USA > California > San Francisco County > San Francisco > San Francisco, a history of the Pacific coast metropolis, Volume II > Part 12
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Preserving Existing Institutions
It did not take long for the people to adapt themselves to the workings of the new constitution. Even those who had prophesied all manner of evil from its adoption very soon began to find virtues where formerly they had discovered noth- ing but defects. Only those who felt that they must maintain their reputations as prophets still continued to talk about the instrument "driving out capital," and pointing to the alleged hegira of rich men, which consisted of the departure of few mining speculators, like Keene, for New York, where their talents could be exerted in a broader field. The bitterness of defeat had not entirely disappeared, but the disposition to pluck the flower of success from the nettle of discomfiture had caused it to cease rankling. There were few disposed to accept the sober advice of the retiring Governor Irwin, who urged that no method was so effective to secure the repeal of an unwise or oppressive law as its strict enforcement. The legislature of 1880 proceeded on no such assumption. It soon came to be regarded as a very conservative body, and has been extolled as such by writers who could find no words strong enough to denounce the excesses of the sand lot. One of these informs us that the main purpose in each house "was to stay the tide of encroachment and preserve existing institutions so far as could be done under existing circumstances."
In this work the legislature was ably seconded by the courts, which commenced to read new meanings into the constitution, before the echoes of the campaign which resulted in its adoption had died away. In his message of January 3, 1881, Governor Perkins announced to the legislature "that the power of the State Board of Equalization had been neutralized by a decision of the supreme court" of the state, and he suggested that a new constitutional amendment was necessary to cure the wounds inflicted by the judiciary. He referred to what was known as the Wells Fargo decision, the effect of which was to deprive the State Board of Equalization of the power to raise or lower the assessments of individuals, and confining it to the raising or lowering of the entire roll of a county or counties. The need for the amendment which he suggested was occasioned by the fact that in the exercise of its power to raise or lower the entire roll of a county the board punished the innocent property holder with the guilty, increasing the assessment of the person who had originally been assessed to the full value of his holdings,
Judge Made Law
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as much as it did that of the shirker who, by connivance with the assessor sought to escape his share of the burden of taxation. But it was not to correct this judge- made law that the amendment was proposed. Its object was to do away with the anomaly of taxing gold coin and mortgages at more than their actual value, a re- sult of the Wells Fargo ruling which advertised, if not the stupidity or venality of the court, at least made it plain that it was ready to defy the will of the people, who sought in creating the State Board of Equalization to invest it with the power which was deliberately taken from it by the decision.
The taxation question was never allowed to rest in San Francisco, but it ab- sorbed more attention than usual immediately after the adoption of the constitu- tion. The active discussion of the injurious effects of evasion by the corporations and large landholders, while the new organic law was under fire, had directed attention to many evils, and the newspapers of the City were acutely alive to the fact that the system was working against the development of the state and injuring its chief commercial center. The agitation against the railroad's successful shirk- ing became very pronounced and resulted in a practical move by John P. Dunn, who had been auditor of the City of San Francisco and was subsequently elected state controller. That official stimulated the attorney general to action, and in 1881 he caused the institution of a hundred cases against the railroad in thirty-three different counties. They were brought to recover over a million dollars of delin- quent taxes. A tedious litigation ensued which was finally removed to the United States courts, in which the state lost, but a writ of error was sued out and the case carried to the United States supreme court. Before a decision was reached by that body a compromise was effected which involved the attorney general in a scandal, as it was generally assumed that the $800,000 paid by the corporation under the arrangement would not have been paid had not the railroad received an intimation from Washington that the case was sure to be decided in favor of the state.
About this time the legislature formulated an amendment to the constitution which proposed to substitute for the then method of assessing and taxing railroads a gross income tax. Creed Haymond, who had previously figured as a legislator, and an antagonist of the railroad, had become chief counselor of the Central Pacific. He was a lawyer of ability and had served the state as code commissioner. Very soon after the assumption of his duty as adviser of the managers of the railroad Haymond announced that the policy of the corporation would be changed, and that an era of good feeling was to be brought about by acting in harmony with the people. As a condition precedent to the accomplishment of that result, Haymond argued that it would be necessary to remove the friction produced by the existing taxation system, and he proposed to bring about the desirable change by substituting a gross income tax for all other taxes imposed on railroads by the state. An amendment to that effect was submitted to the people which was vig- orously discussed and rejected at the polls. The objections urged to the amend- ment were the inflexibility of the provision fixing the rate at 21/2 per cent, and the current belief that 21/2 per cent would not produce as much as the railroads should pay; but the true cause of the failure to secure approval was the suspicion that the corporation would find some way to defraud the people if the amendment should be adopted.
