The Detroit times., 1913-07-15

II Will not be impertinent at this
point 10 suggest 10 this committee The
moral and legal responsibilities which
rest upon the directors and officers Of
this company There are no lai ze
stockholders, but on the contrary a
large number Of small once The MOLD
ings Of many OF these are so small that
they cannot AFFORD 10 attend the meet.
ings OF the stockholders OF the com
pany, and therefore, are obliged 20 trust
the management OF their proper "
wholly 10 the hoard of directors aud
the Officers or the company The mora +.
II not legal duty therefore. which rests
upon the latter 10 protect the rights
OF these stockholders viii be readily
understood by an men 10 be greater
than under ordinary circumstances
The duty is obviously 90 do every
thinS IN their power 10 protect the
property under their direction and con-
troll 10 the best OF their ability. To
neglect that duty would scarcely be
less than criminal. Feeling the re
sponstbilltN resting upon us we shal'
try TO show To your honorable body
why the ordinance proposed cannot 10,
accepted. twithstandinR the consc-
qucnces which may follow our refusa I.
1t II not necessary at this time 20
Sint OUT the many somewhat minor
there is a disposition on both sidea 10
get together on some fair and work
able ordinance. doubtless these ob5sC-
tlohs can ne removed but there ar. In
superable obstacles in the way OF &C.
ceptance.
First; IL provides for "a rate OF fare
which cannot pay the cost OF msiptc-
nance and operation, let alone paying
any return on capital invested.
Seconds IL provides for the immcdi-
ate construction Of several extensions,
which we concede are necessary, under
terms mud conditions which render IL
impossible 10 obtain the necessary
capital.
LOW FARES.
Since Jan !, 1909, the Interstate COIN
merce Commission Of the United states
has claimed and exercised jurisdiction
over the affairs Of this company, ,ad
particularly over It's accounting sys-
TEN II has established SIS different &C
counts into which all receipts and dis
CURED this company to keep it's ac-
counts In accordance with the abave
mentioned classifcstions. and i'm ac-
cordance with it's rules. This the COM
Eany has done, SO that since 1909. every
item OF receipts or disbursements mas
been carried 10 the different accounts
required 10 be kept by said Commerce
Commission, and in addition periodical
reports Of the accounts so kept haV.
been forwarded 10 the commission
We have had these accounts for the
year 1912 and for the first 1--WE months
OF the year 1913. carefully examined by
competent auditors for the purpose Of
ascertaining what would have been ~"
excess or deficit OF earnings over ~CSt
of maintenance and operation. had The
company received three cents Cor each
passenger fare instead OF the rates which
I
shows that for the year 1912, there
would have been a net deficit from cp.
Grafton OF cars within the City of lie.
tLoit, at three cents per passangGr. after
revenues whatever. and before charg
ing any interest on investment or de-
probation. OF s4ssl674; and for the
hrst hve. months OF the present year
under like accounting. s20.42Q.95.
That is not all The proposed ordi-
nance requires the company to do a
"a y "a Of Ffs,er lR.aI a 4
Is now required 10 do. and which would
increase the annual deficit above shown
70 an amount several times larger
Moreover, IL the railway is to be kept
up as IN should be 10 prevent ultimate
loss, there must be set aside each year
out OF It's earnings for depreciation
reserve, not less than 100000 10 cover
losses from depreciation and ohsol"9-
cence; but nc amount whatever was al
lowed for this purpose or taken into
consideration in the computation show
ing the above dcac
The ordinance also calls for universal
transfers. This would considerably re-
duce the number OF fares sold because
many people could then ride for one
fare where il now takes two.
Ii IL, therefore, too plain for Discus
sion that under IN three-cent fare there
pay interest upon the cOmpany's indc bt-
edness, or upon any part OF Il. anu I'm
considering this proposition IL should
not he forgotten that the company has.
over the Krester part az it's system In
the city, unQuesttOned right for several
years to receive higher rate of fare
nance. This right. and substnntinit, NIL
other rights. IL IL compelled To give mp
without anything I'm return.
Extensions.
The cost OF the immediate extensions.
which include necessary cars, power
and other equipment called for by the
proposed ordinance. so far as they can
be estimated by our department heads.
Will amount to over s1,I00eGS When
installed they will have to be oper-
ated under the same terms and con-
ditions as the rest % ;ne lines, and
therefore must be operated al "a loss.
Moreover we viii be obliged TO cease
operation and TO remove them at any
time the council may direct.
1t should be perfectly plain TO any
one that II this company should at
tempt or agree TO attempt to operate
It's lines at loss. and at the same
time 70 agree to build extensions re-
movable at the will OF the city, which
during the continuance OF their oper-
alton must likewise be operated at "A
loss, 1t could not obtain one dollar OF
additional capital to build such extern
sions.
The ordinance, therefore, calls for
that which is impossible. and whatever
the consequences may be, both to
TO the company, We are compelled ~
say that under no circumstances can
IL be accepted
This company respectfully calls YOU
attention 10 the fact that said pro-
posed ordinance apparently Ignores
section 10 OF the ordinance OF the COM
mon council OF the city Of Detroit ap-
proved Dec. !, 1894, concerning the De-
torit railway. To which this company is
the successor in interest That ordi-
nance provides for a general plan or
urban transportation In the city ~ De-
trott, at low rate OF fare. for uni
versal transfers. for service 70 be -en-
common council shall deem necessary
to protect the interest, safety, welfare
and accommodation OF the public, and
10 continue In effect until Dec. 1, 1924
The ordinance Is commonly known as
The Three Cent Fare Ordinance" Tn
der II the railway company was bound
not only go operate the lines therein
specified. but 10 construct and operate,
under the same terms. all further eX-
tensions and additional lines which the
common council should deem 10 be FOR
the public convenience. or 10 give spe-
cial privileges by which such line "
constructed and operated by others.
would become part OF the same gen
eral system Of transportation,
This ordinance was accepted by the
railway company and constitutes n
binding contract between the city pf
company has fully performed all lts
bliea tons under the CONTRACT, and has
complied with numerous requirements
OF the common council OF Detroit. In
regard not only 10 the operation Of it's
original lines but in regard 10 the
construction and operation Of additional
tines. The city OF Detroit Is not now
at~lthcrty 20 violate that contract and