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Published online by Cambridge University Press: 02 September 2013
Publicity of campaign funds spent for and against proposed constitutional amendments, initiative and referendum measures, and other propositions voted on by the electorate of the state is the object of a California statute adopted in 1921 and revised in 1923. This is one of the few statutes specially designed to deal with campaign funds on issues rather than candidates, and its operation is a matter of particular interest to students of campaign finance in that it represents a relatively successful effort to compel publicity of expenditures by non-party organizations. All reports under the act have been made by well established pressure groups, corporations, or temporary committees representing interest groups lacking permanent secretariats. The act is broad enough to apply to party committees, but no reports have been made by such agencies, presumably because of their inactivity in this type of campaign.
1 Stats., 1921, Chap. 583; 1923, Chap. 391.
2 The full definition of those required to make reports is as follows: “Any person and any committee, firm, association, public or private corporation or other group of persons, whether incorporated or not, that collects, raises, or receives moneys or receives promises of money aggregating from all sources a sum in excess of one thousand dollars, or that expends his, its, or their own money or funds, in excess of one thousand dollars ….” Stats., 1923, Chap. 391, sec. 1. The phrase “or that expends his, its, or their own money or funds” was added in 1923, after the contention had been made before a senate committee investigating the operation of the act that concerns spending their own money in a campaign did not come within the terms of the law. This committee was under the chairmanship of Senator Herbert C. Jones, and will be referred to herein as the Jones Committee. For its report, see California Senate Journal, 1923, pp. 1780–88Google Scholar.
3 Comparison of reports of expenditures on constitutional amendments of legislative origin and on referenda on statutes in Table I and of expenditures on the two types of measures in Tables III and IV furnishes a very good index of the efficacy of the two-thirds rule for submission of constitutional amendments in protecting established interests and vested rights. Under a system where 14 of 40 senators can dictate constitutional content, it is indeed a weak and inconsequential interest that cannot ordinarily check in the legislature proposals for constitutional amendment seriously detrimental to itself.
4 The cost of promoting constitutional amendments before the legislature, of course, does not appear from these reports. This may be not inconsiderable.
5 The initiated propositions on which reports were made by neither proponents nor opponents were the following:
1922: No. 10, providing for the taxation of publicly owned utilities.
No. 11, providing for the regulation of publicly owned utilities.
No. 12, creating a state budget system. The Jones Committee found that $6,548.08 had been spent in support of this proposal.
No. 30, giving the Railroad Commission power to grant franchises to transportation utilities using streets and highways.
1926: No. 17, permitting the use of the Bible in the public schools.
No. 20, providing for reapportionment of the legislature according to population. Expenditures against this were probably included in reports of expenditures for a proposition embodying the federal plan of apportionment considered at the same election.
1928: No. 21, prohibiting rodeos, bull-dogging, etc.
1932: No. 2, providing for state liquor control. Expenditures for this measure were probably included in reports concerning expenditures for a measure repealing the state prohibition enforcement act.
1934: Nos. 3, 4, 5, and 6, a series of measures relating to judicial reform initiated by a combination of civic organizations. Probably very little was spent in opposition to these measures.
No. 13, providing for local option. Expenditures against this were presumably included in reports of expenditures in favor of another measure relating to liquor. It is probable that the local option measure was initiated without a large cash outlay.
6 The initiated measures upon which reports were made by proponents but not by opponents were:
1922: No. 1, validating an issue of veterans' aid bonds. Probably no expenditures of any consequence were made against this proposition.
No. 19, creating state water and power system. The expenditures against this measure were brought to light by the Jones Committee.
1924: No. 7, legalizing boxing and wrestling.
No. 1, reducing taxes on highway transportation companies.
1926: No. 28, adopting the federal plan of apportionment.
1930: No. 10, weakening the usury law. In all likelihood very little was spent against this measure.
No. 14, adopting permanent registration. Doubtless the expenditures against this proposition were small.
1932: No. 1, repealing the state prohibition enforcement act.
No. 5, legalizing racing.
1934: No. 2, “liberalizing” liquor laws.
No. 7, strengthening the state civil service law.
No. 11, making the state board of education elective.
7 Expenditures in favor of No. 27,1922, to weaken the initiative, it developed, were included in the report of expenditures against the single-tax proposal of the same year. No reports of expenditures were found on file from the proponents of No. 28, 1922, prohibiting vivisection; No. 9, 1934, loosening restrictions on chiropractors; No. 17, 1934, providing for the licensing of “naturopaths.”
8 A form-letter of the Bible Protective Association, under date of October 21, 1926, soliciting funds and enclosing a circular, stated: “One million of these are already in the mail, with one million more on the press.” No report of expenditures in the organization's campaign of that year could be found on file.
