Anatomy of a Murder: The Federal League and the Courts

This article was written by Gary Hailey

This article was published in the SABR 50 at 50


This article was originally published in SABR’s The National Pastime, Vol. 4, No. 1, in Spring 1985.

 

THE COURT HOUSE
This is that theater the muse loves best.
All dramas ever dreamed are acted here.
The roles are done in earnest, none in jest.
Hero and dupe and villain all appear.
Here falsehood skulks behind an honest mask,
And witless truth lets fall a saving word,
As the blind goddess tends her patient task
And in the hush the shears of fate are heard.
Here the slow-shod avengers keep their date;
Here innocence uncoils her snow-white bloom;
From here the untrapped swindle walks elate,
And stolid murder goes to meet his doom.
O stage more stark than ever Shakespeare knew
What peacock playhouse will contend with you?

Wendell Philips Stafford, the composer of “The Court House,” was a federal judge in Washington, D.C., for almost twenty-seven years. One of the thousands of trials Judge Stafford presided over was a 1919 antitrust suit brought against Organized Baseball (O.B.) by the Baltimore club of the defunct Federal League — a suit that threatened to loosen O.B.’s monopolistic hold on the national pastime.

Antitrust litigation is rarely colorful or dramatic enough to be the stuff of poetry, and it is doubtful that Judge Stafford had Federal Baseball Club of Baltimore vs. National League in mind when he wrote his verse. But a reading of the testimony given in the two-week-long trial does bring to mind a number of the poem’s phrases. There were few if any heroes to be seen, but “dupe and villain” were well represented in Judge Stafford’s courtroom. Certainly “falsehood skulk[ing] behind an honest mask” was present in abundance at the trial, as well as “untrapped swindle.”

But more than anything, the evidence presented by the Federal Baseball litigants tells the story of a “stolid murder” — the murder of O.B.’s last serious competitor, the short-lived Federal League.

THE FEDERAL LEAGUE WAR

Late nineteenth century professional baseball was plagued by wars between the established National League and a succession of upstart leagues. The American Association war of 1882, the Union Association war of 1884, the Players League war of 1890, the American League war of 1900 — all these bitter conflicts resulted in huge losses for almost everyone involved, not to mention widespread public disenchantment with the professional game.

More than two decades of strife ended in 1903, when the National League and the American League signed a peace treaty. American League President Ban Johnson testified at the Federal Baseball trial that the purpose of the peace treaty was to restore “normal conditions” to professional baseball.

Q. Then your purpose was to eliminate competition between the two leagues for players?

A. … I don’t think we cared for competition at all.

Later that year, the two major leagues and several minor leagues adopted the “National Agreement,” which provided for mutual respect for player contracts, reserve lists, and territorial rights. It also established a “National Commission,” consisting of the major league presidents and a third man selected by them, to rule the sport.

Peace — or, to put it another way, the lack of competition between the two leagues — brought prosperity. Attendance and profits reached unprecedented heights, and the World Series added greatly to the public interest in the pennant races. That prosperity attracted the attention of potential rivals. In 1913, several wealthy businessmen organized the Federal League of Professional Baseball Clubs. Prior to the start of the 1914 season, Federal League President James Gilmore asked Ban Johnson if O.B. would allow the Federal League to operate under the National Agreement as a third major league. Johnson told Gilmore that “there was not room for three major leagues.”

The Federal League owners declared war. They quickly erected brand-new stadiums in seven of the league’s eight cities: Baltimore, Brooklyn, Buffalo, Chicago, Indianapolis, Kansas City, Pittsburgh, and St. Louis. They also declared that the reserve clause in O.B.’s standard player contract was unenforceable, and began to sign up players under reserve by existing major and minor league clubs.

THE RESERVE CLAUSE

Lawyers for the Federal Baseball Club of Baltimore hoped to persuade the jury that the purpose of the “right of reservation,” a key feature of the National Agreement, was to enable O.B. “to eliminate the possibility of competition by establishing an absolute monopoly” over the supply of professional baseball players.

Much of the National Agreement and many of the rules and regulations issued by the National Commission dealt with the right of reservation, which National Commission chairman and Cincinnati Reds president August “Garry” Herrmann described as “absolutely necessary” to O.B. For example, Article 8, Section 1 of the National Agreement provided that: “[N]o non-reserve contract shall be entered into by any club operating under the National Agreement until permission to do so has been first obtained …. “ Article 6, Section 1 of that document stated that no club could “negotiate for the purchase or lease of the property” — that is, players — “of another club without first securing the consent of such club.” The title of a team to its “property” lapsed only when a team released a player or failed to include the player’s name on the reserve list it was required to submit at the end of each season.

The reserve clause itself, which was found in section 10 of the standard player’s contract, provided that:

In consideration of the compensation paid to the [player] by the [team], the [player] agrees and obligates himself to contract with and continue in the service of[the team] for the succeeding season at a salary to be determined by the parties of such contract.

What happened if the player and his team couldn’t agree on a salary for the succeeding season? According to Herrmann, the player was free to go elsewhere.

Q. And if he does not want to sign, what happens?

A. That ends it. He becomes a free agent.

Q. Could he go out and play for any other club in Organized Ball?

A. If he got employment, yes. There is no rule against it.

But on cross-examination, Herrmann admitted that the player would have a hard time finding a job with any other team.

Q. Could he get employment with any other club in Organized Baseball? ..

A. I do not imagine any other club would take him, because I have always felt, and we all feel, that reservation is absolutely necessary to keep the game alive.

Baltimore Federals director and stockholder Ned Hanlon, a veteran baseball man who had managed Baltimore and Brooklyn to five National League pennants before the turn of the century, described what happened if a player didn’t agree on contract terms with his team.

Q. At the end of a man’s term of employment, under the Organized Ball system, it is provided in these contracts that the club shall have a right to negotiate with him for employment for
another year, or another season, upon terms to be agreed upon. Suppose they could not agree on terms, on a salary, for instance, for the next year? What happened?

