chicago college. . . . This statement was followed by a perfect bedlam of applause, shouts, and waving of handkerchiefs. One brother on the platform was so excited that he flung his hat up into the air, and lost it among the audience.” Eloquent speeches at once overflowed the lips of the leading men of the meeting, which was a delegate assembly. They sprang to their feet, one after the other, and mutually surpassed each other in praising God and the giver of this gift, which was equal to his income for a fortnight. “I scarcely dare trust myself to speak,” said a doctor of divinity. “The coming to the front of such a princely giver—the man to lead. . . . It is the Lord’s doing. . . . As an American, a Baptist, and a Christian I rejoice in this consummation. God has kept Chicago for us; I wonder at his patience.” Another reverend doctor said: “The Lord hath done great things for us…. The man who has given this money is a godly man, who does God’s will as far as he can find out what God’s will is.”

The audience rose spontaneously and sang the Doxology. On motion the following telegram was sent, signed by the president of the society:

“BOSTON, May 18, 1889.

“The Baptist denomination, assembled at the first anniversary of the Education Society, have received with unparalleled enthusiasm and gratitude the announcement of your princely gift, and pledge their heartiest co-operation in the accomplishment of this magnificent enterprise.”

The name signed to this telegram happened to be the same as that of the divine with whom, when president of Brown University in 1841, one of the most devoted of the laborers for the freedom of the negro had a discussion which is perhaps the most pungent in the literature of the antislavery movement.

On August 30,1841, Henry C. Wright wrote to Edmund Quincy: “I once met the president of Brown University, in the presence of several friends, to converse on the subject of slavery. The conversation turned on the question: Can a slaveholder be a Christian? To bring it to a point, addressing myself to the doctor, I asked him, ‘Can a man be a Christian and claim a right to sunder husbands and wives, parents and children, to compel men to work without wages, to forbid them to read the Bible, and buy and sell them, and who habitually does these things ?’ ‘Yes,’ answered the reverend doctor and president, ‘provided he has the spirit of Christ.’ ‘Is it possible for a man to be governed by the spirit of Christ and claim a right to commit these atrocious deeds, and habitually commit them?’ After some turning he answered, ‘Yes, I believe he can.’ ‘Is there, then, one crime in all the catalogue of crimes which of itself would be evidence to you that a man had not the spirit of Christ?’ I asked. ‘Yes, thousands,’ said the doctor. ‘What?’ I asked. ‘Stealing,’ said he. ‘Stealing what, a sheep or a man?’ I asked. The doctor took his hat and left the room, and appeared no more.”[3]

The Sunday following a special service was held in the churches throughout the country in behalf of further help in “the new educational crisis.” Many eulogistic sermons were preached that day by the leading clergymen of the denomination. “And so,” one of them is reported to have said, “when a crisis came God had a man ready to meet it. . . . An institution was bound to come, and unless a God-fearing man established it it was likely to be materialistic, agnostic. . . . In this emergency, and in God’s providence, society raised up a man with a colossal fortune, and a heart as large as his fortune.” “God,” said the Chicago Standard, a religious weekly, “has guided us and provided us a leader and a giver, and so brought us out into a large place.”

Another of the trustees has poured into a Southern State hundreds of thousands of dollars for churches of various denominations, and millions for hotels of a more than Oriental magnificence. “There is no philanthropist,” says an editor of that State, commenting on these expenditures, “who renders the world greater service than the man of enterprise.” But “Western Pennsylvania,” said the Pittsburgh Post, “looks more with awe than pride at the liberal diffusion of its wealth in Florida improvements and Baptist universities.” A daily paper of Richmond, Virginia, in an editorial commenting on a report that the hostelry glories of St. Augustine were to be repeated in Richmond, said: “We have naught to remark on the tyrant monopoly if some of its profits are to come in such a direction. We could forgive much that monopoly visits on the down-trodden, horny-handed son of toil if it would come with open pockets proclaiming the era of luxuriant accommodations for all those other millionaires whose money we want to see invested in Richmond.”

