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The Machine Lobbyist At Work.
How, Jere Burke Arrayed the County Officials of the State Against Two Beneficial Measures - How the Power of the Southern Pacific Was Employed Against a California Enterprise - Danger Which Constantly Menaces Legitimate Enterprises.
The problem of drawing the line between legitimate and reprehensible lobbying has perplexed wiser men than sat in the California Legislature of 1909.
On the side of the lobbyist it may be said there seems no good reason why a citizen or representative of a corporation which is interested in pending legislation should not appear at the Capitol and in a legitimate way present his case to the members of the Legislature. In fact, the theory of committee consideration of measures introduced in Senate or Assembly, is based on the principle that it is the citizen's right to be heard on any matter that may be pending before the Legislature. The citizen cannot be heard before either the Senate or Assembly; he can, however, present his case to the committee the decision of which carries weight with that branch of the Legislature for which it acts. No one can object, for example, that Mr. P. F. Dunne appeared before the Senate Committee on Corporations, when the Railroad Regulation bill was under consideration, to present the railroad's side. Mr. Dunne appeared openly and aboveboard, and although he sought deliberately to misrepresent the situation to the Committee, nevertheless to object to his visiting Sacramento, or even to the work which he did while there, would be forced and far-fetched.
In the same way, Mr. Seth Mann, representing the shippers of California, appeared before the Committee and presented the side of the shippers. Mr. Mann spoke for the shippers precisely as Mr. Dunne spoke for the railroads. Mr. Mann, however, did not stoop to misrepresentation and deception.
But if Mr. Dunne for the railroads or Mr. Mann for the shippers had departed from openly-presented argument to buttonhole Senators or Assemblymen to tell them they must vote for or against a given measure, or look out for trouble, immediately would he be open to criticism. If either went during roll call from Legislator to Legislator to tell the members how they were to vote, again would he be justly criticized. Or had Mr. Dunne employed the influence of the great corporation which he represents to defeat or pass a measure in which his company can have no legitimate interest, again would there be good reason for complaint. Mr. Dunne could very properly - while acting as agent of the Southern Pacific Railroad Company - urge in a legitimate way the corporation's objections to the Demurrage bill, to the Full Crew bill, to the Railroad Regulation bill, or any other measure affecting common carriers. But for Mr. Dunne to have employed the influence of his position as political representative of a common carrier to force the passage of the Change of Venue bill for example, or defeat an effective Direct Primary bill, or the Party Circle bill, or the Judicial Column bill, would have been most reprehensible, for the Southern Pacific Company can have no legitimate interest in any of these measures.
So far as the writer knows, Mr. Dunne did not concern himself with any measure, except those in which his company was legitimately interested. But paid servants of the Southern Pacific Company were at Sacramento throughout the entire session, and managed to have their fingers in about all that was going on. The most conspicuous of them was Mr. J. T. Burke, more familiarly known as "Jere" Burke.
A fair sample of Burke's methods - and Burke is merely typical of the objectionable lobbyist - is found in the campaign which was carried on against Senate Bills 1229 and 1230. Had these measures become laws, it would have been possible for county assessors to discover property, owned principally by public service corporations, which at present escapes taxation. It is estimated that the total taxable value of this untaxed property is $100,000,000. It is not taxed because assessors have no means of reaching it. Mr. Burke's company could have no legitimate interest in Senate Bills 1229 and 1230. This statement is made, of course, on the assumption that the officials of the Southern Pacific Company aim to make honest returns to the tax collector. But to return to Senate Bills 1229 and 1230, and Burke's connection with them.
The two measures were intended to amend sections of the Codes relating to the assessment of property. Section 3681 of the Political Code provides that "during the session of the Board (of Supervisors sitting as a Board of Equalization) it may direct the Assessor to assess any taxable property that has escaped assessment, or to add to the amount, number and quality of property, when a false or incompetent list has been rendered."
Under this section, as it at present reads, the Supervisors may direct the Assessor to assess property that may have escaped assessment, but there is no machinery provided by which the property may be discovered. Senate Bill 1229 provided the machinery by which the unassessed property might be discovered, by adding to the section quoted above: "And the Board (the Supervisors sitting as a Board of Equalization) may employ legal or other assistance in discovering any taxable property that has escaped assessment in the performance of their duties under this section."
Senate Bill 1230, the companion bill, provided that the Supervisors may subpena witnesses in all matters pending before them when sitting as a Board of Equalization. Under the present law, they can compel attendance of witnesses only upon the particular point under consideration.