A. He could not play professional baseball. If they did not agree on terms, he could not go anywhere else, could not play anywhere else under professional baseball.

Q. How long could he be kept in that situation without employment?

A. For year after year.

Q. It would not prevent him from going to blacksmithing or plowing or anything like that, would it?

A. No, sir. If they put him on the reserve list, they could not agree on terms, and they did not see fit to sell him or exchange him to somebody else, they would reserve his reservation year after year, continuously. That is what it means.

The experience of former major leaguer Jimmy “Runt” Walsh supported Hanlon’s claim that the right of reservation could last forever. Walsh was a Phillies utilityman who decided to sign with the Baltimore Federals after Philadelphia sold his contract to Montreal after the 1913 season. After the Federal League folded, Walsh spent the 1916 season with Memphis. When he and that team could not agree on a salary for 1917, Walsh quit baseball and went to work at a Baltimore steel mill. Walsh had not played professionally since then, but he still heard from the Memphis club in following years.

Q. …They tendered you a contract at the end of the season of 1916 for the following year for $250 a month, and you would not accept that. Did they tender you another contract at the end of the year 1917?

A. I got a contract from them again this spring, yes, sir, this past spring, February, I think.

Q. At the end of each year they have been offering you contracts, have they?

A. Yes sir.

Q. Why do they do that? Do you understand why?

A. I do not understand the reason why, no, sir, with the exception that they still reserve me to their club.

Q. The object is to reserve you, so that you cannot make any other contract without their consent. That is the purpose of their offering you these contracts every year?

A. Yes, sir.

Connie Mack described the situation of holdouts like Walsh very graphically.

Q. Suppose you cannot come to an agreement with him?

A. I will tell you. If a player is at all reasonable we come to terms.

Q. But suppose you don’t think he is reasonable; suppose you can’t agree?

A. There are cases of that kind.

Q. What happens?

A. We just let him lay there.

THE BLACKLIST

Other rules of O.B. were intended to discourage players under reserve from jumping to “outlaw” organizations that were not parties to the National Agreement, such as the Federal League. Articles 22 and 23 provided that any player who signed a contract or even entered into negotiations with an outlaw team “shall be declared ineligible” for at least three years. Any National Agreement team that signed an ineligible player could be drummed out of O.B. Any playerwho even appeared in an exhibition game with an ineligible player was himself subject to blacklisting.

As several of the plaintiffs witnesses testified, players were reluctant to sign with the Federal League because they knew that they might be blacklisted for the remainder of their playing days. On November 12, 1913, Herrmann had told the annual meeting of minor league teams that “there will be no place in Organized Baseball” for players who did not respect their contractual obligations, including the reserve clause. According to Hanlon, his fellow director and part-owner of the Baltimore Federals, L. Edwin Goldman, and Baltimore’s player-manager, Otto “Dutch” Knabe, the team had to offer excessively large salaries and long-term, guaranteed contracts to attract players. Moreover, they alleged, most of the players who did take a chance with the new league were veterans who knew they were nearing the end of their playing days.

“Runt” Walsh’s testimony supported those witnesses’ statements. After the 1913 season, Walsh learned through the newspapers that the Phillies had sold his contract to Montreal of the International League. He had never been to Montreal and was not consulted whether he would care to go to Montreal, so he signed with Baltimore.

Walsh demanded a three-year contract without the usual provision that allowed a team to release a player on ten days’ notice. He wanted the security of a guaranteed, long-term contract because he believed there was little if any chance that he would be permitted to return to O.B. A letter he received from Montreal president Sam Lichtenheim after signing with Baltimore proved that Walsh’s concern was justified.

Dear [Mr. Walsh]:

…. I am very much surprised … you signed with the Federals….

… [I]fyou start to play with them, you are blacklisted from Organized Ball for three years, and if their league blows up I don’t know what you will do for three years.

… I don’t think you want to throw away three years of your future for the sake of a few hundred dollars advance money which you may have received, and which if it is not too much I may be willing to pay back for you ….

… So don’t be foolish and let these people blindfold you, which they have done with several players, and which players would be very glad to come back to Organized Ball but it is too late, because their clubs won’t take them back, but in your case I will take you back, if your terms are not too much, before you make this fatal jump, but once you have made the jump and played one game for them, I could not take you back if you were willing to play for me for $100.00 per month, as you must stay out of Organized Ball for three years, the same as any other player who plays one game for the Federal League.

Lichtenheim’s letter to Walsh was very helpful to the plaintiff’s case. The Montreal team president did not just threaten Walsh with blacklisting. He also encouraged Walsh to break his valid contract with Baltimore and generally libeled the new league.

[I]f the amount that they have advanced you is not too large, perhaps we could arrange to pay it back for you to them, when you report to us, and sign you to a contract, because … you know they will not go to the courts.

I am quite sure that Manager Knabe, or any of these other managers, would not do anything for you if you get hurt, or if you took sick, whereas in Organized Ball we have to take care of you, and I think you must know by now that this Federal League started out to be a Major League. I think you have already seen enough to know that they won’t even be as good a league as ours, as they have only obtained very few Major League players, and the big bulk of their players come from our league and lower leagues, and I am quite sure that you know the public will not look on them as a Major League.

Don’t you see that their whole trick is to get you signed to a contract so as to be taken over by Organized Ball, which will never be the case, but if they were taken over by Organized Ball, you would be in a worse position with them than you would be with us, because they would chop you down quickly, knowing that you could not go anywhere else.

Now just think this over and you will see that it is best to send them back their money, if they advanced you any money … and sign another contract with your real employers, who have always taken care of you, and who have made you what you are, and if you sign [a] contract with us we will protect your interests.

….