9 Seven reporting agencies stated in their final report that this was the reason for their omission of the second report.
10 Among the cases in which no second report was found when it is reasonable to suppose that one should have been made were:
1926: The American Legion reported at the third period expenditures of $3,220.27 in favor of a veterans' bond issue. The Southern California Prohibition Committee reported total expenditures of $2,216.22 against a proposal to repeal the state prohibition act. The person making the report stated: “This is the first report I have made out in California. I have done the best I know.”
1928: The Draymen's Association of San Francisco reported total expenditures of $8,411.88 in a referendum against an act to increase taxes on trucks.
1930: All-California Committee Against Proposition No. 26, a Sunday closing measure, reported total expenditures of $7,375.00.
1932: H. L. Cornish spent $41,000 from the California Oil and Gas Association and the Union Oil Company in support of an oil control measure brought to the electorate on referendum. The Independent Petroleum Association spent, according to its final report, $46,399.82 against the same measure.
11 For example, the manager of a campaign in support of a constitutional amendment of 1930 to exempt the Huntington Library from taxation filed a late report stating that “he did not know any was required until I saw other reports in the papers.” In other cases, reports were made very late by temporary committees probably without a great deal of experience in such matters.
12 The California State Church Federation holds the record for the most tardy report. Its final report of expenditures in favor of an initiative act of 1928 to repeal the boxing and wrestling act was over one hundred days late. The Church Federation was preceded in its report only about two weeks by the Veterans' League of Southern California, one of the organizations favoring boxing and wrestling. The veterans probably should not be assessed with responsibility for this organization, which was financed largely by prize-fight promoters, stadium owners, and the like who were “entitled” to use this name because of the fact that a part of the proceeds from the licensing of such exhibitions was earmarked for institutions for the care of disabled veterans.
13 In the case of Gilmore v. California Daylight Saving League. See note 20 below. In the same year, a committee working against a Sunday closing measure also reported a contribution from “Edwin Higgins, agent.” A person of the same name was at the time manager-director of the California Oil and Gas Association. The petroleum interests were reported as favorable to the daylight saving initiative because of the belief that it would increase pleasure driving.
14 In 1930, the State-wide Committee Against Amendment No. 21 reported receipts of $6,500 from the California Taxation Improvement Association; in 1932, the State-wide Committee Against Amendment No. 9, an income tax proposal, reported receipts of $8,000 from the Association; in 1933, the California Tax Relief Committee, campaigning for the abolition of the system of separation of sources of revenue, received over $10,000 from the Association. In each case, the Taxation Improvement Association reported its contributions to these organizations, but did not indicate their ultimate source. There were several other instances of this type. For example, in 1928 the California State-wide Committee for Federal Plan Reapportionment reported receipts of $7,000 from the Agricultural Legislative Committee.
15 Reports have been made regularly, however, by Campaigns, Inc., a firm which specialized in handling all phases of campaigns for candidates and for organizations interested in constitutional amendments or other issues. The establishment of such a concern, operating successfully on a commercial basis, is extremely significant as an indication of the trend away from personal politics of the precinct variety and toward the use of modern propaganda techniques.
16 The Jones Committee in 1923 found that in a campaign against the state water and power proposal the opponents had hired a prominent labor union official to aid them. He resigned his union offices when this was disclosed. The committee also found in several instances that campaign managers had employed prominent members of women's organizations. A prominent W. C. T. U. leader, for example, was employed to work for the public utilities against the water and power proposal. This is the type of expenditure which publicity requirements are designed to discourage.
17 Most of the money to support this proposition was furnished by Mr. Rudolph Spreckels, then of San Francisco.
18 In seven of the twenty-six cases in which reports were made by both proponents and opponents of a measure, the side making the smaller expenditure won the campaign. In three of the seven cases, however, the difference in expenditures was less than $1,000.
19 Information furnished by Mr. Charles J. Hagerty, deputy secretary of state.
20 Gilmore v. California Daylight Saving League, No. 45, 259, Superior Court, Sacramento County, 1930. The Daylight Saving League was supporting an initiative proposition to adopt daylight saving time and was backed principally by brokers and bankers who were handicapped in doing business during the summer months when Eastern cities turned their clocks an hour ahead. The opposition was financed principally by the movies and utilities, fearful of losing business if the proposal should be adopted, with the active support of the clergy, both Protestant and Catholic, who anticipated declines in summer church attendance.
21 Such a requirement would be more feasible if Senate Bill No. 127 had been adopted at the 1935 session of the legislature. This bill required every committee working for or against any candidate or measure to register with the secretary of state.
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