The next year after the Boston meeting the Church celebrated its “Anniversary week” in the city which was to be the seat of the new college. And the anniversary closed with a jubilee meeting, which filled the largest assembly room in America. “All the church-going people of Chicago must have attended,” one of the daily papers said. It was addressed by the principal clergymen of the denomination from all parts of the country. Again, as at Boston, the centre of interest was the gift of a fortnight’s income to the university. A telegram making the gift conclusive, since the conditions on which it was promised had been complied with, was read. Cheer after cheer rose from the assembly, and oratory and music expressed the emotion of the audience. The divine who made the closing speech declared that he needed ice on his head on account of the joyful excitement of the occasion. The cheers and the hand-clapping closed again, as at Boston, with the spirited singing of the Doxology. Not only in the religious press of all denominations, but in the worldly press, the topic was the best of “copy.” The great dailies gave columns, and even pages, to the incident, and to the subsequent gift from the same source of larger sums. “Conspicuously providential,” “princely,” “grand,” “munificent contribution,” “man of God,” were the phrases of praise. A writer in the New York Independent said: “Your correspondent speaks from opportunities of personal observation in saying that pecuniary benefaction to a public cause seldom if ever, in his belief, flowed from a purer Christian source.” The only recorded note of dissent came from a humbler source. Under the text, “I hate robbery as a burnt-offering,” a weekly business journal said: “The endowment of an educational institution where the studies shall be limited to a single course, and that a primary course in commercial integrity, would be a still more advantageous outlet for superabundant capital. Such an institution would fill a crying want.”

It was the last Thursday in May, 1890, when this great representative convention of the Church from all parts of the United States celebrated the acceptance of this endowment. Even while the roll of the Doxology was still rising to the roof of the auditorium the plans were preparing for a performance at Fostoria the next Sunday, three days later, which had a profound effect upon Toledo, though just the opposite of what was expected.

Fostoria, Ohio, is the home of the president of the principal natural-gas company in Ohio controlled by the oil trust and leader in the vendetta against Toledo. A wealthy miller erected in Fostoria in 1886 a flouring-mill, with a capacity of 1000 barrels a day. One of the inducements was a contract made with this manufacturer by the gas company, by which it bound itself to supply him with natural gas at a price which would be one-fifth what coal would cost him, and to continue to supply him as long as it supplied any one. The manufacturer carried out his agreement by the expenditure of $150,000 for the erection of the mill, and by running it continually to its full capacity. His bills for gas he paid promptly every month. Relying upon the contract with the gas company, the mill was built for natural gas, and could use no other fuel. In February, 1890, the gas company, dissatisfied with the bargain it had made, demanded better terms. The milling company refused. On a Sunday morning in June, “when, if ever, come perfect days,” a gang of men appeared, led by an officer of the gas company, and dug up and tore out the pipes supplying the mill with gas.

Church bells of different denominations were scattering their sweet jangle of invitations to the sanctuary as the tramp of these banded men, issuing on their errand of force, mixed with the patter on the sidewalks of devout feet. Private grounds were unlawfully entered, property was destroyed, the peace broken, a day of love changed to one of hate, all the bonds of community cut asunder, and the people turned from the contemplation of divine goodness to gaze at shapes of greed and rage. Sunday is chosen for such deeds, since the help with which the pagan law, gift of heathen Rome, would interpose, cannot be invoked by the victims on Sunday, and because on Sunday Christian people go to church, and leave their property undefended. The peace-officers were summoned to arrest the invaders for violating the Sunday law, but before they could get on the ground the mischief was done. The pipes had all been excavated, the connections wrenched off, and the trench nearly filled up. The milling company began suit for $100,000 damages against the gas company,[4] but a private settlement was made, and the case has never been pressed to trial. The laborers who did the work of the Captains of Industry in this matter were tried and convicted at the County Court in July, but by no process did the law, which is “no respecter of persons,” reach out towards the principals.

This Fostoria incident occurred during the heat of the Toledo contest—June, 1890—while the city was pushing the sale of bonds for its emancipating pipe line by popular subscription and in odd lots. Notice had been already served on the people of Toledo at public conference, that despite contracts, charters, franchises, the private companies would not take any less price from Toledo than they demanded. In pursuance of this, after the council had fixed the price in accordance with its admitted right, a circular was sent out containing this significant threat: “If it”—the legally declared price—”is approved by our customers we will know what course to pursue.”

Even before the occurrence at Fostoria it had been definitely suggested to the people of Toledo that in case the council failed to accept the demand as to rates in making the new ordinance (July, 1890) the pipes would be so far removed as to cut off the supply on some Sunday when no legal help could be invoked. The possibility of this Sunday cut-off of the fuel supply of 15,000 consumers became a living topic of discussion, public and private, and was considered in all its bearings by the Toledo press. Calculations were made and published of the number of men it would require to take up the hundred miles or so of pipe in the streets of Toledo between dark and dark some holy Sabbath day. It was confessed, hopelessly, that they would be more than the police could handle. “Of course,” as was said in the Toledo Blade by a leading citizen, “such enterprise would involve a very remarkable degree of both lawlessness and desperation on the part of the managers. It would be a mode of withdrawal from trade quite unknown among sound business men. But then their processes have been peculiar from the start.”

