The Birmingham age-herald., 1916-03-26
SUGGESTION FOR THE B. R., l.. & P. co. TO
 BUY THE TIDEWATER
 ON $1,500,00O BASIS
tconinued from Page FIvc)

NlSeQ or any pOSSlDle ODJecJlOn on the part of the city authorities. After due consideration, the Birmingham Railway, Light and Power company advised the committee that, subject to the approval of the board of commissioners of Bir- mingham, 1t would be willing to take over the property, guaranteeing to the present bondholders 50 per cent of the amount of their present bonds. This would be the equivalent of a gross purchase price of S1, 500,000, including the expenses of fore closure and reorganiza tion. This figure, of course, would represent a sum much less than the cost or value of the prop erty; but the plan seemed to be the best arrangement that could be made to man- tain and improve the service and, at the same time, afford some protection to these investors, who had, in the utmost good faith, invested their savings in Bir- ningham. The committee thereupon in- vited the approval by the board of com missioners of the proposed transfer.
 CONSIDERED BUYING SYSTEM
 '"The commissioners suggested that they would prefer to consider the possibility of acquiring the system. As generous con- sideration has at all times been accorded
 this property by the commissioners, own ership by the city would have proved most acceptable to the bondholders. and
 would seem to suggest an admirable so- luton of the question of a municipal railway to the Warrior river. After in- formal discussion, the commissioners reached the conclusion that they could not approve the proposed transfer to the Birmingham Railway, Light and Power company, and suggested, instead, that the city might be willing to pay $750,000 for the system.
 'Inasmuch as this figure represented 1 only a fraction of the cost and value I of the system it could not be considered. 4fAz 41r -1r,,r, 4loz4 | the city has not yet secured sufficient | statutory authority to authorize it to purchase and operate a railroad of this ! character, or to issue bonds for that pur- pose. While the city officials take con- trary view as to the citys authority, it is undeniable that grave doubt as to it's 1 power exists, and that the mater could 1 be determined only after indefinite delay | in the courts. It also seemed to be the | view of the commissioners that municipal 1 ownership of railways would logically
 follow other plans along that line. For | these reasons the possibility of the city s
 becoming the purchaser of the property l has not been regarded by the committee
 as practicable. A reorganization based l on the indefinite possibility of munich pal ownership would result in the con- l tinuation of the system in a crippled and | incomplete condition and would not be | satisfactory to the public or fair to the 1 bondholders.
 MEET COMMISSIONERS DESIRE "Confronted by these difficulties, the
 committee has felt that every effort should be made to adopt a plan that would be consistent with the desire of the commissioners for ultimate munici- pal ownership and insure continuation of the service. After further considera- tion, the only method by which both of these purposes could be accomplished
 and, at the same time. allow the present investors to recoup a small part of the
 losses sstained by them as result ol ttheir investment in good faith in Bir-
 mingham, seemed to the committee to
 be transfer to the Birmingham Rail- way, Light and Power company, with a
 right of purchase secured to the city. This would give the city time to per feet it's statutory authority and enable
 1t to extend its present lighting system and mature it's other plans with the View to acquisition of the railway and It's extension to the Warrior river.
 With this end in view, the board of commissioners were requested to con- slider transfer to the Birmingham Hallway, Light and Power company, on terms which would secure to the city the absolute right to purchase this
 property within such reasonable period as might be approved, at the exact price paid by the Birmingham Railway, Light and Power company to the present own CTS. without interest, and without talk ing into consideration any losses which
 might be sustained by the operating company during the present period of depression in Birmingham. Until the general idea proved acceptable, it was unnecessary to consider details, but the committee has thought that it would be possible to provide for such adeuuate e representation of the city in the control
 and operation of the system, pending the exercise of the city's option, as to Iprepare the way admirably for munich pal control, ownership and extension; and the plan proposed would, if accept able to the city and to the Birmingham Railway, Light and Power company, undoubtedly CD insure the mainten
 ance of the present system and (2) pre- serve to the city definite right of purchase by the city at a time whec the value of the system will undoubted- ly exceed the purchase price proposed.
 WANT TO INVITE CONSENT
 "The committee trusts that upon further consideration of the matter the commissioners may be willing to au- thorize the committee to invite the def finite consent of the Birmingham Rail- I way, Light and Power company to the proposed plan. While the general plan proposed has been only tentatively con y, com
 mittee has felt sufficiently assured of that company's willingness to respond
 to any reasonable suggestion to justify the committee in requesting the author | ity of the commissioners to go into the
 matter in detail.
 "The officials of the Birmingham Railway, Light and Power company state frankly that the continued opera l tion of this line by receiver or in
 an incomplete condition flinders their
 ability to market securities for neces- sary extensions and equipment and they think that by consolidating the operation of the two systems they could effect economies sufficent u
 justify their guaranteeing to the pres
 ent owners the purchase price pro- posed. It seems to afford the best so-
 lution of the difficulty confronting the
 bondholders, under present conditions
 and the committee had hoped that the
 last suggestion would be highly ac- l ceptable to the city. Under the terms
 of the franchise, this transfer could be
 accomplished without the consent of
 the commission, subject to the ap-
 proval of the Alabama public service
 commission. The city authorities have
 been too generous and considerate in
 their cooperation with the enterprise