The Detroit times., 1915-07-31
All Are Parties to Plan,
Under Agreement,
Says Lawyer
D. u. r. FAVORED
CONDEMNATION
Forced, Though, Into
Deal More Favor
able to City

bondholders decline to become par
ties to the suit by which the value
Of the company's property II to be
fixed by the circuit Judges. and later
start legal action on their own &C.
count to prevent the agreement
from going through"
This question was asked Of Rich
ard i. Lawson. former corporation
counsel OF Detroit. now collector oil
customs, and attorney for the city
with Alfred Lucking. In the nego
tiations with the d. U. r.. which
eliminated in the agreement. pub
lished Wednesday.
mo bondholder can take such &C
tion." Mr.. Lawson replied. I'VE
have a written agreement that they
will be parties to the suit which the
city will start. II they do not en-.
ter that suit. the agreement which
has been drawn with the d. u. r.
will be void Moreover. the bond
holders are bound by their trust
agreement to leave all their powers
in the hands Of the trustees, and
the trustees have agreed that they
will be parties to the suit"
Beyond making this statement
Mr.. Lawson declined to discuss the
agreement for publication at the
present time.
When the proper time comes.
expect TO make a statement Of the
way in which | regard the agree
ment." he said.
Several points in the agreement
are arousing widespread discussion
pro and con. II Is pointed out thai
the bondholders ought to be GLAD
to reach a settlement. as many
franchises have expired, others are
expiring. and thus the security on
which the bonds were issued Il
gradually being reduced. There are
81 100000 of bonds on the Fort-st
line, and the city has the power
according to the decision OF the
United States supreme court. to
drive the company out OF Fort-st. al
any time.
One argument In favor OF the
agreement that Il being advanced
is that II the city finds that It's
operation OF the cars IL too expen-
sive, II can advertise for bids for
20-year or 30-year franchise, and
can turn over the property 10 a
private concern At S40,000.000 or
$50. O00. 900, depending on the terms
OF the franchise. II will have made
its municipal ownership experiment
and will have settled once for all
the vexed question OF its feasibility
The program OF those municipal
ownership men who favor building
competing lines lie said 10 have been
held invalid by no less a person
than Elihu Root. who claims that
the franchises governing the three
cent lines. prohibit the city from
building competing lines. There ia
considerable room for argument on
that point, and attorneys are divid-
ed: but the question exists, and II
is strong enough to tie up the city
In lawsuits that would have TO be
fought through court after court.
Another advantage claimed for
the agreement 10 that II cuts out
condemnation proceedings. This, II
Is claimed. is a victory for the city
The city would have to pay the
costs for condemnation, and not
only the actual value of the prop.
erty, as fixed by jury, but what.
ever damages the ID. u. II. incurred
by giving up its property. Under
the terms OF the agreement. the
circuit court judges are to Hx the
value OF the property itself. and that
Is the only sum which the city will
have to pay.
The program OF building compel
ing lines has an additional drawback,
IL is pointed out. In that these lines
would have 10 be built on the faith
and credit Of the city. Under the
agreement. the city will have to
borrow only 100000 on Its own
faith and credit. and these bonds
cannot be questioned. II Ia believed
that the city would have great DIFF.
nculty in disposing OF bonds issued
to build competing lines.
The d. u. r. attorneys insisted.
at first. on condemnation proceed.
ings, but were overruled. They also
insisted that some assurance be
given the company that the city
would treat the ID. U. r. literally
in allowing the interurban cars en-
trance over the city tracks, but the
commission insisted that the city
be given a free hand in such nego.
tiations. and refused to consent TO
their being made part of the agree
ment. The city is In q position, II
the agreement goes through, to
make strong terms with the com.
pany regarding the entrance of In
terurbans.
A statement of what the commits
sion expects In the way Of earnings,