University of California General ~ibrary/~erkeley

Regional Cultural History Project

Max Thelen

CALIFORNIA PROGRESSIVE, RAILROAD

COMMISSIOmR, AND ATTORNEY

An Interview Conducted by

Willa Klug Baum

Berkeley

All uses of this manuscript are covered by an agreement between the Kegents of the University

of California and- Max Thelen, dated January 1962. The manuscript is thereby made available for

research purposes. All literary rights in the

manuscript, including the right to publish, are

reserved to the General Library of the University

of California at Berkeley. No part of the manu-

script may be quoted for publication without the . -

written permission of the University Librarian

of the University of California at Berkeley.

n

INTRODUCTION

C a l i f o r n i a , l i k e s o m n y of h e r s i s t e r commonwealths a t t h e t u r n of t h e century, had only t h e shadow of r e p r e s e n t a t i v e government, whi le t h e r e a l subs t ance of power r e s i d e d l a r g e l y i n t h e Southern P a c i f i c R a i l r o a d Company. To a degree perhaps u n p a r a l l e l e d i n t h e n a t i o n , t h e Southern P a c i f i c and a web of a s s o c i a t e d economic i n t e r e s t s r u l e d t h e s ta te-

George Mowry The C a l i f o r n i a P rogres s ives , p.9

To r e t u r n the s t a t e and l o c a l governments t o the hands of.

t h e people became t h e g o a l of a s m a l l group of well-educated,

i n d i v i d u a l i s t i c , youngish men of v i g o r and p u b l i c ded ica t ion

who ga the red toge the r , f i r s t i n l o c a l good government groups,

then i n a loose s t a t e w i d e f e d e r a t i o n of Lincoln-Roosevelt

Leagues, and f i n a l l y , as t h e P r o g r e s s i v e Republican p o l i t i c a l

p a r t y , t o e l e c t H i r a m Johnson as s t a t e governor and t o enac t

much reform l e g i s l a t i o n ,

Oce of t hese re formers w a s Max Thelen, young a t t o r n e y f o r

th? Western P a c i f i c i i a i l road and at t h a t time a bachelor who w a s

w i l l i n g t o devote h i s off-work hour s t o p o l i t i c a l a c t i v i t i e s , B He began h i s work f o r t h e P r o g r e s s i v e Republ icans i n 1907 as I s e c r e t a r y f o r t he Berkeley a r e a Lincoln-Roosevelt Republican

Club. I n 1911 the new Progres s ive governor , H i r a m Johnson, i n accordance wi th h i s p o l i c y of s e l e c t i n g t h e b e s t man f o r t h e

o f f i c e , a2poin ted Thelen a t t o r n e y f o r t h e o l d Ra i l road Comiss ion

d e s p i t e h i s youth and h i s p rev ious work as a . r a i l r o a d a t t o r n e y . i !

I n t h i s c a p a c i t y he t r a v e l e d up and down t h e country observ ing .'

o t h e r s t z t e p u b l i c u t i l i t y comniss ions , then r e t u r n e d home t o

a u t h o r t h e b i l l t h a t became t h e C a l i f o r n i a P u b l i c U t i l i t i e s Act. Thelen thus became t h e one t o a c t u a l l y e f f e c t some s o r t

of r e g u l a t i o n of t h e r a i l r o a d s which h i s p a r t y had s o l o n g

a t t a c k e d f o r t h e i r r e s p o n s i b l e u se of t h e i r power i n t h e s t a t e .

Appointed a co:nmissioner on t h e new R a i l r o a d Commission i n

1912, he worked c l o s e l y wi th t h e C o m i s s i o n l s p r e s i d e n t , John

Eshleman, i n e s t a b l i s h i n g t h e p o l i c i e s and procedures under which

t h e Commission has s i n c e opera ted . I n 1915, a f t e r Eshleman's

e l e v a t i o n t o t h e l i e u t e n a n t governorsh ip and subsequent dea th , he became p r e s i d e n t of t h e Commission, a p o s i t i o n he h e l d u n t i l

1919. A t t h a t t ime a r e q u e s t from S e c r e t a r y of War Newton D. Baker t h h t he e n t e r t h e War Department as Surveyor of Con t r ac t s

f o r t he General S t a f f p rompted .h i s r e s i g n a t i o n from t h e Commis-s ion . A t t h e c l o s e of t h e war, Thelen t r a n s f e r r e d t o t h e U.S.

R a i l r o a d Admin i s t r a t i on as D i r e c t o r of P u b l i c Serv ice .

I n 1920, n i n e y e a r s a f t e r he accep ted h i s f i r s t p u b l i c

appointment, he r e t u r n e d t o San F ranc i sco t o p i c k up h i s p r i v a t e

c a r e e r as an a t t o r n e y by opening an o f f i c e s t a f f e d by himself

and one s e c r e t a r y . That o f f i c e , now the f i rm of Thelen, Marrin,

Johnson & Bridges , ha s grown t o i n c l u d e t h i r t e e n p a r t n e r s and

e i g h t e e n a s s o c i a t e s , w i th r e p r e s e n t a t i v e s a l l over t h e world.

And Max Thelen, age eighty-one, is s t i l l t h e d i r e c t i n g s e n i o r

p a r t n e r .

I t w a s t o t h e o f f i c e s of Thelen, Marrin, Johnson & Bridges ,

which occupy t h e complete t op f l o o r of t h e 111 S u t t e r Bu i ld ing i n downtown San F ranc i sco , t h 2 t I went i n t he f a l l of 1961 wi th

t h e o b j e c t i v e of a f u l l - l e n g t h b i o g r a p h i c a l i n t e r v i e w wi th Max

Thelen. My impress ion of Mr. Thelen was of a compact, white-h a i r e d gentleman, impeccably d r e s s e d i n a dark s u i t wi th a s m a l l

f l ower i n h i s bu t tonho le , s t a n d i n g behind a dark, immaculate :f l ower i n h i s bu t tonho le , s t a n d i n g behind a dark, immaculate :

*

-.

desk in his conservatively furnisned'offiee. Through the

window behind him could be seen a magnificent view of San Francisco. Courteous, friendly, and historically-minded, he

none theless was reluctant. to tap'e record his recollect.ions

of the Progressive era, pointing to his bookshelf of reports

and hearings of the California State Railroad Commission which

he felt adequately documented his part in Hiram Johnson's

administration. I left disappointed but assured by Mr. Thelen that he wauld be glad to answer a few specific questions if

answers could not be found elsewhere.

Later however, through the good offices of another of our

interviewees, Philip Bancroft, also a faithful Johnson-Progres-

sive, Mr. Thelen was persuaded to expand his specific-questions

offer to a two-session interview in which he discussed some of

the high spots of his politj administrative activities

from 1907 through World War I. . interviews were held on

the evenings of November 13 and 15, 1961, at his long-estab-

lished home in the Claremont district of Berkeley where he

lives with his wife 2nd a grandson who is staying there while

attendins the University of California. Mrs. Thelen, a willowy

lady with an enthusiastic interest in polities and. a devotion

to Progressive principles as firm as her- husband's, served

refreshments after each session and joined in the recordings

at one point. Before the recordings began, Mr. Thelen had

thought over and checked some of the dztes and details of the

questions submitted to him beforehand.

The interview was transcribed, slightly rear.ranged for

clarity, and sent to Mr. Thelen for his editing and approval

before it was retyped. Mr. Thelen donated 2hotographs to

illustrate the mahuscript. He has previously deposited in Elancroft Library the minutes of the Berkeley area Lincoln-

. , . ' . . -4, . . . . . . . . . . . iv .

. . . > ' . . . . , ., . . . . . . , . . . . . . . . . . . . . : . . . . . . . . . . . .. . . . . . . ... , . . . . .. . ,. .. ' ' .. . . . . - . . . . . ,. . . . . . . . . . . . . . . . . . . . . . . . . . ~ . . . . , . . . . . . . . .. . .. . .. . .... . . . . .. ~.

.' . , r , . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . ,.., . . . . . . . . . . . . . , . .. . . . . . . . . . . . . . . .

. . . . - . . . . . - . ,. ,.. . . ...? : . . . . . . . . .. . . . . . . . . . . . ~. . . . . . . , . . . . - , . . . . . . . . . . . . . . . . . . . . . . .. .. . .

. .. . . ' ' .

. R o o s e v e l t League which he k e p t as s e c r e t a r y o f t h e c l u b , and

co r respondence from him can be found i n t h e H i r a m Johnson

and C h e s t e r Howell p a p e r s , and p e r h a p s o t h e r s , i n B a n c r o f t

L i b r a r y . A b i o g r a 2 h i c a l a r t i c l e on Max Tnelen by John W,

K e l l e y a?pea red i n t h e San F r a n c i s c o S r i e f c a s e o f Kovember

195gs as d i d a f e z t u r e a r t i c l e by A n i t a Day Hubbard i n t h e

San ~ r a n c i s c o Zxaminer on May 7, 1961.

T h i s i n t e r v i e w , a l o n g w i t h one w i t h P h i l i p B a n c r o f t , was

done a t t h e r e q u e s t of P r o f e s s o r s Walton E. Bean 2nd George

P. Hamond of t h e Depsrtment of Y i s t o r y t h a t we document

C a l i f o r n i ~ p o l . i t i c s 1 movements o f t h e e a r l y 1900s. I t f o r m s

a p a r t o f t h e c o l l e c t i o n o f a u t o b i o z r a p h i c a l i n t e r v i e w s w i t h

? e r s o n s p r o n i n e n t i n t h e development o f Xor the rn C a l i f o r n i a

conducted by t h e Reg iona l C u l t u r a l H i s t o r y P r o j e c t . The pro-

j e c t i s under t h e a d m i n i s t r a t i v e s u ? e r v i s i o n o f A s s i s t a n t

L i b r a r i a n J u l i a n Michel ,

Willa Klug Baum, Head

R e g i o n a l C u l t u r a l H i s t o r y P r o j e c t

2 J a n u a r y 1962 R e g i o n a l C u l t u r a l H i s t o r y P r o j e c t G e n e r a l L i b r a r y U n i v e r s i t y o f C a l i f o r n i a a t B e r k e l e y

BEGINNING A LEGAL CAREER

Education 1

With Olney and Olney, 1906-1907, and Attorney

for the Western Pacific Railroad, 1907-1911 2

Lecturer in International Law at the

University of California, 1907-1913 5

WORKING WITS THE LINCOLN-ROOSEVELT REPUBLICAN

LEAGUE IN BEMELEY 8

ON THE CALIFORXIA STATE RAILROAD COMKISSION, .

The public Utilities Act, 1911

The Railroad Commissioners

Cay to Day Operation of the Railroad -Commission 31

The National Association of Railroad

Commissioners, 1916-1919 . .

Chairman of the Coamittee on Petroleum of the

California State Council of Defense, 1917-1918- 46

A Blue Sky Law for California 47

THE ADMINISTRATION OF HIRAM JOHNSON : 52

Comments on Johnson 52

Rowell, L i s s n e r , and Heney 57

The E l e c t i o n of 1916

I N WASHINGTON, D. C - , 1918-1920 63

With the War Department, June 1918 - Janua ry

1919 63

With t h e United S t a t e s Ra i l road Adminis t ra t ion ,

February 1919 - October 1920 67

PRACTICING LAW I N SAN FRANCISCO, 1920 - PRESENT 72

YOUTH, E D U C A T I O N , AND FAMILY 85 ..

APPENDIX - COMMONWEALTH CLUB

PARTIAL INDEX 97

Baum: Well , we're s k i p p i n g your school y e a r s ,

go back t o l a t e r on. which I hope w e ' l l

Thelen: They were v e r y i n t e r e s t i n g years ,

Baum:

Thelen:

You completed Cal i n 1904. -.

T h a t ' s c o r r e c t , and then I went back t o t h e Harvard Law

School a n d s t u d i e d t h e r e f o r two y e a r s . I d i d t h e t h r e e

y e a r s 1 work i n two. I had done one y e a r ' s l a w work h e r e a t

t he U n i v e r s i t y s o t h a t I only had t o do two y e a r s 1 work back

t h e r e . 1'11 be p e r f e c t l y f r a n k , I d i d n ' t g e t a l a w degree ,

t h e r e a s o n be ing t h a t they had a r u l e t h e r e t h a t a man had

t o s i t on h i s haunches f o r t h r e e y e a r s i n o r d e r t o g e t a

l a w deg ree , and I c o u l d n l t wait a n o t h e r year . I ' d done a l l

t h e work. So I came home and s t a r t e d t o work.

Baum: Why did you choose l a w ?

Thelen: I chose l a w because eve r s i n c e I w a s a l i t t l e shaver I w a s

i n t e r e s t e d i n p u b l i c a f f a i r s . We were r a i s e d down i n San .

Diego @ D U ~ ~ Yand they had a newspaper i n San Diego, t h e San

Diego Union, and on t h e f r o n t p a g e , t h e y always had t n e world

news and I was very much i n t e r e s t e d i n i t . T h a t ' s t h e r e a l '

r eason , I suppose, I chose t h e l a w , because I was i n t e r e s t e d

i n p u 6 l i c a f f a i r s *

i Baum: Your f a t h e r w a s ve ry a c t i v e , wasn' t he?

.. .:

. . : . . . . . . . . . . . . . . . . . . ,. :. . .

, . . . . 2..' . . . . . . . . . . .. . . . . . . . . .:, .. . . . . . . . . . . . . . ;.. . .. . . . . . . . . . . . . . . . ' . ' . . . . . . .

t. . . . . . . . .

..: . : . . : : . _ . . . . . . . . . ., . . . . . . I . . . . . . ,- . . . . . . . . . . . . . . . . ,:.. . . _ . . . . . . . . . . . : P . . . . . . . . . . . . . . . - :

. . . . .. . . .. . I . . . . . . '

. ' . . . . . . . '. . . .: . . . : . . . . .

.

.......... . . . . . . . . . _ . . ' . . . . . . . . . . . . . !' . . .. . . . . . . . . . . . . . . . . . . _ . ; " . . . .-. . . . . . . . . . . , . ' . . , . . . . . . . . . . . . ,#./ . .- . . . . . . . :: - . . . . . . , .. . , , . . . . .