… [T]here is nothing to stop them throwing you out at any time, and cancelling your contract as soon as they know you cannot get back to Organized Ball for three years and which you know is the case. So I think you are much better off with Organized Ball, and which is the devil you do know, instead of Outlaw Ball, which is the devil you don’t know, and it must sound sensible to you, that Organized Ball, for whom you have worked for many years, can and will do more for you, than your new owners, who are only speculators, and who have started out to bluff the public right from the jump, because they have promised Major League Ball, which you know they will not have.

They also promised to have a club in Toronto, which they will not have, and I think you will find before you get through that they have made a great many other promises, which they will not carry out, whereas with Organized Ball we must carry them out, and if you know of any promise I ever made, of any kind, which I did not carry out, I will be glad to hear of it.

….

P.S. … [Y]ou must understand that you have a chance of being captain or manager here later on, whereas with them as soon as your usefulness as a player is finished, or you meet with an accident, which I hope you won’t, they would throw you on the street, and you could not work for them…. So don’t throw the substance away for the shadow, and get caught by these alluring offers which cannot materialise, and you know as well as I do that they cannot pay these salaries and take it at the gates by playing Minor League Ball, and you also know that they will play nothing but Minor League Ball, and will also have to play when we are away, in other words they will have to take our leavings, so I don’t see how your future is in any way secure with them…. [O]utlaws in business have never been successful, and without organization there cannot be any success, and if we were not organized your position as a player would not be secure, and I think they don’t know from week to week what cities they will play in and every week sees them change their cities, so you see they are only making a stab to be taken into Organized Ball, but they have guessed wrongly, and Organized Ball will never recognize them, and I think you know this already, and if you don’t know it you may write to President Ban Johnson or [National League President John K.] Tener, and get their reply and find out for yourself that what I tell you is correct.

JOHNSON FIGHTS BACK

Walsh never wrote to American League president Ban Johnson, as Lichtenheim had suggested. But only two weeks after Lichtenheim had written to Walsh, Johnson made his opinions known. In a March 5, 1914, interview with a New York Evening Sun writer, Johnson “declared war” on the Federal League.

There can be no peace until the Federal League has been exterminated … [W]e will fight these pirates to the finish. There will be no quarter.

Yes, I’ve heard that peacemakers are at work, but they are wasting their time. The American League will tolerate no such interference ….

This Federal League movement is taken too seriously, why, the whole thing is a joke. They are holding a meeting once a week to keep from falling to pieces. Quote me as saying that the Federals have no money in Buffalo, Indianapolis, and Pittsburgh. They have no ball parks in any of their cities, except an amateur field in Kansas City and a ramshackle affair in Pittsburgh. There are some wooden bleachers put up on Hanlon’s Park in Baltimore, I believe.

We hear from day to day that the Feds have millions behind them. If that is true they ought to build half million dollar stadium[s] in a few weeks. But getting down to brass tacks, they have neither grounds nor players that amount to anything.

When the list of players is finally announced the baseball public will realize what a bluff these fellows have been putting up. They have many unknown players, taken offthe lots[,] and a bunch of Bush Leaguers with a sprinkling of big fellows. But the American League will lose not more than ten men ….

We are going to cut and slash right and left from now on. We intend to show up the four flushers and the bluffers in the proper light.

The Johnson interview appeared in print the day before fifty-odd major leaguers returned to New York on the “Lusitania” after an around-the-world trip. According to the plaintiff, Johnson’s tough talk was intended to frighten those players away from the Federal League as well as to destroy the new circuit’s credibility with the public.

THE 1914 SEASON

In spite of Organized Baseball’s opposition, the Federal League opened the 1914 season confident of success. Opening day attendance was high, with Baltimore’s home opener attracting a standing-room-only crowd of 19,000.

The 1914 pennant race was a close one: Indianapolis, led by outfielder Benny Kauff (who hit .370, stole 75 bases, and scored 120 runs) and pitcher Cy Falkenberg (a 25-game winner with a 2.22 ERA and 9 shutouts), edged Chicago by one and a half games, with Baltimore a close third. Still, total Federal. League attendance did not approach that of either the American or National League. The Chicago Federals led the league in attendance, but drew fewer fans than the sixth-place White Sox. The established leagues suffered as well; AL attendance fell from 3.5 million in 1913 to 2.75 million in 1914.

The players were not complaining about the competition between the rival leagues. The Federal League eventually signed 81 major leaguers and 140 minor leaguers to contracts, nearly all of them at much higher salaries. Other players used the threat of jumping to get more money from teams in O.B. Several players — including Ray Caldwell, Walter Johnson, “Reindeer Bill” Killefer, and Ivy Wingo — signed contracts with Federal League teams but were persuaded to jump back to their former clubs. Caldwell made $2400 in 1913, but the Yankees gave him a four-year contract paying $8000 annually to bring him back into the fold. Killefer’s and Wingo’s salaries also more than doubled while Johnson’s went from $7000 to $12,500.

Several times, disputes over who had rights to a player ended up in court. Organized Baseball did not take legal action against players who were reserved but not under contract, but it did go to court to restrain players who had signed contracts for the 1914 season from jumping leagues. Early that season, pitchers Dave Davenport and George “Chief” Johnson and outfielder Armando Marsans of the Cincinnati Reds jumped to Federal League clubs. A Missouri federal judge granted the Reds’ request for an injunction against Marsans, but a court in Illinois refused to issue a similar injunction against Johnson because the contract lacked “mutuality.” On similar grounds, a New York court denied a White Sox request for a court order to prevent first baseman Hal Chase from jumping to the Buffalo Federals.

The tables were turned in the Killefer case. Killefer’s 1913 Phillies salary was $3200. On January 8, 1914, he signed with the Chicago Federals for $5800; only twelve days later he signed a new Phillies contract for $6500. A federal appeals court refused to order Killefer to stand by the contract with Chicago on the grounds that the Federal League team, which had induced Killefer to ignore his reserve clause, came into court with “unclean hands.” George Wharton Pepper, who represented O.B. in that case as well as in the Baltimore Federal Club litigation, persuaded the court that while the reserve clause was not legally enforceable by Philadelphia, the Chicago Federals had no business luring Killefer away before the Phillies had a fair chance to sign him to a contract for the 1914 season.