The necessity of the amendments was generally admitted. The task of the Assessor is at best no easy one. Through his deputies he must list all the property in his county - that he can find.
The holdings of the small property owners are in sight, and, down to the last chicken, go on the assessment roll.
The property of the large corporation is not so readily discovered and $100,000,000 worth of it, according to conservative estimate, escapes assessment. The Assessors, with comparatively small force of deputies, have no way to force its assessment.
The Board of Supervisors, sitting as a Board of Equalization, may know that the unassessed property is in existence, but has no way to reach it. The Board may, under section 3681 of the Political Code quoted above, direct the Assessor to assess it, but the law stops there. There is no machinery provided for the discovery of the property. Senate Bills 1229 and 1230 provided the machinery. They were introduced by Senator Sanford of Mendocino. Before their significance was appreciated by Southern Pacific lobbyists, the Senate Judiciary Committee had recommended them for passage.
When Burke did grasp the significance of the measures, he demanded of Sanford that they be withdrawn. The argument which Burke advanced against them was in effect as follows:
"These bills are the most un-American propositions I ever heard of," said Burke. "They make of the Boards of Supervisors inquisitorial bodies. The corporations have property which they prefer to conceal. They prefer arbitrary assessments. They do not care to make returns to the Assessor. The passage of these bills would compel them to make returns."
In other words, the corporations, if Jere Burke, their legislative representative, reflects their sentiments, prefer that the Assessors continue to guess at the value of their properties. If the guess be too high, the corporations can compel reductions; if the guess be too low, they rest content. But, however the corporations may approve the guessing method of assessment, it has not proved equable, has not been fair to the farmer, the merchant and the householder, who under oath make honest returns to the Assessor.
Burke's argument, however, failed to move Sanford. The Senator from Mendocino refused to withdraw the bills. And then a curious thing happened. The members of the Senate were, within three days after Sanford had refused to withdraw the bills, fairly swamped with telegrams and letters from County Assessors and County Supervisors, protesting against the passage of the bills, on the ground that their passage would be a reflection upon the County Assessors of the State. Many who thus telegraphed or wrote, stated that they had not seen the bills but added in effect, "We understand that they are bad bills and should be defeated."
Of course, there was no evidence that Burke or his agents had instigated the telegrams. But there was a shrewd suspicion that such was the case. Sanford's answer to the Supervisors and Assessors was most effective. He mailed them copies of the Sacramento Bee which set forth the actual purpose of the bills, and copies of the bills themselves. Immediately Assessors and Supervisors who had wired their Senators to oppose the bills, sent telegrams withdrawing their opposition.
In passing it may be said that neither bill passed the Senate. Bill No. 1229 passed second reading, but was amended on third reading, March 11, and was not heard of again. Bill No. 1230 passed second reading, but was not read the third time. There are other ways to kill good bills than to bluff their authors into withdrawing them, or by stirring up State-wide antagonism to them. The incident shows, however, the State-wide ramifications of the machine. Within three days it was possible for the machine to create the impression from one end of the State to the other, that Senate Bills 1229 and 1230 were bad bills, measures casting reflection upon the County Assessors. Only the prompt action of Senator Sanford dispelled this impression. It also demonstrates the powerful backing behind the machine agents kept at Sacramento during a Legislative session.
It is bad enough when the far-reaching influence of the machine is employed to defeat measures which provide the machinery to enable public officials to enforce the law, against beneficiaries of the system, but when one of the agents employs this influence to promote his personal interests in a matter in which the particular corporation which he represents can have no interest whatever, particular emphasis is given the evils of the machine domination and reprehensible lobbying. To illustrate:
A peculiar situation which has developed at Owens Lake in Inyo County, made it necessary and proper that slight amendment be made to the law of eminent domain. The water of Owens Lake is heavily charged with soda. Some years ago, the Inyo Development Company was organized to recover this soda. The company invested $200,000 in establishing a soda-ash plant at the lakeside. This does not include the cost of building a railroad from the Lake to Mound House, Nevada, a distance of about 400 miles. The investment proved a success. The company harvests as high as 10,000 tons of soda ash a year. As the product is worth as high as $30 a ton at San Francisco, the enterprise adds an important industry to the developed resources of the State. The method of recovering the soda is simple. The water is drawn from the lake into vats, where it is left to evaporate. The soda is then recovered.
Owing to the fact that the waters of Owens Lake are constantly receding, a considerable strip of land has, during recent years, been uncovered between the company's holdings near the lake. and the water. The water from which the soda is reclaimed has to be piped over this land.