Vol. II-6
Railroad Taxation Shirking Scandal
Railroad Proposes Gross Income Tax
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Although the provision of the constitution which more directly than any other concerned the people of San Francisco was that which would enable it to emanci- pate itself from the much objected to interference of the interior with the admin- istration of local affairs, the people, when the privilege was accorded them of estab- lishing a municipal government to their own liking, were in no hurry to secure the much desired boon. Nothing had been attempted in that direction when the legis- lature met in 1880, and as there was no movement looking to the selection of free- holders to frame a charter, a senator from San Francisco sought to furnish the City with a ready-made organic law by reenacting the Consolidation Act of 1856, with all of its amendments. It would have been a hodge podge affair, but it was advocated by the conservative element on the ground that most of its provisions had been construed by the courts, and that the people knew just what it contained. There was little ground for the latter assumption, for it was as puzzling as the celebrated Schleswig-Holstein question, for its intricacies were only understood by the clerk of the board of supervisors and one or two lawyers who made a special study of its amendments. Nevertheless the conservative instinct which had gained in strength from the time of the adoption of the act in 1856 would have made it acceptable, for a time at least. But, although it passed the legislature, and was approved by the governor, it was promptly declared unconstitutional by the supreme court.
Although it was claimed by the conservative element in the City that the Con- solidation Act with all its defects was still an admirable system of municipal law, an attempt was made in 1880 to obtain a new charter by following the provisions of Sections 6, 7 and 8 of Article XI of the Constitution of 1879. It was submitted to the people on September 8, 1880, but was rejected by an overwhelming majority, 19,143 voting against and only 4,144 in favor of the new instrument. In 1882 another board of freeholders, presided over by John S. Hagar, the author of the provision in the constitution which permitted cities of more than 100,000 inhabit- ants to frame their own organic laws. The deliberations of the freeholders were numerous, and their work was vigorously criticized, but less than half of the electorate entitled to vote went to the polls and the charter was defeated by a narrow margin, 9,336 voting for and 9,368 against the new instrument. As 39,102 votes had been cast at the general election preceding it was assumed that the people did not take much interest in the matter, and the subject was not revived again until 1886 and it was not until 1898 that an instrument was framed which met with the acceptance of the people.
The cause of the failure of the first two charters submitted under the provisions of the Constitution of 1879 was intensified conservatism. The reaction after the adoption of the constitution, the experience with Kalloch and general distrust of change disposed the people to cling to that which they had, preferring it with its recognized defects to something which might bring unsuspected evils. The charter submitted in 1880 provided for an enlargement of the powers of the mayor. It was argued that such a provision would add to the responsibility and dignity of the mayoralty, and would result in "a great improvement in the selection of mayors, insuring the very best and most favorable men for that office," but the fear of another Kalloch outweighed every other consideration, even that of the limitation of the tax rate, which would have made it impossible for the supervisors
Cause of Rejection of Charters
Attempt to Reenact Consolidation Act
Failure to Adopt « Charter
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to levy a tax of more than $1.17 on the hundred, which would have provided $1 for the ordinary expenses of the municipality, the 17 cents extra being added to meet the interest and sinking fund demand, and to provide a park improvement fund. This limitation was opposed by the element which later became the stanch- est supporter of the dollar limit, because its lack of flexibility might impede the improvement of the City.
The charter voted for in 1883 had for its chief opponents the office holders, who would be deprived of their jobs by its operation. Something in the nature of a conspiracy developed to prevent its submission to the people. The election com- mission, under the pretense that there were no funds to meet the expenses of hold- ing a special election, refused to call one, but a taxpayer, ex-Supervisor Gibbs, applied to the supreme court for a writ of mandamus to compel the commission to call the election, which was granted. The strongest point made in advocating this instrument was that it afforded protection to the defenseless taxpayer against the raids of the predatory office holders, to whom was applied the significant appella- tion of "tax eaters." The interest of the people in the matter, however, appeared to be very slight, only 18,764 turning out to vote. As 41,292 ballots were cast at the general election in 1880, the presumption is that less than one-third of the citizens entitled to vote availed themselves of the privilege.
This abstention from voting may suggest to the student of civics that the peo- ple were contented with the results achieved by the government, under which they were operating, but the evidence is entirely against the accuracy of such an assump- tion. Dissatisfaction was rife, and the complaints of inefficient municipal manage- ment were loud. All of the practices which later caused such a commotion in the City when the Schmitz-Ruef administration was in power were freely charged against the supervisors of that period. One of the provisions of the rejected charter of 1880 was designed to accomplish the salutary result of placing a check on the indiscriminate and fraudulent granting of franchises. It reserved to the common council created by the instrument the power "to alter, amend or repeal any ordinance for the grant of a franchise, right or privilege at any time after the passage of such an ordinance." The object of the framers of the charter was to prevent a repetition of the scandalous grabbing of franchises which occurred in 1879, the chief beneficiaries of which were the systems of street-car lines now in existence. These grants were made by the board of supervisors elected when Kal- loch was elevated to office, and because they antagonized him they were generally accounted as respectable.