On January 5, 1915, the Federal League took the legal offensive by filing an antitrust suit against Organized Baseball. The Chicago federal judge assigned to hear the case was none other than Kenesaw Mountain Landis, who had the reputation of being a committed trustbuster. The trial of that case ended on January 22, and the Federal League hoped for a quick decision from Judge Landis. But the future commissioner seemed to be in no hurry to act. In March, Brooklyn Federals owner R.B. Ward approached Ban Johnson and again asked O.B. to allow its rival to become a party to the National Agreement.

1915: THE WAR CONTINUES

The Federal League opened the 1915 season with high hopes. Over 27,000 fans were on hand for opening day in Newark, where oilman Harry Sinclair had moved the Indianapolis Federals. But attendance fell off rapidly and losses began to mount. By the end of the league’s second season, Brooklyn’s Ward had lost $800,000; the Kansas City and Buffalo clubs were insolvent. Baltimore lost $35,000 in 1914 and almost $30,000 in 1915.

According to President Gilmore, the league’s financial ills became apparent early in the season.

A. [I]t was probably in May that some of us realized that it was going to be a very poor season from a financial standpoint, and I know along about the middle of July we started to hold meetings to discuss the situation, because previous to that time I had been called to Buffalo, and I had been called to Kansas City, in an effort to induce other people to invest money. Their overhead was far in excess of their receipts, and they were all beginning to complain.

Q. When did you say you reached the conclusion that the Federal League was doomed?

A. Along about the middle of June or the first of July…. [M]y opinion was that we were fighting a hopeless task. There were two clubs that had practically given up the fight, Kansas City and Buffalo. I had already received an opinion from the other members of the organization that they would not continue with six clubs….

Q. You had no idea from June on that the Federal League would be able to prepare for the next season at all?

A. I did not see any opportunity at all, no sir.

Q. Were you absolutely convinced of that?

A. I felt satisfied in my own mind to the extent that I began to figure out some way that we could at least save the ball players, and save our own reputations.

“IT WAS ONE BIG BLUFF”

Gilmore approached Sinclair and Ward with an audacious plan. First, they rented a suite of Manhattan offices and purchased an option to buy some vacant land at 143rd Street and Lenox Avenue. They then asked Corry Comstock, a New York City engineer and architect who was also the vice-president of the Pittsburgh Federal club, to draw up plans for a grandiose, 55,000-seat stadium. Gilmore then announced to the press that the Federal League planned to “invade” New York in 1916.

The purpose of all this? According to Gilmore, “[i]t was one big bluff,” a trick to force O.B. into “coming around and making some kind of offer.”

Q. Your real purpose was to get Organized Baseball to buy you out?

A. To reimburse us for some of our expenditures, yes, sir.

Q. To buy you out. Did not they have enough ball parks for the American and National Leagues at that time?

A. I presume they did.

Q. You expected them to buy you out and get rid of you as an annoying competitor; is that the proposition?

A. I think so, yes, sir.

Q. You had statements and interviews in the papers about it [the N.Y. stadium]?

A. Yes, sir.

Q. You said you were going to build it?

A. Yes, sir.

Q. And you had no idea of building it?

A. None at all. We did not know where the money was coming from unless some angel came along.

Q. You mean some devil; you were not associating with angels. Do you mean to tell this jury that you gave out interviews to the papers that you were going to build this stadium, employed an architect and manifested all of the different things that were necessary to accompany a real good faith act and had no idea of building a stadium at all?

A. It was one big bluff.

Q. That is the word you used for it?

A. Bluff, yes, sir.

Q. Might you not also characterize it as false pretense?

A. I do not know what you characterize it.

Q. Were you not engaging in false pretense?

A. We were trying to be protected to the best of our ability.

Comstock described the threatened invasion of New York by the Federal League as a “holdup”; he said there was “not a word of truth” in the announcement of the plans to build a stadium.

Gilmore and his co-conspirators did not tell the other Federal League owners about their scheme. According to Gilmore,

A. . .. [T]he bluff that we had formulated, the plan we had formulated, to put this thing through, was an absolute secret between Mr. R.B. Ward, Mr. Comstock, Mr. Sinclair and myself ….

Q. You were putting up a bluff on Baltimore?

A. Baltimore did not know one thing about the plan we were putting up in New York …. [W]e decided to keep it a secret from everybody. Mr. Weeghman [of Chicago] knew nothing about it. Mr. Ball of St. Louis knew nothing about it.

Gilmore’s machinations certainly fooled the Baltimore club. While he was trying to bluff O.B. into buying out the Federal League, Baltimore officials were naively making preparations for the 1916 season. Colonel Stuart S. Janney, a prominent Baltimore attorney who held stock in the team and served as its lawyer, testified that the club’s directors and stockholders had not expected to turn a profit overnight and were prepared to supply whatever additional financing was necessary for the 1916 season.

These preparations were encouraged by a series of letters Gilmore wrote to club officials in the fall of 1915, all of which contained some implication that the Federal League would be alive and well enough to operate in 1916. In an October 13 letter, Gilmore wrote:

[I] hope that your club is signing up some good talent for the coming year. I have wonderful faith in Baltimore as a Major League city, and know if you can get a fighting team there and keep it in the race, you will draw wonderful crowds and easily pay expenses.

On November 1, he wrote:

I also want to suggest that in view of your experience the last year that you make out a statement of the approximate cost to operate your club during the next season. In other words, I would like an idea of how much cheaper you think you can operate in 1916 than you could in 1915. This will be valuable information for our Board Members, and I want you to get it as accurately as possible.