, . . . . . . . . . . . . ... . . . . . . . . . . . . . . - . . . . . . . . . . . . . . .

. . .Thelen: was very: much i n t k r a s t e d i n p u b l i c affairs. She was o n t h e

N a t i o n a l C i t y L i b r a r y Board f o r a g r e a t many y e a r s and was

on t h e c h i l d r e n " $ Home i n San Diego. They were bo th i n t e r -.e s t e d i n p u b l i c a f f a i r s ,

Baum: Did you p l a n t o go i n t o l a w when you e n t e r e d c o l l e g e ?

~ h e l e n : Oh, a b s o l u t e l y . I was look ing r i g h t s t r a i g h t ahead , e x a c t l y ,

i n t h e l a w ,

Saum: Why d i d you r e t u r n t o San F ranc i s co? Your f a m i l y were down

i n San Diego, weren ' t they?

Thelen: Well, I didnl t t h ink , f r a n k l y , t h a t t h e r e was much chance i n

San Diego a t t h a t t ime, and t h e r e wasn ' t . O f cou r se , now i t ' s q u i t e d i f f e r e n t . But i n t h o s e days t h e r e was v e r y l i t t l e

chance , and I had most of my f r i e n d s up h e r e s o i t was q u i t e

l o g i c a l t h a t I shou ld come here .

With Olney and Olney, 1906-1907, and A t to rney f o r t h e Western

P a c i f i c R a i l r o a d , 1907-1911

Baum: I was wondering how you g o t your job wi th Olney and 'Olney, . .

Thelen: I went i n and asked them whether t ney had room f o r a y o u g -

s t e r . I t happened. t h a t t hey did.

Baum: Did you h.ave t o t rudge around t o a number-of o f f i c e s b e f o r e '

you f0un.d a p o s i t i o n ?

Thelen: Oh, y e s , I d i d , a t l e a s t abou t a dozen of them. I t happens

t h a t t he Olney firm had j u s t been appo in t ed a t t o r n e y s f o r t h e

new Western P a c i f i c R a i l r o a d , and they had a good many con-

demnation s u i t s t o f i l e and th& o t h e r work t o do and t hey

needed h e l p , s o they took t h i s o f f i c e boy in.

Baum: About how many people d i d they have i n t h e i r o f f i c e ?

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4

Western P a c i f i c and t hen l a t e r h e became a n a s s o c i a t e j u s t i c e of t h e s tate supreme c o u r t , as you probab ly know, He d i e d

s t i l l q u i t e young; I t h i n k he w a s i n h i s s ix t i e s ,

Was h e a p a t i e n t man?

I t h i n k he had t o be p a t i e n t , w i t h me. [ ~ a u ~ h i n ~ ]. H e w a s a wonderful man t o g e t a l o n g wi th ,

Did you l e a r n by l o o k i n g th rough t h e l a w books y o u r s e l f , o r

d i d h e a s s i g n you t h i n g s t o work on?

Well, t h e r e were jobs t o be done, p a p e r s t o be s e r v e d , p lead-

i n g s t o be p r e p a r e d and a l l t h a t s o r t of t h i n g ,

So when he gave you a n ass ignment you f i g u r e d o u t how t o do i t by you r se l f .

You ' re c o r r e c t ,

T h i s o t h e r gent leman, w a s i t M i l t Mannon?

Yes, J.M, Mannon, Jr.

d he have a n y t h i n g t o do w i t h you r t r a i n i n g ?

11, yes , of c o u r s e he d id . H e was, s h a l l I s a y , t h e c h i e f

c l e r k . He t o l d me what t o d o , l a r g e l y ; f o r i n s t a n c e , i f a c o n -demnation s u i t was t o be f i l e d a g a i n s t some concern o u t h e r e i n Alameda County, where t h e Western P a c i f i c was coming through,

h e ' d t e l l me t o p r e p a r e t h e compla in t , go and s e r v e ~ t ,and s o on and s o on.

Did you come i n . c o n t z c t wi th 'viarren Olney, S r , , v e r y much?

Not v e r y much, no, I

I suppose he was i n Oakland as t h e mayor. 1 1

Yes, t h e f a m i l y l i v e d i n Oakland and h e w a s mayor t h e r e , I i r e a l l y d i d n ' t come i n v e r y much c o n t a c t w i t h h i m .

You s a y Warren Olney, Jr.., was a t t o r n e y f o r t h e Western Pac i - . ,

f i e , and you . became a s s i s t a n t , a t t o r n e y a lmos t immediately. . , ' . i. . . . 8. . . . . . . . . . . . . . . .. . . . . ~. ,. . . . . . . . . . . . . . : . . . . . . . . . . . . . : . . . . . . . . . .

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Thelen:

Baum:

Thelen:

Baum:

Thelen:

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rhelen:

3aum:

Chelen:

Bancroft Libray

5 . . . .

\ #e l l , no t almost immediately, but ' a f t e r a year or two. A f t e r a year o r two he became genera l a t t o r n e y and I became a t to rney ,

and as a t t o r n e y f o r the Western P a c i f i c I had j u r i s d i c t i o n

over the va r ious l o c a l a t t o r n e y s s c a t t e r e d along the l i n e of the Western P a c i f i c

. ..

Lecturer i n I n t e r n a t i o n a l Law a t the Universi ty of Ca l i fo rn ia , 1907-1913

I wanted t o ask you how come you were a l e c t u r e r i n in terna-

t i o n a l law?

Well, t h a t is q a i t e a problem, i s n ' t i t? You're asking some

very i n t e r e s t i n g ques t ions -- how come t h i s , how come t h a t , how come the o t h e r thing. . I don ' t know,

You s t a r t e d r i g h t i n i n t h a t job, d i d n ' t you, as soon as you

go t here from Harvard?

No, Let me s e e , I have the record of i t . I must have been

back a t l e a s t two yea r s from the Harvard Law School before I

w a s made i n s t r u c t o r i n i n t e r n a t i o n a l l a w , and why they took me

the Lord only knows, I don ' t know. But i t w a s very in tere . r t ing .

How long d i d you s e r v e i n t h a t job?

Oh, u n t i l a f t e r I w a s z a r r i e d , I th ink about s i x years , and

then I hzd t o q u i t . When I became married I thought my wife w a s e n t i t l e d t o some cons ide ra t ion s o I resigned,.

I You taught one c l a s s s e v e r a l times a week? i

Twice a week, e i g h t o 'c lock i n t h e morning, And t h e r e were i n t e r e s t i n g times. Things looked well . No one ever dreamed

at t h a t time t h a t we were going t o g e t i n t o another world war,

and a l l these problems were being solved and about a l l t h a t w a s

l e f t w z s the Declara t ion of London and i t looked as though

Baum: And I ' v e t a l k e d t o people who l i k e d P a t r i c k Calhoul~ and thought

t h a t t h a t w a s t he only way t o do bus ines s under those c o n d i t i o n s

Thelen: Well, t h e r e were a l o t of

do bus ines s t h a t way.

u s who thought t h a t we j u s t wouldn't

--

Baum:

Thelen:

Baum:

Thelen:

Baum:

Thelen:

Baum:

Thelen:

Baum:

Thelen:

Baum:

Thelen:

8

WORKING WITH THE LINCOLN-ROOSEVELT REPUBLICAN LEAGUE.I N BERKELEY

Did your work f o r t h e Western P a c i f i c b r i n g you i n t o p o l i t i c s

then?

No, i t had n o t h i n g t o do w i th it.

I t w a s complete ly d ivo rced from you r p o l i t i c a l i n t e r e s t s ,

I t had a b s o l u t e l y n o t h i n g t o do w i th p o l i t i c s ,

Well, d i d t he f a c t t h a t Warren Olney, S r . , w a s t h e mayor have

a n y t h i n g t o do w i th you r p o l i t i c a l i n t e r e s t s ?

Not a t a l l .

These were comp'letely d ivorced from your work?

Absolute ly .

T h i s was your n i g h t t i m e hobby, i s t h a t r i g h t ?

I t h i n k you h i t t h e n a i l on t h e head t he r e . I t ' s v e r y obvious

t h a t you've been r e a d i n g newspaper a r t i c l e s and t h e Lord knows'

what a l l abou t t h i s youngs te r . [ ~ a u ~ h i n ~ ]

Well , t e l l me, how d i d you g e t i n t o p o l i t i c s and what s o r t of

t h i n g s d i d you do i n t h e beginning?

Now, l e t me s e e , t h i n k i n g back: I f i r s t became i n t e r e s t e d i n

t h e p o l i t i c a l s i t u a t i o n h e r e l o c a l l y i n Berkeley . I was q u i t e

a c t i v e i n t h a t . From t h e r e , when t h e Los Angeles l e a d e r s of

t h e Lincoln-Roosevel t Republ ican movement g o t busy, I thought

t h a t t hey were on t h e r i g h t t r a c k and I was v e r y happy t o f o l l o w

them. You s e e , I don1t know whether y o u ' r e familiar wi th t h e

Lincoln-Roosevelt Republ ican League o r no t . I t was s t a r t e d i n

Los Angeles. There w a s Meyer L i s s n e r and Ead i e Dickson and

t h r e e o r f o u r o t h e r s who s t a r t e d i t i n Los Angeles where t h e

c o n d i t i o n s were v e r y c o r r u p t , and i n t h e meantime C h e s t e r

. . .". - , ..: . . / I

'- . , . > .

- r , .

II

1c

1

r4 d +

. -- "

'9 . -

., Thelen: Rowel1 became i n t e r e s t e d i n i t . He was t h e e d i t o r of t h e F re sno

R e ~ u b l i c a n and he s t a r t e d w r i t i n g powerful e d i t o r i a l s s a y i n g

t h a t t h e time had come f o r ,a change p o l i t i c a l l y . I thought

t h e y were r i g h t s o I became i n t e r e s t e d and became t h e s e c r e t a r y

of t h e 52nd assembly d i s t r i c t of t h e Lincoln-Roosevelt League,

t h e 52nd b e i n g Berke ley . We f i n a l l y developed t h e largest,

from t h e p o i n t o f view o f numbers, membership of any o f t h e

assembly d i s t r i c t s i n t h e s t a t e . We j u s t went t o i t h e r e i n ~ e r k e l e y .

Baum: You were mainly concerned, your Berke ley c l u b and y o u r s e l f , w i t h I s t a t e i s s u e s r a t h e r than Berkeley i s s u e s , i s t h a t r i g h t ?

Thelen: Yes. The Lincoln-Roosevelt Republ ican League as such w a s not

i n t e r e s t e d i n p u r e l y l o c a l m a t t e r s , b u t the l e a d i n g members of

t h e l e ague h e r e were v e r y much i n t e r e s t e d i n l o c a l affairs, We

p r e p a r e d a new c h a r t e r f o r Berke ley and we e l e c t e d Bever ly L. Hodghead as mayor,

You probab ly have l e a r n e d a l o t abou t C.C. Young, who be-

came governor of t h e s t a t e ? Well, we were aiming t o have a

p r e c i n c t l e a d e r h e r e f o r every p r e c i n c t i n Berkeley. I n t h o s e

days we had wards and p r e c i n c t s , s i x wards, I t h i n k , and q u i t e

a number of p r e c i n c t s , and we were o r g a n i z i n g t h e v a r i o u s pre-

c i n c t s . We hadn.' t any l e a d e r s i n t h e f irst p r e c i n c t of t h e

f o u r t h ward -- t h a t ' s where C.C. Young l i v e d -- and someone s a i d ,

"Well, now, I know a r e t i r e d s c h o o l t e ache r who l i v e s up t h e r e

i n t h a t p r e c i n c t and he might be i n t e r e s t e d , " s o I c a l l e d on

C.C. Young and g o t him i n t e r e s t e d as t h e l e a d e r of t h e first

p r e c i n c t of t he f o u r t h ward, H i s o r g a n i z a t i o n a l t a l e n t s , which 1 were p e r f e c t l y marvelnus, l e d him up s o t h a t we s e l e c t e d

9 .I

him as t h e member of t h e s t a t e assembly from Berkeley. From 1 jt h e r e , as you know, h e kep t go ing up. He became t h e l e a d e r of ;

t h e P r o g r e s s i v e s i n t h e lower house o f t he l e g i s l a t u r e and

l a t e r he becarne l i e u t e n a n t governor and f i n a l l y governor. It

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5:

Baum: they are now,

Thelen: They weren ' t . And t h e Da i ly C a l i f o r n i a n i n those days on ly brought news r e f e r r i n g t o our narrow l i f e h e r e a t t h e Univer-

s i t y . Nowadays i t ' s q u i t e d i f f e r e n t . I unders tand that t hey

b r i n g news of more o r l e s s a n a t i o n a l cha rac t e r .

Baum: They do and they don' t, Not very much. Weli, you've t o l d me

a l i t t l e b i t about how t h i s Berkeley c l u b s t a r t e d . I w a s won-d e r i n g i f i t w a s easy f o r you t o g e t t h e c l u b going,

Thelen: I t was compara t ive ly easy, . because of

we had i n Berkeley,

t h e type of people t h a t

Baum: Everyone w a s j u s t ready t o go in ,

Thelen: Ready t o go. We had our r e g u l a r ca rds , membership i n t h e Lin- coln-Roosevelt Republ ican League. We had 1,200 people, 1,200

men s igned h e r e , an2 as I s a y i t w a s the l a r g e s t p robably i n

t h e s t a t e ,

Baum: I r ead a l e t t e r you wrote t o Chester Rowell. s o r t of t h e f a t h e r o f you r group,

You c a l l e d him

rhelen: T h a t ' s c o r r e c t .

Baum: And Eddie Dickson.

Phelen:

3aum:

rhelen:

And Eddie Dickson of Los Angeles. Eddie Dickson l a t e r became a r e g e n t of the U n i v e r s i t y o f C a l i f o r n i a , as you probably know.

