The Detroit times., 1913-07-16

following communication
Respectfully submitted
RICHARD LINDSAY.
City Clerk
The following is the communication re-
ferred to:
To the Mayor and Common Council OF
the city of Detroit:
There Is pending before your Hon
cradle Body an ordinance which In law
ana IN fact is proposed contract be-
tween the CITY of Detroit and the De
troit United Hallway
IL is needless to say that the Conn
pany is CHAD OF an opportunity 10 evan
Inc and criticise and point out ob1ec-
items 10 a contract TO which IL is asked
10 become a party.
We fully recognize our duty fairly
10 consider any ordinance Affecting TIE
relations between this Company and
the city of Detroit, whether the prop
osition is 10 be considered as a settle
metn of "A long standing controversy. or
as establishing conditions under which
the city may take over and operate the
street railway system within It's limits.
We also recognize that IL is our duty.
both to our stockholders and to the
public. TO agree TO any proposition
which will enable the public 10 set in
creased transportation facilities and as
low rates OF fare as are consistent with
the service. demanded by 1t.
II VIII not be impairment at this point
to suggest to this Committee the moral
and legal responsibilities which rest
upon the directors and officers OF tlls
ers, but on the contrary, large num-
Der OF small ones The holdings 81
many of these are so small that they
cannot afford to attend the meetings
and therefore are obliged TO trust the
mana cement or their property wholly
TO the board OF directors and the Of
icers OF the Company. The moral, ~
not legal duty. therefore, which rests
upon the latter to protect the rights OF
these stockholders viii be readily an
\ ..N1 -. - s..s.. kn ~
under ordinary circumstances:
The duty is obviously TO do every
thing In their power TO protect the
neglect that duty would scarcely he
less than criminal Feeling the respou-
sibility resting upon US, we shall try to
show 20 your Honorable Body why the
ordinance proposed cannot be accepted
Notwithstanding the consequences
which may follow our refusal
II Is not necessary at this tme to
point out the many somewhat minor
Elections 10 the ordinance. because IL
there is a disposition on both sides 10
get together on some fair and work
able ordinance. doubtless these oblec-
tions can be removed. but there are
insupera bile obstacles in the way OF ac-
lceptance.
First: II provides for rate OF iare
which cannot pay the cost OF mair.ten-
ance and operation, let alone paying
any return on capital invested
date construction OF several extensions
which we concede are necessary. under
terms and conditions which render IL
impossible To btain the necessary cap
ital
Low Fares.
Since January l. 1909, the Interstat,
Commerce Commission OF the United
States has claimed and exercised juris
diction over the affairs OF this Com
pany. and particularly over its sccount-
IN f.
ferent accounts into which all receipts
and disbursements must he carried. IT
has required this Company to keep
It's accounts In accordance with the
above mentioned classiiications so kept
accordance with it's rules This u.
Company has done. 80 that since 1909
every item of receipts or disbursements
has been carried To the different ac-
counts required to be kept by said com
mtrce Commission, and In addition per
iodical reports OF the accounts so KEEP,
have been forwarded TO the Commis-
sion.
We have had these accounts for the
year 1912 and for the first 1--we mouths
of the year 1913, carefully examined by
competent auditors for the purposs OF
ascertaining what would have been the
excess or deficit OF earnings over cost
OF maintenance and operation, had the
Company received three cents for ench
passenger fare instead OF the rates
which have prevailed The result asc'
tanned shows that for the year 1912.
from operation of cars within the CIV
OF Detroit at three cents per passenger,
after giving credit for all miscellaneous
revenues whatever, and before charging
any interest on investment or depreGia-
ton, OF st9,S167b. and for the first I'VE
months of the present year under Ike
accounting $20.429.95.
That is not ali The proposed oral
nance REQUIRES the Company 10 do a
large amount of paving which the city
is now required TO do, and which woul1
ia a. 1HfCtf SHOWN
to an amount several times larger.
Moreover II the railway is TO be kct
up as II should be TO prevent ultimate
loss. there must be set aside each year
out OF it's earnings for depreciation
and obsOlescenCc but no amount what
ever was allowed for this purpose or
taken into consideration in the com
putatiOns showing the above deficit
The ordinance also calls for universal
tranTcrs. This would considerably re-
ducc the number of fares sold. because
many people could then ride for one
fare where IL now takes two.
II Is. therefore, too plain FOR dis US
sion that under a three cent fare there
would be no net earnings whatever 10
pay Interest upon the Company's IL
debtedness or upon any part Of II
And In considering this proposition
pany has over the greater part OF 49,
system In the city. the unqucstioned
right for several years TO receive
higher rate Of fare than Is prescriS I'd
in the proposed ordinance This right
and substantially all othe rights ~ ~
compelled TO give up without anything
I'm return.
Extensions.
The cost Of the~immediate extensions
which include necessary cars. powev
and other equipment called for 10y the
proposed ordinance so FAR rs they can
be estimated by our department. heads.
will amount 20 over 81 100000. W Tch
installed they will have 10 be opers ', I
under the same terms and condit IONS
as the rest Of the lines ana Therefore
must be operated at a loss Moreover
We viii be obligated 10 cease oper.
alton and TO remove them az any Time
the Council may direct
II should be perfectly plain 20 any
one that II this Company should a.
tempt or agree 20 attCmpt TO operate
its liner az loss. and-at the SAINT
time agree TO build extensions removable
at the will OF the city. which during
the continuance ~ their operations
could not obtain one dollar ~ dddt-
ti0nal capital TO build such extensions
The ordinance therefore calls FOR that
which ~ Impossible. and whatever the
consequences NAV be. both 90 the psp-
pie OF the CITY OF Detroit and 20 tire
under no circumstances can ~ be ac-
This COMPANY respectfully calls YOUR
attention 20 the fact that said propose
ordinance apparently ignores Secti~u ~
Of tho ordinance Of The Common Cpur1
cU III the city 0f Detroit sppV", Z
December T. 1894. concerning the lfe-
troit RAILWAY. to which this Company
Is the successor In interest That ordi.
nance provides for general plan ~