On November 30, Gilmore forwarded to Baltimore club president Carroll W. Rasin a letter from a Williamsport, Pennsylvania fan recommending that the Federal League sign up for the 1916 season a local star who was a “natural-born hitter … fast on his feet; a sure catch and a ‘find.’” And on December 3, Gilmore wrote again to request the financial information that he had asked for in his November 1 letter.

PEACE TALKS

Baltimore officials did hear rumors that some Federal League owners were negotiating a settlement. At a November 9 league meeting in Indianapolis, Baltimore President Rasin asked Gilmore, Weeghman, and Sinclair point-blank if there was any truth in newspaper reports to that effect. All three denied that they were in communication with Organized Baseball, but Rasin suspected at the time that their denials “might not be frank.” In early December, Rasin saw more “newspaper talk” that O.B. and the Federal League were about to cut a deal. When he called Gilmore, Gilmore again assured him that there was no truth to the rumors.

On December 12, Gilmore ran into three National League officials in the lobby of New York City’s Biltmore Hotel. One of them asked Gilmore to “come around and take this matter up” at the National League owners’ meeting scheduled for the next day. Gilmore turned down the invitation. “Absolutely nothing doing,” he said. “We have gone too far and made too much progress on our New York invasion.”

The next day, the same men called Gilmore and asked him to “come over and fix this thing up.” Gilmore — hoping to hook his adversaries a little more firmly before reeling them in — feigned disinterest. “I told you the other day I would not have anything to do with it,” he said, “and I will not talk about it.”

Gilmore then turned to Harry Sinclair and said, in a voice loud enough for his caller to hear, “Harry, these people want [us] to come over and talk to them. Do you want to go?” Also intending the caller to hear him, Sinclair replied, “We might as well go and hear what they have to say.” The two of them went to National League President Tener’s office to discuss the situation.

Gilmore, Sinclair, and the National League representatives came to a tentative peace agreement. First, the NL agreed to make all blacklisted Federal League players eligible to play in O.B. and to let the Federal League owners sell their players’ contracts to the highest bidders. Next, the NL owners offered to buy the Brooklyn Federals’ park for $400,000, subject to the American League owners agreeing to kick in half of that sum. They also promised to approve the sale of the Chicago Cubs to Chicago Federals owner Charles E. Weeghman and put up $50,000 of the purchase price. The NL owners then agreed to buyout the Pittsburgh Federals for $50,000. Sinclair was a close friend of St. Louis Federals owner Phil Ball, and he assured the conferees that Ball would be satisfied if he could buy either the Cardinals or the Browns. The Buffalo and Kansas City clubs were no longer members in good standing of the Federal League — their owners had run out of money before the season ended, and the other teams had provided funds to pay their players in order to keep the league’s financial problems a secret — so there was little need to worry about them. There was apparently no discussion concerning the Newark franchise, even though owner Sinclair was present.

That left only the Baltimore club. Gilmore testified that he asked for $200,000 for Baltimore’s owners, but was laughed at. He later told Sinclair that he thought it was wise “to start high.” The meeting then broke up.

On December 16, 1915, Rasin received a telegram from Gilmore: “You and Hanlon be at Biltmore in morning. Important.” Rasin, Hanson, and Janney took the midnight train to New York, and went to Gilmore’s apartment at the Biltmore Hotel on the morning of December 17. Gilmore explained that he had summoned them to New York to tell them that the 1916 Federal League season was “all off.” Gilmore then told the stunned Baltimore officials about the tentative peace agreement of the 13th.

Janney and Rasin asked why Gilmore and the others had agreed to sell out, but Gilmore did not reply. They then asked what arrangements had been made concerning the Baltimore club’s interests. None, said Gilmore; however, he was sure that Baltimore would be “taken care of” before the settlement was made final.

Later, Sinclair, Weeghman, and representatives of other Federal League teams joined the meeting. They told the Baltimoreans that the opportunity to make peace had arisen suddenly and unexpectedly, and no one then present in New York felt he had authority to speak for Baltimore; however, like Gilmore, they were all sure that the National Commission would give due consideration to Baltimore’s claims.

The Baltimore officials were in no mood to take Gilmore’s advice and “accept the situation philosophically.” According to Janney, the discussion “grew rather bitter.” When Sinclair defended his and his allies’ actions, “quite a dispute arose” between him and Janney; “his words and mine,” Janney testified, “were not always of the smoothest.” Janney argued that the Federal League clubs should get some share of the proceeds of any agreement to dissolve the circuit, but Sinclair said he “would have none of that.”

Gilmore and his allies hoped to finalize the December 13 agreement at a meeting with American and National League club owners that evening at the Waldorf-Astoria Hotel. According to Gilmore, Comstock, and Ward, Rasin moved that a committee of three — Gilmore, Sinclair, and Weeghman — be authorized to represent all the Federal League clubs at that meeting. Rasin denied that he made such a motion.

THE WALDORF MEETING

The Waldorf meeting was called to order by National Commission president August Herrmann at 9:10 P.M., Friday, December 17, 1915. Among the thirty or so baseball men present at the meeting were American and National League presidents Johnson and Tener; Federal Leaguers Gilmore, Sinclair, Weeghman, and Rasin; American League owners Charles Comiskey (White Sox) and Colonel Jacob Ruppert (Yankees); and National League owners Charles Ebbets (Dodgers), James Gaffney (Braves), and Barney Dreyfuss (Pirates). A stenographer was present, and a transcript was produced.

The conferees quickly ratified those parts of the tentative peace agreement of December 13 that provided that the National League would put up $50,000 toward Weeghman’s purchase of the Cubs; that Organized Baseball would pay R.B. Ward’s heirs $20,000 a year for twenty years in exchange for the Brooklyn Federals’ stadium; that Organized Baseball would pay $50,000 to the owners of the Pittsburgh Federals; and that all Federal League players would be eligible to return to O.B.

Gilmore was asked if his committee was empowered to enter into a binding agreement on behalf of the Federal League.

