By Jerry Harrington
Iowa Gov. William Larrabee one day in 1886 was reviewing state expenses and noticed what he thought was clearly a billing mistake.
Coal shipped by rail from mines in Lucas County located south of Des Moines to a state school in Glenwood in western Iowa cost more to transport than sending the same amount of coal to Council Bluffs, 30 miles further down the line.
Surely, this was an error, wrote the governor to Charles E. Perkins, president of the Chicago, Burlington & Quincy Railroad. No, replied Perkins, it was not. The Glenwood route offered little profit to the railroad and competition to Council Bluffs mandated a lower rate, so the railroad charged more for the shorter distance.
Gov. Larrabee was stunned. In another letter to Perkins, the governor pointed out that the Burlington Railroad made plenty of money on the Glenwood route and these different rates were unfair.
“The sense of justice in intelligent minds rebels against it,” wrote Larrabee. So the governor took the dispute to the Iowa Railroad Commissioners who advised the railroad to revise its rates.
Yes, you’re right, replied Perkins, it was unfair. So he raised the rates to Council Bluffs, which proved to be a big mistake.
The president of the powerful Chicago, Burlington & Quincy Railroad had arrogantly poked his corporate stick into the eye of the wrong man. The incident so enraged Gov. Larrabee that he rallied the Iowa legislature to pass railroad reform measures to dramatically curb abuses of these then-dominant businesses. The effort placed Iowa in the national spotlight — and indirectly helped doom the presidential dreams of a prominent Iowa politician.
Larrabee did not start his career as a political reformer against powerful corporations. In fact, he was a successful businessman who built a commercial domain of his own in northeast Iowa.
A native of Connecticut, Larrabee moved to Iowa in 1853 and began work as a teacher and later at a flour mill. He saved enough money to buy into a mill near Clermont in Fayette County and soon used his profits to invest in holdings in land, banking and railroad interests. His commercial acumen was so skillful that, at one time, he was one of the largest landowners in Iowa.
Soon after the Civil War, Larrabee turned to politics and was elected in 1867 to the Iowa Senate as a Republican, serving Fayette County in that post for nearly two decades. During his Senate career, Larrabee was generally supportive of railroad expansion, so necessary to transport farmers’ produce to market in an age before there were good roads in Iowa.
In the second half of the 1800s, railroads in Iowa were key to city and town expansion and integration of the state’s farms and businesses into the regional and national economies. Without the modern roads available today, railroads were the means of land-based passenger and commercial transportation. By 1870, there were more than 2,600 miles of railroads in Iowa, made up of four great rail lines crossing the state from east to west. By the end of that decade, more than 4,100 miles of rail covered Iowa and, by 1884, there were 7,200 miles of track. Much of the capital — and control — of these businesses came from the East. By the mid-1880s, among the 25,900 stockholders of the Iowa railroads, only 740 were Iowans.
This was a major point of contention among those within the Granger Movement which grew in the 1870s to fight against unfair railroad practices. A rural-based movement that fought for farmers, it gained popularity after the financial panic of 1873 when agricultural prices plunged, yet rail transportation prices remained the same. The group’s agitation led to the Iowa “Granger Law” in 1874 which fixed maximum prices, created fines for violations and prohibited discrimination between individuals.
Sen. Larrabee voted against the law because he thought it would have little effect on business practices and, he thought, could make things worse — though he supported the spirit of combating railroad abuses. After the Granger Law was successfully upheld in the courts, the railroads fought it tooth and nail by making life difficult for customers. The businesses increased rail rates to the maximum allowable, which were often greater than previous charges. Rail managers often combined state and national rates, doubling charges. On top of that, railroads laid off some of their employees, complaining that the law’s restrictions compelled them to do so.
To overturn the Granger Law, railroad political professionals recruited legislative candidates who sided with the rail interests and helped them get elected to the next session of the Iowa General Assembly. By this time, Granger agitation had subsided a bit with the rise in agricultural commodity prices. All of this led to the repeal of the Granger Law, replacing it with a three-man Board of Railroad Commission with advisory powers, rather than having rail rates fixed by law. The board, appointed by the governor and financed through rail fees, had the power to look at the railroads’ books, investigate complaints and provide an annual report. The goal was transparency, not state regulation and that remained the compromise for about a decade. Sen. Larrabee joined the effort to replace the Granger Laws with these reforms.
Larrabee was elected Iowa’s governor in 1885, nominated by Iowa Republicans as a “safe man” who towed the party line. Railroad abuses were not burning issues in that campaign. That is, they were not an issue until Larrabee had his confrontation with Perkins of the Chicago, Burlington & Quincy Railroad in late-1886. The clash between the Iowa governor and the railroad executive dramatically raised the ire of Larrabee and transformed him from a cautious critic of railroads into a crusader.