New-York tribune., 1907-06-08
CAN'T GRANT MONOPOLY
MAY KILL COMPETITION.
Ellison on City's Po1cers Regarding
Telephone Franchises.

u,llic streets still il would not be illegal VOID
against public Yollcy for the city to contract with
,fs New York Telephone Company under condi-
,yons that would enable the company Ito continue
n the field without competitor. The practical
meaning Of the opinion is that the city legally
make q bargain with the New York Telephone
Company which will shut out any new company,
like the Atlantic Telephone Company, if it wants
10 do so.
Mayor Mcclellan took occasion to score the Cor
poration Counsel for allowing outsiders to get
advance information OF opinions before such in
formation came officially TO the board
When the subject came up Martin W Iittleton
counsel for the Atlantic Telephone Company said
that he would furnish the board with copies of
the opinion Of the Corporation Counsel
How did you get the opinion?" angrily asked
u got It from the Corporation Counsel" replied
Nj Litteton.
In that case retorted the Mayor. with heat
''the secretary is instructed 10 ask the Corpora
tion Counsel for explanation OF this unusual
conduct. II Is entirely wrong that counsel for in
terested parties should get possession of informa-
ton in advance Of the members of this board.
Such an abuse must cease"
The Mayors motion unanimously carried,
and the amended motion of Controller Metz the
effect that all information for the board should in
the future be submitted to the members OF the
board before being given out 10 any one else, was
also carried.
The Board of Estimate and Apportionment sent
TIE Corporation Counsel last year a letter con-
tanning the following questions
FGrst-Can an exclusive franchise be granted 10
& telephone company or an arrangement equivalent
Second-Can a satisfactory settlement be made
q the suit Of the Empire City subway Company
company maintain the subway system in which
Third-Are the New York Telephone Company
enc me New hork and New Jersey Telephone
Saidity? O''--'4S 1--e -''-'''''S'' q
M- Ellison in considering these points SAYS:
On the first point can assert most unqualihedIy
that. In my opinion on the city has 70 power po,.F to
system in the public streets
The right OF the city to grant such monopoly is
The sSt Of the the 6i c5ty o 10 proaidate the terms and
- s II oesItes ~ IpGse % on n.lg ii, no
10 accept upon the sole enjoyment by the grantee
such terms and conditions IN their original form
eoC 10 apply once 4l similar csnt IS fo1
communication TO me. dated Decem6er Il i%.5'
counsel for the above named telephone companies
but recoenen Of the os situation that so iong as
no competition exists. such a company enjoys
valuable nature that It afford to pay there
Tor a. q much higher rate than after competition
the right 70 compete exists
Mr.. Ellison says he has received elaborate briefs
behalf Of the present operating companies and
In behalf Of the Atlantic Telephone Company. but
I have neither found. has my attention been
called 70. any decision Of the holding that
such grant as IS proposed would be against pub
Tic policy, Illegal void" He continues:
therefore advise you that If in the wisdom of
your board only ore system Of telephone service is
ADVISABLE or proper under conditions at present
such Service MAJ be considered and granted on
satisfactory terms the payments provided thereby
ve pr5tisions BEING Tna9a fa2 4edction or
modification Of such terms in the Of other
telephone systems being established in the city OF
should clearly appear that such grant should not
r. bar to The city ma King other grants under
tons, If city should thereafter decide 10 grant
other applications for similar service
70 whether settlement satisfactory TO the city
tould be effected in the action of the Empire city
Subway Company against the city Independently
or as part Of the consideration of the franchise
grant contemplated. Mr.. Ellison says that he can
not give any definite d this time. except
tHat while the company processes to be willing
settle this action there is practically no possibility
o. such settlement involving the voluntary sur
render OF the rights Of the company to maintain its
present system OF conduits and ducts"
Hearings have already been begun before board
o. referees consisting of Eugene H. Philbin Ham
Uton OdeI and \. Il Joline. says Mr.. Ellison:
searching examination Of the company's books is
bSing made by expert firm Of accountants, and
the action will be pushed with al possible speed.
He says
IT. is -, my present impression that rather than
tWa:t me outcome Of what may prove to be pro-
tracied and involved proceeding il would be better
se2arately, and in considering the imposition Of
terms IN granting telephone franchise eliminate
therein
On the validity OF the franchises Mr.. Ellison says
Le has collected a great amount OF evidence but
cannot give opinion pending the submission of
olAer data He also awaits the final decision in
'Ae case Of the New York Electric Lines Company
against Ellison, argued before the Court of Appeals
n the early part Of the year and still under advise
tnent By that court.
Martin " Litteton counsel for the Atlantic
-elephone Company. gave out the following state
Ii'ht yesterday afternoon after reading the Cor
pO'ailon Counsels report:
,r ne alIrcation Of the Atlantic Telephone Com
.tI2ruonment for fully two years. We have been
SeLtIfed at great expense and loss Of time.
ne city government has been TO the trouble OF
F-aas d corps Of engineers all over the United
troposlton We have finished plans and these
ths Tegs nave nave reported in our favor Meanwhile,
-: OK Telephone Company has made
ttCp93slton 10 the city offering to give $4,000.
its.Flng 4 period Of twenty-five years, for the
etsslke right 10 do business: in other words they
ofI l.ss "a :. amount for a monopoly against our
question The right Of the city enter into such a
- tinFact More than five months ago that ques-
ttl.i3n has just been given the board He holds
sf tb oS city: y i! chooses may accept the money
.. ~ ne Ne~ York Telephone Company and as long
company franchise but II II sbou9 sov, nj tred of
ShIHs the money Of the New York Telephone
s6me other can g1 ana then F 5 grant frqnchise
Las no right then 70 grant a rnonopoI, 10 I5s tbs
elofk Telephone Company. Just what Is the
.-Iefenoe between these two opinions the fys
,-5 ,+@Ins @ deiiheraton in which he has INDUCED has
en- hled him clearly to say. He touches very
Yroe' ~ and Wi'h commendable conservatism the
b2st difficult question. OF course. the purpose Of
NS~ York Telephone Company in trying 70
c-t,8.tlYe franchises. which exactly the same
mas been 50 valantly assailed by the Cor
IT,