Ches t e r Rowel1 had a tremendous i n f l u e n c e h e r e i n C a l i f o r n i a . Frank Devl in of V a l l e j o , a judge up t h e r e , w a s one of t h e

l e a d e r s . , .

He l a t e r went on t he R a i l r o a d Commission.

T h a t ' s right, !

I

3aum: Why would you c a l l Ches t e r Rowel1 t h e f a t h e r of t he Berke ley c lub?

, I

Chelen: Well , he spoke he re q u i t e a number of t imes, c a l l e d upon him t o d e l i v e r a ~ a l ka t one of

and whenever we our g e n e r a l meetings, -

. -

Thelen: he was a lways ready and w i l l i n g t o do it. And b e s i d e s , t h e r e

was a s o r t of a k i n s h i p between him and us. We though t t h e

same way, we were t h e same s o r t of people . He w a s a wonderful

man. You know, I f e e l s o sad t h a t he n e v e r w r o t e a n a u t o b i o -

graphy. He s h o u l d have w r i t t e n a n au tob iography . I spoke t o

him on numerous o c c a s i o n s . "Yes, I ' l l get a t i t , I ' l l g e t a t

it." But he n e v e r d i d g e t a t i t , and t h e r e wzs a hope t h a t h i s

d a u g h t e r would w r i t e a b iography , b u t I - t h i n k s h e p a s s e d away.

I n t h e meantime, h i s p a p e r s a r e up h e r e i n the B a n c r o f t L i b r a r y .

I d o n ' t h o w whether someone w i l l e v e r t a k e h o l d of them.

Baum:

Thelen:

Baum:

Thelen:

Baum:

I t h i n k you c a l l e d B a n c r o f t L i b r a r y ' s a t t e n t i o n t o Rowel l ' s

p a p e r s . The L i b r a r y went o u t , on your s u g g e s t i o n , a n d g o t them.

Y e l l , now, t h e r e ' s something t h a t I had comple te ly f o r g o t t e n ,

as I have s o many t h i n g s ,

So t h a t t h e C h e s t e r Rowel1 p a p e r s a r e i n B a n c r o f t because of you.

Well , of c o u r s e , t h e Johnson p a p e r s a r e i n B a n c r o f t , too.

Yes. I t ' s t h e r i g h t d e p o s i t o r y , , I t h i n k , f o r a t l e a s t t h e

Nor the rn C a l i f o r n i a P r o g r e s s i v e s .

I----III II

Thelen: You're a b s o l u t e l y r i g h t .

Baum: Who do you r e c a l l

c l u b ?

as t h e o u t s t a n d i n g members o f your B e r k e l e y

Thelen: Wel l , F r e d F o s s , who l a t e r became a s u p 3 r v i s o r h e r e -- h e ' s

dead now, i n f a c t n e a r l y a l l t h e s e men a r e gone -- F r e d F o s s

was t h e p r e s i d e n t of t h e c l u b ; C.C. Young, o f c o u r s e ; A r t h u r

E l s t o n , who l a t e r became a congressman; P e r r y Tompkins of t h e

Mason-McDuffie Company; W.F. McClure, who l a t e r became s t a t e

e n g i n e e r . There were a good many men i n t e r e s t e d . Those men

o c c u r t o me immedia te ly . Oh, Elmer Nicho l s , who la te r became

s e c r e t a r y after I res igned .

L J t

1

Baum: I d o n ' t

II t h i n k .t h i n k .

r e a l l y have t h e h i s t o r y o f t h e c l u b a f t e r August 1908,

IsIs t h a tt h a t whenwhen youyou r e s i g n e dr e s i g n e d asas s e c r e t a r y ?s e c r e t a r y ? --

Thelen:

Baum:

Thelen:

3aum:

I'helen:

aum:

he l en :

aum:

helen:

3.m:

I t h i n k you ' re iight. We had s e c u r e d cont-rol of t h e Republ ican

county committee and had accompl ished ou r immediate purposes;

2nd be s ide s , I was a w f u l l y busy, s o I res igned . I t h i n k i t was

i n August of t h a t year .

But t h e c l u b con t i nued on?

Continued on f o r a whi le .

Was i t l e s s a c t i v e a f t e r t h a t p o i n t ?

[ ~ a u ~ h i n ~ ] That i s a ve ry s u b t l e q u e s t i o n . It became l e s s

a c t i v e as time r o l l e d on, b u t whether i t w a s r i g h t a f t e r I

r e s i g n e d o r n o t , t h a t ' s a n o t h e r m a t t e r . I t h i n k t hey g r a d u a l l y ,

s h a l l I s ay , d i e d away. They g r a d u a l l y l o s t i n t e r e s t after

Johnson was e l e c t e d because "Why shou ld we worry? We had t h e

man t h a t we wanted as g o v e r n ~ r . ~ ~And he made a wonderful

governor .

Your c l u b minu t e s book is a t b a n c r o f t L i b r a r y , v e r y n e a t l y

w r i t t e n o u t ,

D i d I s p e l l a l l t h e words c o r r e c t l y ? -

Oh, p e r f e c t l y . I d o n ' t

n e a t l y as peop l e -0

t h i n k people nowadays can w r i t e as

I know a l o t t h a t d o n ' t

p a r t n e r s ,

w r i t e t h a t way, i n c l u d i n g some o f my

Be fo re you l e f t t h e c l u b , t h e r e

p r imary law made mandatory,

was a problem of g e t t i n g t h e il

1;I ~ e l e n : F r a n k l y , I ' d f o r g o t t e n e n t i r e l y abou t t h a t u n t i l I g o t your [

3q u e s t i o n , b u t I ' v e looked i n t o t h e s t a t u t e and h e r e was t h e e

s i t u a t i o n : I t r e l a t e d t o t h e members of conven t ions , because

i n t h o s e days t h e nomina t ions were made by conven t ions , and Q I

t h e r e was a s t a t u t e t o t h e e f f e c t t h a t i n c i t i e s of a popula-

t i o n over 16,000 t he p r i m 2 . r ~ law was mandatory as far as member-

s h i p i n conven t i ons was concerned, b u t i n t h e o t h e r towns and i n -

. -

. . . , . . . . . . . . . .

., . . . .

. . . . . - , I

. . . .

Thelen: . o t h e r communities with a l e s s e r popula t ion , i t was n o t made ; -mandatory, b u t . i t w a s p o s s i b l e f o r t he people i n thosg..;communi-

. . . .

t i e s through an e l e c t i o n to:make i t mandatory. I remember at t h a t time t h a t t h e r e w a s a s i t u a t i o n i n San Diego County i n

which Nat iona l C i t y and Escondido and some of the o t h e r towns

under 16,000 were confronted with t h e problem of making the l a w

mandatory. I be l i eved t h a t i f i t wss made mandatory t h a t the

P rogres s ives would cap tu re the convention i n San Diego Cgunty,

and I cor responjed w i t h the m a n w h o ' l a t e r became s e n a t o r ,

Sena tor Edgar Cuce, i n t h a t r ega rd , bu t i t w a s too l a t e i n t h e

game t o accomplish anyth ing and j u s t no th ing was done. I t 's

a very unimportant mat te r . L a t e r on, of course , a r e a l d i r e c t

primary l a w was passed and t h i s s o r t of t h ing became unneces-.

sa ry . I f I were you I don' t th ink I ' d even bother with i t .

3a-m: Were you a f r i e n d of Edgar Luce?

'helen: A very dea r f r i e n d . He was a wonderful man. H i s f a t h e r had

been a f i n e man, Judge M.A. Luce. Edgar Luce w a s one o f t h e

last s u r v i v i n g de legg tes t o the Republiscan convention i n Chicago

which nominated Taft, and I had occasion t o look i n t o t h a t mat- . t e r a while ago and I found ou t t h a t appa ren t ly the only sur-

v i v o r is a man who's been egging you on as far as I ' v e been

concerned, P h i l i p Bancrof t . I th ink h e ' s t ne only survivor .

Edgar Luce w a s nex t t o h i m , because Edgar died only a year o r

two ago. !I

~um: I wish we'd g o t t e n Edgar Luce, because I guess he knew a l o t )1

of i n s i d e information. I

C le len: He did.

L U ~ Well, we have soBe good l e t t e r s from him anyuay, desc r ib ing t h e:

s i t u a t i o n . Ge t t ing back t o your Berkeley c lub , d id you spend

a l o t of time on t h a t ? I know i t met once a month.

lelen: I spen t a g r e c ~ t d e a l of time on i t . You s e e , I w a s unmarried,

I had my evenings t o myself , and I spen t most of my evenings

3aum: Did you work w i t h t h e o t h e r o f f i c e r s of t h e c lub?

rhelen: I worked wi th them i n a g e n e r a l way, b u t I ' l l be p e r f e c t l y

f r a n k a b o u t i t , I had t o c a r r y most of t h e burden mysel f .

32um: I j u s t wondered how a c t i v e everyone w a s on t h i s , o r whe ther

t h i s w a s a once-a-month a f f a i r f o r most of t h e members,

Phelen: Oh, i t wasn ' t a once-a-month affair . we had mee t ings o f t h e

c l u b eve ry s o o f t e n and then we o rgan i zed p r e c i n c t L inco ln-

Rooseve l t Bepubl ican c lubs . They had mee t i ngs e v e r y once in a

whi le . I t h i n k they were v e r y active.

3aum: You had t o keep r a c i n g around t o a l l t h e s e p r e c i n c t mee t ings? I Chelen: I ciidn' t go t o a l l of them, b u t I had something t o do w i t h most

o f them, I 3aum: I wanted t o a s k . y o u i f your Be rke l ey members had c o n s i d e r e d

Johnson as a c a n d i d a t e from t h e beg inn ing , o r d i d t hey have

o t h e r men in mind?

Fhelen: I t h i n k they d id , I t h i n k he was i n t h e p i c t u r e from t h e v e r y

start. We had him speak h e r e , make s e v e r a l s p e e c h e s - i n Berke-

l e y , under t h e . a u s p i c e s of t h e Lincoln-Roosevel t Republ ican

Club. We c o u l d n ' t have f a i l e d t o c o n s i d e r him i n view of what

had happened i n San F r a n c i s c o i n t he graft p r o s e c u t i o n and s o

on, and h i s s l o g a n a b o u t k i c k t h e S.P. o u t of p o l i t i c s . He

became a ve ry prominent man as fer as the g o v e r n o r s h i p w a s

concerned. There were o t h e r men mentioned from time t o time, b u t none of them had any chance.

From what I ' ve r e a d , f o r a l o n g time Johnson d i d n ' t c o n s i d e r

r u n n i n g h i m s e l f , and t h e r e were many o t h e r men cons ide r ed . I t 'i

was ha rd t o choose somebody o r t o g e t somebody t o r un , a c t u a l l y , Q who would be s a t i s f a c t o r y ,

i

Thelen: A g r e a t d e a l of p r e s s u r e w a s n e c e s s a r y t o be b rough t on him t o e

g e t him t o run because he d i d n ' t want t o r u n a t first,

baum: Do you know why? . . -

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Did you t h i n k t h e S.P. w a s t h e c u l p r i t i n C a l i f o r n i a , o r were t h e r e o t h e r u t i l i t i s s o r monopolies?

Well , i t was t h e S.P. Wiil iam F. H e r r i n c o n t r o l l e d t h e SOP, and he p r a c t i c a l l y c o n t r o l l e d t h e p o l i t i c a l s i t u a t i o n he re . The o t h e r s w e r e n ' t i n p o l i t i c s t o amount t o any th ing .

I shou ld t h i n k a l l of t h e o t h e r b u s i n e s s would have been suf -

f e r i n g from S.P. domination.

They were a f r a i d . I I ' v e h e a r d i t s a i d t h a t Theodore B e l l , t h e Democrat ic c and ida t e ,

f o r governor , w a s s uppo r t ed by t h e Sou the rn P a c i f i c . And I ' v e

h e a r d i t r e f u t e d ,

Well , wou ldn ' t i t be c u r i o u s i f he we ren ' t , a t leas t s u b r o s a , because t h e Sou the rn P a c i f i c had t h e a l t e r n a t i v e between H i r a m

Johnson and Theodore B e l l . You wouldn ' t expec t them t o s u p p o r t

H i r a m Johnson, would you?

No.

I h a v e n ' t any doubt t h a t t hey d i d s u p p o r t Theodore B e l l .

A s t h e l e s s e r of two e v i l s ,

Yes,

D i d n ' t Theodore B e l l a l s o p l a n t o k i c k t h e Sou thern P a c i f i c ou t , i f n o t q u i t e as --Not q u i t e as v i g o r o u s l y as H i r a m . Yes, I t h i n k t h a t ' s c o r r e c t .

I ' v e h e a r d t h a t some P r o g r e s s i v e h a s s a i d t h a t t h i s was a c t u a l l y !

a f i c t i t i o u s i s s u e , t h a t t h e S.P. had a l r e a d y l o s t i t s power i n ! p o l i t i c s b e f o r e H i r a m Johnson was e l e c t e d . 1P

I d o n ' t know on wha t t h a t ' s based. I neve r hea rd t h a t p o i n t , E 'f

! Well, c e r t a i n l y you 'd know t h e s i t u a t i o n b e t t e r than anyone e l s e . 5

1

Well, I would be i n a p o s i t i o n t o know p r e t t y w e l l what t h e

s i t u a t i o n was. You s a y b e t t e r . t h a n anyone e l s e . I ' m in t h e

1;

Thelen: p e c u l i a r p o s i t i o n of be ing t h e s u r v i v o r of t h e whole group.

Baum: T h z t ' s t r u e , b u t t h e f a c t t h a t you were s o c l o s e t o t h e rail-

r o a d s i t u a t i o n would make you know more a b o u t t h a t , I t h i n k ,

t h a n many people . You don1 t t h i n k t h e r e ' s a n y t h i n g t o t h a t

comment t h a t t h e S.P. was a l r e a d y o u t of p o l i t i c s b e f o r e Johnson

w a s e l e c t e d ?

