The Detroit times., 1915-10-12

debt even II IL were specifically
not assumed. and the entire
debt OF the u. L.. K. admitted TO
be $2i.so0. 000. although bonds
TO. more than s30.o60.0o0 are
authorized. Il far beyond any
borrowing power or the city.
Fourth-Even Ii the entire
bonded debt OF the d. U. r. did
not have 10 be assumed. existing
library. water and lighting
bonds. which must be consider
ed pubic utility bonds under the
meaning OF the -Heme Rule act.
although they were issued for
the extension OF public utilities
already established AZ the time
OF the adoption OF the new con-
stitution. constitute such q total
that there Is not sufiicient mar
gin left in the total to which the
city may bond for general and
public utility purposes 10 take
care Of even tho original $ll,-
600. 900 proposed to be assumed
at the start.
Fifth--The plan provides for
the issuance Of bonds, X rcven-
ues do uot do all that Is expect
ed OF them. secured only by the
property, whereas the Law pro-
vides for a security franchise in
such a case. and the absence OF
such security franchise would
make the sale OF such bonds
doubtful and the uninterrupted
service 10 the people CORE
spondingly doubtful.
The reasons advanced why the
election should not be prevented
follow:
Because the plan proposed for
purchase OF the street railway is
entirely legal and presents a
desirable. method OF settling a
question which has vexed and
harrassed the city OF Detroit
for years.
Because the street railway
commission and the street rail
way officers have been able TO
agree on all the terms Of the
sale contract except the price,
which. therefore. becomes a lie
climate matter for decision by
court of equity.
Because the city. counting out
school and library bonds and
water bonds prior 10 April !.
1918, still has a margin of $751;
900, 900 and more, and with the
price still unfixed no person can
say that the purchase price and
the liability OF the city win be
any more than that.
Because in planning to issue
bonds on the property alone.
without the issuance of secur-
ity franchise. the city would
simply be failing TO exercise a
right conferred on II for use n
necessary. the security franchise
clause in the law being permits
sive and not mandatory.
The attorneys for the injuncti n
argued that the. city was stuck for
the whole debt. once IL took over
any part Of a mortgaged property,
and cited a lot OF decisions. the bur-
den of which was that while a Fri.
rate individual nigh; purchase .
property. definitely as
suming a part Of the debt person
ally, and IL the income from the
did not pay the rest OF the
debt let IL 60 by default, a city has
rot that right. inasmuch as the city
having spent q part OF the money OF
he taxpayer for an equity in prop
arty. was bound to protect that
equity. even TO the extent OF pay.
ng the entire debt. Consequently
he decisions went TO prove that
having purchased an equity in mort
gagged property. a city thereby a.
,umed the rest Of the debt auto
one particular case In Illinois was
.ited as an exact parallel This
ras case where a water company
vas to sell TO q city. The purchase
price was some $4,000. but the wa
er company had q debt OF $1,000.
which the city specifically did NOT
assume. The total Of the two ex.
,eeded the city's debt limit and ths
supreme court put the kibosh ON
he whole deal. ruling that the city
would become responsible for the
sniire debt.
These and similar citations were
lsFesed- Of by Mr. Lucking by The
that the statutes of 9th
~ states might read that way. but
lot those Of Michigan.
Briefs were submitted by Attorney
and Attorney Lucking prom
sed 10 have his In Tuesday or Wed
lesday. This means decis on
when the judges have had q chance
% argue It out. probably BY Mon.
fay. '