It was nothing less than startling to Toledo, almost before the print on the types of these words was dry, to hear the news from Fostoria of the Sunday raid there. There were those who declared that the Sunday violence at Fostoria was deliberately done as a warning to Toledo. If it were a warning to them not to insist on the legal and equitable and contract right of their Common Council to fix the rates of gas, it was a failure. The council went forward and did its duty. If it were a warning to the people to redouble their labors to free themselves forever from the possibility of such thralldom as that in which Fostoria and other cities were enchained, it was a success. The people heard and heeded, and in ten months thereafter gas began to flow into the city through its own pipes.

CHAPTER XXVI
TOLEDO VICTOR

IT was remarkable to see the revival of the passion of freedom of 1776 and 1861 in the editorials, speeches, resolutions of public meetings, and the talk of the common people in Toledo as in Columbus. The example of “the heroic liberty-loving people of Boston” was held up in every aspect to fire the heart of Toledo not to be frightened into subjection to the foreign power that threatened them. To resist “the domination of an economic monarchy” was the appeal made in posters with which the town was placarded.

“During all the time George III.’s soldiers were quartered in Boston that monarch did not spend as much money to bring the city to terms as has been spent in this effort to subjugate the city of Toledo,” said Alderman Macomber.

“A people like those of Toledo,” said one of them in the press, “when once united and determined as they now are, cannot be subjugated by any combination of mercenaries yet known.”

“It is evident,” the Toledo Sunday Journal said, “that the people of Toledo have come to a full realization of the truth that the money saved by the independent pipe line, though great, is a matter of little importance compared with the social and political issues involved. It would be a thousand times better,” it continued, “to utterly bankrupt the city than permit the oil combination to win. The fight was not for the present alone, but it was for the present and future, and for all time to come. It was not for the people of Toledo alone, but it was for the whole Union, though God had chosen the people of Toledo for the struggle.”

The Cincinnati Commercial-Gazette said, in its editorial columns: “In itself the Toledo enterprise is not a big one, but it will prove an object-lesson for the whole country. It will show the open door through which people may pass from under the yoke of a most gigantic, unscrupulous, and odious monopoly. And it will be surprising if this does not extend beyond gas and ultimately cover oil. We are only on the verge of a revolution that is as sure to come as that which followed the throwing overboard of a lot of tea in Boston Harbor. Neither the power nor the vulgarity of capital can long rule the people.”

Numerous letters of sympathy, congratulation, and indignation were received by the Toledo committee appointed by the citizens’ mass-meeting to make a statement of their case to the people of the United States. There were letters from chairs of political economy in the universities, from scholars and students in history and politics, and from men in affairs and finance.

The completion of the line to the city was not the completion of the enterprise. Mains had still to be laid in the streets, and house connections made. At every step, now as before, unrelenting opposition did all that could be conceived of—in the courts, the Legislature, the city government, the money-market—to block municipal self-help. Great numbers of the citizens desired to change from the private companies to the city. Over 700 consumers were at one time, in 1891, calling upon the city to supply them.[5] The litigation which was kept up, and the defeat of the attempt of the city to sell its natural-gas bonds in the open market, had exhausted the funds at the disposal of the city trustees. But they showed a readiness of resource equal, with the help of the people, to all these emergencies, and proving that public enterprise can more than hold its own in the competition with private enterprise. Contractors were got to pipe the streets by sections, and take for pay the pledge of the income earned by the pipes so laid. In other cases people wanting the gas were willing to advance a part of the cost. The same contractor who had faith enough in the city to build the main line from the gas fields and take the bonds while they were under fire volunteered in the same way to build the submerged lines across the Maumee River, and ten miles of mains within the city. This was done at a moment when otherwise the enterprise must have come to a stop, and the name of this patriotic contractor is given to the public by the trustees in their annual report with words of gratitude.