Thelen: No. I t h i n k t h a t t h a t ' s a b s o l u t e l y n o t t h e case . I t h i n k t h e y

were v e r y mdch i n p o l i t i c s and H i r a m Johnson had t o k i c k them'

o u t . T h a t ' s whzt h e s a i d h e ' d do, t h a t he would k i c k them o u t

as far as p o l i t i c s was concerned., and o f c o u r s e h e d i d it.

ON T I E CALIFORNIA STATE RAIIZtOAD COivIMISSION, 1911-1918 I T.he Pub l i c U t i l i t i e s Act, 1911

Baum: When Johnson was e l e c t e d , one of the f i r s t th ings w a s the Publ ic U t i l i t i e s Act, which you and Eshleman -

Thelen: . I don ' t t h ink i t ' s q u i t e accura te to. say i t was one of the

f i rs t things. He was e lec ted i n November of 1910. I n h i s

inaugura l message t o the l e g i s l a t u r e he advocated t h e s t r eng then ing of the powers of the Rai l road Commission as i t then ex i s t ed . There was nothing s a i d i n h i s message about

pub l i c u t i l i t i e s ; he simply spoke of the r a i l roads . Now, t h a t w a s i n November of 1910 and he assumed o f f i c e i n J e u a r y

of 1911. A s f a r as the Publ ic U t i l i t i e s Act i s concerned,

t h a t wasn't d r a f t e d u n t i l August and September of t h a t year,

a f t e r a g r e a t dea l of h i s t o r y had t r ansp i red , because a t the same time t h a t H i r a m Johnson was e l e c t e d governor a new R a i l -

road Commission was e lec ted , c o n s i s t i n g of th ree men. You

know who they were: Jack Eshleman, H.D. Loveland, and Alex

Cordon. These men, of course, were Progressives.

Baum: Loveland?

Thelen: Yes, he w a s a p r e t t y good man.

Baum: He w a s . on the old commission, wasn' t he? Ee !IThelen: Yes, he 'd been appointed by Governor G i l l e t t e , and of course Y

'I

iihe wasn't as much of a Progress ive as Jack Eshleman was, f o r :

i n s t ance , but I don ' t be l i eve i t ' s q u i t e f a i r t o say t h a t he J I,

was a double-dyed-in-the-wool conservat ive because hewasn' t. $ C i,B u t ' t h e p o i n t i s t h a t with H i r a m Johnson these th ree men were d

e l e c t e d as members of the Rai l road Commission, and i t w a s i n

Thelen: t h e air t h a t t h e r e w a s go ing t o be some s o r t of r e g u l a t i o n or c o n t r o l over p u b l i c u t i l i t i e s as we l l as t h e r a i l r o a d s , They

were anxious , t h e s e t h r e e men, t o g e t a founda t ion on which a p u b l i c u t i l i t i e s act could be d r a f t e d , s o they made me a t t o r - ney f o r t h e Commission. That w a s e i t h e r March o r A p r i l of t h i s same year , 1911, and you know t h e s t o r y from t h e r e on, probably,

I c a l l e d upon e i g h t o r t e n of t h e l e a d i n g p u b l i c s e r v i c e

commissions o f t h e count ry t o examine t h e workings of t h e i r

commissions from a p r a c t i c a l p o i n t of view, t o s e e what t h e i r

s t a t u t e s p rov ided , t o g e t t h e i r sugges t ions f o r improvement,

bo th i n t h e s t a t u t e s and i n t h e a c t u a l working of t h e commis-

s i o n s , and then came back t o C a l i f o r n i a i n August of t h a t same

yea r . Mind you, we hadn ' t g o t a p u b l i c u t i l i t i e s a c t yet .

A l l t he se t h i n g s were t r a n s p i r i n g l e a d i n g up t o i t . Then I K e n t home t o my f a t h e r ' s ranch, and t h i s i s n ' t g e n e r a l l y known,

b u t t h e f irst d r a f t of t h e P u b l i c U t i l i t i e s Act was w r i t t e n by

me i n my f a t h e r ' s garden i n Na t iona l C i t y i n San Diego County.

I came up wi th t h a t d r a f t i n my pocket , and j u s t about t h a t

t ime ~ i = a m Johnson was going t o start a campaign i n f a v o r o f c e r t a i n of t h e twenty-three-odd consti t u t i o n a l amendments which

had been sabmi t t ed by t h e l e g i s l a t u r e , and he asked me t o ac-company him on h i s t o u r and I d i d so. He spoke on t h e i n i t i a -t i v e , referendum and r e c a l l , and I spoke on t h e t h r e e c o n s t i t u - t i o n a l amendments which l a i d t h e founda t ion f o r t h e P u b l i c

U t i l i t i e s Act. I n o t h e r words, t h e c o n s t i t u t i o n had t o be amended b e f o r e a p u b l i c u t i l i t i e s a c t cou ld be enacted. There I! was a s p e c i a l e l e c t i o n c a l l e d f o r October of 1911, at which !

t he se t h r e e c o n s t i t u t i o n a l amendments were vo ted on as w e l l I as twenty o t h e r s on o t h e r s u b j e c t s . They were passed , and i t t4 w a s only then t h a t a proposed P u b l i c U t i l i t i e s Act appeared 3

i!

on the s cene ; t h e c o n s t i t u t i o n having been amended, i t became

p o s s i b l e t o hzve the l e g i s l a t u r e enac t a P u b l i c U t i l i t i e s Act.

Thelen: We had mee t ings w i t h t h e r e p r e s e n t a t i v e s o f t h e p u b l i c u t i l i t i e s , we were p l a y i n g the -game open w i th them, and Jack Eshleman was v e r y h e l p f u l i n making s u g g e s t i o n s i n connec t i on w i t h t h e d r a f t t h a t I had p repared . k s p e c i a l s e s s i o n of the

.

l e g i s l a t u r e was c a l l e d by t h e Governor f o r November o f t h a t

y e a r ; to. e n a c t t h e l e g i s l a t i o n i t w a s n e c e s s a r y t o make t h e s e .

c o n s t i t u t i o n a l amendments e f f e c t i v e , and a t t h a t t ime t h i s p u b l i c u t i l i t i e s ac t , t h e d r a f t o f i t , w a s i n t r o d u c e d i n t h e

l e g i s l a t u r e , Tha t w a s t h e first t ime t h a t we a c t u a l l y had a d r a f t o f a p u b l i c u t i l i t i e s a c t . I t was deba ted r a t h e r ex-

t e n s i v e l y i n bo th houses o f t h e l e g i s l a t u r e and passed a lmos t A

unanimously i n bo th houses. The Governor s i g n e d i n on Decem-

b e r 23, 1911, and i t was t o be e f f , e c t i v e n i n e t y days l a t e r , as

was t h e s i t u a t i o n w i th most s t a t u t e s , on March 23, 1912. Tha t

w a s t h e f i r s t time t h a t we r e a l l y had a P u b l i c U t i l i t i e s A c t ,

March 23, 1912. The a c t p rov ided a n i n c r e a s e i n t h e number

o f commissioners from t h r e e t o f i v e and t h e Governor a p p o i n t e d

two new men -- I happened t o be one o f them. On March 23,

1912, we s t a r t e d i n as a p u b l i c u t i l i t y body. Now I ' v e gone

i n t o t h e s e t h i n g s because I t h i n k you had t h e imgress ion t h a t

t h e P u b l i c U t i l i t i e s Act s t a r t e d some c o n s i d e r a b l e d i s t a n c e

ahead of t ime, b u t t h a t wasn ' t t h e c a s e a t all.

Baum: Yes, I thought i t w a s i n t h e works be fo r e ,

Thelen: I t wasn ' t i n t h e works u n t i l I sat down a t t h i s c rude t a b l e on

Baum:

my f a t h e r ' s r anch and drew up t h e f i rs t d r a f t o f t h e a c t ,

Before t h a t you took t h i s t o u r around t h e coun t ry . I n o t i c e d you wrote up a v e r y s u b s t a n t i a l r e p o r t on a l l t h a t you found

o u t , and t h e r e were q u i t e a b i t o f d i f f e r e n c e s i n t h e p u b l i c

u t i l i t y commissions.

'1 I

Qa: 5

!

Thelen: Yes, t h a t ' s t r u e . Some of them were r e a l f i n e commissions and I

o t h e r s were j u s t embryonic commissions. . The b e s t commissions .

25

Thelen: v e r y c a r e f u l l y . T h i s i s n ' t a c a s e where we found something

h e r e i n C a l i f o r n i a t h a t no one e l s e had had b e f o r e , because t h e s e o t h e r s t a t e s had commissions and some o f them v e r y e f f e c -

t i v e , too. So. we had t h e advan tage o f t h e i r e x p e r i e n c e i n drawing o u r s t a t u t e he re ,

III

Baum: Some of t h o s e s t a t e s , I n o t i c e d , p a i d t h e i r c o m m i s s i ~ n e r s

$3,000 a y e a r , and New York p a i d $15,000 a year,. That seemed l i k e a tremendous d i f f e r e n c e ,

I t w a s a tremendous d i f f e r e n c e , and z l s o t h e r e was a tremen-dous d i f f e r e n c e i n t h e gooas t h a t w e r e w v e r e d by t h o s e two

commissions. They had two commissions i n New York s t a t e , t h e -

f i rs t d i s t r i c t commission and t h e second d i s t r i c t commission.

The f i r s t d i s t r i c t commission was t h e c i t y of New York, and

t h e second d i s t r i c t was a l l t h e r e s t of t h e s t a t e o f New York,

Now, t h e second d i s t r i c t commission, whose h e a d q u a r t e r s were i n Albany, was a f i n e and a b l e commission. The one i n t h e c i t y

of New York w z s n l t s o good. Wisconsin had a s p l e n d i d commis-

s i o n . Of c o u r s e , t h e r e were t h i n g s t h a t v..e were a b l e t o p u t i n t o

our a c t which I t h i n k were q u i t e a n advance over what t h e y had

i n e i t h e r New York o r Wisconsin. These m a t t e r s g o l a r g e l y t o

c o u r t p rocedure . We were a f r a i d i f t h i n g s went t h e i r u s u a l c o u r s e t h e s e p u b l i c u t i l i t i e s would be a b l e t o b l o c k t h e o r d e r s

of t h e commission by g o i n g first t o t h e s u p e r i o r c o u r t s and t h e n t o t h e d i s t r i c t c o u r t of a p p e a l s , f i n a l l y t o t h e s ta te su-

preme c o u r t , and we though t i t h i g h l y d e s i r a b l e t h a t we c u t through a l l t h e s e d e l a y s , s o we provided i n t h e P u b l i c U t i l i t i e s

Act t h a t i f a p u b l i c u t i l i t y was d i s s a t i s f i e d w i t h t h e d e c i s i o n of t h e commission t h e y must f i r s t a p p l y f o r a re -hea r ing , a n d

t h e y must s e t f o r t h whztever grounds they had f o r a s k i n g a re -h e a r i n g and any g rounds which were n o t s e t f o r t h they c o u l d n ' t

r e l y on l a t e r . But a f t e r t h a k p e t i t i o n f o r r e - h e a r i n g w a s

I Thelen: .p a r t i c u l a r ca se I have i n mind -- t h e u t i l i t y had . t o go d i r e c t l y

t o t he s t a t e supreme c o u r t , one s h o t only, and i n t h a t r e s p e c t

o u r a c t w a s consider t ib ly more e f f e c t i v e tnan t h e a c t s of any

o f t h e o t h e r 'states.

Baum: Was t h e r e much p r e s s u r e when you were t r y i n g t o p a s s ' the l a w t o

p r e v e n t i t s passage?

Thelen: Well, t h e r e was. p r e s s u r e , of cou r se , b u t - t h e a c t passed both

houses p r a c t i c a l l y unanimously. I th ink I have a r eco rd h e r e ,

yes. The b i l l passed the assembly on December 13, 1911, by a

v o t e of 68 t o 1 and i t f i n a l l y passed t h e s e n a t e by 23 t o 0.

Of course , t h a t doesn ' t mean t h a t t h e r e was no oppos i t i on , There w a s oppos i t i on , p a r t i c u l a r l y t o t he s t o c k and bond fea-

t u r e of t h e a c t , bu t f i n a l l y when i t came t o t h e f i n a l v o t e a

member of t h e l e g i s l a t u r e would h e s i t a t e t o v o t e "no," whatever

he might f e e l about i t and whatever p r e s s u r e might have been

brought on him beforehand,

Baum: T h i s d o e s n ' t mean t h a t t h a t pe rcen taze of t he l e g i s l a t u r e were

P r o g r e s s i v e s , does i t ?

Thelen: No. The P r o g r e s s i v e s had a b i g m a j o r i t y i n both h.,uses of t h e

l e g i s l a t u r e , bu t you s e e f i n a l l y , h e r e was t h e ques t ion : a r e

you f o r t h e a c t o r a g a i n s t i t ? If you' r e a g a i n s t i t you won ' t be r e - e l ec t ed . So p r a c t i c a l l y everyone, wi th one except ion, .

f i n a l l y vo ted f o r t h e b i l l . The u t i l i t i e s had ob jec t ed par-

t i c u l a r l y t o t h e ?revisions wi th r e f e r e n c e t o the r e g u l a t i o n

of s e c u r i t y i s s u e s , s t a c k s and bonds. They d i d n ' t want t h e

commission t o have a u t h o r i t y t o p a s s on s t o c k s and bonds, bu t

we f i n a l l y p r e v a i l e d on t h a t p o i n t a l s o ,

Baum: Wasn't t h e r e oppos i t i on t o r a t e supe rv i s ion? r

Thelen: There w a s some. That r a i e e d ano the r i s s u e : t h e r e was a ques- ! t i o n as t o whether o r n o t the S t a t e Commission should have t h e

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Baum: Was he a f r i e n d of y o u r

Thelen: Not s o c i a l l y , b u t he and I had been c l a s s m a t e s h e r e a t t h e

U n i v e r s i t y . He was a j u n i o r when I was a freshman, and t h a t ' s where he g o t t o know me, and t h z t ' s why he f i n a l l y had me ap-

p o i n t e d a t t o r n e y f o r t h e Conmission. That was a c u r i o u s s i t u - a t i o n , t h a t t h e R a i l r o a d Carmiss ion a p p o i n t e d as i t s a t t o r n e y

a r a i l r o a d lawyer.