Recently former employees of the Inyo Development Company took up the land lying between the company's property and the lake, and under the name of the Natural Soda Products Company, propose to go into the business of manufacturing soda ash on their own account.
Not long since the new company began to complain of the old company's pipe, which crosses the new company's land. The old company saw that it had trouble ahead unless it could condemn a strip of the recently reclaimed land for a pipe line. It was found, however, that there is no law in California by which this could be done. Under the law of eminent domain land could be condemned for almost any other purpose than to establish a pipe line to carry water not to be used for irrigation or domestic purposes. An attempt was therefore made to have the law governing eminent domain amended so as to read that land could be condemned "for oil pipe lines and pipe lines for conducting the waters of any lake which are not fit for irrigation or domestic purposes, and which contain soda or other minerals' or chemical substances in solution, and also pumps and machinery for raising the same and forcing the same through such pipes."
This amendment was included in Senate Bill 797, and in the companion Assembly Bill 815. Senate Bill 797 passed the Senate and was referred to the Judiciary Committee of the Assembly, where the amendment providing for the soda water pipe line was added. This bill received a favorable recommendation from the Assembly Judiciary Committee and was returned to the Assembly. And then a very mysterious thing happened. Without apparent reason the bill was referred to the Assembly Committee on Corporations. Provision for soda water pipe lines, so far as the Assembly was concerned, came to a sudden ending.
At the time Senate Bill 797 was undergoing suppression in the Assembly, the companion bill, Assembly Bill 815, was pending before the Senate Judiciary Committee. The measure was amended to make possible the condemnation of land for a soda water pipe line. Chairman Willis of the Committee expressed himself as satisfied with the amendment. And as amended, the bill was referred back to the Senate with the recommendation that it do pass as amended. Two days later, however, Senator Willis stated on the floor of the Senate that he had information from Inyo County which convinced him that the amendment was not desirable, and should be excluded from the bill. He stated that the county officials of Inyo County opposed the amendment, and for that reason suggested that the amendment be dropped. He stated that the Assembly would refuse to concur in the amendment even though the bill were passed with it. Mr. Willis' wishes were respected and the bill re-amended. Provisions for condemning land for soda water pipe lines came to as dead a stop in the Senate as in the Assembly. The next development in this comparatively unimportant incident of the session, was the discovery that Mr. J. T. Burke of Berkeley, member of the Southern Pacific law department, the Jere Burke of Southern Pacific lobbying, is one of the directors of the Natural Soda Products Company, which owns the land over which the Inyo Development Company would build a pipe line, a pipe line upon which the future prosperity of the Inyo Development Company largely rests. Burke was alleged to have opposed the amendment - and so far as the writer knows the charge was never denied - and with having brought about the defeat of the amendment. In other words, Mr. Burke is charged with throwing the full weight of the influence of the large corporation (the Southern Pacific Railroad Company, which he represents) on the side of a small corporation in which he is a director, and against a third corporation, which has large interests at stake. And the citizen who stands for fair play should not lose sight of the fact that Mr. Burke's corporation, the Southern Pacific Railroad Company, is the principal factor in the machine which works against good government, fair play, the "square deal" in business and politics which President Roosevelt insisted upon. The Inyo Development Company failed in its perfectly legitimate purpose because arrayed against it was in effect the political influence of the Southern Pacific Railroad Company, the tenderloin, and all the other elements that go to make up the political machine in California. And the fact should not be lost sight of that no other independent enterprise in California, even where it has, as has the Inyo Development Company, hundreds of thousands of dollars invested, is immune against similar experiences.
Early in the session when the lobbying question was, because of the excitement over Anderson, decidedly prominent, Sanford in the Senate and Callan in the Assembly introduced bills requiring lobbyists who appear at the Capitol during a legislative session to register their names, the names of their employers and the amount and nature of their compensation. At the close of the session they were, under the terms of the measures, required to file a detailed statement of their expenditures.
Had these measures become laws they might have proved very embarrassing to certain gentlemen who were very well received by the machine element in both Senate and Assembly chamber.
But they didn't become laws.
The Assembly bill went to the Assembly Judiciary Committee, which held it two months, finally, on March 16th, reporting it to the Assembly without recommendation. On March 19th, the measure was refused passage.
The Senate bill went to the Senate Judiciary Committee. The Committee referred it back to the Senate with the recommendation that it do not pass. On January 29th, it, too, was defeated.
The lobbying problem, like Jere Burke, continues with us.