The amount of bonds originally authorized was $750,000. The trustees, in consequence of the delays and enhanced cost caused by lawsuits and other tactics of opposition, had to incur a floating debt of $300,000. The council by ordinance directed the issue of bonds by the city to the amount of $120,000 to pay off part of this floating debt. The State Circuit Court refused to sustain this action of the council, but pointed out that all the city lacked was the authorization of the Legislature. This was the only decision against the city in all the litigations, and in this the State Court was afterwards overruled by the United States Circuit Court. A bill was accordingly introduced, giving the city the right to issue $300,000 in bonds for the floating debt, and $100,000 for the extension of the gas plant: wells, pipes, pumps—whatever was needed. A strong lobby immediately appeared in the State Capitol to defeat the bill. As part of its ammunition a pamphlet was circulated among the legislators, giving “Facts and Reasons” why the Legislature should not authorize the new issue of bonds. This pamphlet illustrates the easy virtue with which some lawyers dispose of themselves to those who have the money to pay them. Two of its strongest points were that the contracts for which the floating debt had been incurred were let without proper competition, and that the trustees had no power to make the contracts. This pamphlet was signed by two lawyers, one of whom, before these contracts were let, had given the trustees his written opinion supporting such contracts unqualifiedly. The representatives of the people were able to exhibit to the Legislature his written opinion stating that the trustees had the power to make the contracts, and had let them in compliance with the requirements of the statute as to bids. The pamphlet declared that the court, in granting the injunction against the issue of the $120,000 of bonds by the Common Council, had declared the claims which were to be paid by the proceeds of the bonds to be “illegal and invalid.” This was untrue. The court had held only that the city had not the power to issue the bonds, and pointed out that the remedy was in new legislation by the State to remedy the want of power.

Pursuing the tactics of defamation of the city and its authorities which had been used throughout this contest, the pamphlet said: “We are prepared to prove . . . that the contractors put in their bids substantially as gambling transactions, at such excessive price that they thought they could take the risk of the illegality of the natural-gas proceedings, trusting that these illegal transactions would be permitted to pass without question, or that subsequent legislation would ratify these illegal acts; all, or nearly all, of the contracts were taken at prices more than double the fair cash value for all the work and material provided for; and all the work and materials, the claims for which now aggregate about $350,000, could have been obtained in the open market, under valid laws, upon proper terms of payment, for less than $250,000. We have the evidence within our control to establish that the work under some of these contracts was actually done for less than 40 per cent. of the amount named in the contract. In addition to these facts, we can establish, if permitted to offer evidence, that the certificates issued by the natural-gas trustees were, immediately after the conclusion of the contracts and before any litigation was had upon them, hawked about the streets of Toledo at from 60 to 75 cents on the dollar; and that the great majority of these certificates are now in the hands of speculators, who bought them at not to exceed 65 per cent. of their face value.”

The authors of these statements were at once challenged by the city’s gas trustees to prove them. “We assert,” the gas trustees said, in a formal challenge, “that you cannot establish the truth of those statements. We deny that the facts are as you state them to be, either in substance or in detail.” This was signed by John E. Parsons, W. W. Jones, Reynold Voit, J. W. Greene, gas trustees, and Clarence Brown and Thomas H. Tracy, ex-gas-trustees. The city’s trustees proposed that they and their accusers deposit $1000 on each side as a forfeit to abide the result of an inquiry by the three judges of the Court of Common Pleas, or any other disinterested arbitrators. They placed at the service of the accusers and the arbiters all the books, records, and employees of the city’s gas department.

The challenge was not accepted, and the authors of these attacks made no attempt to prove them. The Legislature disregarded them, and granted the city and the gas trustees all the additional power to issue bonds asked for. In a subsequent proceeding in the Federal courts—the issue involving the validity of these certificates—it was admitted, contrary to these allegations, that the prices were fair, and that the contracts were entered into in good faith, and the court held the certificates valid.

The most serious crisis in the contest was still to come. In 1892 the gas wells of the city began to do what the people of the city will never do—surrender to the enemy. When the oil trust found, after years of opposition in the Legislature, the courts, and the gas-fields, that it had been helpless to prevent Toledo from getting ample tracts of excellent gas territory, with some of the largest gas wells in the field, and equal to the supply of the entire consumption, domestic and manufacturing, it turned to other tactics.

All about this territory secured by Toledo and found so productive the private companies of the trust proceeded to buy or lease and to sink wells. The trust shut off all its own wells, except those adjacent to the city territory, and for two years drew exclusively from the wells nearest those of the city. When the city’s line was completed to the wells the volume of gas was found to be largely reduced. It had been drawn off into the wells of the opposition. In the spring of 1892 the private companies resolved to put in pumps to strengthen the diminished natural pressure, but to prevent the city from doing the same thing. Then, with their pumps alone at world, the pressure could be so much further reduced as to render the Toledo pipe line valueless. To this end all efforts were directed. The newspapers were kept full of matter showing how impossible it was to pump gas, that all the money expended in pumps would be just so much wasted, and that the companies had canvassed the matter fully, but abandoned the idea. Column after column of inspired interviews filled the papers, all admonishing the city of Toledo not to commit such an act of folly as to put in gas pumps. Then application was made to enjoin the sale of the bonds authorized by the council and the Legislature for pumps. So month after month dragged along. The bonds remained unsold, and the pumps unobtainable.