Baum: T h a t ' s c u r i o u s , a l l r i g h t . How c o u l d t h a t be? I Thelen: Wel l , i t was because J a c k knew me and had conf idence i n me and I

he knew I would s e r v e t h e i n t e r e s t s of t h e people no twi ths tand- i n g t h e f a c t t h a t I ' d been a r a i l r o a d lawyer. But I ' v e o f t e n

though t what a r e a l l y p e c u l i a r s i t u a t i o n t h a t was. I Baum: How d i d he know you? He was a j u n i o r and you were a freshman.

Were t h e c l a s s e s s o s m a l l t h a t j u n i o r s knew freshmen i n t h o s e

days?

Thelen: Yes, t h e y were v e r y small. I t was t h e job of t h e j u n i o r s t o

t a k e c a r e ' of t h e freshmen and i t was t h e job of t h e s e n i o r s . ~

t o t a k e c a r e of t h e sophomores. . Now J a c k was i n t e r e s t e d i n de-

b a t i n g and- I w a s , too , and t h a t ' s one of t h e c o n t a c t s w e h a d . .

between us.

Baun: You w e r e n ' t i n t h e same c l a s s e s , I suppose , j u s t t h e , same de- I b a t i n g group?

Thelen: T h a t ' s c o r r e c t . I;

3aum: Thing3 a t t h e U n i v e r s i t y have changed so.

Thelen: Oh my, I s h o u l d s a y so . 11 Baum: I t ' s i n t e r e s t i n ; t o f i n d o u t how t h e y used t o be. And t h e n you 1

ih e a r a b o u t how a s t u d e n t knew a l l t h e peop le i n h i s own c l a s s , I

ii '$a l l t h e f e l l o w s knew e a c h o t h e r . . . I

. -Thelen: 1 knew e v s r y member of my c l a s s . . W e , h a d 250 g a d u a t e s and.1 . It

knew e v e r y one of them. C a n ' t do i t now. . -

1:

b n u o f t Library

29

..

Baum: I unders tand Monroe Deutsch was one of your f r i e n d s .

Thelen: Yes, he was one o f my f r i e n d s and one of J z c k Eshleman's par-

t i c u l a r f r i e n d s . He was a l s o an '02 m a n , very , very f i n e man.

You asked me about t hese o t h e r commissioners. There w a s

a c u r i o u s s i t u a t i o n about Commissioner Alex Gordon. He was a farmer and he c e r t a i n l y appealed t o t he farmers . There was -a

g o ~ d , squa re , f a i r - f i g h t i n g fe l low. Of course he d i d n ' t w r i t e

any of t nese l e a d i n g d e c i s i o n s , bu t he went a long , which was

ve ry h e l p f u l , and he always voted with Jack and me. Colonel

Loveland wasn ' t q u i t e as p rog res s ive as e i t h e r Jack o r Alex

Gordon, bu t 1'11 s a y t h i s f o r him, t h a t he went a long a l l

r i g h t ,

Baum : He never switched h i s r e g i s t r a t i o n t o P rog res s ive , I t h i n k

a l l t he o t h e r cornmissioners switched over t o P rog res s ive r e g i s -

t r s t i o n , Loveland s t u c k t o t h e Republican des igna t ion .

.

Thelen: Is t h a t so? I d i d n ' t r e a l i z e t h a t .

l o t of t h ings . [ ~ a u g h i n g ]

My, you've found o u t a

Baum: Edgerton?

Thelen: Edgerton had been i n t e r e s t e d i n l o c a l p u b l i c u t i l i t y r e g u l a t i o n

i n Los Angeles, and he was w e l l q u a l i f i e d .

Baum:

Thelen:

Baum:

Thelen:

Baum:

Loveland wasn' t an a t t o r n e y , was he? He was a merchant.

A merchant, co r r ec t :

And everyone e l s e was an a t t o r n e y ?

Well, Gordon wasn' t . There were tl-'ree a t t o r n e y s and two t h a t

weren ' t . The a t t o r n e y s were Eshleman and Edgerton and myself

and t h e two who weren ' t were Alex Gordon and Harvey Loveland,

There w a s some c r i t i c i s m of Gordon and I wondered i f i t w a s

based on the f a c t t h z t he wzsn l t an a t t o r n e y , * .

1 I 'i11 I!

1 L

,4

ji !F

I'helen: Well, he hadn ' t h d t he t r a i n i n g , ne wasn't a c o l l e g e man. He .

b n ~ o f tLlbray

Thelen: d e c i s i o n s th rough , b u t a p a r t from t h a t t h e r e wasnl t a n y p a r t i c u -

l a r co n f l i c t . There was n e v e r a n y c o n f l i c t , f o r i n s t a n c e , be-

tween J a c k Eshleman and m y s e l f , n e v e r i n a n y case.

Sam: I assume you were p r e t t y much of t h e same p o l i t i c a l phi losophy.

Wouldn' t y o u r p o l i t i c a l p h i l o s o p h y have someth ing t o do w i t h

how you r u l e d on some o f t h e s e c a s e s ?

Thelen: I d o n t t t h i n k s o , We k e p t p o l i t i c s o u t o f o u r dec i s . ions , I Saum: The u t i l i t i e s d i d n l t f a v o r one c o n m i s s i o n e r o v e r a n o t h e r i f t h e y

c o u l d g e t t h e i r n e a r i n g h e l d h e r e o r t h e r e ?

Thelen: I t n e v e r came t o my a t t e n t i o n , though t h e y may have done t h a t

s u b r o s a . I ' m s u r e t h a t none of tnem f a v o r e d me, a l t h o u g h I d i d

t r y t o b e fair. I n f a c t , t h e d e c i s i o n s which Eshleman and I w r o t e a r e s t i l l m i l e s t o n e s as f a r as t h e Comrnissionls work is

concerned.

Did you f e e l t h a t t h e u t i l i t i e s l a w y e r s , f o r i n s t a n c e , d i d n ' t

l i k e you as w e l l as t h e y had b e f o r e ? Was t h e r e any p e r s o n a l

f e e l i n g t h e r e ?

No, n o t as far as I know. Of c o u r s e , t h e y may have had p e r s o n a l

f e e l i n g s , b u t t h e y d i d n ' t come t o my a t t e n t i o n ,

I wondered p a r t i c u l a r l y i f some of t h e r a i l r o a d s d i s l i k e d Eshle-

man p e r s o n a l l y . B1

/ Ihelen: I d o n ' t t h i n k so , I t h i n k t n e y must have r e s p e c t e d him, I d o n ' t 1

1 i

t h i n k t h e r e was a n y f e e l i n g a g a i n s t him, b e c a u s e he was h o n e s t

and he was a b l e ,

Day . t o Day O p e r a t i o n o f t h e R a i l r o a d Commission

What was t h e day of a commiss ioner l i k e ?

I h e l e n : Work, work, work,

The Sari F r a n c i s c o o f f i c e w a s y o u r c e n t e r ?

. -

32

!helen: That ' s co r rec t ,

iaum: How o f t e n would you go out from t h e San Francisco o f f i c e ?

'helen: Well, I th ink as far as my case is concerned t h a t I was o u t perhaps one-third of the time up and down the s t a t e .

aum: How long would you be gone from the c i t y ?

helen: I t depended, of course, upon the case. If i t was a hard--fought

r a t e case i t misht be a ques t ion of a week or so; i f i t was

some small case i t might be a quest ion of a day or even a few

hours. I n f a c t , i n a good many casos i n which I had gone up

and down the s t a t e , t r a v e l i n g by ra i l i n those days, I would

a c t u a l l y w r i t e the dec i s ion on the way back. Next morning,

why, t h e r e ' s the dec is ion ,

sum: So t h a t you weren1 t of ten away from home f o r , oh, a month a t a

time.

~ e l e n : Oh, no, n o t while I w a s on the Commission. Later on, of course, condi t ions were d i f f e r e n t . For ins tance , you take the

famous Los Angeles Union S t a t i o n case, which by the way i s t h e

longes t and hardest-fought case, I guess, i n which the Commis-

s i o n ' s ever been i n t e r e s t e d . I n t h a t case the re were long-

continued hearings i n Los Angeles and i n Washinston before the

I n t e r s t a t e Commerce Commission and so on. In those cases I was

away q u i t e a while. But most of t h a t w a s a f t e r I l e f t the

Comiss ion , as a p r i v a t e a t t o r n e y f o r the City of Los Angeles, 1 ~um: Another case t h a t seemed t o take you q u i t e a long time w a s

t h i s Ca ta l ina -- the f r e i g h t e r going t o Ca ta l ina I s l and from 9 i!

Los Angeles. That began i n J u l y 1913, ! j

ielen: That was the f i r s t case which the Ca l i fo rn ia Hailroad Commis- 6 t

s i o n had before the b n i ~ e d S t a t e s Supreme Court. What happened 1b

t h e r e w a s t h a t some sh ippers complained of the f r e i g h t r a t e s

between San Pedro and Ca ta l ina Is land . Ca ta l ina I s l and , I

th ink , was twenty-one mi les out from the mainland, and the - .

. . . . . . . . . . . . . . . . .' .

. . . .. .

.

. ' , .

. . . .

, . .

. . . .

. . ' . . : . . -33,. . ' . . . . . . . . - . . . . . : . . . . . . . . . . . . . . - . . . . . . . . . . . . ,. ,. .>.. . . . . . . . . . . . .. . .

. . . ,.. . .. . , . . . . .-, . . . . : . . . . .. . . . . . . . . . . ..... . . . . . . . . . . . . . , . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . , . . . . . . . . . . . . . . . .... . . . . . . . . . . . . . . . : . ~ . . . . . . , . . . . . . . . . . . : . . . . . . . . . . .. . . . _ . . . . . . . . , .

. . . . .

....- . . . . . . ; . . . . . . . . . . . . . . . . . . . . . - .. . . . . . . . . .. . . . . . . . . . . .. . . . .. .: . .. . . . . . . . .

~ h e l e n : : held . . . ~ a i 1 r o a d : ~ o r n m i s s i o n t h a t w e had j u r i s d i c t i o n , and made .soma- , ' .

r educ t ion i n t h e f r e i g h t r a t e s . The shippirig company took t h e

c a s e f i r s t t o t h e C a l i f o r n i a Supreme Court , which c o u r t h e l d

t h a t t he I n t e r s t a t e Commerce Commission n o t having a c t e d i n

t he ma t t e r , t h e C a l i f o r n i a Commission might go ahead, which we d i d . The company took t h e c a s e t o t he Supreme Court of t h e

United S t a t e s . That was my f i r s t case be fo re the Supreme Court

of t he United S t a t e s .

Baum: What was t h e name of t h e case?

rhelen: I t was the sh ipp ing concern, the Wilmington T r a n s p o r t a t i o n

Company, wnich took the ca se t o the Supreme Court of t h e United

S t a t e s , and i t ' s known as t h e Wilmington T r a n s p o r t a t i o n Company

Case. J u s t i c e Hughes wrote t h e d e c i s i o n i n t h a t ca se and sus-

t a i n e d t h e o r d e r of t h e Commission. T h a t ' s t he f i r s t c a s e t h e

Commission had be fo re t he Supreloe Court of t h e United S t a t e s .

3aum: I looked a t t h a t case . Your d e c i s i o n was very long and cons t i -

t u t i o n a l ; i t was one of t h e only d e c i s i o n s I found i n t h a t

whole pe r iod t h s t r e a l l y was based on c o n s t i t u t i o n a l l a w , and

n o t j u s t on t h e f a c t s of t h e case. I wondered i f you 'd been

s e l e c t e d p a r t i c u l z r l y t o handle t h a t case.

'helen: I was t h e a t t o r n e y f o r the Commission as w e l l as a member of

t h e Commission, on one s a l a r y , mind you, n o t two. I was the

a t t o r n e y f o r t h e Commission, and having heard t h e c a s e i t w a s

q u i t e l o g i c a l t h a t I should be des igna t ed t o a rgue t h e ca se . .b e f o r e t h e Supreme Court.

h aum: Then t h i s case f e l l t o you p a r t i c u l a r l y as t h e a t t o r n e y . I j u s t

wondered i f i t happened t o be i n your r o u t e of t r a v e l , o r -- 1 a helen: No. Now t h a t you r e f e r t o t he m a t t e r I th ink t h a t i t came t o 1

f me as being t h e a t t o r n e y f o r t h e Comnission, j u s t as I defended . I

t

t he Commission i n q u i t e a number of c a s e s before the C a l i f o r n i a . supreme Court as long as I was t h e a t t o r n e y , bu t wnen. . I became. . . .-: .

, 8

. . . . . . . . . ~. . . . ,:. . . :. . :. . . .. . . . . . . . . . . . . ,.. '. . .:. . - , , .- .. . . . . . . . . . . . . . .'2... . . . . . . . . . . . . . . . . . ........:....::..:.r..

:,: . . . . " . . . . . . . . . .: .~. . .. . . ,.- . . . . . . . . I.:. . . . . . . . .... . . . . .. . . .. . . . . ,... , . . .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . - .. . . . . . . ..... . . . . . . . . . . . . . . . . . :. . . .. . . . . . . . . . .. - . . .. . . . . . . . .... .:. . . .. . .. . . . .; . .. . . . .. . . . ~. .. . . . . . ,-. . . . . . . . . . . . . . . . . . . . . , . . , . . . . . . . . . . . . .. . . . .. '.' . . . . . . . .. . . . .. . . . .. . . . . .I. . . . .~. . . . - ., -. . .. . . . . . . . . . . .

. . . . .

I

34

e

jam:

Ihelen: p r e s i d e n t of t he Coamission i t d i d n ' t seem proper t h a t I shou ld

cont inue as a t t o r n e y , and Douglas Brookman became t h e a t t o r n e y

and I no l o n g e r r ep re sen ted t h e Commission i n c o u r t cases .

