Chapter III: The San Francisco Ruef Ruled

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FOOTNOTES:

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

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

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

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

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

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

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

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

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

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

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

(1) That a uniform system was necessary.

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

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

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

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

"TOTAL VOTE OF MEMBERS, 364.

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

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

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

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

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

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

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

Underground
Conduit Trolley Cable

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"Respectfully.

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

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

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

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

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

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

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

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

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

"The Court: I will overrule the objection.

"Mr. Stanley Moore. We take an exception.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"Very truly yours, PATRICK CALHOUN, President."

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

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

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

[44] Mayor Schmitz in his statement, said:

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

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

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

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

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

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

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

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

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

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