The injunction was refused both by the Court of Common Pleas and by the Circuit Court. But there was a right of appeal to the Ohio Supreme Court until the beginning of 1892. Boston bankers had subscribed for a large block of the bonds, but withdrew upon learning these facts. “It is possible for the contestants,” the lawyers advised them, “to carry the matter to the Supreme Court. This, we understand, they propose to do.” The simple assertion of a purpose to continue the litigation was enough to defeat the sale of the bonds. The payment of costs and lawyers’ fees would be a very moderate price to pay for compelling the city’s gas plant to go past mid-winter without the pumps indispensable for its operation. One of the employees of the private pipe line, according to an account in one of the Toledo papers, declared to a reporter that “if we could not prevent the city from putting in a [pumping] plant any other way, we would blow it up with dynamite.”[6]

Any faithful employee familiar with the blowing up of derricks in the shut-down of 1887,[7] the explosion in the independent refinery at Buffalo,[8] and the “chemical war” waged by the whiskey trust against the “outsiders” in Chicago[9] might almost be pardoned for thinking this was “only good, reasonable talk.” The oil monopoly is evangelical at one end and explosive at the other, and it has made both ends meet.

The people of Toledo were thus prevented from getting the pumping facilities ready during the summer of 1892 for the work of the winter. Meanwhile its rival had been secretly pushing pumps for itself to completion, in the hope that it alone would be ready when cold weather came. This would mean a gain to it, at the city’s expense, of hundreds of thousands of dollars. Late in August, 1892, the representatives of the city found that two powerful duplex gas pumps had been shipped to the gas-field, and were being put in place by the very opponents who had declared pumps impracticable. Public sentiment became aroused to the need for the immediate purchase of pumps to protect their wells. The city attempted to use its income from the sales of gas to buy pumps. An injunction was applied for and granted. This emergency was finally met by having the gas trustees hand over to the city authorities the accumulated earnings they were forbidden by the court to spend themselves. The city thereupon turned around and invested this money in the gas bonds. In this way the identical money the gas trustees could not use while it remained in their hands was made available to them by passing through the hands of the Sinking Fund Trustees, and coming back to them. Thus the natural-gas trustees were enabled to make a contract in September, 1892, for pumps to assist the flow of gas to the city.

The gas pumps are a patented device. The private companies, wanting all the profit of everything, had their pumps made at their own factory. The city made its contract directly with the owner of the patents. The result was that the city got its pumps in place in time to save the city pipe line, while its opponents were delayed by the inexperience of their own pump-makers. This was the most critical period in our history. Greed had again defeated itself. Had the Opposition gone to the owner of the patents he would have been unable afterwards to take the city’s contract and complete it in time, and the effort to make the city line valueless would have succeeded—for the time being, at least. The bonds in question were afterwards held valid by the Supreme Court.

Toledo knew it was building wisely, and every day brought new proof that it had builded better than it knew. Its saving was great, but that was the least of its gains. It escaped tyranny and extortion and other wrongs which fell upon communities in plain sight, which had not the wit and virtue to establish their independence. When the city pipe line was opened in 1891 the city began supplying gas to its citizens at 8 cents a thousand for houses. The private companies were charging 12 cents a thousand, or 50 per cent. more. Profits were such at this charge of 12 cents a thousand feet that in some tracts single wells would repay the cost of the land every four days and two hours, or eighty-nine times a year. Since then the private corporations have raised their rate to 25 cents. The city continued the rates at 8 cents until December, 1892, when the rate was advanced to 15 cents. This advance would have been unnecessary but for the losses arising from the obstructions placed in the way of the city plant.

The people of Toledo got their gas lands, pipe line, and street mains for an outlay of $1,181,743 up to the end of 1891,[10]

Private enterprise cannot find rhetoric strong enough to express its contempt for the inefficiency, costliness, and despotisms of public enterprise. Private enterprise put at $6,000,000—twelve times the amount of the property they reported for taxation—the “capital” stock invested by the two natural-gas companies. The city pipe line was capitalized (bonded) at just what it cost—a little more than a mill ion. The city trustees built a better pipe line than private enterprise had laid. The private line was of cheap iron of 14-feet lengths, while Toledo’s was in 24-feet pieces. One of the private lines was laid with rubber joints and in shallow trenches, in many places of not more than plough depth. It leaked at almost every joint; its course could be traced across the fields by the smell of gas and the blighted line of vegetation. There were frequent explosions from the escaping gas; lives and property were much endangered. The city line was laid with lead joints, and had every device that engineering experience could suggest for its success, and was so constructed that it could be cleaned or repaired, and freed from liquids interfering with the flow of gas, without shutting off the supply—features the other pipe had not. The action of the city trustees had to endure the microscopic scrutiny of friend and foe. No one was able to show as to a single acre that the title was defective, or that it could have been bought for less, or to find any taint of a job in the construction of the pipe. A committee of the city council sat and probed for six weeks, but failed to find any evidence whatever to confirm the reported ” irregularities.”