I don ' t r e a l l y unders tand how you were a s t o r n e y and commissioner

a t the same t i m e ,

~

Ihelen: Well, h e r e ' s what happened: when Eshleman, Gordon, and Loveland

were appoin ted on t h e Commission, w i th in a few months t h e r e a f t e r

they appoin ted me as the Commission's a t t o r n e y , and i t w a s i n t h a t c a p a c i t y t h a t I went e a s t and examined t h e work of t h e s e

o t h e r commissions and came back and d r a f t e d a p u b l i c u t i l i t i e s

a c t , and when Governor Johnson a ~ p o i n t e d me as one of t h e two

new members o f the Commission i t w a s with- t h e d i s t i n c t condi-

I

t i o n t h a t I could r ema imas a t t o r n e y f o r t h e Commission because

t h a t was my p r o f e s s i o n and I d i d n ' t want t o g e t o u t of it. Johnson s a i d , "Well, t h a t ' s a l l r i g h t . You can remain as a t t o r -

ney f o r t h e Commission, bu t y o u ' l l g e t t h e s a l a r y o f a commis-

s i o n e r , and n o t a second sa la ry , ' ' which, of course , was a l l

r i g h t with me. I d i d n ' t c a r e about t he s a l a r y . Have I e x p l a i n e d

t h a t s u f f i c i e n t l y ?

&urn: Well, i t seemed l i k e a commissioner had a f u l l - t i m e job.

nelen: Well, I had n i c h t s as w e l l as daytimes t o work.

xum: You g o t $8,000 a yea r , is t h a t r i g h t ?

i e len : No, we d i d n ' t . I t h i n k i t was $6,000,

t he muni f icen t s a l a r y of $5,000, and I g o t as a t t o r n e y

Was $6,000 a good s a l a r y . in those days?

tum:

Yes, i t was a l l r i g h t , -

You s t a r t e d t o t e l l me what a day 's work was begin work, and how d i d i t go along?

4

l i k e , When d i d you

1

1 i !1 1

Well, I d o n ' t know t h a t I can be s p e c i f i c as t o hours , b u t t h e '

helen: f a c t i s t h a t I worked d u r i n g t h e dayt ime in t h e o f f i c e and I

worked a t n i g h t u n t i l t e n o r e l e v e n o ' c l o c k a t home writ ing d e c i s i o n s , s o t h a t ' s how I s p e n t my day,

aum: How much of your day would be t aken up i n h e a r i n g s ?

helen: Wel l , t h a t depended e n t i r e l y on what c a s e s t h e r e were b e f o r e t h e

Commission, what c a s e s had been a s s i g n e d t o me, whether they

were long h e a r i n g s o r s h o r t h e a r i n g s . I c a n ' t g i v e you any

g e n e r a l i z a t i o n ,

ium: Did t h e work f a l l abou t e q u a l l y on a l l t h e coamis s ione r s ,

i n c l u d i n g t h e f a c t t h a t you were a t t o r n e y a l s o ?

n o t

ielen:

e l en :

Well, I d o n ' t want t o s a y a n y t h i n g t h a t would d i s p a r a g e any of

t h e o t h e r commissioners . I ' l l s a y t h a t J a c k Eshleman worked

h a r d , worked many hou r s , and t h a t I worked as h a r d and as many

hou r s as he d i d , b u t I do n o t want t o go any f u r t h e r than t h a t .

How were t h e c a s e s a s s i gned?

By t h e Commission as a whole, I

um: How d i d they make t h e d e c i s i o n as t o who wsuld hand l e what?

Well, c a s e s i n v o l v i n g q u e s t i o n s of c o n s t i t u t i o n a l l a w o r p o l i c y

would g e n e r a l l y come t o J a c k Eshleman o r me o r bo th of us.

Cases i n v o l v i n g r a i l r o a d c r o s s i n g s would come t o Gordon. Cases

i n v o l v i n g i s s u e of s e c u r i t i e s , e i t h e r Edger ton o r Eshleman o r

mysel f . Cases i n v o l v i n g r a i l r o a d f k g h t rates, Loveland. The

c a s e s n a t u r a l l y f e l l t o p a r t i c u l a r commissioners ,

Oh, d i d they? I t d i d n ' t seem, as I looked th rough a l l t h e hear-

i n g s , t h a t t hey d id . You've hand led eve ry k i n d of c a s e t h a t

came up, i t seemed l i k e .

Yes, w e l l , J a c k Eshleman d i d a l s o , a l t h o u g h we were l a r g e l y

c o n f i n e d t o c a s e s , as I s a i d , i n v o l v i n g c o n s t i t u t i o n a l q u e s t i o n s

o r q u e s t i o n s o f p o l i c y ,

You had l i t t l e c a s e s , too , t h a t would be j u s t

oh, a pe rmi t t o i s s u e bonds -some l i t t l e i s s u e , .

. -

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8 11

E ii+'helen: t h z t t h e Commission e x e r c i s e s a g r e a t d e a l of j u r i s d i c t i o n ove r

t h e s e t r u c k s and j i t n e y s and buses and s o on. Ye t r i e d t o es-

case t h a t j u r i s d i c t i o n , b u t t h e C a l i f o r n i a Supreme Cour t would

n o t l e t us. They f o r c e d u s t o assume j u r i s d i c t i o n , b u t what

w e had t h e n w a s n o t h i n g compared t o whzt t hey have now. They have a v e r y l a r g e s taff devoted t o buse s and t r u c k l i n e s and s o

on,

aum: I t was p a r t of your r e s p o n s i b i l i t y

n o t j u s t t o t a k e com?la in ts ,

t o i n i t i a t e i n v e s t i g a t i o n s ,

l e l e n : Wel l , we had a u t n o r i t y and

d i d t h a t , .

once i n a whi le , n o t ve ry o f t e n , we

hum: I wondered how many i n v e s t i g a t i o n s you cou ld i n i t i a t e on your

own, o r i f t h e e n t i r e staff was busy a l l the t ime i n compla in t s

t h a t came i n , i n i t i a t e d o u t s i d e t h e o f f i c e ,

~ e l e n : Well , t h e fact i s t h z t t he s t a f f w a s busy p r a c t i c a l l y a l l t h e

1 um: .

1 e len :

~ r n :

3len:

( m:

? l en :

t ime , bo th on fo rmal comp la in t s and on i n fo rma l comple in t s , and t h e i n s t a n c e s i n which we i n s t i t u t e d i n v e s t i g a t i o n s o f o u r

own were v e r y few and far between,

Was i t i n 1915 t h a t you s t a r t e d examiners, o r d i d you have ex-

aminers b e f o r e then? I know i t w a s i n August of 1915 t h a t you

a z p o i n t e d P h i l i p Banc ro f t , Harry E n c e l l , and Myron Westover.

I t h i n k t h a t t h o s e were a b o u t t h e first t h r ee .

The p r e j s u r e w a s g e t t i n g h e a v i e r and h e a v i e r ?

Well, y e s , t h a t ' s c o r r e c t ,

Did t h a t sys tem seem t o work o u t a l l r i g h t , t o have examiners?

S u r e , worked o u t f i n e . I n g i v i n g t h e heads of depar tments a

l i t t l e w h i l e ago I o m i t t e d one ve ry impor t an t one, and t h a t w a s

Mr. S in she imer , who was t h e head of our s t o c k and bond depar tment A

and o u r p u b l i c i t y agen t . We g o t p e r f e c t l y wcnderful coverage I

i n t h e newspapers of t h e s t a t e du r ing t , o s e f irst few y e a r s , and

38

Thelen:

. . -.

i t was l a r g e l y due t o t h e a r t i c l e s which P a u l S i n s h e i ~ e r wrote d e a l i n g wi th d e c i s i o n s t h a t , w e were render ing ,

Baum: Who were some of t h e l e a d i n g a t t o r n e y s who appear.ed b e f o r e t h e

Commission when you were on i t?

Thelen: I ' l l g i v e you, s a y , h a l f a dozen, if you want them. A s far as

t h e Sou thern P a c i f i c Company is concerned, t h e two l e a d i n g at-t o r n e y s were Henley Booth and C.V. Durbrow. A s far as t h e

y e s t e r n P a c i f i c i s concerned i t ' s Warren Olney, Jr, A s far as

t h e P a c i f i c Gas and E l e c t r i c Company i s concerned, t h e i r l e a d i n g

r e p r e s e n t a t i v e wasn ' t a lawyer b u t was t h e p r e s i d e n t of t h e com-

pany, John A. B r i t t o n ,

Baum:

Thelen:

He appeared b e f o r e t h e Commission?

Oh, yes . A s far as t h e P a c i f i c Telephone Company i s concerned,

I t h i n k i t was H.D. P i l l s l j u r y . A s far as the Sou thern C a l i f o r -

n i a Edison Company was concerned, i t w a s H.H. Trowbridge. Those

a r e a t l e a s t among t h e l e a d i n g a t t o r n e y s who appeared,

II

Baum: Those were whi le you were on t h e Commission,

Thelen: T h a t ' s c o r r e c t .

Baum: Those men appeared b e f o r e you i n many cases?

Thelen: I n q u i t e a few, p a r t i c u l a r l y t h e S.P.

Baum: Did you g e t t o know t h e s e a t t o r n e y s w e l l s o c i a l l y ?

Thelen: Not s o c i a l l y , no.

Baum: Did you t r y t o a v o i d them s o c i a l l y ?

Thelen: No. But I wasn ' t do ing t h e s o c i e t y a c t . I w a s working, 4

Baum:

I'helen:

,

I wondered i f t h e r e was any code t h a t you t r i e d n o t t o know any-

body s o c i a l l y .

No. When they appeared b e f o r e u s w e l i s t e n e d c a r e f u l l y t o what

they had t o s a y , t r i e d t o r ende r a d e c i s i o n t h a t w a s j u s t on t h e

f a c t s , b u t t h a t was a l l . P e r s o n a l l y I w ~ sneve r i n v i t e d t o any of t h e s e homes and I probab ly wouldn ' t have gone i f I ' d been

i

-I

Thelen: i n v i t e d , b u t I never have been. And I d idn ' t want t o 'be,

Baum: I n a case t h a t you d i scussed wi th Johnson -- i t ' s i n a l e t t e r i n

the Johnson pape r s -- I t h i n k t h e i s s u e was t h a t the Key System

was t r y i n g t o . i n c l u d e a f r a n c h i s e . v a l u e i n t h e i r rate base-

rhelen: Yes, I t h i n k they were t r y i n g -

3aum: I b e l i e v e they 'd been g iven t h e f r a n c h i s e by t h e C i ty of

They purchased i t a t a low r a t e ,

Oakland

rhelen: Oh, t h a t was a case t h a t happened s o o f t e n , where a concern

would g e t a f r a n c h i s e f o r no th ing and then expec t t h e r i g h t t o

c a p i t a l i z e i t . Na tu ra l ly we were ' a g a i n s t t h a t s o r t of th ing.

jam : Did you prevent them from doing t h a t ?

'helen: Yes, we d id , because i n f i x i n g r a t e s we would n o t a l l ow a n al-

leged f r a n c h i s e va lue as a b a s i s f o r t h e rate,

~aum: I know t h a t you made i t 2 r u l e t h a t from t h a t t ime on they were

n o t al lowed t o t r y t o c a p i t a l i z e a f r a n c h i s e , they had t o a g r e e

n o t t o when they accep ted the f r anch i se .

helen: Tha t ' s a p r e t t y good p o l i c y , don1t you th ink? [ ~ a u g h i n g ]

am: Yes, I th ink so. D idn ' t they t r y t o c a p i t a l i z e on good w i l l ,

too? Try t o pu t a d o l l a r va lue on t h a t , and you would t r y t o

s t o p them from doing t h a t ?

helen: Well, we d id s t o p them,

i nvo lv ing 2 va lua t ion .

as far as any case

We s topped them,

t h a t came b e f o r e u s

3um: Wouldn't a l l r a t e s come be fo re you?.

l e l e n : Yes, bu t they d i d n ' t a l l come b e f o r e u s at one and t h e same t i m e .

~um: But wouldn't they appear every yea r? Vhen you looked

r a t e base you would see t h i s - c a p i t a l i z a t i o n t h e r e ? ; ;

over t h e

le len: No, i t d i d n ' t work ou t t h a t way.

e r a l l y l e t s l e e p i n g dogs l f e .

If nobody complained we gen-

40

~ a u m : .One of the t h i n g s t h a t I know people who buy water were angry about was t h a t they f e l t t h a t t he u t i l i t i e s were go ing t o capi-

t a l i z e water r i g h t s t h a t they had g o t t e n f r e e .

Thelen: We never a l lowed them t o do t h a t ,

Baum:

Phelen:

I heard t h a t you were a l i t t l e s e v e r e r on water companies t han on o t h e r p u b l i c u t i l i t i e s ,

II have no knowledge a t a l l of any such s i t u a t i o n . I don t b e l i e v e i t ' s t r u e . I t h i n k we t r e a t e d them a l l t h e same way.

Baum: There was some c r i t i c i s m t h a t t he P u b l i c U t i l i t i e s Act had

pe rmi t t ed u t i l i t y monopolies i n t h a t a u t i l i t y c a n ' t

f i e l d wi thout permiss ion of t h e ail road' Commission.

e n t e r t h e

Phelen: Well, t h a t ' s a tremendously impor t an t s u b j e c t . I t 's t r u e t h a t

t he Commission adopted a g e n e r a l p o l i c y t h a t where an e x i s t i n g

u t i l i t y is g i v i n g adequate s e r v i c e a t r ea sonab le r a t e s t h a t

we're n o t go ing t o l e t ano the r concern come i n t h e r e and c u t

them t o p i eces . We adopted t h a t ve ry d e f i n i t e l y as a po l icy .

