The Kansas City sun. (Kansas City, Mo.) 1908-1924, 1914-07-04
The Commercial Club Committees
StreetRdiIWdyR Report
Adopted $50 to SO

tors appointed the following committee: o. v Wilson chairman; Franklin
l6, 1t is herewith given in full;
Report of the Special Committee Appointed by the Board of Directors of tn.
Commercial Club on the New Street Railway Franchise.
To the Directors of The Commercial Club:
In arriving at its conclusion, and in making a accommodation in the
Railways Company, commonly known as the new Metropolitan franchise"
conscious Of the great responsibility of its duties and moved by al earnest
desire to be Just and fair both to the city and to the owners and creditors
jct as you would any question Of Importance arising in your daily business
If you think you have scores to settle, forget them. In considering street
railway service let US be governed by the universally recognized fact that
ours TO free Questions If this kind off If all persona and political has bms The
Commercial Club O Kansas City will, and must do this, o. it will not have
the influence which belongs to it in a settlement Of the questions now being
Your committee urges the members of the club to read the franchise
provisions, be they good or bad. W. have found that the most pointed
criticisms of the pending ordinance we're made by those who had never
read it. We have heard frequently the declaration that the franchise does
FORMED nT e%I tn eS ai we as eut to wSat s in r rUm s% %s com mdeP ask "@ fnp nv vb hevG tbe m
"a a reasonable probability of our getting.
the property and the earnings and expenses of the Metropolitan Company as
every important calculation, and the figures which in the ordinance repre-.
500 GOO of which is n Missouri are a. onoIem an comDromiise Of tbs
estimates Of engineers represendng both the COMPANY nD n AHtb e nfy u the Thu
intangible, are those which have been adopted and used by courts anr
certainly 10 citizen with a reasonable faith in the growth If Kansas City
{" TN %D stISSt railway y G t%a Tisvs with nf t5o 0 tDdFt, d@S' emnor. IN rs..rs 70 :.
franchise, they ought not to reject the n now pending before they have
studied the elaborate, minute and scholarly reports bearing o the case
prepared by h engineers appointed by the United States Court, the com
service ana IN kansas city, especially for better service; that is, for more
the money must. in the present case, come from some other source than the
Sorrov 70 81 m ee tho Un Demand L fT no SsmS ss Tree a nat th the company mp an mus, must
diatey necessary. If our faith in Our city be justified, they are necessary
1t is hardly necessary for us to point GU. that in the process of borrow
ing the lender must be consulted. No matter how much W e may object to
the security offered. Without undertaking to discuss the fairness or un.
a fact that these interests and the securities issued by them have been so
i reaso nno oe a 1s stret Is o. opposition up ats a q from ns one f0 1uaTte on o ia another Gthsm,o OE for or. one ne
large large investors, .oD We have gray doubts as to the success of an issue of
thirty thirty years years ~, We s do not be believe eve. that a substantially shorter t0cuIe the
on %'i Interest," saeA It is agreed we must have and secure it at a reasonable rate
The franchise a S drawn contains many matters of operative detail,
which we NaVe 10 Le EXPERTS n many sections Csee Section III which
a nno,t special Ella interests IN which naon we think tx. car be safely left a written in the
Importance in which every citizen is interested, and these ought ito be, and
In June, 1911, receivers we're appointed in the United States Court for
is now being operated by receivers
mortgage given in 1895 covering the street railway system as IS it then exist
ed, being mainly, the lines now in the central portion of the city, to secure
Another suit is also pending in the sam court to toreclose the mort
and IN acquired acquired under 1.sG the S1 provisions ION of what is known as the Peace Treaty"
R Re G'f IN i8s. passed during the first year of the second term Of Mayor
Mortgage bonds of the company, amounting in round numbers to s22,
The total Indebtedness of existing railway companies, secured by mort
a considerable portion of which is now bearing interest at the rate Of 6 per
Judge William c. Hook of the United States Circuit Court, before whom
ing has stated that he cannot tin reason and with Justice much longer deny
ue haders OF existing nc overdue bonds the right and privilege to fore
In 1911 Judge Hook instructed the receivers to ascertain whether or not
III city was willing to negotiate a ew street railway franchise, and if SO
t. enter enter upon upon negotiations. The receivers, acting on his instructions, took
have been going on n e ever asH since nen'HSs VT Mayo Brown n negotiations
Tho only alternative ito the making If a e franchise is for the existing
the parties who a become econ ,T he n Upels ssrI e "a afserwards operated by
property will, in all probability GsGhiS , pasi Dao the hands ID Of 4 oS n or sI 81 s oaEsr the he
Tn several classes OF mortgages Of bondhoders, and possibly different pr.
owners.
We fnd that more than s37OOOOOO have been invested in HI street
railway property and that there exist mortgage liens amounting in the 10.
gregate to s2S'7O00O0, with eleven years remaining of the term of ehtine
franchises. SN"e
We are advised that during the remainder of the term Of, existing fran
chises Which expire June ], 1925, the street railway companies meetng heir
oohgations under tn Peace Agreement" cal make a legitimate profit of
between 10 million and 10 million dollars.
Under such conditions, If a new franchise be not granted il is moi IN he
expected tina the owners and operators of the property will mako an
extensions or beterments which they will not be compelled by thu cMv n
make, O. render any better service than they will be compelled 10 render
In other words, it will certainly be to their interest to max as large a nroGt
as possible at the expense of improvements, beterments and of service out
OF the remaining life of the present franchise. Present needed improve.
emit extensions would certainly be indefinitely DELAYED and postnoned
During the whole of such period, until the expiration of the present fran.
cMses' o until some other arrangement be made, there will Inevitable be
prolonged and bitter controversies between the city and tbe street ranuav
company In reggrd to Improvements and the rendering OF proner seruce
suc a condition would be disastrous and ought to be avoided
In view of these facts and circumstances ~ concIuaon ia that non
franchise Is not only desirable but is necessary in the best interest of the
city and its commercial welfare, and for the general benefit Of an our
citizens. ""
The proposed new franchise requires that a corporation be oreanzed
under the laws of Missouri, 1t provides (Seetion Az that the total amount
of mortgage Indebtedness and capital stock shall never. at av time excaed
the value of the companys property, and expressly provides that the com.
pany shall never issue either stock or bonds against the value Of the fran.