What Toledo will save in one year by the difference between the actual cost at which its people can supply themselves and the price the private companies would have charged, to pay dividends on $6,000,000 of “capital,” is only part of the story. The profit of the city enterprise is to be estimated by its competitive effect upon the charge of the private companies. These have been kept down in Toledo much below the average of other towns, where they have been as high as 35 cents a thousand. If the city had not supplied a foot of gas this check on the private companies would make its pipe line still a good investment. The people, when it is in full operation, can pay the cost of the system complete out of the savings of a few years, then pay off the entire city debt, and have a large income left for public buildings, roads, parks. Or by reduction of price they can keep this sum in their pockets, where it will do quite as much for the general welfare as if it had been transferred to the bank accounts of non-residents.

The city, at the end of 1891, had 3299 3/4 acres of gas land. In March, 1892, forty five wells were giving over 50,000,000 cubic feet of gas, equal to 3500 tons of anthracite coal. Its income from the sale of gas was at the rate of $20,032 a month in winter, and $10,221 in summer. An investigation made in March, 1892, by a committee appointed by the mayor at the request of the city’s gas trustees, showed that an income could be counted on ($180,000) ample to pay all expenses ($128,120), including interest, rentals, and the cost of drilling new wells, and provide a small fund annually ($51,880) for the extinction of the bonded debt. The committee said: “We believe that if the gas plant is properly managed upon prudent business principles and methods, that it can be made a profitable investment for the city and her people; that the class who will derive the greatest benefit is the laboring class, who pay rent or taxes upon their little homes, and to whom the matter of cheap fuel is quite an item in the total amount of annual expenses; and we believe it to be the duty of every good citizen to aid and encourage this class.”

These were the results with a charge of 8 cents a thousand. Gas to the amount of $167,899 had been sold up to August 1, 1892. Between November, 1891, and August, 1892, the city earned on the million invested the sum of $150,000, or nearly one-ninth of the cost of the plant, and this at the low price of 8 cents a thousand feet. Unobstructed by its enemies and at the price charged by the private companies, 20 cents a thousand, the city would pay for its entire plant in less than three years.

To discourage the public from going forward with its pipe line the private companies “talked poor.” In an interview in the public press the president of the principal company said it had paid but 9 per cent. in dividends in two and a half years. The net earnings were stated to be “about 4 per cent. per annum on the capital,” $4,000,000;[11] for the smaller company they were figured out to be at the rate of a fraction less than 1 per cent. a year on its capital of $2,000, 000.[12] “We feel sore and hurt about it,” said the “direct representative” of the oil combination to the citizens’ committee; “we have seen no good return from our money.” “It has pretty nearly swamped us,” said the president of the company. The citizens of Toledo were shrewd enough to ask themselves how long their antagonists would have been likely to remain in a business which paid only 3 per cent., and was as “hazardous” and “short-lived” as they pictured it to be. Careful estimates made by close students of the question calculated that of the $6,000,000 of paper capital “invested” in the two companies which supplied Toledo and other cities, $1,125,000 was the proportion of actual cash devoted to Toledo. The receipts upon this Toledo investment in the two and three-quarters years between the opening of the business and the date at which, by the contract with the city, the council was to make new rates (June 30,1890), were, as nearly as can be calculated from the figures of their report, $1,300,000 greater than the expenses of the Toledo business. This is a profit of 115 per cent. In less than three years the total investment had been repaid by the profits, and, in addition, enough to have paid dividends of 5 per cent. a year. This was an estimate, but it was an estimate publicly made from the companies’ figures, and by a responsible man. It remained unchallenged at a time when every cranny of fact and fiction was being rummaged for missiles to fling at the people. When the citizens’ committee sought a reduction in price, the companies pointed to the small dividend their stockholders had had. In the face of the fact that they had received but a 3-per-cent. dividend the previous year, no business man, their spokesman said, could ask them to reduce their price. It is for such uses that shrewd men “water” stock. The surface of the capital is broadened, so that even large dividends can cover it only by being spread out very thin. This 3 per cent. a year was on $6,000,000 of dilution, representing a solid, at the most, of only $1,500,000. The balance sheets of the companies showed that the companies had paid small dividends for the additional reason that a large part of their receipts had been reinvested in lands, wells, and extensions of the pipes and plants.

