The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1925-03-10
FRANCHISE FOR
25 YEARSGlVEN
TO HUGHES CO.
Emergency Clause and I'm.
mediate Acceptance Pre-
cludes Referendum upon
Ordinance
SOME ISSUES RAISED
Commissioner Larson in
Doubt as to Powers of City
in Granting Privileges

The city commission at its meet
ing last evening granted the Hughes
Electric Company a franchise to use
the streets, alleys and other public
places for the purpose of transmit
ting electric power to the inhabitants
OF Bismarck and it's suburbs for a
period of twenty-five years. In all
its essentials. the franchise is the
same as published, except section six
dealing with the time when the fran
chise shall take effect.
At the request of Attorney E. b.
Cox who appeared before the city
commission as representative Of
the Hughes Electric Company, this
section as originally set out in the
and a section inserted reciting that
the measure was an emergency ordi-
nance for the public welfare and
also stated that the Hughes Electric
Company's old franchise was about
to expire and it was necessary that
immediate action be taken to grant
the Company new franchise to
enable it legally to operate on the
streets of the city. The amendment
was unanimously approved by the
entire commission present at the
meeting.
Raises Issue
After. the reading of the franchise
ordinance, Commissioner Larson
raised the point whether the city
commission had the power to grant
a franchise for more than 20 years.
Attorney Cox explained that this err
roneous impression gained currency
due to the fact that some Dickinson
attorneys believed that franchises
were LIMITED to 20 years. But, on
examination he proved to the salts
faction of these attorneys that the
20 years limit applied to the articles
of incorporation of a private corpor-
alton and not to franchises. In his
opinion, franchises might be granted
for twenty-five years or even fifty
years. The commission however
could not grant an exclusive fran
chise. Commissioner Thompson who
believed that the franchise should
run for twenty-five years emphasized
this point by stating that if proper
applicant appeared at the next meet
ing of the city commission and all
legal requirements had been met, the
city commission could grant another
electric franchise at that meeting.
Twenty-Five Year Term Necessary
In advocating that no change be
made in the life of the franchise
Attorney Cox said that the reason
the Hughes Company desired twen-
ty-five year term was based largely
on financial grounds, and that the
shorter term would seriously inter-
fere with its program for improve
ments. His Company contemplated
making about $lO0,0O0.00 of improve
ments to the existing plant, and in
order to do this it would be obliged
to sell bonds. Such bonds usually
were made payable in periods of five
years, thus five, ten fifteen or twen-
ty years. No bond attorney would
pass a bond issue for eighteen years,
nor would bond company buy or
sell such securities, terming them,
"Outlaw securities" Hence, if the
franchise were limited to twenty
years and his company were to offer
20 year bonds, the franchise would
expire before the bonds matured.
Also, that long term bonds sold at
a better rate than short Lived ones.
Commissioner Thompson pointed
out that twenty-five years was but
five years longer than 20 years, and
in view Of the desire Of the Hughes
Company to make large 'outlays, the
city commission should keep the life
Of the franchise as originally framed.
He also called attention to the fact
that the franchise had been publish
ed as provided by law and that no
citizen appeared to object to its
terms and consequently the public
seemed to be satisfied with its pro-
visions. After some further discus
sion the matter was dropped and no
action taken as all commissioners
seemed agreed upon the 25 year
period.
The ordinance as amended was
Continued on page two)