The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1911-03-14
CITY CANNOT STOP
PROPOsED'PHONE
MERGER
/ Anti. Consolidation Clause in Home
Company's Franchise Annulled by
Decision in Suit Against
Lighting Board.
Believed That Amalgamation Awaits
Ruling in Standard Oil and
Tobacco Cases.

Il don't see where these rumors are
coming FROM" said President Jackson
Of the Home Telephone Co., when
asked about the story that his COM
pany is to be merged with the tele-
phone trust.
There are no negotiations what
ever In progress, and there have been
= none," he continued. 1T Is true that
we have some plans for new financ
ing on foot, but there Is no ground
for this talk about merger with the
Bell companies"
In spite of Official denials, however
the talk OF a merger which will in
clude all the important iDdeDendent
telephone companies, will not down.
Definite action, II is said, is being de-
(. layed until the supreme court hands
down decisions in the Standard OH
and American Tobacco Co. cases
When the attitude OF the court Is de-
fined, the merger can be framed along
lines that will comply with its rulings.
1t Is generally supposed that the
franchise of the Home Telephone Co.
effectively prevents any merger or
consolidation with any other company,
but an examination of the records
shows that this is not the case. short
ly after the COOPERATIVE Telephone
Co., to the rights of which the Home
succeeded, started to build its lines,
IL brought suit to compe, the puDnc
J. lighting commission TO allow 1t TO use
' the city poles and conduits, in accord
aDce with the franchise terms; but
Judge Hosmer denied the petition and
the company was ordered to keep on
city property.
The decision, however, went farth-
er. and said that inasmuch as the per-
mission to use the city poles and con.
Quits where convenient, was part OF
the consideration for the franchise
and the city could not grant this, that
the company should be freed from
certain provisions of the franchise.
the most important of which was the
requirement that IL should never
merge or consolidate with the Michi-
gan Bell Telephone Co., or any other
telephone concern.
The security which the company
7 gave for performance OF this require
ment, a conveyance Of all its property
and certificates for all stock Issued
was returned, and the company Is
now left free to do as 1t sees Mt In
the matter OF merger.
Another important provision or the
franchise which was eliminated Dy
this decision, was the clause that the
plant might be bought by the city at
any time, the conveyance given as
security to become operative when
ever the city wanted to pay for the
property.
There are several other important
provisions Of the franchise which
were declared invalid by the decree OF
Judge Hosmer. One of these is the
/. clause which limited the rates to be
charged for city telephone service.
Another provided that the books or
the company should always be open
TO inspection by the public, and an
other that the life Of the franchise
should be limited to 80 years unless
the city took il over before. All these
were declared invalid by the court
because the city could not perform
what Il promised to do in regard to
The use Of the conduits and poles or
the public lighting commission.
AS the franchise stands at present
there is no limit to the length of life
~ the franchise, but Corporation
Counsel Hally gave it as his opinion
that IL could not be construed to be
more than the 80 years provided by
the instrument In the first place.
II do not believe" said he, that
the court had power TO set aside part
of the franchise as invalid and hold
the city bound by the remainder of Ii.
II seems to me that such revision is
a function of the common council and
II II should come into court | would
be inclined TO set UP that the Home
company has no city franchise under
which TO operate since the decision OF
the court has so seriously altered the
terms of the original agreement be-
tween the Cooperative Telephone Co.
and the city. The company has a
right to operate, however, under it's
= state franchise but the restrictions
which we're placed upon IL originally
arc altogether invalidated."
The city has, consequently, nothing
to say as To the DISPOSAL of the prop
!, erty by the Home Telephone Co, al
though this was one of the most im-
portant provisions of the franchise.
The city has no more chance OF own