Gilmore: I can say for the Federal League that the committee represented here tonight was appointed with full authority to discuss this proposition with you, and conclude any agreement that we might come to, and we are ready to open up the talk and see what can be done.

Herrmann: I understand, Mr. Gilmore, you state now that you have authority to act on behalf of the Federal League; that is, your committee?

Gilmore: We have full authority, Mr. Herrmann.

Rasin did not challenge Gilmore’s assertion. At about the time the meeting was beginning, a Baltimore Sun reporter went to the Biltmore to tell Janney that it looked as if Baltimore might be able to get a National League team. Janney hurried to the Waldorf, where Rasin also told him that Baltimore had a good chance of landing an established franchise if they asked for one. Herrmann then gave Janney the floor.

We feel just as I suppose everyone feels, that peace is the very best proposition in baseball and for baseball. We are all willing to concede that, and we hope it will come about. There is in the proposal which has been adopted, and which has been signed by certain parties — the situation in Baltimore is not touched upon, and it seems to me important in several aspects. In the first place, Baltimore has a population of seven hundred and fifty or eight hundred thousand people, including the suburbs ….

We are willing to purchase and pay for a franchise in the major leagues, if we can get it, and we want that to be the main keynote of our situation this evening ….

….

We are not venturing to suggest to you gentlemen just what franchise we think that would be. You could work that out probably better than ourselves, but that is our starting point, and that is what we would like to see, and which we lay before you.

Baltimore is not mentioned in the proposals that you have heretofore considered, and we think that, that is — we want to be taken up with every consideration, and … if you state or suggest that Baltimore would not pay the rest of the teams what the city does from which the franchise might be moved, we would be willing, and we will say that [we] will guarantee to pay as much as the city from which it is moved. In other words, the patronage there, we are willing to stand back of. We know it is there. We know that the people [will] attend the games, and we know we can produce the same revenue for a visiting team that has been produced by the city from which it will be moved ….

….

We represent a large body of representative citizens there, and we will see to it that suitable guarantees are given to back up every word that I have said. That is our position, gentlemen; and … we do not ask anything if we could be given the privilege of buying and locating a major league club in Baltimore, at a reasonable price, a franchise in … either one or the other of the two major leagues which you represent. We do not ask anybody to sacrifice anything or contribute to us. We are willing to stand in our own position and come forward and back our words with deeds and give you suitable guarantees.

Several of the major league owners present ridiculed the notion that Baltimore could support a major league franchise.

Comiskey: Well, what would you give for a franchise in Baltimore? Suppose we could blow life into McGraw and Kelley and Jennings and all those players that you had there that you could not support …. What would you give for those players if we would guarantee that they would play good ball in Baltimore for ten years, what would you pay for them and how loyally would you support them?

Janney: We would support them well.

Comiskey: What crowd would you draw?

Janney: We would draw sufficient to enable us to pay $250,000 for a franchise.

Comiskey: That is just the proper price for a minor league franchise …. Baltimore, a minor-league city, and not a hell of a good one at that.

Ebbets: That’s right.

Comiskey: As sure as you are sitting there now, and your friends will tell you. Charlie, show them what you have got in Baltimore. You are the best evidence in the world. Tell them what you drew in Baltimore ….

Ebbets: When [Ned Hanlon] quit Baltimore and came to Brooklyn, he said, “Baltimore is not a major league city.” We lost money in Baltimore operating the club with the same players that Mr. Comiskey speaks of.

Janney: There are very peculiar circumstances that brought that about.

Ebbets: Nothing peculiar about it; it is a minor league city, positively and absolutely, and will never be anything else.

Janney: That is your opinion.

Ebbets: Sure that is my opinion, because I had a piece of experience and lost money down there.

Janney: But money has been lost in other towns also in baseball.

Ebbets: Not in major league cities.

Janney: Yes, they have been lost in other towns that are major league cities.

Ebbets: It is one of the worst minor league towns in this country.

Janney: It will never be a minor league town because the people feel naturally —

Ebbets: You have too many colored population to start with. They are a cheap population when it gets down to paying their money at the gate.

Janney: They come across, I think, in good shape. This is perfectly futile, of course. It requires your consent and I am not going to try to convince you when you are so set in your ways.

Janney was right to call further discussion futile. Under both American and National League rules, the transfer of any franchise to Baltimore would require the unanimous consent of the league owners. From the statements of the owners at the meeting, it is clear that any motion to give Baltimore an existing team — Janney and Rasin had thought the Cardinals might be available — would have been met not with unanimous consent, but unanimous refusal.

The two sides agreed that a detailed settlement, including something for Baltimore, should be worked out by the National Commission and a Federal League committee of three. Gilmore proposed that himself, Sinclair, and Weeghman serve as that committee, and neither Janney nor Rasin objected.

There was then some discussion of the Federal League’s pending antitrust suit against Organized Baseball, which Judge Landis had still not decided. National League counsel John C. Toole felt that the suit should be withdrawn before any more negotiating was done:

[I]t seems to me that the very first thing that should be done, and that should be done very promptly, to show that the thing is moving along, is that both sides should agree that that action be discontinued, and prompt steps should be taken to discontinue it and get it out of the way. That ought to be done before you have any meeting of the [National] Commission with this committee.

Janney objected that Toole was putting the cart before the horse.

Janney: I think that should be part of the agreement ultimately reached, that the suit be discontinued. It would not certainly be any discourtesy to the Court for parties to a litigation to discuss its composition, and when they come to a composition, then to have the dismissal of the action as a part of the composition.

Toole: You are not settling that suit, that is the difficulty. If you were settling that litigation, that is another thing, but you are settling a multitude of things in no way involved in that, and reaching agreements on them and this decision has been in abeyance. He may decide it tomorrow, and all this go to nothing, and put you all in a very embarrassing position, although you do not, perhaps, get into contempt of court.

