Anatomy of a Murder: The Federal League and the Courts
Gary Hailey wrote this splendidly detailed story about the Federal League for The National Pastime, a publication I created for the Society for American Baseball Research in 1982. Gary submitted this story for the Spring 1985 number, for which I continued to serve as editor. It is my privilege to reprint it in this space, in serial form. While Dan Levitt has recently issued a marvelous book on the subject, The Outlaw League and the Battle That Forged Modern Baseball, it may be said that he owed a good deal to Hailey’s pioneering effort. A 1977 graduate of Harvard Law School, Hailey 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 a wildly popular music blog, www.2or3lines.blogspot.com.
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.
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.