The Detroit times., 1915-01-27
BEMIS FIGURES
ATTACKED BY
APPRAISER
Franchise Valuations Are Away
Too Low, Prof. Friday Tells
Brooks
PLACES TOTAL BETWEEN
SEVEN AND TEN MILLIONS
Says Definite Contracts, Not
Conjectures, Must Be Basis
of Computation

The ID. u. X. charges that Prof.
Bemis in appraising the company
franchise valuations as OF Jan. j.
1916. at s2.50o,O0O. did not follow the
method of appraisal agreed upon with
Prof. David r. Friday, the company .
expert.
Prof. Friday holds that the unex-
pired franchises are worth $7.O6l,sIs,
II the dates OF expiration according
to the city's claims ara correct, and
So, ,40O,979, IL the dates OF expiration
claimed by the company are accurate.
He insists that the valuation he
placed on the unexpired franchises
was computed from the values OF the
d. u. r. physical property as fixed by
Prof. Bemis, and not on the higher
reproduction cost claimed by the com
pany, and further, that the method
OF procedure In fixing the values used
by Prof. Henry C. Adams In making
the city's appraisal In 1909. was
agreed upon by Prof. Bemis as the
correct'procedure.
Prof. Friday has submitted a re-
port to General Manager Brooks, OF
the d. U. r., in which he argues
against the Bemis franchise valuation.
He states that Prof. Bemis first COM
puted these values according to the
city's expiration claims TO be $6.-
357 ,0O0, as of an. 1. 1915. Later, he
declares that Prof. Bemis informed
him that, in his opinion. the ID. U. K
would not be allowed to charge alter
Jan. /, 1916, q rate OF fare higher
than that provided in the so-called
three-cent franchises. Prof. Bemis'
opinion being that after Jan. /, 1916,
the ID. u. r. could not reach the heart
OF the city, except over three-cent
lines, since all the five-cent franchises
in the downtown district will have ex-
pired by that time. On the basis OF
this assumption, Prof. Friday says,
Prof. Bemis arrived at the value OF
unexpired franchises on Jan. j, 1915,
OF approximately $3,791,000. and oy
denying any value to franchise earn
ings accruing after Dec. 4, 1924, ne
arrived at a value on Jan. /, 1915. OF
approximately S3.137.000.
Getting down to the $2,500,OOO
figure, Prof. Friday says: by elm
mating the value OF the earnings OF
the year 1915, Prof. Bemis arrives e.
a valuation Of approximately $3,340-
900 for the unexpired franchises on
Jan. /, 1915. and by denying any value
to the franchise earnings accruing az
er Dec. A., 1924, he arrives at yalua-
ton on Jan. /, 1916, OF approximately
2.500. .000."
Prof. Friday argues that the valua-
tions are being made on definite con-
tracts between the city and the d.
u. r. He declares that these con-
tracts provide for definite rates OF
fare during definite periods. and 1t -
not permissible to base their value
upon conjectures as to the changes
that might be made In such contracts
In the future. The proposition that
the d. u. r. will not have access to
the heart Of the city after Jan.
1, 1915, is Offset, he says. by the fact
that whoever operates the lines oc-
the streets covered by the
expired five-cent franchises, must get
access to the outlying portions Of the
city over ID. u. r. tracks occupying
streets on which the franchises have
not expired.
"The' News IS In error In stating
that Prof. Friday rejected our repro
duction values In estimating the fran
chiss Values said General Manager
Brooks, OF the Detroit United Rail-
way. wednesday. "As matter OF
fact neither our reproduction values
nor our present day values have as
yet been submitted to Prof. Friday.
"Prof. Friday and Prof. Bemis
ed upon the principles and meth
cd of determining the franchise val.
ues, and SO far Prof. Friday has ap-
Piled this method of procedure only
to the physical values as given ont by
Prof. Bemis. Prof. Friday reached the
as stated In his report
while Prof. Bemis abandoned the
agreed upon method Of procedure In
his report to the railway
ta