The l e a d i n g case is what ' s known as t h e Oro B l e c t r i c Case, i n

which case t h e Oro E l e c t r i c Company t r i e d t o e n t e r the e l e c t r i c

f i e l d i n S tock ton , J ack and I h e l d h e a r i n g s on t h a t a p p l i c a t i o n

i n Stockton and a l s o i n San F ranc i sco , as I remember i t , and we

tu rned down t h e app l iLan t on t h e ground t h a t t h e e x i s t i n g com-

pany was g i v i n g adequate s e r v i c e a t r ea sonab le r a t e s . hat's the g e n e r a l 2 o l i c y which the Commission adopted then, and I

t h i n k i t ' s adhered t o ever s i n c e . The reason we f e l t s a f e i n

doing t h z t i s because we had the power t o r e g u l a t e t he e x i s t -

i n g concern, and i f tney weren ' t g i v i n g r ea sonab le r a t e s and

g i v i n g adequate s e r v i c e we would f o r c e them t o do it .

3aum:

'helen:

Well, the c r i t i c i s m i s t h a t t h e P.G.&E. and t h e Southern C a l i -

f o r n i a Edison Company hr2ve become s o powerful t h z t tney a r e

a b l e t o p r e s s u r e t he P a b l i c U t i l i t i e s Commission.

Tha t ' s t he ' theory, A s a m a t t e r of f z c t , do t hey do so?

/1 J

4! b

aancrofi bbraq

41

i . .

Baumt I don ' t h o w .

Thelen: Well, I d m ' t e i t h e r .

Baum: T h i s wculd be a f t e r your day on t h e Cornmission, I t h ink , because

t h e P.G,&E, wasn-'t as powerful a company then.

Thelen: A s a m a t t e r of f a c t , t h e P.G.&E,, I t h i n k , i s doing a wonderful

job. I t ' s g i v i n g r a t e s t h a t . z r e among the lowest i n t h e United I--

S t a t e s and t ak ing c a r e of whoever needs t o be taken c a r e of.

Same s i t u a t i o n as wi th t h e te lephone company. One of our per-

naps l e a d i n g c a s e s w a s a c a s e i nvo lv ing t h e Sunset Telepnone

and Telegra2h Company and the Home Tele2none Company, Both

were s e r v i n g t h e Los Angeles a r e a , and h e r e w a s t h i s man who

had t o have two te lephones . He h2d t o have the Sunse t te lephone

and he had t o have t h e Home te lephone, and,we thought t h a t t h r t

was wrong. I had t h e c a s e and I r e f u s e d t h e c e r t i f i c a t e o f

p u b l i c convenience and n e c e s s i t y t o t he Home Telephone Company

b u t I s a i d i n t h e d e c i s i o n t h a t i t would be very i n t e r e s t i n g

t o s e e how t h i s s i t u a t i o n worked o u t , t h a t i f i t d idn ' t work

ou t t o t h e b e n e f i t of t h e p u b l i c t h a t t h e r e w a s on ly one a l t e r -

n a t i v e l e f t , which I s u r e l y d i d no t advoca te , and t h z t would be

p u b l i c ownership of the te lephone c3mpany. The P a c i f i c Tele-

phone Company must g i v e good s e r v i c e t o t h e p u b l i c because

over t h e i r neaCis is the power t o r e g u l a t e . T h a t ' s a r e s p e c t

i n which t h e s i t u a t i o n i s d i f f e r e n t from what i t w a s be fo re

t he Johnson a d m i n i s t r a t i o n came i n , wnen t h e r e wasn ' t any e f -

f e c t i v e power of r e g u l a t i o n . Then you'd run i n t o a very d i f -

f i c u l t s i t u a t i o n i f you r e f u s e d t o l e t a second company in, You h-ve r e f e r e n c e s t o l e a d i n g c a s e s before t h e Rai l road Com-

miss ion. I t n i n k t h ~ tt h e Oro E l e c t r i c Case is one of t h e

l e a d i n g c a s e s (Oro E l e c t r i c Company vs. t he Vestern S t a t e s

Company) -- t h a t ' s a Byllesb; concern, the d y l l e s b y organiza-

t i o n i n t h e E a s t i n Chicago owned the com2any. And I th ink if

y o u ' r e p u t t i n g down l e a d i n q c a s e s you might a l s o pu t down t h a t

t e lephone case , t h e Xome Telephone Company Case. -

. - - .

42

Baum: Then 'you d o n ' t f e e l t h a t t h e P;G.&E. P u b l i c U t i l i t i e s Commission?

t r i e s t o p r e s s u r e t h e

Thelen: I h a v e n ' t s een any evidence of i t .

B a ~ m : Another c a s e I wanted t o ' a s k you &bout w a s i n 1914, when i t came t o l i g h t t h a t P a t r i c k Calhoun had absconded wi th over a

m i l l i o n d o l l a r s from t h e United Ra i l roads .

Thelen: Well, t h d t c la im w a s made, and the Uni ted Ra i l roads appeared be fo re t h e Cornmi:-sion t o g e t t h e Conmission's consent t o i s s u e ,

I t h i n k , $2,000,000 worth of n o t e s t o pay some of t he ou ts tand- i n g o b l i g a t i o n s and s o on. The Commission took the p o s i t i o n

t n a t .he'd have t o submit h i s f i n a n c i a l affairs t o t h e C ~ m m i s -

s i o n , i n c l u d i n g h i s account ing r e c o r d s and s o on, and he would n o t do t h a t , s o he d i d n ' t g e t h i s n o t e i s s u e . I don ' t know

how he f i n a l l y took c a r e of t h e s i t u a t i o n . The gene ra l f e e l -

i n g was t h a t t h e United Ra i l road was one of t h e p r i n c i p a l

c u l p r i t s , as' far as t h e i s s u e of s ecu r i t i e s was concerned. I

d o n ' t know t h a t t h e r e ' s evidence t h a t he a c t u a l l y took a m i l -

l i o n d o l l a r s . I' don' t remember t h a t .

Baum: There w a s a p i c t u r e i n the paper of t h e Commission, and you

were s i t t i n g over a t t he s i d e , a very young man i n a stiff

c o l l a r . The a r t i c l e t o l d about t he d i r e c t o r s of t h e Uni ted

I

R a i l r o a d s t e s t i f y i n g t h a t Calhoun had taken t h i s money and they had n o t i n v e s t i g a t e d -- I guess he took i t wi thout p u t t i n g i t on t h e books.

Thelen: I d o n ' t know, f r a n k l y ,

I j u s t d o n ' t know.

i f he a c t u a l l y s t o l e a m i l l i o n d o l l a r s ,

Baum: Your concern was j u s t t o decide if they could i s s u e those no tes?

Thelen: T h a t ' s c s r r e c t , and i n t h z t connec t ion we s a i d we won't g i v e you our a u t h o r i t y u n l e s s you submit t h e books t o u s , and he wouldn' t

do t h a t .

5

;

. - .?

. ,

. . . . . . . . . ... . . . . . . . . . . . . . . .. . . . : . . ... . . .... . . . .

. . . . . . . . .

. .. .. . ... . . . . s . . . .. . .. . . . . . . .

re t h e r e any . i m p o r t a n t ' i s s u e s we ' ve missed o n , t h e ail road . . :.

Baum: . . . . . .

. . . .. . . ~ o m r n i ~ s i o n ? missed a good' b i t . . ' . .

. .

' I know we 've . :. . . . . . . .. .

. . . . .Thelen: We've missed a n a w f u l l o t , . b u t I t h i n k you 've h i t t h e h i g h .

p o i n t s ,

Baum: Of c o u r s e , t h e r e a r e t h e h e a r i n g s and t h e r e a r e your a n n u a l

r e p o r t s , b u t they a r e a . l i t t l e b i t dry ,

Thelen: And t h e y a l s o a r e m a t t e r s of r ecord , I t h i n k you s a i d t h a t as

far as m a t t e r s of r e c o r d a r e concerned, you w ~ u l d n ' t be i n t e r -

e s t e d i n them because you c o u l d g e t them anyway,

Baum: T h a t ' s r i g h t . Did you t h i n k t h e R a i l r o a d Commission as i t worked o u t was e f f e c t i v e ?

Thelen: Yes, d e c i d e d l y so. I Baum: Could i t have been any more e f f e c t i v e by any changes i n t h e l a w ? I Thelen: I d o n ' t t h i n k so . No, I t h i n k i t was j u s t abou t t h e way i t I

ought t o be,

Baum: Do you t n i n k i t became more l ax i n t h e 1920s?

Thelen: I wouldn ' t Know. T e l l y o u why I wouldn ' t know: I w a s i n Wash-

i n g t o n i n 1918, middle of and I s t a y e d t h e r e u n t i l . . t h e y e a r ,

October 1920.

The N a t i o n a l A s s o c i a t i o n o f R a i l r o a d Commissioners, 1916-1918

Baum: I wanted t o a s k you a b o u t your work on t h e N a t i o n a l A s s o c i a t i o n

of R a i l r o a d C o m i s s i o n e r s , what k i n d s of problems you were un-I 4

I d e r t a k i n g t h e r e , I have you l i s t e d as p r e s i d e n t of t h e N a t i o n a l I! 3

I Associ:2t ion of R a i l r o a d Commissioners, 1916-1917, and chairman I

i of t h e s p e c i a l w a r committee, 1917-1918, 3

I t' ~ h e l e n : The N a t i o n a l A s s o c i a t i o n 3f R a i l r o z d C o m i s s i o n e r s was a n as- : I

s o c i a t i o n c o n s i s t i n g of r e p r e s e n t a t i v e s of t h e . r a i l r o a d

Thelen: commiss~onsand p u b l i c u t i l i t i e s commissions of a l l t h e v a r i o u s

s t a t e s of t h e Union. i e d i scussed problems of mutual i n t e r e s t

t o a l l the v a r i o u s commissions. This w a s 1915 t o 1918. I d o n ' t remember any s 2 e c i f i c problems t h a t we had a t t h a t time. I remember t h a t t h e r e was a good d e a l being s a i d at t h a t t i m e about v a l u i n g the r a i l r o a d s s o as t o f i x t h e r a t e s on them,

b u t I never d i d b e l i e v e t h a t t h a t w a s t h e r i g h t way t o handle

t h e s i t u a t i o n . I he ld t h e p o i n t of view t h a t t he r a i l r o a d s and

t h e p u b l i c u t i l i t i e s ought t o be a l lowed a f a i r r e t u r n on t h e

money t h a t t hey had p u t i n t o the p rope r ty , and no t what might

be determined now on present-day. v a l u a t i o n s which, of course ,

were very much h igher than o r i g i n a l l y h2d gone in.

II

Baum: I t w a s mostly t h a t they were working on a v a l u a t i o n of a l l the

r a i l r o a d s i n o rde r t o g e t a nation-wide r a t e base?

Thelen: T h a t ' s c o r r e c t . Well, a nation-wide r a t e base; each of t h e -

s t a t e s would heve i t s own r a t e base dependent -- accord ing t o

my p o i n t of view -- on t h e money t h a t had a c t u a l l y gone i n t o

the company. I wrote a r t i c l e s f o r magazines, s e v e r a l a r t i c l e s

f o r v a r i o u s magazines, advoca t ing t h z t theory. I t h i n k t h a t

t h e I n t e r s t a t e Commerce Commission h a s p r a c t i c a l l y come t o i t

now.

Baum: Did the r a i l r o a d s f a v o r g e t t i n g a replacement cos t ?

Thelen: Yes. Replacement c o s t t h a t ' s e n t i r e l y a c c u r a t e a l though we

c a l l e d i t the r ep roduc t ion c o s t new. Reproduction c o s t new

f i r s t and then r ep roduc t ion c o s t new l e s s accrued dep rec i a t ion ,

and some of t h e s t a t e s would f i n d t h e r a t e base t h a t way. They

wouldn' t take t h e reproduct ion c o s t new completely, wi thout any

r educ t ion , because t h z t obviously would be u n f a i r , b u t they

would t r y t o f i n d ou t what t he d e p r e c i a t i o n had been and sub-

-- I

II

i I

t r a c t t h a t from t h e r ep roduc t ion c o s t new and g e t a r a t e base

t h a t way. They d i d t h z t because of t h e d e c i s i o n of t he

rhe len: Supreme Cour t of t h e Uni ted S t a t e s i n w h a t ' s known as t h e A m e s

Case, which was t h e l e a d i n g case f o r a great many y e a r s , i n which t h e Supreme Cour t s u g g e s t e d t h a t ra te base . But I t h i n k

t h e Supreme Cour t h a s changed now. I t h i n k t h e y take t h e o r i - g i n a l c o s t i f t h e y can f i n d it,

The N a t i o n a l A s s o c i a t i o n o f R a i l r o a d Commissioners pub- l i s h e d a n n u a l r e p o r t s . I have a copy o f t h e "Proceed ings o f

t h e 2 8 t h Annual Convention Held i n Wzshington, D.C., November

14-17, 1916." A l l t h e committee r e p o r t s are shown t h e r e i n

f u l l . We d i d have commit tees on a good many d i f f e r e n t s u b j e c t s ,

~ u tI t h i n k t h a t t h e most i m p o r t a n t committee a t t h a t t i m e w a s

t h e committee on v a l u a t i o n s .

am: I t l o o k s l i k e i t t o o k you a l o t o f e x t r a t ime t o do t h e work on t h i s .

h e l e n : Well , 'of c o u r s e i t did. I aum: I t h i n k I ' l l have t o t a l k t o Mrs. Thelen on what s o r t o f l i f e

i t was t o b e t h e w i f e of a r a i l r o a d commissioner and p r e s i d e n t ,

he len : [ ~ a u ~ h i n ~ ] a mouthful .She can g i v e you The p r i n c i p a l t h i n g t h a t we d i d a t t h a t c o n v e n t i o n w a s t o s e l e c t Commissioner

Clyde B. A i t c h i s o n of t h e Oregon commission t o r e p r e s e n t t h e s t a t e commissions i n Washington, i n c o n n e c t i o n w i t h p r o c e e d i n g s

b e f o r e t h e I n t e r s t a t e C o m e r c e Commitsion. H e was a p a r t i c u l a r

f r i e n d of mine. He gave up h i s commiss ionersh ip i n Oregon and

went t o Washington and s t a y e d t h e r e f o r a w h i l e u n t i l E r e s i d e n t ! Wilson a g p o i n t e d him t o t h e I n t e r a t a t e C o m e r c e Commission.

