Monday, September 28, 2009

More About Valpo

I've been hither and yon, and will be for the next few weeks.

But back to local news as it was reported in 1930 in the Valparaiso Vidette-Messenger. Here's a story that one might find today:

"The Valparaiso Chamber of Commerce voted to carry its fight against the sale of the local branch of the Northwestern Telephone company to the Winona Telephone Company of Plymouth, to a finish.

"Warned that the Indiana Public Service commission which twice before had disapproved the scheme devised by Former Governor James P. Goodrich, to link the Valparaiso phone system to his Plymouth holdings, was going to change its position, the local civic body has determined to stay in the fight. The Chamber of Commerce has resisted the move through three hearings by the Public Service Commission, a court testing at Crown Point and finally a Supreme Court hearing which reversed the findings of Judge E. Miles Norton of Lake county, approving the deal, and sent it back for a rehearing."

Times are different. It's difficult in today's world to comprehend exactly why it would matter who owned the local phone company, but remember that there were no area codes or direct dial. Long distance meant connecting with another phone company. And chambers of commerce no longer command the sort of institutional authority they did 80 years ago. Still, this sounds like an outlier of an investigative story alleging corruption.

But the 1930s Vidette-Messenger practiced a sort of personal journalism that we don't see and that probably would be condemned today. As noted in my last post, the Vidette was Pro-Valparaiso. Its view was that whatever was for the development of Valparaiso as the business center of Porter County -- particularly at the expense of Chesterton -- was good for Valparaiso, Porter County, and the Vidette-Messenger and its readers and advertisers. (This, of course, was the viewpoint of most newspapers during the 1950s and 1960s, the last era when everyone read newspapers. Newspapers were For The Community back when "community" had a broader meaning than today.)

Lynn Whipple, the co-owner and editor, daily expressed (in a column that often ran more than two columns long, back in the era of wider columns and smaller type) what he thought was best for Valparaiso, and I'm sure he expected many leading citizens of Valparaiso to fall in line (if, indeed, he was not simply falling in line with them). An excerpt from his column explaining why this was an issue shows the sort of involvement a small-town editor was then expected to have with his community. This is a long excerpt, but this is less than half the column. It opens with some high-minded

"The re-electicn of Glfford Pinchot as governor of Pennsylvania and that of George W. Norris of Nebraska as U.S. Senator, are outstanding examples. These men, for years have been as voices in the wilderness, warning the people against too great centralization of public utilities, such as light, power and heat, in the hands of a relatively few men. They have made powerful business, banking, industrial and political enemies. Yet, the people believe in them and continue them in office. ...

"It would seem that those holding public office charged with the responsibility of
representing the public interest as it is concerned with regulation of utilities and utility service would now awaken to the fact that the people of the United States, who have been very liberal and unquestioning in these matters, are beginning to become aroused to the fact that advantage is being taken of them. The above serves to give a background to a question of utility management ... the question of who shall own and operate the telephone company which, until three years ago, was a local utility, owned and operated by men of this community.

"In summer of 1927, however, the local owners decided to sell ... the local telephone company -- which had closely linked the entire county into one telephone system. They knew that there was a buyer for their properties...a buyer which represented the largest telephone system in the world and which controlled telephone operations in the great industrial and metropolitan areas with which Valparaiso and Porter County are closely linked... The Illinois Bell subsidiary of the American Telephone and Telegraph Co. [was] for several years, looking forward to eventual purchase of the Northwestern Indiana Telephone Company's "Ideal" system, with stations at Valparaiso, Kouts, Wheeler, Hobart, Porter and Chesterton. The Illinois Bell Company, which controls the telephone service in Chicago, Gary, Hammond and other Calumet district cities, including Crown Point, h£d had a direct hand in the development of the Northwestern Company.

"It was natural, then, for the owners of the local company to turn to the Illinois Bell Company, as the purchaser, when they determined to dispose of their holdings. The Valparaiso and Porter county public looked with favor upon the pending negotiations as they promised to tie local telephone service directly into that of the fast developing district to the west. The Illinois Bell company financed the transfer of stock holdings.

"Under Indiana law (as under the law of most, if not all other states) the consent of the Public Service Commission has to be secured before the sale of a utility can be consummated. Before giving approval to any such transaction, the commission is required to hold hearings to determine whether or not the proposed action is against public policy and interest. It demands all the facts. Then it was that it was disclosed for the first time, that the local telephone company was not to be sold, as a unit to the Illinois Bell Telephone Company, but instead, to be divided arbitrarily between two operating companies.