The people are often assured that these false figures of capitalization are merely romantic and do them no harm, because charges must be governed by the “laws of trade.” One of the “laws of trade” that regulates the “market price” of such commodities as transportation, light, water, gas, furnished by the help of the public franchises, is the power of the public to regulate. This public power depends upon the public knowledge and the public disposition. To make the public believe that the profit of serving it has been only 3 per cent. a year, when it has been nearer 50 per cent., is to manipulate public opinion, the most potent of all the “laws of trade,” for a competing supply cannot be got easily, often not at all.

A committee of citizens were invited by the representatives of the gas companies to meet them to verify the statements of the companies as to the unprofitableness of the business, and the inexpediency of municipal self-supply. But when the committee wanted to know what had been the real cost of the private pipe lines, on the $6,000,000 nominal capital of which the people were expected to pay dividends, they could not get any satisfaction. The companies would only give an estimate. To the request for more definite information, the reply of both companies was, “We have not got the books of the contractors; we have never had them. We have no means of knowing the actual cost of the Toledo plant, or any books to show it.[13] We have no papers or documents in regard to the construction of this line.” It came to light later that one of the companies in the oil trust had constructed the pipe line for the gas company, and at a price approximating the large figures claimed. The company that built this pipe line is a ring within the oil and gas ring, always on hand for such contracts and at like margins of profit, and it is owned almost wholly by the principals of the combination.[14] The people—mostly Ohioans—who took the minority 40 per cent. Of stock of the gas company were really the “simple greens.” All that was paid for this construction by those who were members both of the inside ring and the gas company came back to them; their associates in the minority paid, but got nothing back. It was from the latter came the profits of this contract to the insiders.

The people of Dayton had a similar experience. Their natural-gas company demanded an advance to 25 cents a thousand, and met a committee of the people to prove that the demand was proper. But it would not let the people know what the actual investment was to make which good it sought to tax the people. The books containing the construction account were “not accessible.” “The actual cost to construct the plant is what we most desired to know,” the committee reported. As at Toledo, so at Dayton; all private enterprise would let its customer-subjects know was what it wanted them to pay; information to show what they ought to pay “was not accessible.” What the profits were elsewhere can be guessed at from the fact that in Pennsylvania $36 a year was charged in most of the towns for cooking-stoves. In Toledo the charge was $19.50 a year.

Almost every day after the pipe line had been decided on the people saw something done, showing how well founded their apprehensions had been. The power to discriminate in rates the people saw used by the private companies for selfish and anti-public purposes, precisely as they had foreseen it would be. When the fight for and against the city pipe line was on, one of the gas companies sought to enlist the strong men in their support by making them special rates, pursuing the tactics of divide and conquer. Manufacturers with influence useful in controlling public sentiment were conceded special rates. Others were given to understand that any lack of “loyalty” would be followed by punishment. So effective were these alternating methods of boodling and bulldozing that the council committee on gas, in a subsequent investigation, found it almost impossible to obtain any information from manufacturers as to their use of natural gas for fuel. What little they did secure was under injunctions of secrecy. The committee found that some were made to pay twice, some three, and some even four times as much as was paid by neighbors for like service. The only rule for charging seemed to be to favor those who had influence.” This was using municipal franchise just as the franchise of the highways had been used in their behalf by the railways. An assembly of divines could not be trusted with such power over their fellows.

After the Fostoria incident the people of Toledo had another illustration given them of how wisely they had builded. The gas supply of the people of Columbus, Ohio, was shut off arbitrarily and suddenly in midwinter—January, 1891—and they were informed that the company would supply them with no more gas unless the City Council would raise the price to 25 cents a thousand feet from 10 cents. The gas had not failed. The caverns that discharge gas at 25 cents a thousand will let it come just as freely at 10 cents. The council had fixed the price at 10 cents, and the company had accepted it. The demand for a higher price was close upon an increase in the capital stock of the Columbus company from $1,000,000 to $1,750,000. More stock called for more dividends, and this was one way to get it—to strike this sudden blow, and then to say, after the manner of Silas Wegg, “Undone for double the money!” It was for the power to do this at Toledo, to preserve the power of doing it everywhere else, that hell and earth were being moved in Toledo to prevent the people from serving themselves and setting an example to the rest of America. In the same way the gas was turned off at Sidney, Ohio, and not turned on again until, upon the application of the mayor, the company was ordered to do it by the courts. “There is a great deal of suffering here,” the press reported, “and it is feared that several deaths will result from exposure.”