Janney: I think the most that could be done, so far as I can see, would be to wire our respective counsel to appear before the Court tomorrow and advise him that there are matters under discussion which may ultimately result in an agreement, and if this agreement is effective, it will involve the discontinuance of the action before him, and suggest it would be proper for him to delay rendering a decision in it until this could be seen, whether the composition was effected, and that would be perfectly compatible with every possible legal or courteous principle…. What we do here will be subject to the dismissal. It is not usual to dismiss the case and then compose it. You compose it and then dismiss it…. You do not dismiss your suit and then agree how to settle it. That is that whole settlement. You settle this thing, and then, with your settlement, go and dismiss it. I have no objection, of course, to notifying the attorneys and telling them to do everything that is necessary to be courteous and pleasing to the Court.

When the meeting was adjourned, Toole telegraphed Organized Baseball’s Chicago attorney:

Negotiations are pending, which if carried out will result in an agreement to withdraw the action brought by the Federal League. Please bring the matter to the attention of Judge Landis, if you think it advisable, and secure his approval of situation. Communicate with attorneys for Federal League, who will be advised by their client.

The Federal League was dead, but Gilmore and his allies weren’t shedding any tears over its demise. Fearful that the league was doomed anyway, they decided to cut their losses rather than fight to the finish. Organized Baseball was happy to offer the Federal League a generous peace settlement. After all, there was still a chance that Judge Landis would issue a damaging verdict in the Federal League’s antitrust action. The rival league’s New York bluff also raised the specter of even more bitter competition for players and fans, with plenty of red ink to go around.

Ban Johnson would have preferred not to call a truce. The Federal League’s threat to put a team in New York may have fooled the National League, but the American League knew better: It had considered building a new stadium on the Lenox Avenue property years earlier, but found that it was absolutely impractical to locate a park there. Johnson was characteristically blunt in describing his feelings about the peace pact.

Q. Can you tell us without any lengthy answer why did you pay $50,000 for [the Pittsburgh park]?

A. That was a tentative agreement that the National League entered into, and we abided by their decision in the matter. I could not see any reason why Pittsburgh should be given
$50,000. As a matter of fact I did not want to give a five-cent piece to Pittsburgh.

Q. What you wanted to do was to knock them out?

A. Knock them out; that is it.

Q. Not to pay a cent?

A. Not a nickel.

Q. You were not as generous as Mr. Herrmann. Mr. Herrmann said yesterday he wanted to help them out.

A. I did not want to help them out. I am very frank in that regard.

The National Commission and the Federal League committee signed a peace treaty in Cincinnati On December 22. Before the agreement was concluded, Gilmore called Rasin to ask if Baltimore would accept $75,000, but Rasin said no. Another meeting to discuss Baltimore’s claims was held in Cincinnati on January 5, 1916, but no settlement was reached. A day or two later, Baltimore filed a complaint with the U.S. Department of Justice, but Assistant Attorney General Todd announced on January 11 that he had no reason to believe that Organized Baseball had violated the antitrust laws.

THE WAR MOVES TO THE COURTROOM

On January 27, the Baltimore stockholders voted to authorize the club’s directors to spend up to $50,000 on “litigation in such form as they deem advisable” to protect the stockholders’ interests. They eventually filed suit in Washington on September 20, 1917.

After a year and a half of legal skirmishing, a jury was sworn in On March 25, 1919. The testimony summarized above was presented, the judge gave his instructions, and the jury retired to deliberate On April 12. Given the judge’s instructions to the jury — which, in essence, told the jury that O.B. had in fact violated the federal antitrust laws, and that the Baltimore club was entitled to recover for any damages it suffered as a result — the verdict came as no surprise. The jury found in favor of the plaintiff and assessed damages at $80,000. The antitrust laws provide that guilty defendants pay three times the amount of the actual damages plus attorneys’ fees, so the final judgement was for $254,000.

Organized Baseball’s lawyers immediately appealed to the U.S. Court of Appeals for the District of Columbia. They attacked the trial court’s decision on a number of legal grounds, but focused most of their attention on a single key issue:

By far the most important question presented by the assignments of error is whether professional baseball is interstate commerce.

In his memoirs, George Wharton Pepper, O.B.’s top lawyer, described his appeal strategy.

I raised at every opportunity the objection that a spontaneous output of human activity is not in its nature commerce, that therefore Organized Baseball cannot be interstate commerce; and that, it not being commerce among the states, the federal statute could have no application….

… [T]he case came on for argument … on October 15th [, 1920]. I mention the date because of the coincidence that on the same day there was being played the final game in the [Dodgers vs. Indians] World Series of that year ….

. . . Counsel for the Federal League made the grave mistake of minimizing the real point in the case (the question, namely whether interstate commerce was involved) and sought to inflame the passions of the Court by a vehement attack upon the evils of [Organized Baseball], a few of which were real and many, as I thought, imaginary. I argued with much earnestness the proposition that personal effort not related to production is not a subject of commerce; that the attempt to secure all the skilled service needed for professional baseball is not an attempt to monopolize commerce or any part of it; and that Organized Baseball, not being commerce, and therefore not interstate commerce, does not come within the scope of the prohibitions of the Sherman [Antitrust] Act.

If the business of professional baseball was not interstate commerce, it was not subject to the Sherman Antitrust Act or any other federal regulation, even if all of the Baltimore club’s allegations of monopoly and conspiracy were found to be true.

On December 6, 1920, the Court of Appeals issued its decision, which was written by its Chief Justice, Constantine J. Smyth. Chief Justice Smyth first stated that interstate commerce “require[s] the transfer of something, whether it be persons, commodities, or intelligence” from one state to another. But, Smyth wrote,

A game of baseball is not susceptible of being transferred…. Not until [the players] come into contact with their opponents on the baseball field and the contest opens does the game come into existence. It is local in its beginning and in its end. Nothing is transferred in the process to those who patronize it. The exertions of skill and agility which they witness may excite in them pleasurable emotions, just as might a view of a beautiful picture or a masterly performance of some drama; but the game effects no exchange of things. . . .

