Sure that the growing popularity of baseball could support a third major league, John T. Powers of Chicago brought together a group of entrepeneurs in 1913 and founded the Federal League. In its first year of existence the six-team circuit made no pretentions to major league status and respected major league contracts. Only a few faded major leaguers were in the league that season, although all six managers were former players of note, including Cy Young, who piloted Cleveland. Following the season, in which only one team folded, the owners ousted the cautious Powers and replaced him as president with James Gilmore, one of the Chicago owners.
The league expanded to eight teams and put franchises in Eastern cities for 1914, posing more direct competition to the major leagues. Some prominent players were signed, including Three Finger Brown and Joe Tinker. Officially, the FL was still respecting contracts, but as the majors began to play tough following some contract disputes with players who played the leagues against each other, open warfare erupted in the signing of players and in court. Walter Johnson almost signed with the upstart league, but Senators owner Clark Griffith convinced the AL to pay for Johnson’s salary increase for the good of the league.
A close pennant race gave the FL fair attendance figures in most of its cities, but large financial losses were suffered due to extensive litigation. Even though the Feds won most of the cases, the NL and AL continued to file suits in an attempt to drain the coffers of the Federal backers. In January 1915 the Federal League filed an antitrust suit against major league baseball, hoping for a ruling against the reserve clause that would give the FL protection against further such harassment. They chose to enter their case before Judge Kenesaw Mountain Landis, who was known for his hard line against monopolies. But Landis felt differently about baseball, and put off a decision. After a season of declining attendance despite having signed more stars and another close pennant race, talk of a “peace settlement” became common. The major leagues had also suffered, but were better able to sustain themselves.
That winter, the “peace treaty” was announced. The majors partially compensated the debt-ridden Federal League owners; the FL withdrew its lawsuit, still being sat on by Judge Landis; and FL owners Phil Ball and Charles Weeghman bought, respectively, the Browns and the Cubs. The’wh)”@@grateful major leagues appointed Judge Landis to the new office of Commissioner five years later.