The liberality of the supervisors in the matter of franchises, however, was not nearly so great a cause of discontent as the failure of the successive municipal governments to make a showing of improvements for the large and constantly in- creasing sums demanded from the taxpayer. Indeed, it may be fairly asserted that the major part of the community at the time attached no value to a street-car franchise, and simply regarded its conference as a means to secure much needed extensions of traveling facilities. Although uncomplimentary comment upon the alacrity displayed by the supervisors in granting everything that was asked for was frequently heard, much of which suggested turpitude on the part of officials, it was usually of the cynical nature inspired by observation of the general laxity attaching to municipal activities. There was very little apprehension expressed
Opposition of Office Holders
Franchises Freely Granted
Cynical Attitude of the Community
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that the moral fiber of the community was being broken down by practices which in private life would be designated by such ugly words as rascality and thieving.
Increased Expenditures but No Improvements
There was ample reason for the statement frequently made during the cam- paign of 1883 that the air of decay that pervaded the City was mortifying to the self-respecting citizen and offensive to the eye of the visitor. The expenditures for municipal purposes had increased from $2,459,210 in the closing year of the sixty decade to $4,452,940 in 1876. This great increase excited very little com- ment during the "flush" days when speculation in mining stocks gave a meretricious but fleeting prosperity to the community, but when the craze bad passed away, and business men and property holders found it difficult to make ends meet, the pres- sure of taxation which some of the daily journals charged operated "as a confis- cation of rents in many parts of the City" and bore with severity on the owner of a little property who happened to be out of a job, questions began to be asked, the burden of which invariably was: What becomes of the money? What do the people get for it? Though asked with emphasis they remained unanswered a long time.
Change of Attitude A
Before passing to another illuminating phase of the political history of San Francisco, that of the advent of Christopher A. Buckley, and the bossism which disgraced the City in the Eighties the acceptance of the new constitution, and the changing point of view of some of its severest critics needs to be described so that the subject in its relation to San Francisco may be disposed of finally. Bryce in his account of the turbulent proceedings of 1877-78-79 and 80 says: "When I was in San Francisco in 1881 people talked of Kearney as a spent rocket. Some did not know whether he was still in the City." That is true, and it would have made little difference to them if he had been, for the community had got over its fright and was disposed to look at things more dispassionately. Most of those intelligent enough to weigh the effects of what had been accomplished were quite ready to agree with Bryce that the "new constitution is anything but agrarian or communistic, for it intrenches vested rights, especially in land, more thoroughly
than before. . . It is anything but a workingman's constitution; it levies a poll tax without exemption and disfranchises a considerable portion of the floating vote." And he summed up the situation thus: "After all, say the lawyers and bankers, we are going on as before, property will take care of itself in this coun- try, things are not really worse so far as our business is concerned."
This stated the case plainly. It indicates that the ones who made the outcry were more scared than hurt, but Bryce added a comment some years later, the underlying idea of which, had it seized him earlier, must have induced him to pitch some of his criticism in a different key and place the chief blame where it really belonged-on the shoulders of the class who were too busy with their personal affairs to give any time to civic duties. He says: "Neither are things better. . . Though the new constitution has not altered the economic condition of
the workingman and farmer, it might have been thought that the crisis would cause good citizens to take a more active interest in politics, make them see the necessity of getting better men into the offices and the legislature, and indeed of purifying public life altogether. But I could not discover that these conse- quences have followed. . . It may be that another shock is in store for the Golden State more violent than the last, although equally within legal limits, for
Historian Bryce's Final Judgment
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SAN FRANCISCO
of mere mob law and anarchy there seems no danger. . . . The president of the Vigilance Committee of 1856 told me that all that he had seen happen in San Francisco since the days when it was a tiny Spanish mission station, made him con- fident that everything would come out straight. Probably he is right. American experience shows that optimists generally are."
Of course Bryce, who leaned upon Henry George's statement that the farmer and workingman had gained nothing from the new constitution, was mistaken. The farmer did gain that which he sought, for the State Board of Equalization, although its powers were curtailed by judicial decisions, did use the remnant that was left to them to compel assessors to deal fairly with all classes in placing their valua- tions upon the land; and this course more than anything else made the owners of large estates realize that more profit would come to them from dividing them up and selling than could be derived from holding them intact. That, and the agita- tion of the Chinese question, which culminated in the Exclusion Act, completely changed conditions in the interior of the state and started it on its career of agri- cultural development which, with the growth of population, and the subdivision of the land into small holdings took on more and more of an intensive character, and has placed the state in the front rank of the horticultural producing regions of the earth.
