The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-04-08
THE GIVING OF FRANCHISES.

Few people realize just what it
means to give away a franchise IN a
growing city, even as small as To-
peka. They do not realize its value to
the persons who get it. It is an ex-
tremely valuable asset. as all hnan-
ciers know, and company with
good franchise in the average city has
something of tremendous value.
In the current number of the
Worlds Work commences a series OF
articles entitled sgFhe Confessions of a
Business Senator" and right in the
beginning the value of franchises is
aptly illustrated. The senator who is
making the confessions Git is an actual
experience) first tells how he came to
enter politics, and it was through the
necessity of controlling franchises.
1.-THE city had been growing with
great rapidity," he says. 1T was rag
ged and spread over q. large area. One
day the president of the bank of
which I was a director said he thought
that a street railway would be a
profitable venture. and suggested that
I go in with him and secure a fran
chise. 1 smiled at this idea. for I
knew nothing of street railway mat
tiers, and had no money to invest in
such a project.
"'Oh,' he said, you can leave that
to me, if we can only secure the fran
chise. You are well known among
the politicians, and have a number of
friends in the council. At the same
time, you are the owner of large
tract of land on the outskirts Of the
city which might be reached in our
routes
This suggestion appealed to me.
We had a franchise for twenty-five
years prepared by our attorneys.
took the matter up with Murphy, one
of the party leaders, a number of
aldermen, and the mayor. Murphy
said it would probably cost from S.
600 to $4,000 to see the matter
through the council. i refused to con-
slider such a proposition. But my as
sociates were not so delicate. Some
arrangement was ultimately made.
We interested the daily papers in the
project, and finally the franchise was
granted to a dummy from whom we
purchased it for $4,000. Most of this,
I fancy. stopped in the pocket of Muir
ply, the party boss, who had man
aged the matter for US.
Estimates were secured on the cost
of construction, and with these in our
pockets, we went to New York to
finance the proposition. It did not
occur to me that money could be Dor
rowed upon a mere privilege in the
streets. which was terminable at the
end of twenty-five years. But we
boldly proposed to issue a half million
dollars Of bonds and to use the pro-
ceeds for construction purposes. The
bankers seemed to be interested chief
ly in the size of the city, its rate of
growth and the distribution of the
people. ultimately learned that a
franchise in the streets was the best
sort of security, and that one could
secure a loan upon it even in excess
of the cost of construction, for in a
growing town, earnings are bound to
increase. whether times be good or
bad. from ten to fifteen per cent a
year. We finally secured a loan for a
half million on consideration of giving
the bank 20 per cent of the stock, and
found ourselves the Dossessors of a
street railroad and 100000 Of stock
certificates that had cost US practically
nothing.
From the first. the road paid in
terest and operating expenses. Within
a few years we had increased our
capitalization to $5.0oO.000 and Sc
cured such extensions and franchises
from the council as were necessary to
complete the system. We organized
the citizens or real estate SPECTATORS
Of a neighborhood. who fought our
battles for US. We used to send dele
cations to the city hail. clamorous for