The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1915-01-26
Figures On This Item Are $3.-
100000 Less Than Those of
ID. u. r. Appraiser
LATTER MAKES CLAIMS
FOR VALUES AFTER 1924
Pair Use Same System of Com
putation, But There's Wide
Gap In Results

Btmis' figure Is 100000 lower than
that Of Prof. David Friday. OF the Uni
versity Of Michigan. who made the
franchise valuation for the ID. U. r.
In 1903 Prof. Henry G. Adams valued
Che D. U. r. franchises at 46,207.56.
The Bemis appraisal covers all the
property within the one-fare zone.
The Adams appraisal covers only
property inside the city limits.
Prof. Bemis franchise report Ii
based on values. Dec. 81, 1915. The
Grand River-aye. franchise will expire
before the END OF the year. Should
the city purchase the d. u. r. system
before that time, the street grants
Will be worth more
According to figures which Prof.
Bemis has filed with the railway com.
mission, the actual value of the d. u.
Il. property within the one-fare zone
Is $l9,763.000. He figures that the
physical property. less 20 per cent de-
probation. is worth $16,413,000; sup
plies on hand and cash for working
capital. $s50,000. and the franchise
values. $2,500,000. The total does not
include nearly $1.000,0O0 worth Of
paving which Corporation Counsel
lawson says belongs to. the city.
There Is over S12,000.00O difference
between the company's valuation OF
plant and franchises and that COM
piled for the commission by, Prof
Eemis. In the following letter to the
railway commission Prof Bemis ex-
plains the difference between the two
appraisals in the matter Of franchises:
On what appears to be a fair basis
OF calculation the unexpired fran
at the end OF this year. will be worth,
Inround numbers $4,000. 900. The
value Is given as OF Dee. 81. 1915. be-
livery OF the property 10 the city will
not be practicable before that time.
The franchise value as OF July I. 1915.
has not been closely computed but
value as OF Dec. 81. 1915. few ex-
plantations are here given. A detailed
report Will be filed later
The estimated earnings on each piece
81 track where there Ii still n fran
cfise Is reckoned as all the net earn
INKS above six per cent on the repro
dus ton cost. less depreciation, of &16,-
u.s. 100 together Win SIX per cent on
en- allowance OF ss5o,000--aiiowance
for supplies on hand and cash for
above ak per cent may be called a
monopoly earning. or an earning due
to the franchise.
II Il b., held that the company is en-
on Its r sysical investment the fran
chise values above given would be ma
terially reduced. They would also be
reduced II the company were allowed
TO capitalize the paving. or We're to be
considered TO have q eater phydcal
value than n7.s77.ooo, which covers
the above iteias OF plant. quick assets.
: and the prof. ortlonate value OF in
terurban cars used within the one
fare zone. The act earnings since 1900
have increased at rate OF q little
while the, investm mt within the one
fare zone has inc ceased at yearly
compounded ratio OF six per cent. This
OF 1914. where the gr. with In the num-
her OF passengers carried was only
about Ave per cent II is believed that
the abnormal growth of the city and
Of traffic for the last II years win not
be continued at the Aam,. rate; and the
representative of the CON pany In fran
chise matters. Professor David r. FRI
day. OF the University OF Michigan. has
agreed with me In an estimated future
rate OF growth OF traffic yearly and OF
net earnings Of eight per cent and OF
srowes Of eh trafs yearly u snd Of net 81
earnings Of eight per cent and Of six
per cent for future rate OF growth
of Investment as In the past. Profess
our method OF determining net earn
ings and IA the superintendent of net
earnings and Investment 20 each OF the
We differ. however. chiefly in the
following three important respects:
I'd. With respect to the so-called
three-cent franchises granted to the
4, 1924, the question arises an to the
rate OF fare to be ascribed to the traf-
iic going .oyer any portions OF the
but belonging to other lines. Since
the franchises for the tracks In ques-
tion are for eight tickets for 26c from
s.S o to ap p M with tn. universal
operated by the said grantees. as
have Computed ali traffic on these
the average fare of tn. present three
cent lines, known as the sherman,
Fourteenth. warren. Crosstown and
narnsi n ss: rss s, n. .'P qn
nvs-csnt. fare charged by the other
%snt % Aus. 4: 1918. viii apply to
cent track. By other nss clssr ON snr us
company accounts for differsnce be-
tween " me o. : :ssona '' Siss:no
TO the value OF the so-called nve-osnt
line: On unexRired grsnts from Dec:
ward. west west jsfrsrson ana West Fort Fort
have only franchise rights to come
into the city after this year by means
OF . considerable and expensive dstour
over thres-cent lines sia Harper for
the Gratiot line. or via Victor and Oak
Land for the woodward line. or via To-
isdo. .scottsn and Porter for the
Sprfngwells, West Fort and West JET
fsrson lines. Others. like East Jeffsr-
sons, Mack. Michigan and Grand River.
can only come In by grace OF the city
DYER unexpired grants. I have there
fore assumed that these detached seq
nasnts near the city limits WOULD not
legal fare OF the three-cent lines. The
company's representative has run out
these franchises to Dec. 4, 1924. on the
suppositfon that they could continue to
charge not merely what they are
shArsins now, but his aseu rare ~ nssr.
which they were charging prior to
Aug n. 1913 The company assumes
that Il will be allowed 20 collect such
rates Of fare on these discontinued
frsgmsnts Of franchises near the city
Ifmits until Dec: T. 1874 Even whsn
sent worth on . six per cent discount
basis. there n n difference here OF
about Sf.Boo,Ooo. according 20 which
rate OF fare II computed
ca. The last large point Of differ
e4o: consists n the ne. Company on IA 49, claim
franchiss earning on the outer ends OF
JsfYerson. woodward, Michigan. Grand
River and Springweiis until the expfr-
alton Of these grants at the various
datsa between 1874 and 1s2b- on the
nve-cept rate Of fare CHARGED prior TO
| which 4 MADE for the nrst Detroit
otrosf raflwav oornrni oofon. Of 0ovornoP