“The only thing new in the world is the history you don't know.” -- Harry Truman

Wednesday, October 26, 2011

Burlington: The Public Power Story

October 19, 2011: At the start of a tough mayoral campaign Republican candidate Kurt Wright proposes the sale of Burlington's Electric Department to reduce the city debt.

James Burke, Burlington’s Democratic mayor for seven terms between 1903 and 1935, is commonly hailed as “father” of the Burlington Electric Department. Though his political rivals at the time often reminded the public that the idea hadn’t actually originated with him, Burke was indisputably the engine that pulled the new department along during its early years.

Municipal power had enormous appeal in the early 20th century. In Vermont, the legislature authorized Burlington to furnish electric power to local residents on December 9, 1902. This meant that the city could purchase needed land – by eminent domain when necessary – and issue bonds for the work.

Three weeks earlier, however, the lawmakers had also approved the incorporation of a privately-owned light and power company. Burlington Light and Power would subsequently compete with – and more than once sue – the city over the management of energy distribution.

The Moran Plant on Burlington's Waterfront once generated power,
but has been closed for the past 25 years. 

Public vs. Private Power

Burlington Light and Power was founded by men like B.B. Smalley and Urban Woodbury. Smalley was a wealthy Democrat who had run for governor in 1892. A corporation lawyer, banker and president of the Burlington Gas Light Company, he was also on the board of directors of the Consolidated Electric Company, which merged with his Gas Light Company in 1906.

Woodbury was one of Smalley’s closest business associates. President of Consolidated Electric and founding board member of the Gas Light Company, he was a war hero, a former mayor and lieutenant governor, and had diverse business interests. Two years after Smalley ran for governor as a Democrat and lost Woodbury ran as a Republican and, predictably, won.

In short, Mayor Burke had some powerful opponents.

Just a week after he was declared the legal mayor by the State Supreme Court in 1903, he went to the City Council to win backing for light plant bonds. Two days later, on June 11, he staged a special citywide meeting to vote on the proposed $150,000 investment.

Woodbury was there to speak against the plan, along with Elias Lyman, owner of the area’s big coal company and the local mass transit monopoly, Burlington Traction Company. Both were hissed by the crowd as they talked.

The voters said yes to Burke’s proposal. Less than two years later his daughter, Loretta, pressed a button at the bandstand in City Hall park, energizing two circuits of street lights with power from the just-completed plant. Within ten years Burlington was generating over one million kilowatt hours with a turbine generator.

Despite widespread local support for public power, owners of the competing power company didn’t cave in. In fact, when the city was on the verge of expanding the department in 1910, Burlington Light and Power made a competing bid to supply energy for street lights, public buildings and parks. After it was turned down, the utility company filed an injunction to prevent the city from issuing new bonds.

Mayor James Burke
The lawsuit was dropped after two years, since it wasn’t possible to prove that commercial lighting supplied by the city was increasing the public debt. The company’s hope of challenging the city’s legal right to compete had been dashed. But Light and Power did eventually take the city to court and win. The Supreme Court decision came in 1918, while Mayor Burke was temporarily retired. 

The basis of the case was an agreement forged by Burke between the city and the private utility back in 1904. To avoid duplication as demand for electricity increased, Burlington had agreed to share utility pole space with Light and Power. Since the city used more of its poles, the city department was supposed to pay a 20 cent per year fee for each wire attached.

In 1909, Burlington stopped paying. One claim was that its charter established a right to use the top of all poles without charge. Light and Power cried foul.  A contract was a contract, after all, and the city was its chief competitor. The court agreed. No matter what the City Charter said, the department had to pay up.

That small defeat didn’t change the direction in which the city was moving, however. When Green Mountain Power offered $1 million to lease the department for 20 years the city wisely declined. During those 20 years public power brought Burlington more than $2 million in profit. In 1953, the department officially became a city monopoly when it purchased GMP’s franchise.

Modern Times

The 30-megawatt coal-fired Moran Generating Station, named for Mayor J.E. Moran, was completed in 1954. Since its closing decades ago, the city has pursued various plans to convert it for recreation or other community use. Its future, and that of the department itself, have become issues in the 2012 mayoral race. 

In 2005, BED received a National Star of Energy Efficiency award from the Alliance to Save Energy. A House resolution congratulating BED on this achievement noted that “despite the city’s significant commercial expansion over the last 15 years, in 2004, Burlington used less electricity than in 1989, a feat that was made possible through BED’s innovative leadership as a promoter of energy efficiency.” It also assisted in avoiding the release of over 43,000 tons of carbon dioxide annually.  

Today BED is the largest municipally-owned electric utility in Vermont. With more than 19,000 residential and commercial customers, it generates around $50 million in annual revenues, and provides power for the city and Burlington International Airport. Although exempt from local property taxes, the department pays around $1.5 million annually in contributions to the city, plus “indirect costs” that can reach $500,000. Mayor Burke’s vision of municipal energy production has gone farther than he could have imagined.