The people did not fail to comprehend the significance of criticisms in the Toledo organ on the municipal water supply. Monopoly must go on conquering and to conquer, or be overborne by the ever-recuperating resentment which rises against it, freshened with each new day. Nature hates monopoly, says Emerson. The studied attack on the city water works was believed to be meant to prepare the people to intrust that as well as the gas supply to the trust’s “sound business men” and “private enterprise.”

Finding that the council would not bend to the demands as to rates, and that the people were too resolute to be in any way diverted from their pipe line, Toledo was given some such doses as could be ventured upon of the Fostoria and Columbus medicine. The company shut gas off from those who would not pay the increased rate. It deprived public institutions of their fuel. It refused to supply gas to a new public school whose building was planned for natural gas. As the city’s pipe line was not completed, the children had to go cold. The winter of 1891-2 was the first winter the city’s pipe line was in operation. With the first cold snap, at the end of November, great distress and danger were brought upon the people by a lawless act, done secretly by some unknown person to the city’s pipe line. One of the main pipes in the gas-field, through which flowed the product of two of the largest gas wells, was disconnected, so that its gas could no longer reach Toledo. Who did this was never discovered.[15]

Defeat, final and irrevocable, crowned the unvarying series of defeat which the private companies had suffered everywhere and in everything—in public meetings, in the Legislature, in the gas-fields, at the polls, in the courts, in the sale of the bonds, and in the competition with the city. The City Council of Toledo, advised by its lawyers that it could recover damages from those responsible for the losses brought upon the city by the opposition to its pipe line, has had suit brought for that purpose. April 14, l893, City Solicitor Read began proceedings to recover $1,000,000 damages from members of the oil combination and the various individuals who had been used as stalking-horses in the campaign. At the next meeting of the Common Council several citizens of the “influential” persuasion assisted the mayor in trying to coax and bully the council to abandon the suit, but without success. The council were threatened with a financial boycott to prevent the sale in future of any of the bonds of the city, but it refused to be terrorized.

April 8,1893, the natural-gas trustees of Toledo had the happiness of being able to give formal notice to the city auditor that no taxes need be levied to pay the interest on the gas bonds, as it “can easily be met from the revenues derived from the sale of natural gas.” The city pipe line was on a paying basis at last Toledo had vindicated its claim to be a free city. The completion of the enterprise had been delayed three years. A loss of not less than two million dollars had been laid on the city, but its victory was worth many times that. Toledo’s victory showed the country, in full and successful detail, a plan of campaign of which Columbus had merely given a hint. It was not a local affair, but one of even more than national importance, for the oil combination has invaded four continents. This struggle and its results of good omen will pass into duly recorded history as a warning and an encouragement to people everywhere who wish to lead the life of the commonwealth.

NOTE.—For the year ending December 31 1893 the city trustees report that they sold gas to the amount of $ 139 066. The city owns 5433 acres of gas territory and has 85 wells 73 miles of pipe outside the city and 91 miles in the city. Since the gas began to flow the sales have amounted to $388,540. Out of the receipts the debt has been reduced $60,000, besides refunding $67,000 to those who advanced the money for piping the streets, While doing this the plant has been considerably enlarged. The city accomplished this while charging the people but 15 cents a thousand, while the gas companies of the trust charged 25 cents a thousand. Had the city been permitted to act without obstruction, the cost of the gas plant would have been long since fully paid and the price of gas made still lower.[16]

[1] New York Sun of March 31, 1891.
[2] New York Tribune, April 23, 1889.
[3] From Life of William Lloyd Garrison, Told by His Children, vol. iii., ch. i., p. 12.
[4] Petition of the Isaac Harter Company vs. the Northwestern Ohio Natural Gas Company, Court of Common Pleas, Seneea County, Ohio, June 16, 1890.
[5] Annual Report of the Toledo Natural Gas Trustees, 1891, p. 6.
[6] See p. 250 and ch. xxxi.
[7] See p. 154.
[8] See p. 250.
[9] See p. 21.
[10] Annual Report of the Natural Gas Trustees of Toledo, 1891, p. 4.
[11] Report to Stockholders, Northwestern Nutural Gas Company, January, 1889.
[12] Report to Stockholders, Toledo Natural Gas, Company, January, 1889.
[13] See ch. xxxii.
[14] See p. 113.
[15] See chs. ix. and xxxi.
[16] See ch. xxx. and $1,294,467 up to the end of 1892. In the canvass before the election in 1889 their opponents declared that $4,000,000 would be required.

About Shawn P. Wilbur 2571 Articles
Independent scholar, translator and archivist.