"The Crown Point Telephone Company, owned by the Illinois Bell Company, was to gain possession of the Chesterton, Porter and Hobart holdings of the Northwestern
Company...and the Winona Telephone Company, with headquarters in Plymouth, was to come into possession of the exchanges at Valparaiso, Kouts and Wheeler.

"Immediately every civic interest [pointed out that the] county telephone system had been developed as a unit and ought to be so held. It pointed out that Valparaiso had no interest in the Plymouth telephone system, which is functioning some fifty miles east.... {The commission] denied the petition, and demonstrated that it was serving the purpose for which it was created... protection of the public. This left the Illinois Bell corporation the potential owner. Back of the Winona Company, however, was a man once powerful in Indiana politics, former Governor James P. Goodrich. He then took the case to court...under a law that [gives] judges the right to overrule the commission.

"The case was taken to the Lake County circuit court over which presided Judge E. Miles Norton. Why the former governor's company selected this particular court for the hearing has never been disclosed. It did develop that Judge Norton was first named to the bench by Mr. Goodrich, when governor. Judge Norton overruled the commission's order and directed it to approve the deal.

"Then the Valparaiso civic group, :through Attorney Bruce B. Loring, carried the issue direct to the Indiana supreme court... contesting the legality of the law which gave courts the right to make decisions for the Public Service Commission. It got the commission to refuse to comply with Judge Norton's order until and unless the supreme court upheld his position and the law under which he acted. Again the commission demonstrated its desire to serve the public interest.
"Finally, after months and months o£ delay, months, by the way which brought many changes to the financial set-up of the original deal when, because of a severe storm and needed development, the Illinois Bell Company had to extend credit involving many thousands of dollars...the supreme court announced its ruling. It held that part of the law which directed courts to write orders for the commission unconstitutional and sent the case back for a new start.

"Largely because of the contests made by the Valparaiso community representatives the 1929 legislature repealed so much of the 1927 act under which courts were directed to rule for the commission and directed the attorney general of the state to appoint a special deputy whose duly it would be to appear for the commission in all court contests of its rulings.

"It happens that the man now holding this important office... Deputy Attorney General George a Plymouth man and acquainted with the group which is seeking to obtain the commission's approval of the transaction opposed by the Valparaiso civic interests. That is where the issue now stands. Judge Norton has again placed the issue squarely up to the Public Service Commission under the theory that its original order, disapproving the entire transaction, was "unreasonable" and implying that it ought to approve. The commission, for some reason or another, and for the first time, seems to hesitate as to what to do. In view of this, the Valparaiso civic group has appealed to the commission to dismiss the original petition asking for approval of the transaction ...

"Even so, local spokesmen are certain that if the commission will reopen the case, and stands firmly by the policy of protecting the public good, they will be able to again conclusively demonstrate that the proposed deal should not be permitted to go through. With the founding of a new steel city in north Porter county, and the further development of the dunes industrial and recreational district there is added reason why Valparaiso, the county seat, should be directly connected by telephone service and operation, with the entire county on a radius of some ten
to fifteen miles, as it has in the past.

"If the "Goodrich deal" goes, through, Valparaiso's telephone system will be divorced from that of Chesterton, Porter, the Dunes Region and Hobart and tied back into an unnatural and unpromising hook-up with Plymouth, fifty miles east.

"Any other position, on the part of the commission will only serve to feed the fire of discontent relative to utility operation and regulation and hasten the day when control of such will again be lodged with the local communities and strong utility development seriously crippled."

Whew. Here was clearly a man who bought ink by the barrel full. I guess it was his paper and no one could cut his copy. But in other words -- maybe the Plymouth investors are using undue influence; maybe the fix is in with the Crown Point judge; maybe none of that is true and it is simply that Illinois Bell had no desire to serve Valparaiso. But let us pay that little mind. What matters here is that the deal would remove Valparaiso's phone service from that of Chicago and Gary (while leaving Chesterton's with it, by the way). The Valparaiso "civic interests" merely want the commission to see the public good by making it easier for Valparaiso to be part of the Calumet region's growth. The interests of the little guy and the "interests" seem to be one.

As it turns out, until the deregulation of the phone system in the 1970s Valparaiso was a GTE city, as was Plymouth. So clearly the commission failed to act as the Vidette wished.

Yes, we're still in the William Allen White era of journalism here, not the modern era. This is an opinion piece -- but the front-page story on the chamber of commerce, which is simply a news release, is in line with the paper's program. This is how minds were influenced then. This is the sort of journalism that would soon fall into disrepute. More to come.

1 comment:

Anonymous said...

Oh, Calumet Region politics are always exciting and interesting. Politics in the rest of the Hoosier State are as exciting as watching paint dry. How times and Lake County, Indiana have changed?

Danny L. McDaniel
Lafayette, Indiana