Tuesday, October 11, 2011

Boom and Bust in the Quarry Towns

October 18, 1935: In the depth of the Great Depression workers call a strike against Vermont Marble.

As agriculture entered a long, slow decline in the late 19th century, many Vermonters turned to mining and manufacturing. Vermont's first marble quarries had been cut in Dorset in 1792 using gunpowder, saws, wagons and sleds. But the industry faltered through various business cycles until 1857, when major business interests raised it from a decade-long standstill.

Then, in 1880, the Sutherland Falls Marble Company merged with the Rutland Marble Company, owned by New York banks and families, to form the Vermont Marble Company, which grew and took over smaller firms under Redfield Proctor. Within a few years it was the state’s largest corporation.

By 1900 Vermont was producing half the country’s marble output.

The benevolent ruler of both Vermont Marble and the company town named after him, Proctor provided workers with access to accident insurance, a company-owned bank and store, and a town library. As “friend and benefactor,” he also used his economic power to launch a political career, becoming a state legislator, governor, US Secretary of War and US Senator from 1891 to 1908.

Redfield Proctor, 1904
In the Senate Proctor fanned the flames for the Spanish-American War and guided invasions of Chile and Peru. He also chaired the committee that awarded contracts for federal buildings, making certain that their exteriors were built with Vermont marble. The first was Indiana’s State Capitol, followed by the US Supreme Court Building and Jefferson Memorial.

Following in his father’s footsteps, Fletcher Proctor acquired businesses for Vermont Marble in Swanton, Roxbury, Danbury, Brandon, Pittsford and Fletcher. “The ownership of one marble quarry is very precarious,” he explained. “The ownership of many marble quarries of diverse kinds and differently located may be fairly stable.” Also like his father, Fletcher used business as a springboard to the governor’s office.

In 1882, the Proctors invited the first Italian immigrants to Vermont, five sculptors from Carrara. A flow of Italian marble workers and railroad builders into the state was soon underway. But accidents and dust in the quarries claimed lives. And before coming to the US some of the newcomers had been members of Italian “mutual aid societies.” Many were prepared to defend their rights with radical tactics and ideas.

By the early 20th century over half of Barre’s residents were Italian and 90 percent were unionized. There were 15 separate locals, including laundry workers, musicians and bartenders. A Central Labor Union coordinated the groups, and socialist mayors were elected in 1916 and 1929.

As the Great Depression began, many Vermonters were still working in small industries. Employment was divided evenly between mining, quarrying, forestry and machinery production, with somewhat fewer workers in textile mills. New Deal programs tried to prime the pump with public investments, but buying power continued to lag, businesses closed, and unsold goods collected dust.

Some owners used Depression conditions as a rationale for layoffs and pay cuts. When this was attempted in Barre, granite workers launched a bitter two-month strike. Local residents backed the union, local tradesmen and farmers distributed free food, and a federal arbitration board looked for a compromise. On April 29, 1933 the Quarry Workers union rejected extension of the old contract for a second time. But the Granite Cutters accepted binding arbitration and the strike was practically settled by May 5.

Two days later the National Guard arrived, creating easier access for strikebreakers. Soon most quarries were back to business as usual. The workers had been demanding union recognition in the open shop quarries. But the presence of the Guard, combined with compromise by the Granite Cutters union, left many people high and dry. The strike was basically broken during arbitration.

At Vermont Marble the hard times, combined with increased costs, led to reduced services. Management dropped its free medical care and visiting nurses programs. By the mid-1930s the “company town” era was over in Proctor.

Vermont Marble also claimed to be operating at a loss and therefore couldn’t consider any wage increases. The quarrymen didn’t believe it, and on October 18, 1935, more than a hundred of them decided to strike as a protest of management’s decision to stagger their hours, which meant work only three weeks out of every four. The workers wanted a 40-hour week, an hourly wage of 50 cents — up from 37, and recognition of their union for collective bargaining.

Within a few days hundreds of other quarry workers were backing their action and demands. But management refused to negotiate.

Vermont Marble Quarry
That Thanksgiving at least a thousand striking workers and their families marched through Proctor in the rain to draw attention to their cause. This was followed in early December by a clash with the authorities and hired “security” resulting in serious injuries. The strike continued right through the winter.

But after four months on the picket line about half of the employees returned to work. In the end they got a two and a half cent raise and inspired Vermont Rebels Again, a play about the campaign that opened in New York.

By now, however, the Vermont legislature was ready to take a side, opting to help businesses troubled or threatened by worker militancy. A bill outlawing sit-down strikes was passed on April 7, 1937, making Vermont the first state to declare it illegal for employees to stop working but remain in their plant until a settlement was reached.

It was signed by Governor George Aiken, who had just been elected on an anti-New Deal platform. But Aiken wasn’t happy with the law and subsequently tried to mend fences with organized labor. He backed the creation of a state Department of Labor and, in 1938, helped to settle another granite workers strike.

This is the seventh in a series adapted from The Vermont Way, a new study by Greg Guma to be released in 2012.