The Detroit times., 1915-07-31
BOND FOLK
CANT FIGHT
MO- SCHEME
"a Z LAwsoN
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 IL 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 Of
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 = 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, I
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 that
the bondholders ought to be glad
to reach a settlement N many
franchises have expired. others are
expiring. and thus the security on
which the bonds were issued II
gradually being reduced. There are
$1,000 OF bonds on the Fort-st.
lire. and the city has the power.
according to the decision OF the
United States supreme court. to
drive the company out Of Fort-st. at
any time.
One argument in favor OF the
agreement that Is being advanced
Is that II the city finds that Its
operation Of the cars Is too expen-
siye. II can advertise for bids for
20-year or 30-year franchise. and
can turn over the property to a
private concern at $40.000.000 or
$4,000, 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 IL said to have been
held invalid by no less . person
than Efihu Root, who claims that
the franchises governing the three
cent lines, prohibit the city from
building competing lines. There IL
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 Is that II cuts out
condemnation proceedings. This, It
Is claimed, 10 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. ". r. incurred
by giving up its property. Under
the terms of the agreement, the
circuit court judges are to AZ 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.
It In 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. Il 10 believed
that the city would have great dif.
fculty In disposing OF bonds issued
to build competing lines.
The d. U. r. attorneys insisted.
ut FIRST. on condemnation proceed
ings, but were overruled. They also
insisted that some assurance be
given the company that the city
would treat the d. 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 10
their being made part Of the agree
ment. The city II IN . position. u
the agreement goes through, TO
make strong terms with the com
pany regarding the entrance Of In
terurbans.
A statement Of what the comma
sion expects IN the way Of sarnineA