The San Francisco call., 1910-12-29
CITY Will SHARE
RAILROAD Income
Oakland to Derive Annual Rev
enue From Proceeds of
Seventh Street Lire
Southern Pacific Accepts Mu-
nicipaI Officials Terms for
Renewal of Franchise

OAKLAND, Dec 2s.-By granting 10
the Southern Pacific company its de-
sired renewed franchise for electric
trains in Seventh street between Fallon
and Bay. the city OF Oakland will de-
rive Immediately a substantial and
constantly increasing revenue from the
income Of the railroad. President B.
Il Pendleton OF the Oakland city coun-
cu has originated a plan. which he
terms the Oakland plan, whereby the
municipality is assured Of reason
able profit for the use of the street
during the life OF the franchise and the
payments into the city treasury can not
be curtailed by expenses incident to
maintenance and operation Of the rail-
road tracks. The scheme has been ap-
proved by Mayor Frank X Mott, and
by the mayor and Pendleton was taken
10 E. Z. Calvin, general manager Of
the Southern Pacific, who has accepted
the plan in fun. A franchise ordinance
emoodying the terms has been drawn
UP by representatives of the city and
OF the Southern Pacific
PEsDLETON EXPLAINS PLAN
Pendleton explained the working of
the plan TO the city council this even
ing at the resumed hearing Of the
southern Pacific company's application
Tor the renewal Of the franchise The
revenue planned is in addition to the
cost cf paving Seventh street by the
company which is estimated at $780,
0O0
The negotiations which brought
ABOUT the agreement, a revolutionary
concordat in municipal franchise af-
Ialrs, have set a precedent Of inesti-
mable value for this city. according to
Pendleton- Just as Chicago derives its
thousands Of dollars q mile for car
ines operated on its streets under mu-
nlclpaI franchises, so win Oakland be-
gin 10 receive an income from pub
lc service corpora tiOn for q railroad
line as soon as the franchise is granted
Ihat means that hereafter adequate
payment for the use of municipal high
ways may be eNacted with surety from
an similar public service corporations
etreetoar and railroad compsni viii
pay Tor value received on every fran
chise Oakland may grant
BASIS OF COMPUTATION
In establishing the agreement he
tween the city and the Southern pa
cine company, il was necessar rye To
make basis Of computation on the
capital invested in the proposed inn
pleNement This sum was fixed al
about three-Quarter Of a million. The
oakland plan stipuiates:
That the railroad shall receive in
leresl q per cent on the capital in
vested; that the Southern Pacific shall
aiso receive sinking fund Of . per
cent on the investment; that the rail-
road shall hold 20 per cent Of the gross
receipts for operation. taxes and in
cidental expenses: that the net income
or the amount remaining out of the
gross intake. shall be shared by the
city and the Southern Pacific the city
taxing % per cent, and the Southern
Pacific s. per cent.
The books Of the company are to he
subject TO the inspection Of the city
auditor a all times: the gross income |
may be authoritstiveiy determined BIZ
consulting each year the sworn state
ment made semi ally by the rail-
road This statement is filed with the
interstate commerce commission.
CITY Has ADVANTAGE
AS Pondleton explained 10 the city
council tonight. the city in this plan
has decided advania IN the definite
percentage being fixed for operation
and maintenance. Not allowed at any
time IN the life OF the franchise more
than 20 per cent annually OF the gross
amount collected. the company must
bear out Of this amount all improve
ments and betterments
The agreement will become imme- |
distely effective. The company will
make its first payment to the city July
]. 1911 When the Melrose extension is |
made. the city viii derive its pro rata
for all traffic on the whole Seventh
street line.
ACCEPTED By RAILROAD
Pendleton's statement set forth the
following plan. which was accepted by
The Southern Pacific:
First-Thst the railroad should receive ) per |
cent interest the capital invested This |
amount determined 10 be ST23 500.
Sec0Dd-Ihst the railroad should also receive
. per coat this sum for = sinking fund.
Ilrd-Thst the railroad should receive 20 per /
cent Of the gross amount collected for cost Of /
operation. taxes etc. This IS definite and
fixed percentage. which may not be increased |
and during the term Of the franchise must in !
clude the cost to the railroad Of renewals bet |
termcnts- etc. ordinarily Included IN the term |
cost of opera tiOn.
Fourth-I'hst the rems inder should he divided |
between the company snd the city in the proper 1
tion of - per cent 70 the city and 65 per cent |
70 The company
-SV'ARTTSHES BRECEDENT