It didn’t really matter that baseball players traveled across state lines, or that the players carried their bats, balls, gloves, and uniforms across state lines with them.

The players, it is true, travel from place to place in interstate commerce, but they are not the game ….

….

The transportation in interstate commerce of the players and the paraphernalia used by them was but an incident to the main purpose of the appellants, namely the production of the game. It was for it they were in business — not for the purpose of transferring players, balls, and uniforms. The production of the game was the dominant thing in their activities ….

. . . So, here, baseball is not commerce, though some of its incidents may be.

Suppose a law firm in the city of Washington sends its members to points in different states to try lawsuits; they would travel, and probably carry briefs and records, in interstate commerce. Could it be correctly said that the firm, in the trial of the lawsuits, was engaged in trade and commerce? Or, take the case of a lecture bureau, which employs persons to deliver lectures before Chautauqua gatherings at points in different states. It would be necessary for the lecturers to travel in interstate commerce, in order that they might fulfill their engagements; but would it not be an unreasonable stretch of the ordinary meaning of the words to say that the bureau was engaged in trade or commerce?

Chief Justice Smyth then cited with approval cases holding that those who produce theatrical exhibitions, practice medicine, or launder clothes are not engaged in commerce.

The Baltimore club tried to persuade the United States Supreme Court to reinstate the original verdict in its favor. But Justice Oliver Wendell Holmes, writing for a unanimous Court, upheld the decision of the Court of Appeals.

[E]xhibitions of base ball … are purely state affairs. It is true that, in order to attain for these exhibitions the great popularity that they have achieved, competitions must be arranged between clubs from different cities and States. But the fact that in order to give the exhibitions the League must induce free persons to cross state lines and must arrange and pay for their doing so is not enough to change the character of the business…. [T]he transport is a mere incident, not the essential thing. That to which it is incident, the exhibition, although made for money would not be called trade or commerce in the commonly accepted use of those words. As it is put by the defendants, personal effort, not related to production, is not a subject of commerce. That which in its consummation is not commerce does not become commerce among the States because the transportation that we have mentioned takes place. To repeat the illustrations given by the Court below, a firm of lawyers sending out a member to argue a case, or the Chautauqua lecture bureau sending out lecturers, does not engage in such commerce because the lawyer or lecturer goes to another State.

 

The Supreme Court’s decision was issued on May 29, 1922 — almost seven years after the Baltimore Federals played their last game.

Given the legal doctrines of its day, the Federal Baseball case was correctly decided. The courts of that era applied the federal antitrust laws only to businesses that were primarily engaged in the production, sale, or transportation of tangible goods.

It is popularly believed that Organized Baseball was given immunity from the antitrust laws because baseball was a sport, not a business. That belief has grown out of a passage in the Court of Appeals opinion:

If a game of baseball, before a concourse of people who pay for the privilege of witnessing it, is trade or commerce, then the college teams who play football where an admission fee is charged, engage in an act of trade or commerce. But the act is not trade or commerce; it is sport. The fact that [Organized Baseball] produce[s] baseball games as a source of profit, large or small, cannot change the character of the games. They are still sport, not trade.

But a close reading of that language and the rest of Chief Justice Smyth’s opinion shows that the key to the decision was not the fact that baseball was a sport. The more crucial fact was that baseball — as well as the practice of law or medicine, the production of grand opera, and the other nonsporting activities cited in the opinion — was not commerce.

Antitrust doctrines have changed radically since Federal Baseball was decided in 1922. The cases that the Supreme Court relied upon in holding that baseball wasn’t interstate commerce have long ago been overruled. By 1960, the Supreme Court had held that doctors, theatrical producers, boxing promoters, and even the National Football League were subject to the federal antitrust laws.

But baseball has somehow retained its uniquely privileged status. In 1953 and again in 1972, in the celebrated Curt Flood case, the Supreme Court affirmed the holding of Federal Baseball. Justice Blackmun, in Flood vs. Kuhn, noted that baseball’s antitrust immunity was “an anomaly” and “an aberration.” But, he noted,

Remedial legislation has been introduced repeatedly in Congress but none has ever been enacted. The Court, accordingly, has concluded that Congress as yet has had no intention to subject baseball’s reserve system to the reach of the antitrust statutes….

…. If there is any inconsistency or illogic in all this, it is an inconsistency and illogic of long standing that is to be remedied by the Congress and not by this Court.

Is the Federal Baseball ruling of any consequence today? After all, the players’ union has managed to decimate the reserve clause through collective bargaining. Free agency, arbitration, limits on trades without consent — no longer is the major league player, in Curt Flood’s words, “a piece of property to be bought and sold irrespective of [his] wishes.”

But what about the owners? Al Davis and Robert Irsay could move away from Oakland and Baltimore because the antitrust laws prevent the other NFL owners from taking concerted action against such moves. What if Calvin Griffith, rather than selling the Twins, had decided to move them to Tampa — or back to Washington, D.C. — without American League approval? If the other owners simply refused to schedule any games with the Twins and Griffith sued them, would Federal Baseball still control?

Or what if the USFL owners decided to start a baseball league, too? (Perhaps they would play in the fall and winter.) If Organized Baseball threatened NBC that it would never again sell broadcast rights to that network if it televised the new league’s games, would the “USBL” win the antitrust suit that would undoubtedly follow?

Surely then Federal Baseball — a case decided over sixty [today ninety — ED.] years ago, long before television, jet airplanes, free agents, and night baseball — would finally be laid to rest. Of course, that was what Curt Flood’s lawyers thought would happen in 1972. Federal Baseball may be an anomaly and an aberration — but it may also outlive us all.

GARY HAILEY, a 1977 graduate of Harvard Law School, is a partner in the Washington, DC office of Venable LLP. He is also a father of four, a basketball referee, a biker, a voracious reader, and the author of many articles on sports and music.

© SABR. All Rights Reserved