I1

R I

He s e r v e d on t h e I n t e r s t a t e Commerce Commission l o n g e r t n a n I 'i

any o t h e r man t h z t ' s e v e r been t h e r e . H e hzd t o r e t i r e b e c a u s e i

o f h i s age j u s t w i t h i n t h e las t few y e a r s .

~ u m: He j u s t have been a v e r y young man then, r

~ e l e n : He w a s a young man. I t h i n k h e ' s somewhere around e i g h t y now,. a n d h e ' s r e t i r e d . You s e e , w h a t we had i n mind i n t h a t connec-

t i o n was t h a t we d i d n ' t want t h e r a i l r o a d s t o have i t a l l t h e i r

47

Thelen: t h e l i n e s o f .pe t ro l eum i f i t became necessary t o u t i l i z e t hose

r e sou rces , .

Baurn: Did you work with a s t a f f on t h a t , o r d i d you t h r e e men put i t t o g e t h e r yourse lves?

Thelen: No, 1'11 t e l l you f r a n k l y , I d i d n ' t do most of t h e work i n t h a t . Most of t h e work was done by P r o f e s s o r Blackwelder, who was- a petroleum g e o l o g i s t , and M r . Folsom. I t ' s t r u e I w a s

chairman, I s igned t h e r e p o r t , b u t they were t he ones t h a t d id

most of t he work. Condi t ions have changed very much. I t h i n k

i f I should re-read what ' s i n t h a t r e p o r t now I ' d say , 'Oh,

my God, we d i d a l o t of wrong guessing!"

A Blue Sky Law f o r C a l i f o r n i a

[ ~ e c o r d e d 15 November 19611

Baum: L a s t time we l e f t ou t your i n v e s t i g a t i o n i n 1912 of b lue s k y

Izws,

Thelen: Yes. The one s t a t e which had an up-to-date s e c u r i t i e s l a w

i n those days was Kansas. I h rd g o t t e n i n touch with Governor

S tubbs of Kansas. He w a s a w-,ll-known Prog res s ive Republican.

I found ou t how they worked t h e i r l a w and came back and I

t h i n k I must have rendered a supplementary r e p o r t on t h a t sub-

j e c t t o the R a i l r o a d C o m i s s i o n h e r e , bu t my mind i s n ' t v e r y

c l e a r on t h a t . The f i r s t t h i n g t h a t my mind is c l e a r on is

t h e annual message which Governor Johnson submi t ted t o t h e

l e g i s l a t u r e i n t h e f i r s t few days of 1913. I n t h z t message

he advocated a l l t h e s e va r ious l e g i s l a t i v e p roposa l s which

were l a t e r adopted, i nc lud ing the Blue Sky Law f o r C a l i f o r n i a

[ t h e Investment Company Act of 19131, and he very g r a c i o u s l y

t h e r e r e f e r r e d t o me as having i n v e s t i g a t e d t h e b lue sky l a w

and s o on and c l e a r l y po in ted a f i n g e r t o t h e l e g i s l a t o r s t o .

come and g e t i n touch with me. hs a m a t t e r of f a c t , I t h i n k

t h e r e were s i x t e e n d r a f t s of b l u e sky laws in t roduced i n t h e

l e g i s l a t u r e a t t h a t time. The l e g i s l a t o r s were a l l cl imbingI! . -I .. I

I Thelen:

Baum:

Thelen:

Baum:

Thelen:

Baum:

o n t o ' t h e bandwagon. Bu t they werent t v e r y good, and t h e Gov-

e r n o r f i n a l l y s a i d t o them, "Now, y o u ' d b e t t e r g o and see Thelen. H e ' l l f i x i t up f o r you," So I d i d c o n f e r w i t h t h e

members .of t h e l e g i s l a t u r e who were i n t e r e s t e d i n b l u e s k y l a w s

and d r a f t e d what l a t e r ' b e c a m e t h e Blue Sky Law of C a l i f o r n i a ,

So you d r a f t e d t h e --I d r a f t e d t h e one t h a t a c t u a l l y w a s adopted.

Was i t c n l y Kansas you v i s i t e d , o r d i d yoi v i s i t o t h e r s t a t e s ?

Not i n c o n n e c t i o n w i t h t h e b l u e sky l a w , Only Kansas. They

were p r e t t y s t r i c t i n Kansas, Very few of t h e concerns g o t through. We were more l i b e r a l he re . We d i d n ' t t h i n k t h a t i t

kould be d e s i r a b l e t o make i t e x t r e m e l y d i f f i c u l t f o r a c o n c e r n t h a t wanted t o i s s u e s t o c k s and bonds t o do so . The p r i n c i p a l

i s s u e b e f o r e t h e l e g i s l a t u r e i n c o n n e c t i o n w i t h t h e b l u e s k y l a w w a s who would a d m i n i s t e r i t ? The Governor f irst a d v o c a t e d

t h e R a i l r o z d Commission t o a d m i n i s t e r i t . I p o i n t e d o u t t h a t

we cou ldn ' t do t h a t w i t h our c ? n s t i t u t i o n a l amendment, because

t h e a u t h o r i t y of t h e Commission as d e r i v e d from t h e c o n s t i t u -

t i o n was l i m i t e d t o p u b l i c u t i l i t i e s , and of c o u r s e t h i s w a s n ' t

a p u S l i c u t i l i t y m a t t e r , Who s h o u l d a d m i n i s t e r t h e new law?

The Governor 'wanted t h e s u p e r i n t e n d e n t of banks t o a d m i n i s t e r

i t , b u t t h e r e was s e r i o u s o b j e c t i o n . t o t h a t on t h e ground t h a t

h e ' d be t o o s t r i c t , because r e g u l a t i n g banks t a u g h t him t o be

s t r i c t . F i n a l l y i t was prov ided t h a t t h e r e would be a new

o f f i c e r c a l l e d a c o r p o r a t i o n co.nmtssioner, and i t was t h e

c o r p o r a t i o n c o . m i s s i o n e r who f i n a l l y won o u t . You s e e , t h e

Governor d i d n ' t want t o c r e a t e any more commissions u n l e s s h e

had t o , and t h a t w a s why he was g r o ? i n g around t r y i n g t o f i n d

some e x i s t i n g agency which c o u l d a d m i n i s t e r t h e l a w .

If i t hdd been c o n s t i t u t i o n a l , would you have wanted t h e R a i l -

road Commission t o t a k e on t h i s a d d i t i o n a l burden? . I

Qnrroft Library

49

Thelen: I t h i n k i t would have been ve ry proper f o r t h e Ra i l road Com-

miss ion t o do so.

Baum: Why d i d n ' t you f a v o r .a c o n s t i t u t i o n a l amendment?

Thelen: That would hzve taken two y e a r s more.

Baum: I t seemed l i k e t h a t w a s a p e r i o d when you could g e t a cons t i -

t u t i o n a l amendment through e a s i e r than you could have a t some

o t h e r t i m e .

Thelen: I th ink you ' r e r i g h t - I t h i n k we could have b u t i t would have taken two y e a r s and the Governor d i d n ' t want t o w a i t two

y e a r s t o p u t through h i s twenty-one p roposa l s - He wanted

them now, and he g o t them now.

Baum: Would you have p r e f e r r e d t h e supe r in t enden t of banks t o have

admin i s t e r ed i t?

Thelen: No. I t h i n k t h e l e g i s l a t u r e a c t e d wise ly i n c r e a t i n g a com- I miss ione r of c o r p o r a t i o n s . Tha t ' s about t h e s t o r y as far as

t he b lue sky l a w is concerned.

Baum: How do you t h i n k t h e l a w worked out? [ ~ n v e s t m e n t Company Act

of 1 3 3 ; Corporate S e c u r i t i e s Act of 19171

Thelen: Well, I haven ' t had ve ry much exper ience wi th i t r e c e n t l y , bu t I my g e n e r a l o b s e r v a t i o n is t h a t i t ' s working ou t ve ry wel l in-

deed. Some of my p a r t n e r s have a good many c a s e s before t h e

c o r p o r a t i o n commiss ioner~ I n f a c t nowadays, as you know, a 11

c o r p o r a t i o n c a n ' t i s s u e s t o c k s o r bonds wi thou t f i r s t having I 1

taken up t h e m a t t e r wi th the commissioner of c o r p o r a t i o n s , and 1 3

as far as I can s e e i t ' s working ou t a l l r i g h t .

On t o War Work

Baum: Why d id you dec ide t o l eave t h e Ra i l road Commission?

Thelen: [ ~ a u ~ h s ]Well, we had a w t i r , World War Number One. I was

Thelen:

Baum:

I Thelen:

3aum:

Thelen:

p r e s i d e n t of t h e Commission. S e c r e t a r y of War Baker asked me t o come t o Washington and become a member of the g e n e r a l staff

o f t h e War Debartment because he needed someone t o s u p e r v i s e

. t h e making of c o n t r a c t s f o r ordnance m a t e r i a l s and a l l s o r t s

of o t h e r c o n t r a c t s and he needed someone who was'n't t i e d up

with any of t h e concerns t h a t were sugply ing t h e s e i tems. I

happened t o be i n Washington a t the t ime as p r e s i d e n t o f t h e

Na t iona l A s s o c i a t i o n of Ra i l road Commissioners. I r e c e i v e d a

c a l l from S e c r e t a r y Baker ' s s e c r e t a r y , who w a s a c lassmate of

mine i n t h e Harvard Law School; he 'd l i k e t o s e e me. So I c a l l e d on S e c r e t a r y of War Baker and, of c m r s e , when he s a i d

what he wanted I s a i d r i g h t away, "Yes, of course , I ' l l come."

I s t a y e d i n Washington q u i t e a- long whi le wi th t h e War Depart-

ment and t h e n I went wi th t h e United S t a t e s R a i l r o a d A h i n i s t r a -

t i o n as r e p r e s e n t i n g the p u b l i c i n t e r e s t , and i t wasn' t u n t i l

October 1919 t h a t I w a s through. And by t h a t time my job had

been f i l l e d . You a s k me why I l e f t t h e Ra i l road Commission.

The f a c t i s t h a t my job had been f i l l e d , and p r o p e r l y so ; I

hzd no complaint t o make. The Governor appoin ted I r v i n g

Mar t in of t h e S tock ton Record i n my p l a c e , and i t w a s per-

f e c t l y a l l r i g h t because i t threw me o u t on my own. I s o r t

o f expected t o do t h a t anyway, j u s t t o show people t h a t I

could e a r n a l i v i n g wi thout being f ed a t t h e p u b l i c trough.

You d i d n ' t l e a v e because you thought t h a t t he Ra i l road Com-

miss ion had p r e t t y w e l l f i n i s h e d its work?

Oh, my, no. That h;d n o t h i n g t o do wi th it-. I l e f t f o r t h e

r ea son t h a t I had been c a l l e d i n t o t h e s e r v i c e of t h e coun t ry

and when I came back, why, my. job had been . f i l l e d . 'So I hung

o u t my l i t t l e sh ing le .

To start your own p r a c t i c e ? 4F

Yes. k youngs te r i n a b i g c i t y hanging o u t h i s l a w s h i n g l e .

- .

t , - . . . -> .

Baum: You were R a i l r o a d

a v e r y young man when you Commission,

were a p p o i n t e d t o t h e

Thelen: I w a s t h e younges t commissioner i n t h e Uni ted S t a t e s . L e t me s e e , 1912 -- I was t h i r t y - t w o a t t n e t i m e I was a p p o i n t e d

c o m i s s i o n e r ,

Baum: You were t h i r t y - o n e w e r e n ' t you?

when you were working f o r t h e Commission,

Thelen: Then I was a t t o r n e y f o r t h e Commission,

THE ADMINISTRATION OF HIRAM JOHNSON,

Comments on Johnson

Baurn: L e t t s g e t back t o H i r a m Johnson and h i s a d m i n i s t r a t i o n as t h e

g o v e r n o r of C a l i f o r n i a , I Thelen: November 1910 h e was e l e c t e d .

Baum: Over h i s whole a d ~ i n i s t r a t i o n , two t e rms , what would you p o i n t

o u t as h i s major achievements? I Thelen: Well , I d o n ' t want t o have i t a p p e a r t h a t I t m t o o t i n g my own I

horn , b u t t h e s i m p l e h o n e s t f a c t i s t h a t h i s g r e a t e s t achieve-

ment was t h e R a i l r o a d Commission, and n e x t t o t h a t t h e I n d u s t r i a l

Acc iden t C o m i s s i o n . Tha t was a f i n e s t e p forward. Also h e

made e f f e c t i v e a new d i r e c t p r imary l a w , which w a s a s t e p fo r - i ward. He d i d a g r e a t many o t h e r t h i n g s . He had twenty-one

p l a n k s i n h i s p l a t f o r m and he made e v e r y one of t h o s e e f f e c t i v e .

T h a t ' s a v e r y unusua l s i t u a t i o n . A p l a t f o r m ' s g e n e r a l l y some-

t h i n g you walk i n on and h e n f o r g e t i t , b u t wi th him he d i d n ' t

f o r g e t , he went r i g h t through, r i g h t dgwn t h e l i n e and e n a c t e d 1 e v e r y one of t h o s e twenty-one measures , i n c l u d i n g woman s u f -

f r a g e . He d i d n ' t s a y v e r y much a b o u t woman s u f f r a g e . He w a s

i n t e r e s t e d i n t h e i n i t i a t i v e , re ferendum, and r e c a l l , and I

suppose f r a n k l y i f you were t o a s k him a f t e r h e ' d s e r v e d as

governor what measures he p a r t i c u l a r l y had i n mind he would have

s a i d , among o t h e r s , c e r t a i n l y i n i t i a t i v e , referendum, and re-

c a l l , because h e had tnem v e r y much a t ' h e a r t ,

Was t h e R a i l r o a d Commission a means by which he k i c k e d S.P. :j

Baum: 2 g

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