Henry George, whose remarkable book, "Progress and Poverty," is part of the history of San Francisco, the municipality having afforded him the leisure to write it by providing him with a sinecure in the shape of a gas inspectorship, was com- pletely led astray by his theory of taxation. He failed to recognize the true cause of the trouble, and assumed that the tendency to monopolize the land must increase in California, and indeed generally unless all the burden was placed on that class of property. He was also out of sympathy with the movement against Oriental immigration, being firmly convinced that absolute free trade and the single tax would work every reform desired. It is now pretty generally conceded that, while one of his principal contentions was sound, that respecting the difficulty of fairly assessing other classes of property than land, that he was entirely in error in assuming that the process of increasing holdings would continue, and that nothing short of an indirect method of confiscation, through the medium of placing all the burden of carrying on the government on the landholder, would result in dividing up the great Spanish and Mexican grants into small farms.
No movement in California is more remarkable than that which followed close on the heels of this erroneous prediction. The period we are describing had scarcely closed when abundant signs of the disposition of the holders of large estates to divide and sell began to manifest themselves. The provision of the constitution requiring land of like quality, and similarly situated, to be equally valued they saw would put an end to the old trick of assessing fertile unimproved land at fifty cents an acre, while that of the small farmer, who had put a few improvements on his little tract, was valued at ten, twenty and sometimes fifty-fold that amount for purposes of taxation. The recognition of the fact that the importation of coolies would no longer be tolerated also helped to bring about a change of view. Unless Orientals were permitted to enter in sufficient numbers to create a labor condition which would have all the advantages and none of the drawbacks, so far as the employer was concerned, of the African slave system of the South, which
Bryce's Mistake
Henry George's San Francisco Career
George's Unrealized Predictions
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was terminated by the Civil war, the owners of large grants realized that their holdings would not become very valuable while held intact.
Bryce's Recantation of Error
A Reform Movement that Failed
It is true, as both George and Bryce assert, that the Constitution of 1879 was not an agrarian instrument, and in no sense communistic, and to that extent the recantation of the latter may be regarded as part but not full reparation. In order to completely repair the injury it should be recognized that the people of San Francisco and of the state at no time were in sympathy with any proposition to destroy vested rights. A careful reading of the most extreme pronunciamentos of the workingmen and grangers entirely negative the assumption that they urged or desired the destruction of the existing system. Indeed it would be preposterous to assume that the grangers, who were the allies of the workingmen in the con- stitutional convention, would deliberately seek to divest themselves and their con- stituents, who were nearly all land owners, of their property.
The truth of the matter is that the upheaval in San Francisco was chiefly in- spired by the determination of a part of the community to bring about a reform in the management of civic affairs. It cannot be repeated too often that the effort made in San Francisco and California in the late Seventies foreshadowed the awak- ening of the rest of the country, which was deferred until the twentieth century was well advanced. Whether the latter will have the same outcome as that wit- nessed in California remains to be seen. For, while the new constitution by its introduction of a more equitable system of taxation did much to increase the mate- rial prosperity of the state, and helped to greatly increase its population, it is undeniable that no lasting reforms of consequence were brought about in the man- agement of the municipal affairs of the metropolis. That the ebullition did not produce permanent results is due to a recrudescence of the spirit of incivicism that produced the troubles of 1856, the equally serious ones of 1877-80 and the dis- graceful exhibition of official turpitude which was witnessed when Ruef's man Schmitz was elevated to office. That affairs were in a sad condition at those par- ticular periods is true, but it was really very little worse than during those moments when the "spot light" was not on San Francisco.
It is essential to a true understanding of the condition which was created by the revulsion that followed the adoption of the constitution of 1879 to bring into plain relief the fact that the moral sensibilities of the people of California were weakened by the undeserving criticism to which the effort to reform was subjected by the publicists of the whole world, who insisted that it was a movement for the destruction of property rights, and the overturning of the existing social order. For a time, as Bryce tells us, the people of California and particularly of San Fran- cisco were ashamed of themselves. They shrunk from the opprobrium heaped upon them, and no crime seemed greater in their eyes than a departure from the normal. The demand was for peace and quiet. Peace at any price, even that which they were called upon to pay when they resubmitted themselves to the domination of the railroad, for one of the queer outcomes of the Kearney upheaval was the swinging of the political pendulum to the other side, and the practical alignment under the banner of the corporation of men who had a little earlier been its bitterest opponents.
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